So, a while back, I started a series about what makes a good agent. There are obviously two sides to a deal. The agent that represents the buyer, known as a buyers agent or the selling agent. Then, there is the agent that represents the seller, known as a listing agent. I wrote about some of the general things that makes a good agent with the part I of this series. Then, I posted what makes a good buyer's agent. Now, we will talk about what makes a good listing agent. #1) Knowledge- I started to try to list out everything that a good agent should know. And, well, it was a long list. Here are the five major things that jumped out at me. Property value- You don't want to ask too much and have the listing go stale, and you also don't want to under price your home and leave money on the table. (of course, in this market under priced homes are quickly bid up..so, believe it or not, it is even better to under price your home right now than to over price it) Marketing- How to get the most eyes on your property. Yes, the listing services are a great start. It is more than just that. It is having a great website that ranks highly on Google. It is featuring them on Zillow, Trulia and Realtor.com. It is about getting them on Craigslist, Facebook, and Backpage. Basically, everywhere you can get them. Some agents feel it is a waste of time to run Craigslist and Backpage ads. But, the first time homebuyer often starts there because they are comfortable with that sight. They have looked for things there already. Most people try the familiar first. Loan products and lenders- Why does this matter? The seller isn't getting a loan. The seller isn't buying the house. Why should the listing agent care? Well, there are many different loan programs out there. And, so many things depend on the type of loan. The listing agent should know the different types of loans and what the implications are. The two biggest factors that change with loan types are time to get done and repairs required. Some loan programs will require you to fix certain things. So, you may be looking at two similar offers and decide based on price alone. Only, one loan type may cost you thousands in repairs that the other would not have. Oh, and of course, if the listing agent knows the loan types, then they can help you navigate those waters more smoothly and get the house closed on time. Common negotiating strategies- So many people think that the only thing that matters is price. But, this couldn't be further from the truth. Some buyers' agents actually overbid to get the house under contract, only to then negotiate the price during due diligence. Some look to have ridiculous contingency periods that protect them long after what is reasonable and well into the realm of abusive. Some overbid, knowing that the appraisal will knock it down. Other than perhaps the first one, these are not 'improper'. They are just strategies. There are more, especially when you get into different types of sale. Many negotiations are like chess matches. The good agents see the board from many different angles. Contracts- We use standardized forms. However, so many agents have misconceptions about parts of the form. It's as if we don't need to read and understand them, because it is a 'standard' contract. And, due to this complacency, many agents put their clients in jeopardy by an improperly completed field. #2) Communication- This is one of the most common complaints I hear. This is key. Not only to the seller, but also to other agents. I know how frustrating it can be calling a listing agent to show a home and not hearing back for days. Or, calling with a question so that I can submit an offer and hearing nothing. And, of course, communicating with the seller to let them know what is going on and what you are doing to get their house sold. #3) Willingness to invest time, money and resources- Listing agents are only paid if they sell the home. Due to this, some are unwilling to invest the proper amount of time or, more importantly, money to getting the listing marketed correctly. The shortcuts that they take will help their wallet, but it certainly doesn't help your home sell or sell for as much as possible. #4) Knowing our own limitations- I do not stage homes, nor do I take the photos that go on all my marketing. I hire a certified staging specialist and a professional photographer. Does this increase my expenses and decrease my bottom line? Yes. I could easily walk around and give you mediocre staging advice. But, I know that homes sell better when staged. And, I know that those photographs are what represents your home to millions of people. This is so very important, especially in upper price ranges. It isn't just about getting your home sold. It is about getting the most for your home in the shortest amount of time. #5) Counsel- Your agent is your advocate. And, they should be willing to go to bat for you at all times. That should never change. They represent you in this transaction. However, they should also be able to put things in perspective. The other party may not be in the right. However, it may cost you more in the long run to be right, than to let the other party have their way. The agent has to be able to frame those conversations. Like I said at the beginning, there is a lot that goes into being a great listing