4 Things to Know About Buying a 'For Sale by Owner' Home

During the home-buying process you’ll see tons of homes, mostly listed by real estate agents. But from time to time you might encounter a home listed for sale by owner (FSBO). You may even have a friend or relative who wants to sell you their home directly.

While it may seem that buying a FSBO home without involving real estate agents would simplify the process, this isn’t necessarily true. Here are some points to keep in mind when you’re looking at a home for sale by owner.

Most sellers will work with your agent
Smart home sellers know that most buyers work closely with a buyer’s agent for weeks (if not months or years), and they will plan to compensate the buyer’s agent just like any other seller would.

Buyer’s agents act as advisers through the ups and downs of the home search. If a FSBO opportunity crosses your path, ask your agent to make the first contact. Most likely they can still work for you and get paid for their efforts.

You shouldn’t think of the home differently
If you find a great home in a prime location that meets all of your criteria, don’t think of it as any different if it’s listed FSBO rather than listed by an agent.

The main thing to keep in mind is that you will meet and see the owner face to face. A home sale is more emotional and personal than, say, the sale of a used car or a piece of furniture. As such, seeing the owner might make you uncomfortable.

Try to get past it and keep your eye on the prize: your dream home. Leverage your agent, and be ready to ask for time alone in the home if you need it.

Laws still apply
If the law stipulates that the seller has a duty to disclose problems, inspect the home, or perform any repairs, the FSBO must cooperate.

The problem some sellers have with going solo is that they aren’t familiar with real estate processes or procedures. Or they want to do it their own way.

Trust your gut and your agent’s judgment if you think the seller is neglecting a duty or not allowing you to do your due diligence.

Even if the home is great, it might not be the right opportunity for you. If it doesn’t feel right, move on.

Pricing may be off
Homeowners who list their home themselves tend to share one thing in common: They reject local agents’ opinions about their home’s value. Sellers (FSBO or not) who are unable to emotionally detach from a home or who don’t have a solid plan post-closing sometimes self-sabotage their sale by overpricing.

These sellers typically meet with local agents before they list. But they don’t like the agent’s pricing strategy and want to give it a stab on their own.

Sometimes, when they fail to sell solo, they enlist the help of an agent, and get the home on the market at the right price. Why? Because when it comes time to get serious, sellers often want representation.

But if you love a home, and the price is off, move on to the next, whether listed by owner or agent.

A home for sale without an agent isn’t off limits. Ask your agent about the listing, and be open to seeing it and treating it just like any other opportunity you or your agent finds.

A good real estate pro should tell you up front that they could represent you in any sale. Go in with your eyes wide open and know that, just like any negotiation, it may or may not work out.

Source: Zillow Pourchlight, Brendon Desimone
http://www.zillow.com/blog/buying-for-sale-by-owner-home-204781/

7 Times You’ll Need Extra Paperwork to Get a Mortgage

When you apply for a mortgage the first time, or if you’re a little rusty on the process, it’s reasonable to expect some shell shock when you’re told what documentation you need to gather, as there’s often quite a bit of it. If you plan to buy a home in the near future, a good best practice is to save all paperwork just in case it’s something you end up needing.

Some of the initial information lenders may ask for includes:

• Tax returns for the past two years
• W-2s for the past two years
• Pay stubs from the past 30 days
• Asset reports for the past 60 days

These are the basic essentials, although you may be asked for other items, such as:

• A financial paper trail
• Specific dates on previous derogatory credit events
• A marital settlement agreement (MSA) from a previous divorce
• Any missing pages of bank statements
• Any missing pages of tax returns
• Details outlining anything that appears inconsistent

It is a good idea to provide the financial documentation to a lender as quickly as possible. Any delays in submitting these documents may postpone your interest rate lock as well as your ability to perform on your real estate contract. (Remember, a good credit score can help you qualify for the best terms and conditions on a mortgage and even help you afford a bigger mortgage. You can see where you currently stand by viewing your two free credit scores, updated each month, on Credit.com.)

To help you establish what other information you might need, consider the following.

1. You have undocumented money

If you have additional deposits in your bank account, other than your income, you will need to paper trail and source them, whether you plan to use that money for the loan or not. Lenders cannot ignore money in your bank account that cannot be documented.

2. You’re divorced

If you were divorced, even as long as 10 years ago, a lender may ask for a copy of the full divorce decree with all pages and schedules, including the marital settlement agreement. Even if you mark the “single” box on the mortgage application, lenders run a background check and will see any previous marital statuses, addresses, or names. If you didn’t provide a divorce decree upfront, lenders will likely ask for one after the background check.

