Getting to Know an Agent Before You Hire

As I discussed in my earlier post, the Internet has made the real estate industry and its agents much more transparent. And the disclosure of information much more apparent and accessible to consumers.

Wouldn’t it be great to know more about an agent before you actually decide to hire them? And to have information disclosed to you in advance? Well , you can – simply find them on the Internet and read (especially if they are blogging). And since many agents are now blogging, there is much you can learn before you make that big decision. You can read more about this approach here.

But keep in mind that there are limits. The issue of transparency, a popular buzzword in today’s Internet and blogging world, is hotly debated and there is disagreement on how much is too much vs. what should be shared with consumers. Where do you draw the line?

My question to you is…How much should I, a real estate professional, share with you, my readers. What do you want to know that you are not getting, and what are you getting that you don’t care about?

Here’s another article from someone I respect a great deal. She puts an interesting spin on this topic and raises some really good points to consider. Take a look.

Transparency on the Internet

I just started a series of posts on the issues of transparency on the Internet, and the real estate business. The nature of the Internet is such that is now allows more than a casual look into the real estate business, and those of us who work as agents.

Real estate information, once safeguarded by agents and brokers, is now available for all to see and use. And the agents who participate in the Internet through their blogs are, themselves, now transparent to readers. Who we are and what we are all about is less a mystery than in the past.

You can read more on this series about transparency and Internet research on my Relocation A to Z blog. I think you’ll find it intriguing.

To Buy or Not to Buy a Foreclosure

This is a tough issue, especially if you are a first timer. The decision to buy or not to buy a foreclosure can have implications.

On the one hand, given we are seeing more and more foreclosures, ignoring them may mean missing out on a potential great deal. Some of the these homes, depending on the reason for the foreclosure, are in great shape and you MAY be able to buy them at less than market value.  So don’t pass them by without doing some research.

But keep in mind the following. There will likely be multiple offers and lots of interest, so the price that the bank will accept can rapidly escalate. And often the bank has a price they will accept and nothing less. Also, banks will not, in my experience, do any repairs so you are buying AS IS. So doing an inspection, if you have the time and opportunity, is important so you know what you are getting. But the bank will not authorize any repairs, which likely will also include the termite inspection and corrections we see here in California. So, the question becomes – can you buy this property that needs work for less than market, and are you willing and financially able to fix it up?

Oftentimes owners who are foreclosed will trash the house, take and sell the appliances, and worse. So make sure you can tour the home and understand fully what you are getting. It may not be worth it compared to other comparable homes on the market.

I am not telling you to NOT buy, but to do your due diligence carefully, with your agent’s help and knowledge. A foreclosure MAY or MAY NOT be the right thing to do. Don’t make this decision hastily.

Have a great weekend.

Jeff

Do I Need to Use an Agent?

The question “Do I need to use an agent” may have crossed your mind on more than one occasion. You might be thinking about buying, or perhaps are already out looking on your own.

Well the answer is no – you don’t NEED to use an agent. But I think NEED is the operative word here. Certainly you can drive round and look at homes, visit the house that are held open on the weekends, and find properties on the Internet. You can call a for-sale-by owner on your own to arrange to see the property, and make an offer as well. So if you really don’t see the value or simply want to be in control and do it yourself, you can.  And quite frankly, if you feel very strongly about it, then I would not want to act as your agent in the transaction. We would both be frustrated.

I would challenge you, however, to consider a few things just to be sure you want to go it alone.

• Who will protect YOUR interests as the buyer? The sellers? Nope, they have their own interests to worry about. They want THEIR price, THEIR terms and conditions. How will you decide what price to offer?
• How will you gain access to homes that are not open houses and are being sold through a brokerage. Well, you can’t on your own. That agent will have to show you the property because that’s what the sellers want.
• How do you know you are finding all the properties that are for sale? And that they are priced well? How do you know what has sold and for what price?
• How much do you know about real estate contract language, buyer liability, your rights and obligations as a buyer, the actual paperwork that is required, the disclosures you must read and sign, when you can walk a way from a deal and not lose your down payment, etc.

Really, if you want to do it yourself you can. You may not get the best price, there will likely be surprises you weren’t aware of or expecting or now how to solve, you may make mistakes, or become incredibly frustrated since you have no one to talk to about what you are doing, and dealing directly with a seller in a negotiation can be a challenge. That’s your choice.

