Practicing Good Seller’s Etiquette

Let’s face it: When your house goes on the market, you’re not only opening the door to prospective buyers, but also sometimes to unknown vendors and naïve or unqualified buyers. As with any business transaction, there is an expected protocol to how sellers, buyers and their respective agents interact. Should you find yourself in a sticky situation, alert your agent so he or she can address and remedy the problem.

The unscrupulous vendor
Have you ever started a business or moved into a new house and suddenly found your mailbox full of junk mail? Unfortunately, this also can happen when you put your house on the market. When you sell your home, it necessitates all kinds of new purchasing decisions and less-than-ethical vendors are keenly aware of this. Though MLS organizations enforce rules on how posted information is used, some companies have found ways to pull information from various sources to produce mass mailing lists. If you find yourself regularly emptying your mailbox of junk, let your agent know. He or she can tap the appropriate sources to prompt an investigation into the matter.

The naïve buyer
Yard signs, Internet listings and other advertisements can generate a lot of buzz for your home. Some prospective buyers – particularly first-timers – will be so buzzed to see your home that they’ll simply drop by. If this happens, no matter how nice these unexpected visitors are, it’s best not to humor their enthusiasm by discussing your home or giving an impromptu tour. Instead, politely let them know that your real estate agent is in charge of scheduling tours and provide them with the agent’s contact information. If you attempt to handle these surprise visits on your own, you might inadvertently disclose information that could hurt you during negotiations down the road.

Eight important questions to ask your agent

Qualifications are important. However, finding a solid, professional agent means getting beyond the resume, and into what makes an agent effective. Use the following questions as your starting point in hiring your licensed, professional real estate agent:

1. Why should I work with you?
2. What do you do better than other real estate agents?
3. What process will you use to help me find the right home for my particular wants and needs?
4. What are the most common things that go wrong in a transaction and how would you handle them?
5. What are some mistakes that you think people make when buying their first home?
6. What other professionals do you suggest we work with and what are their credentials?
7. Can you provide me with references or testimonials from past clients?
8. Why did you become a real estate agent?

We would love to share with you our history in real estate and put our team to work for you.  Give us a call to meet whenever you’re ready!  770-606-0054

Why Should I use a Buyer Agent?

A Buyer’s Real Estate Agent:

1. Educates you about your market.
2. Analyzes your wants and needs.
3. Guides you to homes that fit your criteria.
4. Coordinates the work of other needed professionals.
5. Negotiates on your behalf.
6. Checks and double-checks paperwork and deadlines.
7. Solves any problems that may arise.

Let us know today if we can be your buyer agent!

USDA Funding Shortfall Leads to Changes-Update

For many looking to purchase a home, the government’s USDA program (100% financing) is the preferred option.  However the money for the program has fallen short.

As we previously posted, because of the funding shortfall, the USDA program is receiving additional scrutiny because of its  no downpayment provision and 2% guarantee fee.  The House of Representatives has now passed a bill extending the USDA housing program.  The bill raises the guarantee fee to 3.5% (from 2%).  Last week, Barney Frank, Chairman of the House Financial Services Committee, mentioned that conversations were underway with the Senate and was hopeful that the extension could be completed before funding expired in early May.

We’ll keep you posted of any new legislation or changes that could affect the way you buy a home.

Post Contributed by Shane Siniard with WR Starkey Mortgage

What will the new year bring for housing and real estate? It’s easy to look at all the negative economic news in the headlines and say – there’s no sign that 2009 is going to be any better than 2008.

But here’s a different perspective to consider from one of the country’s veteran financial analysts — Richard Bove of Ladenburg Thalmann, the investment banking company.

In a research report issued late in December, Bove said he sees a positive dynamic taking shape in the current cycle. The government has intervened aggressively in the markets to push interest rates down — most notably in the home mortgage sector.

Though it takes awhile for low-cost money to begin having its effect, Bove said he expects “housing prices to stabilize and/or rise (in 2009) after a likely boom in mortgage refinancings as rates fall and loan applications increase.”

Add in the expected massive economic stimulus package being put together on Capitol Hill with the incoming Obama administration — and there’s a good chance we’re going to see a gradual transformation of the downward cycle into a slow rebound over the coming several quarters.

Already there are positive signs of the turnaround Bove predicts:

 
• Mortgage applications are off the charts, mainly for refis but also to buy houses at affordable prices. 
• Rates continue to hover at 50-year lows – five percent and even four and three quarters percent for 30-year mortgages, and still lower for 15 and 20 year mortgage terms. 
• Plus we’re all paying a lot less at the gas pump, and sharply discounted prices for retail goods and autos. 
• And guess what? Americans are actually SAVING again, the national savings rate took a nearly three percent jump last month. That might sound small, but it’s hugely important if it is the start of a trend.

There are also some signs that housing prices are stabilizing in some parts of the country. The latest monthly Federal Housing Finance Agency index found home prices UP by six-tenths of a percent in the Mountain states and UP by two tenths of a percent in New England.