3. You’re not a U.S. citizen

Two instances when you’ll be required to provide your birth certificate are if you are unable to provide picture identification or if you note on the application that you are not a U.S. citizen. In these instances, an underwriter will generally sign off on your loan without the supporting document. One way to prevent unnecessary holdups related to your birth certificate is to go over all raw data on the loan application and make sure you answered all of your declarations questions correctly.

4. You’ve been through a short sale

The final settlement statement from the transaction is critical. Many mortgage loan programs have a waiting time to be eligible for new financing.

5. You’ve been through a foreclosure

You’ll want the date of the trustee sale. This is usually accomplished by obtaining a copy of the trustee’s sale date deed from your local recorder’s office.

6. You’ve filed for bankruptcy

If you filed for Chapter 7 or even Chapter 13 bankruptcy, you’ll need all the pages and schedules, including the schedule of creditors specifically identifying everything associated with the discharge. The discharge date is the date at which the waiting time starts to secure new mortgage loan financing. Even if you’re already past the date, but you don’t have all the Chapter 7 paperwork, your new loan process for buying a home can be put on hold until you have all of the appropriate documentation.

7. You’ve had a loan modification

You will need the full loan modification agreement you signed with your original loan servicer when you apply for a new mortgage.

Lenders do not intentionally try to make you provide more paperwork when buying a home. Based on your financial picture it might be necessary in order to meet federal compliance regulations all lenders must abide by. If anything identified above exists in your past or your financial picture is unique, make sure to have supporting documentation and a seasoned loan professional (full disclosure: I am one) working in your best interests.

Source: Realtor.com, Credit.com - Scott Sheldon
http://www.realtor.com/advice/finance/7-times-youll-need-extra-paperwork-to-get-a-mortgage/?iid=rdc_news_hp_carousel_theLatest

5 Reasons to Be Thankful for a Great Real Estate Agent

Not all real estate agents are created equal. Like all industries, there are plenty of terrific pros, but once in a while a bad apple rubs a buyer or seller the wrong way and spoils it for the rest of us.

If you’ve had a bad experience in the past, don’t let it happen again. If you aren’t comfortable with your current agent, stop everything. You can find wonderful agents in every market — don’t move forward until you have.

Once you find an exceptional real estate agent, you’ll discover plenty of reasons to be thankful for them.

They’ll be there for you during the difficult moments

In the middle of a transaction that seems to be giving you more heartache than love? Maybe it’s not the “deal” you thought it was, or something just doesn’t seem right?

A good agent will take your call at 10 p.m., hear you out and support your decision not to move ahead. Buying or selling a home is a serious financial transaction — not to mention one with huge emotional and practical considerations.

Your agent should uncover any issues and, if it’s the best decision, suggest backing out of the deal before you even bring it up. They’ll be on your side, and looking to build a long-term relationship — not just make a quick buck.

They’ll help get your house ready for sale in record time

A good listing agent doubles as a project manager, designer, and connector of all things quick and fast for home improvement.

Thinking of selling, but daunted by the idea of prepping your home, making necessary fixes or simply deep cleaning? Good listing agents take on the burden and alleviate unnecessary drama from an already stressful time in your life.

With your approval, your agent can muster up a team of painters, stagers, floor finishers, home organizers — and the list goes on. As the lead on prepping your home for sale, your agent will be your single point of contact and get the job done quickly.

They know you’re juggling work, kids and all the other parts of your life

A real estate transaction can be so tedious. Someone always wants a random signature or a document notarized. Inspectors and appraisers need to get into the home, and sometimes one of the parties has a last-minute request that you can’t ignore.

A good agent realizes you have a life outside your real estate transaction. She’ll drive to your home late at night or catch you in the lobby of your office building in between your meetings for that important signature. He’ll open doors, get second bids, sometimes pull weeds and even walk your dogs.

Tasked with making your life easier and your transaction as smooth as possible, a good real estate agent is full service 24/7. And they love doing it.

They’ll send you helpful data about your home long after you’ve closed

Some agents do their deals and move on, seeing your purchase or sale as transactional. But good agents know that their services continue long after you close.

Homeowners like to know what’s going on in the market and how their investment has fared over time. Agents see homes in person each week, and can take note of comparable homes and keep their past clients informed about the market.

