5 Top Tips for Sellers to Choose the Best Purchase Offer

Your house is for sale and what you want more than anything is to get it sold quickly for top dollar.  If you made it appealing to buyers and priced it correctly to begin with you should receive offers pretty soon after it starts showing on the internet.

Once you receive a purchase offer, you can accept it, reject it, or propose a change in terms and/or conditions by making a counter-offer.  Keep in mind that all terms and conditions are negotiable.

  1.  Keep your emotions out of the process.  Yes, this is likely the home that you have enjoyed for a period of time and you will no doubt have mixed feelings about the move.  The prospective buyer doesn’t have any history with this house and is often less emotionally involved in the process at this stage.
  2. Think about what is most important to you about selling this property.  Is it getting the highest price, being able to move on your preferred schedule, or something else?  If price is the primary factor, you may need to compromise on closing date.  If the date for you to move is more important it may require a compromise in price or other terms.
  3. If your property receives multiple offers, your real estate consultant can (and should) prepare a method to compare the relative merits of those offers for you.  Ask for their best recommendation and reasoning as to which offer will most likely provide the optimal outcome.
  4. Review all the terms and conditions.  Yes price is important, but what else is at stake?  Is the buyer asking for closing cost help?  Do they want you to leave appliances or other personal property included with the purchase?
  5. Make sure the buyer is actually capable of completing the purchase.  The purchase offer should include a pre-approval from a reputable lender that your real estate consultant has already spoken with and proof of funds needed to close the transaction.  Because your property is no longer being marketed once you have accepted an offer, you want to be sure that offer has the best possible chance of concluding successfully in a closed transaction.

Remain flexible and use whatever information you can to negotiate the best terms of sale.  For example if the buyer needs to move quickly, you may be able to hold firm on price provided you can compromise on an accelerated closing.

Above all, make sure that you are comfortable with and understand how the process progresses once you have an accepted offer.

This is one in a series of articles designed to help the consumer navigate the world of a real estate transaction.  Real estate is local, and working with someone who knows the area and the specific issues that may affect your transaction is important.

Sally Sig extra smallPlease share your thoughts or questions by commenting below, emailing me at Blog@93561Home.com or phone / text at 661.375.REAL (7325)

 

Should You Pay A Record Retention Fee When Buying or Selling a Home?

Whirlpool 3159698458_ec3c3f3c23Most real estate agents work on a commission basis.  That means that whether you are buying a home or selling your house, the agent representing you is most often paid as a percentage of the purchase price.

An excellent agent is worth every penny they get paid.  And sometimes, worth much more than the commission earned on a particular transaction.  For example, right now I’m involved in what should have been a simple, slam-dunk transaction that has dragged on for 10 weeks and involved much more time effort and energy than any of the multiple transactions I’ve already closed in the same time period.

But I digress.

The point of this article is to make you aware of transaction-related fees that may appear on your closing statement and are often presented by a real estate agent as a “requirement.”  We’re talking about “transaction,” “processing,” or “records retention” fees that are disguised as required  in order to close your transaction.  I have heard that these fees can vary in amount anywhere from $100 – $1000.

These fees bother me for several reasons.  Foremost, is that those types of fees are simply the cost of doing business. The law requires that certain documents are included in a real estate transaction (transaction fee to make sure all documents are property executed).  Processing fees may be interchangeable with transaction fees but sometimes are charged by a third-party (for example in the dwindling popularity of short sales).  The law also requires that real estate brokers retain their records for a specific period of time (records retention fee, anyone?).

Keep in mind that each real estate brokerage sets their own business policies. The brokerage may indeed require these fees for their own transactions.  The good news is that there is no legal requirement to include these extra fees in your transaction.  In fact, paying those fees is a bit like watching extra money flushed down the drain.  So, what can you do about it?

If you are already in an active escrow transaction, and you love your agent, the best thing to do is have a discussion about the fees and negotiate those fees to satisfy yourself.

If you are just getting started with buying or selling a home, make sure that one of the questions you ask the agents you are interviewing is whether or not they charge any fees in addition to the commission.

It’s important to interview the agent you plan to work with in order to make sure you are a good match.  One of my favorite questions to ask is “do you discount your commission?”  Curious about the ramifications of the agent’s answer?  Call, text or email and I’ll be happy to discuss it with you.   If you would like a list of great questions to ask when interviewing, please let me know.  I’ll be happy to share that with you as well.

Is there ever a time that you might want to pay the a la carte fees?  I suppose if you decide to hire a discount broker and the addition of the fees doesn’t get the cost above what you would have been paying you could consider it.

One caveat to keep in mind is that “you get what you pay for.”  In the case of these extra fees, you are paying for what you are already getting.

Personally, I believe that if an agent is going to work on a contingency basis, as I do with the majority of my clients, than the commission should cover all the costs.  There are certain cases when I also will work on an a la carte basis, but then the client is fully informed of each of the fees he or she may encounter for my services.

This is one in a series of articles designed to help the consumer navigate the world of a real estate transaction.  Real estate is local, and working with someone who knows the area and the specific issues that may affect your transaction is important.