You can ridicule small regional gains as statistically irrelevant, but here’s Realty Times’s economic proposal to you for the New Year: Keep your eyes open for the small positive signs that are accumulating out there … because all downcycles tail off and come to an end.

We think the smartest players in real estate — consumers and the industry – will make the most of the positives — low-cost money, low prices, stabilizing local markets — and thrive in the new year.

Written by Kenneth R. Harney

When you hear Napa, Sonoma, and Solano, you may think more about cabernet sauvignon and chardonnay, not condominiums. However, one of California’s wine country sides is becoming one of the hottest condo markets in the country.

Condo sales in the nine-county area surrounding the San Francisco Bay are shooting through the roof, ranging from sales increases of 2.7 (San Mateo) to 188 percent (Sonoma). The Marin Independent Journal reports the upward swing of each county year over year for the month of September 2008. The driving force is the downward spiral of prices over the last year in the region.

Solano County has experienced a drop of 67 percent year over year, and had a median condo sales price of $92,000 in September – down from $284,000 in September 2007. While foreclosures and economic uncertainty have driven the sales prices of housing in central California, “in Marin, foreclosure sales … accounted for 14.9 percent of total sales, continuing a steady increase from 13.5 percent in August and single digits a year ago,” according the paper’s online version at marinij.com.

The paper quotes Coldwell Banker broker George DeSalvo, “who specializes in real estate owned, or REO, properties that have gone through foreclosure, said Marin’s real estate market has ‘touched bottom.’

“When you sell a condo in the (San Rafael) Canal district for $225,000, that’s perceived as the bottom of the market,” he said. “The investors are coming out and they’re buying these for 50 cents on the dollar.”

Written by M. Anthony Carr

Here’s a key question about the current market: Do you look at home prices to figure out where we are in the real estate recovery cycle, or do you focus on sales?

In an economy where an estimated 35 to 40 percent of all home transactions are foreclosures or short sales – distress situations in other words — prices won’t really guide you much beyond the conclusion that: We’re still “correcting” the excesses of the boom years, still peeling back those wild and unsustainable hyperinflationary price run ups.

So it’s no surprise that median prices are down, year to year, in a majority of large markets across the country.

Sales statistics, on the other hand, tell you how fast buyers are responding to those lower prices — and greatly improved affordability.

Right now, in market after market, sales are picking up tempo — especially in places where prices once spiraled out of control.

Third quarter sales of existing homes in the U.S. were up by 2.6 percent over second quarter 2008 levels, according to the National Association of Realtors’ latest study.

That’s not spectacular — but let’s face it: It’s forward movement … and we’re in a recession.

In the Western states, sales were up by 13.1 percent in the third quarter! In Florida, sales jumped by 5 percent from year earlier levels, while median selling prices were down by 20 percent.

In a majority of Florida’s metropolitan markets, sales were up, year over year. For example, Orlando sales were 10 percent higher this October than the year before. Sales were up strongly as well in hard-hit Ft. Myers and much of the west coast of the state, and Fort Lauderdale, north of Miami.

Similar recent upturns in sales are occurring in many of the California markets where prices have plummeted during the past two years.

No question that a high proportion of these sales are distress situations.

But that’s what the bottom of a real estate cycle looks like: Value-savvy buyers see the opportunities, move in and mop up the mess left over after the big party.

Happily, in this cycle, they’re getting real help from the capital markets: Mortgage money is at historically-attractive low levels, and is readily available to anyone with a downpayment and reasonable credit.

Rates fell again last week to an average 6.16 percent for 30-year fixed loans, according to the Mortgage Bankers Association, and to 5.87 percent on average for 15 year loans.

If you can spot the opportunities — and have the resources — it’s not a bad time to be a buyer.

Written by Kenneth R. Harney

  If you’re putting your home on the market, better be sure you’re ready to tell all — good and bad.

“The majority of lawsuits or claims that occur are as a result of buyers finding out about something that is wrong with their property after the close of escrow and coming to the belief that the seller knew but didn’t tell them,” says real estate attorney, Peter Solecki of Winton & Larson, LLP.

Disclosure is vital. In one extreme case, it may have spared a seller from going to jail and even saved lives. The New York Times reported on a trial back in the late eighties that found the seller of a home guilty for not disclosing to the buyers that the home’s heater had malfunctioned. The buyers and one of their children were asphyxiated by fumes from a gas-fired heater used to de-ice the driveway of their home. Only their four-year-old child survived. The seller was convicted of involuntary manslaughter. This case is believed to be the first of its kind where a home-seller was held criminally liable for the sale of a home that had a fatal defect.

While certainly this isn’t a typical scenario. It gives good reason to pay attention to the details that you’re disclosing when selling your home. It’s not worth it to leave off some important details just because you think the home won’t sell or will sell for less money if you disclose any problems.

Reporting problems about your property prior to the sale of it can be done through various reporting mechanisms such as the Transfer Disclosure Statement (TDS). But Solecki says some disclosure reporting statements are written in the present tense, which creates a reporting dilemma for some sellers.

