His Needs, Her Needs
July 9th, 2009 categories: Real Estate News, Relocating
Have you ever heard the popular phrase, “Men are from Mars, Women are from Venus” when discussing the differnces between men and women? Of course, as many people know, that phrase comes from the title of the best selling book by John Gray, written in 1992. While the title is often remembered, the subtitle, which is the essence of Gray’s book, is rarely, if ever cited. That is, “A Practical Guide for Improving Communication and Getting What You Want in Your Relationships.”
The author’s focus is on the differences between behaviors and desires of men and women. From there, the book centers on recognizing these differences and learning to communicate effectively to meet the needs of each party. Understanding the expectations of one another, and communicating each others’ desires, are two keys to a successful relationship.
Yesterday, a fellow agent held me captive while recounting their latest adventure with a client of theirs, who had decided they wanted to “move on” and use another agent. In this case, the clients had informed the agent that they believed the agent wasn’t meeting their needs. So, now, it was time to find another agent, one that would do a “better” job of keeping them informed of “all of their options.” According to the agent, the clients talked to the husband’s brother who provided them with valuable information their agent neglected to tell them. From what my fellow agent said, the client’s brother provided a layman’s explanation of the need to make “back up” offers on properties they liked. Specifically, back up offers on Short Sale properties they liked.
Well, for those of us that have handled a few Short Sales – back up offers on short sales, while doable, probably aren’t the easiest road to success. By the way, did I mention, the client’s brother has never had any training in Real Estate? None, zero, zip! Also, these clients wanted to be in a house as soon as possible. So, as many of you know, ASAP and short sale are mutually exclusive. In other words, you can’t get there from here.
After listening to the agent’s tale, I had to ask if they began their relationship with their buyer by doing a “needs assessment.” Were expectations discussed before they began to look for homes? If not, why not? As happens in many real estate relationships, especially with buyers, the foundation that is necessary for a successful relationship is never established at the outset. In the rush to run out and look at homes, the clients, and the agent, sacrifice the most important step that’s vital in establishing a successful relationship – business or otherwise. And when things in the relationship begin to break down, it’s usually due to a lack of proper preparation.
So, what should that initial needs assessment, or discussion of expectations consist of?
1. Clear statement of clients and agents expectations.
2. Ground Rules. The What, Where, When and Why of the relationship. This simply means a review, or preview of what the normal operational parameters are. With expectations already discussed, this clarifies how you’ll look for homes, who will do what, when various parts of the transaction will take place, where things will take place, etc. It’s simply a way of providing a clear picture to the client of the transaction from the outset to the settlement table. No one likes surprises, an this should preclude that.
3. A discussion of a Realtors responsibilities and our of Code of Ethics. This isn’t an in-depth conversation, but simply a reminder to the client of the professional they’re relying on to make their transaction a smooth one.
Unmet client expectations are never helpful in business relationships. To avoid them, it’s essential to clarify, from the beginning, in a manner understood by all, what’s to be expected from all parties involved. While it may temporarily delay the buyer’s house hunting road trip, it’ll likely prevent misunderstandings or problems further down the line. And in a Realtor’s business, where you aren’t compensated until closing, getting there is worth the reward.
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Four Steps to Getting the Foreclosure You Want
June 29th, 2009 categories: Real Estate News, Relocating
For many of us, the current housing market feels alot like, as Yogi Berra might say, “deja-vu all over again.” Five years ago, in the midst of the runaway market, many homes were on the market for less a day before we witnessed multiple offers presented to the seller. In hindsight, one might conclude that the market was “out of control.”
Today’s market landscape looks very similar. As they say, the players have changed, but the “song remains the same.” Much like then, the multitude of today’s bargains comes in the form of foreclosures.
While there’s been much in the press about the the ugly side of foreclosures (owners destroying the property, evictions, mold, etc), many foreclosures on the market are in excellent condition. Very much like the condition they were in when purchased at the height of the market in 2004-2005. Yet, many of these properties are purchased for 35-50 percent lower than what the current owner paid for them. And, in a few cases, even cheaper. But, how do you find these properties before the competition? How do you level the playing field with the investors that have been in the business for years?
While there is no full proof method for success, there are three important steps that dramatically improve your opportunity to successfully purchase foreclosed properties.
The Steps to Success
1. Identify the property the first day it’s listed for sale on the Multiple Listing Service (MLS).
Better yet, locate the property before its actually foreclosed on. many of these properties have been on the market prior to foreclosure, as a resale of short sale. If this doesn’t result in a sale, they’ll be ripe for the pickin’ at the lower foreclosed price point. But, once they’re on the market as a foreclosure, it is, as they say, “the early bird that gets the worm.”