It’s true you have a lot of information at your fingertips already, but having an active agent keeping you in the loop, without even asking, is the best.

They have the inside track because they’re well-connected and well-liked

Often, deals fall into place because of the strength of the relationships a good agent builds over time. Being well-connected with other agents, bankers, inspectors and deal-makers means they can help you find opportunities off the market, get the attention or time you need, or get your offer to the top of the pack in a competitive bidding situation.

A truly great agent constantly has your interests, wants and needs in mind, and uncovers opportunities to find the house or the buyer of your dreams.

If you’ve found your dream agent, you have a lot for which to be thankful. If you haven’t, find a good agent and get them on your team. They can make all the difference.

Source: Zillow Blog, Brendon Desimone
http://www.zillow.com/blog/be-thankful-for-real-estate-agent-187080/

5 Signs It’s Time to Break Up With Your Real Estate Agent

If your agent goes MIA, it's on to the next one.

Working with a real estate agent is similar to a romantic relationship: the introduction, a whirlwind courtship, followed by a commitment. My dear agent, “I do” promise to work with you to search for and buy my beloved new home.

That initial flurry of activity turns into hanging out on the weekends, exploring home after home. The rush of a new project as you work together toward a common goal can bond your partnership even further.

But what happens if the rosy glow disappears from your cheeks and there’s no longer a real estate skip in your step? How do you know when it’s time to think about changing real estate agents? Here are five signs that it might be time to say “it’s not you, it’s me” to your real estate agent.

Missing in action

Whether it’s a personal or business relationship, we all know when we’re getting the brushoff. Text messages aren’t returned quickly. Phone calls get sent to voicemail — and then returned by your agent’s assistant. Your emails seem to disappear down a dark hole, and your request to see a new home on the market is begrudgingly met three days later.

In a cold market, this behavior is simply unacceptable. But when it’s a scorching hot market? Forget it. You’re never going to land your dream home with an agent who treats your business relationship this way. You’ve been sidelined, and it’s time to move on.

High-pressure sales tactics

Rather than a new home, you begin to feel as though you’re shopping for a used car on a discount lot. Each conversation leaves you shaky with anxiety, fearing that every other decent house in the city (and in your price range) is currently under contract and this is your only shot to lock one down.

Regardless of how hot the market is, interactions with your agent should not leave you feeling anxious. Sure, it’s their job to convey accurate market information, but in an honest and straightforward manner.

They’re not listening

You’ve communicated your deal-breaker list to your agent and they consistently show you homes without several of your coveted features. You’re tired of explaining that a second bathroom is not a luxury — it’s essential for your sanity.

When you feel as if you’re wasting time spending Saturday and Sunday afternoons touring homes with an agent who is so clearly missing the mark, it might be time to move on. But before you break the news to your agent, consider asking if there aren’t any homes with your required features in your price range — a problem with an entirely different fix.

They stand you up

After leaving work early and rushing to your agent’s office to sign paperwork, you find their assistant armed with a calendar for an appointment reschedule. Having other clients and commitments is perfectly acceptable, but failing to communicate in advance is not. Their time is not more important than yours.

With that said, life does sometimes get in the way of a carefully planned schedule. If this is an isolated incident, treat it accordingly — if not, you may need to make some changes.

They make decisions for you

You’ve submitted an offer and your agent neglects to ask if you would agree to a longer closing date. Instead, they take it upon themselves to reply for you — and the sellers went with another offer. Regardless of previous conversations, your agent should discuss all contracts and offer details with you in a timely fashion. Full representation does not mean making decisions on your behalf.

As in a romantic relationship, it can be easy to convince yourself you’re overreacting to circumstances by sweeping things under the carpet. Remember, this is an important business relationship and should be given priority. If you’ve communicated openly with your agent and you’re not 100% satisfied, then move on and find an agent who not only meets your needs but also exceeds them.

Source: Time.com,
http://time.com/money/4017994/break-up-with-real-estate-agent/?xid=gonewsedit

The Chinese are about to flood the U.S. real estate market

There are a number of Realtors here in the Silicon Valley who specialize in foreign buyers, particularly Chinese investors, and the stock market troubles in China last week left many of those agents wondering where that leaves the US real estate market. The real estate market here in the Silicon Valley is largely propped up by the tech workers and Chinese investors, without them we wouldn't be enjoying the robust market we are having. Many of my clients came from the tech sector or foreign investors. 