My advice is to make the decision that is right for you. If going it alone is what you want, then do it. Realize there will be implications for that choice, and deal with them. But as a consumer you might find it better to work with someone who knows the ropes. You decide.

Knowing When to Call it Quits

At some time in your home purchasing career (yes, there will be more than one, I can assure you), if not this time, you will need to be in a position of knowing when to call it quits.

I don’t mean to stop looking, but knowing when to say no in an offer negotiation. This is really important. It may not happen, if you make a full price offer or one that is close to asking, but in short sales, foreclosures and other situations where the seller’s price is high, or is above your budget, you need to say no sometimes. Just do it. Don’t feel badly, or quilty. But don’t get sucked into paying more than you should, or can afford. You will regret it, as so many sellers are finding now that the market has shifted.

If you are real close, then perhaps there are creative ways to reach agreement. But if not, it’s better to simply say “next” and move along.  After all, the sellers are willing to say no to your offer, or counter, or counter to their counter, so you should do the same if it’s the right thing to do. Yes, it can be heart breaking if it’s a home you love, but don’t let the emotions carry you away from reality.

Knowing when to call it quits can be a challenge. But not doing so has worse consequences. Trust me on this.

Thanking my Buyers…

I want to share a post with you that I recently wrote to thank some first time buyers I am working with. I think it will also provide some insight into things that buyers should consider doing in order to be effective that I have shared here.

I hope you will enjoy it, and perhaps learn something as well.

Have a great rest of the weekend!

 Jeff

So What do you Know About Credit Scores?

If you are like many of us, you may feel you don’t know much about credit scores – how they are calculated, what affects them, why banks use them, how they differ between the credit reporting agencies, etc. I know a bit about credit scores but I am certainly no expert.

Rather than try to explain what I do know, or to paraphrase a great article I just read, I thought I would share the actual article written by a colleague in the mortgage business, George Souto, who I respect a great deal. He writes well, is clear, concise, and very knowledgeable, and a recent post of his on credit scores is outstanding.

So, get ready for a good read. I am confident you will learn something of value, and hope you will enjoy it.

Will the Sellers Accept My Offer?

I get this question alot, especially with new buyers – will the sellers accept my offer?But any time a buyer makes an offer they are wondering if the seller will accept it. It’s all part of the psychology of the process.

Well, I don’t have a good answer. There is no way to know for sure. Although in my experience if you make a full price offer the sellers will accept it, unless there is something odd in your contingencies or closing date. But most buyers aren’t doing that these days, so they wonder – will the sellers accept my offer?

You can try to guess all you want. Or try to figure out the sellers’ motivation based on time on the market (some feel that the longer the marketing time the more likely the sellers will accept…not true), or perhaps from what you have learned from theMLS – “Motivated sellers” shows up frequently. But that really doesn’t tell you anything. Most sellers want to sell, don’t they?

You may have learned they have bought another place? Or are relocating? Or are getting divorced? Will that help you figure out what the sellers will do with your offer? Perhaps.

I wouldn’t waste a lot of time on this. If you are making a low ball offer based on comparables, chances are you KNOW what they will do – say NO. But if your offer is in the market range, there’s a good chance they will come back with a counter offer so you can negotiate. The first response from the sellers is generally pretty revealing about how things might proceed. Countering at full price, or coming down $1000 tells you one thing; a counter of $10K less tells you something else.

Oh, and keep in mind…the sellers are going to wonder…will buyers accept our listing price? Or our counter offer?

HAPPY VALENTINE’S DAY!!

Hope it’s a great one, however you decide to celebrate.

Are You Making an Offer on a Short Sale Home?

If you are making an offer on a short sale home, there are some things to be aware of.

If you are not familiar with short sales (there are lots of them, in many markets) or want a refresher, check out my post on the subject.

Making an offer on a short sale can, and probably will, be frustrating, so be prepared. Don’t expect this to go quickly, since you not only have a seller involved but also a lender. And there will likely be other contenders with competing offers. You might not get a response to your offer in the time you expect or want, but if it’s a house that really interests you I would simply wait it out.  And try to keep a positive attitude since it can be a frustrating experience.

However, since there is no way to know how it will turn out, you might want to continue looking at other homes while you are waiting, so you don’t waste time. Then, if things don’t move along, or your offer is rejected, you can make an offer on something else. And make sure your agent is staying in touch with the other agent so you are aware of what is going on.