“The seller will look at the Transfer Disclosure Statement and say well there was something wrong but it’s not anymore; therefore, I don’t have to disclose it,” says Solecki. He adds, “If [sellers] haven’t disclosed it and it turns out to be a problem, then you have a potential significant issue, whereas if it’s been disclosed, then the buyer can elect what to do with it.”

Chances are buyers won’t decide to do anything further says Solecki. He says this is because the problem has been disclosed by the seller and reported that it’s been fixed. This will allow the buyers to feel that the problem has been completely resolved and therefore will not hold up the sale of the home.

Reporting all problems with the home regardless of whether they have been fixed is the safest way to sell your home. Making sure you keep good records is vital because, as the years pass, many sellers forget about all the repairs they’ve done to the property.

“Every homeowner should have a file of everything they do to the house,” says Solecki. This file should be given to the buyers for them to review. The file should show all problems and how they have been repaired, complete with receipts.

Solecki says this is a step above what many states require a seller to do. “Even though legally there’s no real requirement to tell about fixed problems, those are as critical as the existing problems.” He says when you don’t report a problem, buyers generally learn about it from neighbors and then assume that you were not telling the truth when you sold the home. Fortunately, Solecki says most buyers tell the truth.

“They’re not going to hide stuff because any buyer is going to find out thirty seconds after the property closes because there will be a knock on the door from the next door neighbor, with a plate of cookies, who will tell the buyers everything that happened in the house for the last three decades,” says Solecki.

But many sellers resist disclosing problems for fear that their homes won’t sell. “That’s the fallacy. People think if I tell the truth about my house, a buyer won’t buy,” says Solecki. But he says if you sell the home with a problem and the buyer finds out after the close of escrow, the buyer will likely file litigation to resolve the problem—creating a huge headache.

If the seller properly discloses all issues with the home, then the buyer can make an educated decision to buy or not. “The fact is that the vast majority of buyers don’t walk away. They decide to buy a house because they’ve determined it’s the house for them. Once they’ve made that decision they usually find a way to make it work,” says Solecki.

So, when’s the best time to disclose? Right away. “Your agent will get whatever negative information there is out there as fast as possible. Once buyers make a decision to go forward they will have made their decision based upon all these factors, including that one,” says Solecki.

When you tell all before you sell, you’re positioning yourself not only for a successful home sale but also a headache-free post sale. “[Not disclosing information] is the primary post-close-of-escrow issue because that’s what leads to significant damages which is what leads to lawsuits,” cautions Solecki.

Written by Phoebe Chongchua

                          When you look at your calendar you may find the months already overloaded with seasonal obligations — shopping, entertaining, children’s pageants, charity work, decorating the house, and so much more. If you are also trying to sell your home, you are under extra pressure to keep your home in “showtime” condition. And that could be the last thing you need before the holiday spirit is broken.

It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded with not enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right?

But wait! Most top Realtors agree that taking your home off the market during the Christmas season is a mistake. The house surely isn’t going to sell off the market! What is the advantage of that? So you’re busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things.

The holidays are a wonderful selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. Most agents like the holidays because the buyers have more time, and they can look at homes together.

Before you take your home off the market, consider the following points:

Bailouts, bailouts and more bailouts: That’s pretty much all they’re talking about up on Capitol Hill right now, but some of the bailouts have direct and potentially important impacts on home owners and real estate.

At a congressional hearing last week, House Democratic leaders put the Treasury Department on notice that if it wants to draw down the second half of the $700 billion mega-bailout package, it will have to commit to a massive program of mortgage modifications to keep thousands of homeowners out of foreclosure.

California congresswoman Maxine Waters put it this way to Treasury bailout chief Neel Kaskari: “Don’t come here and ask for another penny,” she said, “because if you do I am going to work 24 hours a day” to block you.

On the same day, Waters introduced legislation that would require the Treasury to adopt a plan advocated by FDIC chairwoman Sheila Bair to systematically lower payments and soften terms on tens of thousands of delinquent mortgages.

Congressional Democrats are angered by the Treasury’s main use for the first $350 billion of the bailout funds approved by Congress in October: Most of it’s been handed to banks, rather than using portions of the money to assist individual borrowers facing financial troubles.

Now the Treasury is talking about creating a new bailout program for home buyers and the building and real estate industries by cutting mortgage rates to four and a half percent.

The program could cost the Treasury billions in subsidies to pay for the rate “buydowns” — money that presumably would come from the second $350 billion left in the $700 billion fund.

So reportedly the Treasury is now working on some form of large scale loan modification plan — in part to gain access to some of the $350 billion.

But here’s a complication that surfaced last week: A new federal study found that more than half — 53 percent-of delinquent home owners who receive modifications on their loans RE-DEFAULT within six months. At that point, they’re back where they started – heading for foreclosure.

Since Bair’s plan would provide federal guarantees to lenders to lower their losses in the event of re-defaults after six months, Treasury officials believe it could cost many billions of dollars and still not prevent foreclosures.

Bair and her supporters argue to the contrary: If you modify a loan effectively, they say, not just lowering the interest rate but cutting the debt balance, you achieve more successful results and permanently keep owners out of foreclosure.

That’s the crux of the current bailout debate.

Written by Kenneth R. Harney