Seeing it on day one of its listing on the MLS probably depends on getting that information from your Realtor. So, hopefully, your Realtor has set you up with a direct feed of Foreclosures. Most MLS programs now offer the Foreclosure option. If that’s the case, have your Realtor provide you an automated feed of new Foreclosures on a daily basis. While this step a must do if you expect to catch the listing on day one, the second step to successfully getting the foreclosure you want is equally important.
2. Strike quickly.
Submitting a contract as soon as possible is vital to getting your contract accepted. As I discuss with my buying clients, during the contract process, we take things one step at a time. Our goal is to “get to the next step.” By that, I mean that we take things one step at a time. In the case of a foreclosure, we want to have the first contract submitted. The sooner we submit a contract, the less opportunity we give competitors to do the same. Multiple contracts are NEVER in the interest of the buyer. The preparation or due diligence necessary to protect my buyer should have been done ahead of time. Things like looking at comparable properties, neighborhood issues, history of the property, unpaid liens, should be done prior to the offer. But, many of these can be examined prior to the submission of the contract. Another key to securing the property is the terms the buyer is asking for.
3. Make it Easy For the Seller
If your goal is to buy a foreclosure, many pruchasers are looking for as little work as possible. For REO, or bank owned properties that are on the market as foreclosures, the banks are looking for the same thing; as little pain as possible. Since the onset of the current mortgage meltdown, lenders have been inundated with defaults. They aren’t in the property management business, and want to rid themselves of their properties as quickly as they can.
Avoid contract contingencies. Routinely, foreclosed properties are sold “As Is“, which means the buyer will take the property just as it is, at the time of the offer. Should you include a Home Inspection contingency in your offer? That is certainly an option, but not one I’d recommend. Remember, your goal is to get to the next step and provide the bank with few, if any, reasons to say no. However, asking for a home inspection for informational purposes can serve the same purpose, if, at some point, after ratification you decide to withdraw from the contract. Additionally, often, in bank owned (REO) foreclosures, the necessary bank Addendums to the contract will often allow you to alter terms before the contract is “fully” ratified by both parties. While the interaction with various banks are routine and standardized, there are some often differences from bank to bank, with specific procedures. Many banks negotiate one contract at a time. And, you want your contract to be the one they’re considering. So, banks are keying in on the “net” cost to them, make sure your terms aren’t providing the bank a reason to say no to your offer.
4. Go with Experience.
Real estate transactions can be easy, or they can be…not so easy. Make sure you’ve enlisted the services of a professional real estate agent. What does that mean?
It begins with experience and competence. While those traits don’t necessarily go hand in hand, they’re often found in pairs. First, it helps to have someone on your side with foreclosure experience. While the transaction process is fairly straight forward, having an agent that knows how the process works, and knows how best to “work the process” is invaluable. They’re familiar with the necessary timing, procedures, and strategies to accomplish the objective. Further, as the process unfolds, they’ve worked foreclosures with banks previously, and understand what it takes to get you to closing. They have the experience and the competence to close the deal.
Good deals abound in today’s housing market for home buyers. Many of those deals come in the form of foreclosed homes. Capitalizing on the foreclosure opportunities involves a few simple steps. By taking the time to become aware of what’s available, and acting decisively with the aid of an experienced professional, you can maximize your chances for success. Of course, you first have to find something you want to buy. So, how hard is that?
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A Modest Proposal (On Improving the Practice of Real Estate)
May 18th, 2009 categories: Military Installations, Relocating
Previously, I focused on the #1 complaint voiced by Realtors about their profession of Real Estate, that being, other Realtors. After discussing the most prevalent complaints voiced by them, the article concluded by asking, “How do we improve the way we do business”? Since licensing requirements and/or standards vary by state, I’ll focus, specifically, on improving the standards of practice in Virginia.
If agents aren’t performing up to the standards our profession requires, how do we ensure they do? Is it a matter of better preparation? Better oversight? And, more importantly, how do we fundamentally change the way we do business? If the current standards used to conduct business aren’t getting the job done, if it isn’t compelling the type of professional behavior we want from our practitioners, what changes are needed?
Believe it or not, the National Association of Realtors(NAR) established professional standards for real estate practice nearly 100 years ago, outlined in their Realtor Code of Ethics. But, the Code is not law. For Realtors, the Code defines duties and obligations required in the public interest, which are beyond the capacity and power of the law to mandate, and supplements the law by requiring a higher sensitivity to the duties and obligations which it imposes. The Code’s “bottom line” rests upon putting the client’s interest first in the transaction.
While the Code of Ethics provides an excellent set of rules or guidelines, what are they worth if they aren’t followed, or Code violations not reported? Or, in some cases, for various reasons, not punished?
While few doubt the Code’s intent, many of my peers have voiced concerns over how well or closely those in our profession practice the Code. And, remember, adhering to to the Code is not optional. But, the Code is supposed to be a starting point. And, if the Code is a simply a beginning, what other preparation or training is needed to develop the standards we need to more effectively professionalize our business. Let me propose three steps:
1. Dramatically increase required Pre-licensing course work, to 60 college semester credit hours of only real estate coursework.