agent. It would be hard to pick the most important. I supposed it would be integrity. A person who has integrity would work on the rest because they would know how important each of these is. What do you think the most important attributes are? What is a Due Diligence Contingency? When going into a contract, there are several protections for the buyer. This post will be covering the due diligence contingency. IN other words, the deal is contingent on the buyer doing their due diligence. Due diligence is defined: Reasonable steps taken by a person in order to satisfy a legal requirement, esp. in buying or selling something. The due diligence contingency is active for a specified length of time. This time is negotiable and can be any length that the parties agree on. The seller will want this as short as possible and the buyer will want this as long as possible. This length of time is called the due diligence period. The easiest way to describe the due diligence period is a period of time that the buyer can terminate the contract for any reason. This is the time that you will get your inspection completed, get any additional information about the HOA you need to know, and, well, do your due diligence. In other words, discover any and all information that would cause or preclude you from buying the home. The most common reason that someone terminates a contract during due diligence is that the inspection uncovers an issue that the seller is not willing to fix. However, as mentioned above, the buyer can terminate the contract for any reason. If at any point during the due diligence, the buyer changes their mind, they get their earnest money returned. Don't hesitate to make an offer! As many buyers, especially those purchasing below $150,000.00 realize, there is a lot of competition in the market right now. There aren't enough homes being listed and those that are are getting put under contract within days, if not hours. If you want to sleep on it, you won't have the opportunity to purchase it when you wake up in many cases. So, right now, it is imperative that you put in an offer as quickly as possible, and use the due diligence period to fully investigate it and ensure you want to go forward. Word of caution: Some REO companies do not allow for due diligence, they have an inspection period. These are a bit more restrictive in the reasons you can terminate the contract. However, these companies move slowly in responding. You won't have signed contracts for a few days. Until the contract is signed, it is not binding and you can terminate. Final word: No one wants to rush the decision to purchase a home. It is a huge purchase and you want to be sure that this is the home for you. That said, you absolutely cannot handle these decisions the way we have traditionally handled them. You can't 'think about it'. You have to act. Be decisive and know you have protections if you discover something that makes the house not work for you. Oh, and of course, make sure you have an agent that knows how to protect you, and someone that can explain all the contingencies. Happy Hunting and good luck! Well, first, let me apologize, for being away from the blog for so long. I try to never let a week go by without posting something, but I have been busy being a good buyer's agent. (and a good listing agent, but that isn't the point of this post) If you are currently in the market, I am sure you have had this experience. You are looking around, maybe on http://www.metroatlantagarealestate.com/ , you find the exact perfect listing. You call an agent, and low and behold, the home is under contract, or even closed already. Or, lets say you are working with an agent, and by the time you are finding out about things, they are already under contract, you have missed the highest and best deadline, or you are competing against 60 other offers. Nope, that is not an exaggeration. 1818 Stonebrook Way, Lawrenceville, GA 30043 had over 60 bids. This can grow frustrating and disheartening. So, what does a good agent do? Well, first, a good agent should be setting your expectations. It is one thing to know all this going in, it is another to have missed out on four or five homes a month into it and then find out about this. A good buyer's agent should also set you up on a market alert system of some sort. If you are not getting daily emails with anything new that has come on the market that fit your criteria, then by the time you meet with your agent again and find it, it will be too late. If you have objected to the listing alerts, rethink your position. If your agent has offered them, rethink your agent. A good buyer's agent should know what is going on and be able to pull comps for you so that you understand what the true market value is and also show you what the current market is doing. Your offer is up to you, but if you are putting in unrealistic offers, that does nothing but waste time and cost you an opportunity to own the house you want. However, the flip side of that, bidding way over list price and buying well above market value isn't smart either. Yes, homes are appreciating. Yes, you are competing against other buyers. Yes, you will need to pay market value. No, you don't need to pay 10% OVER market value. As agents, our income and livelihood is not determined by how many clients we