Sally Sig extra smallPlease share your thoughts or questions by commenting below, emailing me at Blog@93561Home.com or phone / text at 661.375.REAL (7325)

 

Would you let a car mechanic perform heart surgery on you?

If this is the extent of your real estate holdings, you probably don’t need this article. If you have, or want, more — keep reading to find out what you need to know.

Would you let a car mechanic perform heart surgery on you?  No?  Every day many consumers unwittingly put themselves in a similar position when they become involved in a real estate transaction.

Below is an excerpt from an email I received, apparently exhorting me to abandon the Associations of REALTORS® that are largely responsible for upholding standards of professionalism within the real estate community.

No NAR, CAR, local AOR and Realtor dues. Stay in business.

It’s that time of year again! You have to pay your NAR, CAR and local AOR dues. We know that this is a costly expense and many agents choose to quit the real estate industry rather than paying these dues. Don’t quit, our brokerage will help you to stay in the real estate business without having to pay unnecessary expenses!

If you would like to keep your real estate license active, but do not want to pay even for MLS access, we have an option for you too. This option will permit you to stay in the real estate industry, buy/sell houses, and receive commission without having to spend any money on a single membership. 

Frankly I find the entire message offensive and chose to share it with you so that you could have a glimpse of what goes on “behind the curtain” in the real estate business.  To be clear, I am a licensed Real Estate Broker in California, so some of this may not apply to other parts of the country.

For me, it starts with the subject line.  It indicates that abandoning the professional organizations that are in place first to protect the public is somehow going to benefit the agent or the consumer.  And that somehow, by doing this, that agent will be able to “stay in business.”

Seems much more likely that it’s a fast road to leaving business.  By disassociating themselves from the Associations of REALTORS® (AOR), these agents are losing a lot — but the public that deals with them stands to lose even more.

A quote from the Danger Report sums the issue up nicely:

The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents. This knowledge gap threatens the credibility of the industry.

The company that sent that email soliciting me to join them seems to be promulgating the problem.

37% of the agents did no business in 2015 according to our local MLS statistics.

According to the Danger Report, an agent with no more than 2 years experience is earning a gross median of $9100 annually.  What about more experienced agents?  The overall median gross income is approximately $45,500. Combine that with the average $6500 in expenses and it becomes more apparent why the email I received may be appealing to so many of the non-productive agents.

I suppose it’s possible that I’m wrong, but it seems to me that the agents’ earnings do have a bearing on their competency.

  • If the earnings are so low, how much experience with different issues can they have?
  • How up-to-date are they on changes in law, necessary documents, disclosure requirements, etc?
  • What kind of familiarity and relationships do they have with other area agents?
  • What is the likelihood that those agents would even recognize the validity of these questions?

I’m not going to tell you that all REALTORS® are great, or that all of those who heed the lure of lower fees (as advertised in the email) are horrible because you already know that’s not true but I will tell you that overall there is a difference and you deserve to know what kind of help you are getting.

This is just scratching the surface of the differences between REALTORS® and those that are governed merely by the state provided license.  To find out more, feel comfortable giving me a call (661.375.REAL), sending an email (ProsBlog@YourRealAdvantage.com) or commenting below.

 

5 Easy Ways to Save Money in 2016

Save Money

As a new year begins, many folks are making resolutions about how this year will be different than last year.  One of the popular resolutions each year is to save money.

What’s important about saving money to you?  Thinking about a vacation, a new car, or buying a home?  No matter what’s important to you, these tips can help with the savings.

So let’s look at the top five easy ways to save money in the new year:

  1.  Smoke AlarmChange your smoke alarm and CO detector batteries.  The generally accepted advice was to do this task when switching two and from Daylight Savings time.  That would have you changing the batteries twice each year.  Current batteries typically last 18 months, so by changing them once each year you save several dollars and some time.  If you are disciplined enough you could even set a calendar reminder to do it every 14 months or so and save even more.
    • Keep in mind that newly purchased smoke alarms will most likely be of the 10 year non-replaceable battery type.  That means the task of changing batteries for those devices won’t even exist.
  2. Change your lightbulbs.  If you’re still using old-fashioned incandescent bulbs — those are the ones that Thomas Edison invented — it’s time to mlightbulbake a change!  Those bulbs are the most expensive kind to operate.  Consider replacing them with CFLs (Compact Fluorescent Lightbulbs) or LEDs (Light Emitting Diodes).
    • CFLs are less expensive to purchase, but they don’t provide full brightness immediately when you turn them on.
    • LEDs cost more to purchase but virtually never need to be replaced and are the least expensive to operate.  LEDs provide full brightness as soon as you turn them on.
  3. Adjust the temperature on your water heater.  Setting the water heater to a lower temperature reduces the amount of time the water heatHW Heaterer has to run in order to maintain the temperature in the tank.
    • A 10℉ reduction in temperature can save 3 to 5% on your water heating costs.  It will also reduce the likelihood of scalding injuries.
  4. Wash your clothes on cold.  Not only does this save money because you are not paying to heat the water for washing, it saves wear on the hot water heater and on your clothing fibers.  It’s a win-win-win for savings.
  5. Get rid of cable.  Cut the cable cord and save money on entertainment.  Consider using streaming services to watch only what you want.  Use the time saved to do something fun or educational.