2. Mandatory, Standardized Mentoring Program for New Agents.
3. More Effective Use of Grievance and Professional Standards Processes.
Each of these recommendations will be examined in articles to follow. While these proposals aren’t new, the need for each hasn’t disappeared. Instead, according to anecdotal data, they’re needed now, more than ever.
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We’ve Seen The Enemy
May 13th, 2009 categories: Military Installations, Real Estate News, Relocating
One of the benefits of being a teacher or instructor is the interaction with peers. The opportunity for feedback is almost limitless. Discussions with students are almost always entertaining, and hopefully instructive. And the “instructive” aspect goes both ways. As many teachers will tell you, we, more often than not, learn more from the students than they do from us.
This column has been in the works for weeks. Well, at least I’ve mentally started it on various occasions. But, as life tends to do, other, more pressing tasks have, in the meantime, overtaken my schedule. But, yesterday, after coming across an article on the Real Estate blog, Agent Genius, written by our local Association’s Education Director, Matthew Rathbun, I was reminded of my article-to-be . Our director’s article echo’s the many complaints I’ve heard from students since stepping into the classroom as an instructor a little over a year ago. Their biggest complaint isn’t about the real estate process, or the contracts that they have to use, or the mortgage industry, or even the erratic appraisal business. Their biggest complaint is about other agents. And, it isn’t even close!
Complaints about agents aren’t something new. We’ve heard it for years from home buyers, home sellers, and yes, other agents. But, it reminds me of the outrage and uproar about members of Congress. How they are all crooked and self serving. Well, all of them except my Congressman or Representative.
What are the complaints about Realtors? They run the entire gamut, from lack of communication to various forms of “unprofessional” behavior. These include, in no particular order:
- Lack of communication – Difficult to get ahold of, not updating clients or other agents on the status of a property, not returning phone calls or e-mails, etc (you get the picture)
- Unaware of what real estate contract verbiage says or means – Unable or unwilling to explain what contract documents say to their clients, negotiating contracts based upon false assumptions or a misunderstanding of what the contract says (Do you know what broom swept or clean means?….and that’s the easy part)
- Not showing up – have you ever heard the term, “required formation”?
- Not being on time – agents are notorious for being late (and, yes, so are clients)
- Others….
Every profession has its share of complaints about the way business is conducted. But, normally, the majority of the criticism comes from consumers, or from the “cheap seats” (those critical of the business but not involved in it). But, our profession, the real estate industry, probably hears more criticism from its’ members than it does from outside sources. Are we just a profession of whiners or is the criticism justified? More importantly, if the critics are even close to the mark, how do we improve the way conduct business?
We’ll get into that on Page 2.
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Shrinking Revenue and Bigger Roads
May 22nd, 2008 categories: Real Estate News, Relocating
One of the many tasks our government (elected and otherwise) employees are responsible for is maintaining the roads. As I’ve routinely warned incoming clients, when it comes to day to day living in Northern Virginia, the “long pole in the tent” is transportation. With the area’s increasing population, and more and more cars on the road, traffic congestion seems to get worse every day. For commuters, getting to and from work can be a daily exercise in patience, patience, and more….yes, patience. In its attempt to bring in greater revenues to fund road expansion and improvement, agencies and politicians have had their sights set on increasing the homeowner’s grantor’s tax, which owners have to pay when selling their home in Virginia. 
In order to fund transporation improvements, not only are we going to see increases in our automobile related costs (motor vehicle rental tax, sales tax on auto repairs, vehicle safety inspections, etc.), but also place part of that revenue burden on the home seller. While we understand the need to improve/expand the roads (do we ever!), asking home owners to help foot that bill is questionable. But, as one of the Arlington County Board member said, “No one ever wants new taxes, but more people are recognizing that location is only valuable if you can get there.” The public has resisted efforts to increase the grantor’s tax. Voters rejected an increase in sales tax to pay for transportation in a 2002 referendum. Similary, following last year’s Northern Virginia Trasnportation Authority (NVTA) tax increase to pay for transportation improvements, the constitutionality of the measure was successfully challenged and overturned. Specifically, the Virginia Supreme Court ruled the General Assembly “did not have a constitutional basis to delegate taxation authority to NVTA.”
But, these efforts to squeeze the homeowner seems to know no end. In his call for a special June 23rd session of the Commonwealth’s General Assembly, to specifically address transportation challenges, one of the governor’s revenue proposals is an increase in the grantor’s tax by 25 cents. Opposed to this proposal is the Virginia Association of Realtors (VAR), specifically disagreeing with the statewide tax increase, which VAR fears unfairly taxes homeowners who won’t benefit from revenue generated. And, somehow, even if the increase in the grantor’s tax doesn’t survive this session, I’m sure we’ll be seeing it again real soon.
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