have or how many offers we write. Our ability to fee our families is determined by our ability to getting the offer accepted, and ultimately, you closing on that home. That puts pressure on the agent to, perhaps, push you farther than you should go. Again, remember, I led with the fact that you should be putting in realistic offers. But, your agent should be able to counsel you on that and why. Paying above market is fine and perfectly understandable in this market. So long as you love the house, and you KNOW you are paying at the top of the market if not above the market. A good buyer's agent should have a network of resources. The most important is a lender. So much of how well a transaction goes, is resting solely on the lender's shoulders. A bad lender can cost you the earnest money and the ability to close on the house you want. Not to mention loads of stress and frustration. A good buyer's agent doesn't get anything from a referral to that mortgage company other than the peace of mind that you will be well taken care of. Okay, so we also feel more comfortable that you will be able to close and that we will be able to get a paycheck. A good buyer's agent should also have a few good inspectors and home warranty companies as well. That is stuff that all buyer's agents should be doing. So, what is above and beyond. Well, we all know there is limited inventory and countless bidders. So, is your agent finding homes that aren't listed? If I can't find something that someone is looking for on the market, I knock on doors. Some seller's don't realize that they can easily sell their home right now. Does this work? Absolutely. I have several clients right now looking in the 130K and below price point. (this price point is in the highest demand of any) I have found two of them unlisted houses that I expect to go under contract this week. In a balanced market, you can afford to wait for the 'right' listing to come along. In this market, your agent needs to go above and beyond. A good buyer's agent take fiduciary responsibility seriously. Recently, I was helping a couple. I flat out missed a landfill that was proximate to the home they had just put under contract. You are probably wondering how you miss a landfill. I knew about the landfill. I did not realize that it was that close to the subdivision they were buying in. The entrance is well away from the home, it just covers a much larger area than I expected. Well, we found out about this AFTER they had put down a non-refundable $5000.00 deposit. It was new construction, and they were paying for upgrades. I knew that they were depending on me to inform them about anything like that. I made a mistake. So, I guaranteed that they would either get their money refunded, OR I would pay it from my pocket. Was there any legal requirement for me to do this? No. It clearly states in the contract that this falls under the buyer's responsibility. But, I knew that they were depending on me. That is why you get an agent, right? In the end, I was able to get their money back. (It is amazing how much weight it carries when your brokerage has such a huge market share in your area that the builder knows that a bad reputation would cost far more than $5000.00) Remember, you are hiring the agent to guide you in all parts of the transaction. Not just 'sell' you a house. This isn't a used car, and your agent shouldn't act like a used car salesperson. A good buyer's agent should be available and be able to give you answers. I am perplexed about how many calls I get from other agent's clients. Their agent is on vacation and they would just like to look at a house. Their agent can't figure out what is going on with a listing and on and on. Everyone should be allowed to take a vacation, but an agent should never expect someone to put their home search on hold while they take time off. I have other agents I refer things to when I go on vacation. (Well, if I ever to decide to go on vacation, I have other people to refer clients to) There is no excuse for not having another agent lined up to help in the event that they are unavailable. Buying a home is a big deal. And, there are important time frames that must be met. As far as the answers part of this. I admit, I have things that I look at that some agents don't know about, or don't think to look at, or are too lazy to deal with. Having the experience as an appraiser, loan officer and investor has taught me to be able to dig a little deeper than most agents. But, MOST of the time, any agent can answer most of the buyers questions about a property if they just took the time to look. Finally, a good buyer's agent is your advocate. When you look at the property, they are looking for any potential issues. They aren't directing your eyes away from them. When they talk to you, they make sure to explain the situation fully and all the ramifications, but when they are talking to the other party, there is no sign of weakness or lack of unity. They write the contract to best protect you, not obligate you. They negotiate the best they can to get the other party to compromise, not get you to compromise. So, if you are like me, you have a lot of logic built into you. You see that home prices are rising, and of course, we are still way off the highs that we saw a few years back. So, why not wait it out?
Excellent Question! I am so glad you asked, and there are so many factors, this is a long post. (If you start to get tired, at least skip ahead to 5-C, you do not want to miss what very few if anyone is talking about) Interest rates are incredibly low. This can affect you in three ways. a. If you are going to buy a home, then you are obviously going to be able to purchase more home with lower rates. b. In the same way, rates will affect your pricing as well. Once rates start going up (and they will), your homes appreciation, will slow, stagnate, or even fall. c. And something that you may not consider, the urgency will be gone from buyers. Sure, there will always be buyers. But, right now, buyers are worried that they are missing out on a great opportunity to buy when the market is off it's highs and the interest rates are so low. 2. Recovery to the highs of just a few years ago will not be seen anytime soon. a. Home prices grew well in advance of the affordability index. In other words, home values appreciated well above where they should have. Will that happen again? I am sure it will. It happened in the late 80's through early nighties. Then it happened in the mid 2000's. So, you only have to wait 10-15 years. (If then, if you read further, you will see why this may never happen again) b. Home prices were pushed up because buyer's buying ability continued to increase. The ability to get a loan at that time was much easier, and many loans were made that should never have been made. They had stated income loans, and if the person's occupation didn't 'reasonably' make that amount, then they would just do a 'no doc' loan. The lender was able to charge a higher interest rate, and the buyer was able to get a home that they would not otherwise have been able to. And, of course, real estate is always going up, so it was a smart...'investment'. c. Appraisal guidelines have gotten much stricter. The reality is that an appraisal is an opinion of value. And, appraisers are licensed or certified, they train under a mentor and they are required to perform their work ethically. Unfortunately, appraisers have proven to be corruptible on occasion. To combat this, the lenders have tightened the guidelines to require appraisers to provide much more documentation. Additionally, now, the appraisers have an appraisal management company review the appraisal even before the underwriter. So, even actual appreciation is harder for the appraiser to prove. And, as we progress in the information age, so many things are put to computer modeling. Home values are no different. As this has become more prevalent, the appraiser's discretion has become less so, and there is no reason to expect any reversal of this trend. So, any rapid rise in prices above the affordability index will be harder than ever to realize. 3. Scarcity. a. Believe it or not, there are many more buyers than there are houses. Our total inventory is about 3 month’s supply of inventory. And, this number is a little skewed because if we had more houses, we would have more sales. And, with sales occurring so quickly, agents struggle to keep their system updated and a large percentage of homes that are ‘available’ in the MLS systems are actually already under contract. So, the actual number is LESS than a three month’s supply. In many areas, homes below the median price point for the area are actually at less than a two month’s supply. b. Many homes that are priced right and in good condition are getting multiple offers and selling for above list price. (not kidding) c. Buyers are less selective, because they have to be less selective. 18 months ago, your home had to look like it belonged in Better Homes and Gardens to get market value. And, if not, your home would just sit on the market for months, or even years. Now, so long as the home is in reasonably good condition, buyers are willing to pay full market price. Remember, there is a sense of urgency combined with the scarcity. d. Homes, especially below $150,000.00 are being purchased at an alarming pace by investors. And, believe it or not, these investors are paying market value for homes. Why? They are basing their decisions on market rent and the low price of money. Foreclosures are first offered to owner occupants and non-profits. And, owner occupants are given preference for these homes. So, these investors now focus their efforts on sales from regular homeowners, just like you. 4. You are buying in the same market that you are selling in. Assuming of course, that you are actually buying another property. And, assuming of course that you have a good agent, like the wonderful and eloquent writer of this fine informational blog. Shameless promotion, which of course is the kind of promotion you need when selling your home. ;) a. This has been a valid point for the entire time of the down market. Especially if you were moving up in homes. However, many people were so upside down, that this was not even a possibility. b. The only way this doesn't prove out is if you are downsizing. I would still point out that you would be purchasing a home at what is most likely a much lower interest rate and that could greatly offset any losses that you would take on. 5. Your competition is coming. a. As the message gets out more and more about the market, there will be more and more listings from other owners. That will give the buyers more selection and they can be pickier. b. There is still a lot of foreclosure inventory that isn't on the market. Now, much of this has been sold to foreign investors and hedge funds, and it is being used as rental property. So, this may not come on the market anytime soon. And, banks, most likely, aren't going to turn loose of a bunch of property at the same time crashing the market again. But, they will start to offer more and more as time goes along. c. Builders are coming back....and at prices that will compete or even undercut you. So, the buyer will have a choice between your lovely home or a brand new home with the latest finishes and upgrades for about the same price, if not even lower. i. Before a brick is bought, before a foundation is poured, historically, a builder has to first purchase and develop the land. However, with the recent real estate implosion, many builders went out of business. That left large tracts of land and subdivisions that had already been developed there to be snatched up. And, snatched up they were… and for pennies on the dollar. In most cases, these already developed lots were purchased for less than ten cents on the dollar. Do you think that doesn’t factor into the bottom line? ii. The builders that have been sitting on the sidelines have been operating on a shoestring budget with a much smaller infrastructure. And, much of the land in our area has been acquired by large national builders that can produce a home at an even lower cost per square foot due to standard blueprints and materials sheets. They are able to cut the time of production and the waste of materials. They, bottom line are a leaner, meaner hungry competitor that is just salivating at the current market and lack of inventory. iii. Despite our improvement in the housing market, the job market has not improved. Therefore, these builders will be able to hire skilled craftsman at a much reduced price. Many of these people are still looking for work or vastly under employed, so they will come cheaper. I know that this is a long, long post. But, there are so many factors that indicate that the best time in the next three years or so to sell your home, that I wanted to make sure I pointed them all out. And, explain them to a point that you can see this isn’t just a ploy to get listings, but a heartfelt urging of you not to forego a great opportunity to sell your home and accomplish your goals. And, as with everything on this blog, this comes from the perspective of a Georgia Realtor and Inactive Certified Residential Appraiser with 15 years of experience in the Metro Atlanta area, and more specifically, the Gwinnett, Hall, Forsyth and Jackson counties. If you are outside of these areas, all of these factors may not apply to you. And, if you are in any of these counties and would like me to come show you the market specific to your area, and your neighborhood, contact me. Every market is location specific. Every price point offers different statistical variables and is affected by different market influences. You can contact me via phone at 678-318-4977, via email at dblantonkw@gmail.com, or via the contact form on this website. Remember this is a an overview for the entire United States. Call me directly for how your market is doing.
This morning I read a blog post about how the seller should not list their property for more than it will appraise for, regardless of what you can get it under contract for. I completely disagree. I come from a little different perspective, as I was a certified residential appraiser for 15 years. And, I know this will upset some of my peers in the appraisal business, and even some agents, but frankly, let the appraiser worry about the appraisal.
This is a hard blog to write, because I don't want it to come across as encouraging a seller to overprice their home. That is never a good idea. It will cause the home to sit on the market for months and eventually sell for less than if the home was priced right in the beginning. But, the reality is that you don't get to pick the appraiser and two different appraisers can see the same house very differently from a value perspective. Obviously, as the seller, you need to know if there could be some issues with the appraisal. Your agent should be able to go over what the homes in the neighborhood are selling for and how your home compares with those. With that said, it is always better, from the position of the seller, for the contract to apply upward pressure to the appraiser. Few appraisers like to come in low. And the first piece of information the appraiser gets about what your home is worth is the contract that shows what at least one person is willing to pay for your home. And, while they may not be able to make the value you wrote the contract for, the reality is that if you try to worry about the appraisal before hand, you can leave thousands of dollars on the table. Right now, the market inventory is low and interest rates are at historically low levels. Buyers see that home values are still below the peak of the market. And on top of all that, rental rates continue to go up and you can own the same house for far less than you can rent it. All of this combines to allow sellers to get a premium for their homes right now, and often to get homes under contract for above what it will appraise for. List the property for as much as you think it will go under contract for. So, no, I am not saying list it over what the market will pay for it. But, list it based on how it compares to other properties on the market and how it compares with the homes that have sold in the subdivision. If the appraisal comes in low, the seller and buyer have options. From a seller's perspective, they don't have to sell the property for less, but will probably be motivated to do so. From a buyer's perspective, they have already invested an inspection and appraisal fee into the property. This would be $700 on average. Depending on their financial ability, and how much they desire the home, they may bring additional money to the table. Or, concessions can be reduced such as closing costs. The lender can adjust the rate upward a little to pay for closing costs. This allows the seller to sell at appraised value and still get a similar net price. To sum up, let the appraisers worry about the appraisal. The seller and listing agents job is to represent the seller. Most seller's priority is to put the most money possible in their pocket, so list it for what you can put it under contract for. First, congrats on shopping the rate. That is a great first move. Too many people overlook this altogether. Loan officers are typically paid a commission by the lender to sell you a mortgage. The higher the rate, the higher the yield split, OR commission for the loan officer.
This is mainly focused at borrowers looking to buy a home. However, anyone looking to get a mortgage of any kind would benefit to read through. #1) Know that if you are purchasing a property, there is some risk if the mortgage company does not get the job done. Real estate contracts have a closing date on them. There is typically a seven day unilateral extension option on standard GAR contracts. However, after that, your earnest money will be in jeopardy. So, if your lender cannot close on time, you could lose the earnest money and the right to buy the house. #2) Know that if you are shopping today and can't lock today, that you will need to shop again when you have the property to get the lowest rate. Why? Well, first, there are some loan officers that will lie about what they can do today, so that they undercut everyone else you are talking to. Suddenly, those other names go in the trash, and when you go to lock in the rate, they have no competition at that point. Second, there are times the lender is trying to 'buy' the market. In other words, one lender may be less right now, but in two weeks, another one might be. Lenders, like every other business have a maximum capacity. When they get to that point, they may raise their rates a little to increase the margins to pay overtime, temp workers, or just to make it worth it to put additional stress on their system. If a lender is slow, they may lower their rates just a tick to keep the loans coming in. #3) There are direct lenders and mortgage broker. A direct lender is a company that will be handling the entire process. A mortgage broker has the ability to shop many different mortgage companies. So, which is better? A mortgage broker can often find the best rates. (they may also use that to just put extra money in their own pocket) However, mortgage brokers will often go with whatever company is giving them more profit for the lowest rate. If it is a difficult company to work with and your loan may not get done in time, many of them don't factor that in. Smaller direct lenders like Guarantee Mortgage and Brand Bank tend to have good rates and the ability to close on time, 99.9% of the time. (Especially if you have a good loan officer.) Larger banks are often the worst of both worlds. I have one specific large lender that I would never advise anyone to use. They nearly cost one of my buyers their earnest money TWICE. I won't say their name, let's just call them Stank of Amerika. If you are considering using a mortgage company that rhymes with this...reconsider. #4) When you get locked, ask for a copy of the lock sheet. Otherwise, the lender is playing roulette with your money. They are hoping rates go down, so they can make more money. Most, however, will not eat the difference if rates go up. They will call and make up an excuse as to why your rate is different. And, you may be two weeks into the process and need to close to save your earnest money and get the house you want. #5) There are new regulations that will protect you somewhat compared to five years ago. These keep loan officers from making a mint off of you. However, that is very limited and there is a lot of wiggle room. #6) And, this is very, very important. If you intend to be in the house long term, especially if it is the entire term of the mortgage, shop by the APR. The APR is the actual cost of the loan to you. Lenders can charge points and fees, and all sorts of different things as profit centers. A 3.5 interest rate with no points and low fees is most likely a better deal than a 3.375 interest rate with a 1 point origination fee. The APR factors in ALL costs for the length of the loan. This can make it MUCH easier to cut through all the fees and charges on the quotes. #6a) If you are planning to move in less than ten years, and the lower APR has higher fees up front, then you have more work to do. If the lower APR has higher up front fees, then take the additional fees and divide it by the amount of money you will save per month. So, if one payment is $25.00 per month less, but it costs you $2500.00 more to get the loan. You will break even in 100 months. So, if you plan on moving in less than 8 years, it would be smarter to go with the one that has the fewer upfront costs. |
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Testimonials 557886 David is awesome to work with. He knows the area very well. He is extremely responsive, always took my calls and answered my emails and txts. He truly ... more 5.0/5.0 by philipkupersavage 557657 David was extremely helpful.....We were very picky buyers & he never pressured us to look at a house outside of our parameters or place an offer... he ... more 5.0/5.0 by dwcourter 309784 Mr. Blanton helped us find the home of our dreams and he did by listening to what we wanted. He taught us about the housing market, guided us in the ... more 5.0/5.0 by user30821228 Archives
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