Anyhow, check out the great article below from The Real Deal about the growing concern of Chinese investors with their money in the Chinese stock market and how they are increasingly looking to U.S. real estate as a safe place to park their money.



After yet another drop in the Shanghai stock market and Hang Seng index on August 6, Daniel Chang heard his cell phone ping. The real-estate agent was on a business trip in Shanghai, and he was mid-bite during a dinner when he saw his phone light up from a message on his app, WeChat.

It was a Chinese client concerned over a $6 million property she was about to buy in New York City. She was visiting New York at the time.

“I don’t know if I can do this,” she told him over voicemail. “I might have to back out.”

She wanted some time to reconsider, she said, and maybe recoup her losses on the Chinese stock. She was considering dropping the $600,000 she had already put down on the cooperative — she had already lost as much on the stock market.

Then, over the course of a week, the Shanghai Composite had a brief and unsteady rise, while the yuan devalued by 3.2%. Chang’s client surveyed the apartment one more time.

She closed the deal.



Chang’s client is one of the group of wealthy Chinese caught in between a rock and a hard place: Leave their assets in China to potentially weather additional market volatility and yuan devaluations — or put it in real estate that is now more expensive than just a few weeks earlier.

“Lots of my clients have been hit heavily by the equity market,” Chang, who was once a vice president at HSBC’s private bank, told Business Insider through a series of interviews. “But that only makes them more determined to diversify out of China.”

The chaos of the past few weeks is likely to lead to an acceleration in the rate of real-estate purchases by wealthy Chinese buyers in the US and elsewhere.

“[Chinese] Investors who were looking at investing overseas may bring forward their purchases,” James MacDonald, head of Savills Research in China, wrote in an email to Business Insider. “While some of those that may not have been considering the purchase of property in the U.S. may now look at doing so.”

The Chinese see US real estate as a relatively moderate risk, high-return investment, Svenja Gudell, the chief economist at real-estate-research site Zillow, told Business Insider. Especially if buyers anticipate further RMB devaluation and market volatility.

Wealthy Chinese are already the largest group of foreign real-estate buyers in the US, with 16% of the single homes and condominiums purchased by foreign buyers snapped up by Chinese last year, according to the US National Homebuyers Association. They were trailed by Canadians, who bought 14% of homes.

These houses are typically more expensive properties, worth an average $831,800. Domestic buyers average $345,800 on a new single-family home, according to the US Census Bureau.

Brokers in the US can see the shifting sentiment among their Chinese real-estate clients.

Emma Hao, a broker for Douglas Elliman who specializes in Chinese clients, told Business Insider she’s already felt an increase in urgency among her buyers to purchase property in the US before the yuan devalues further.

“Because they are insecure about the economy and the politics, with the RMB devaluation, the stock market got mashed, and the real estate in China is a big bubble — there is nowhere to go.”

Chinese homebuyers also like the US real-estate market as a base for children who have been educated abroad, and as way to diversify holdings.

Andrew Wu, a real-estate agent at Daniel Gale Sotheby’s who caters to Chinese luxury-real-estate buyers in Long Island, told Business Insider: “They’re looking for a safe haven, and the real-estate market has always been looked upon as a safe haven for Chinese buyers.”

The US is also seen as more politically and socially stable, according to Hao. Chinese President Xi Jingping started focusing on an anti-graft campaign back in November.

Many of China’s rich have ties to the political figures, and many will look for somewhere to stay away from government scrutiny, Hao said.

“Because of the crackdown, many people got thrown into prison, and the political people are always connected to the rich people — they do business. They need their help,” she said. “People worry about their own position.”

More and more Chinese buyers will also be eyeing residential property as an investment, according to Gudell, the chief economist at Zillow.

She said she expects to see a different kind of Chinese buyer seeking property in the US: A reduction in buyers looking for homes, but an increase in those looking for investment properties.

“Where they are buying will also be different. The investor will buy in higher-tier neighborhoods, such as New York or Los Angeles,” she said.

Chinese individuals are also being actively encouraged to buy abroad by the government.

Thus far, Chinese individuals have been allowed to convert $50,000 into other currencies annually — though there are ways to skirt the regulation.

That is about to change, with the Chinese government readying the launch of the Qualified Domestic Individual Investor program.

The QDII2 is an overseas-investment scheme that would allow Chinese citizens to invest overseas directly. Those with at least $160,000 in financial assets qualify.

The program is likely to launch this year and will bolster overseas real-estate purchases on the part of the Chinese.

“With QDII2 in mind, within five years we might look back and think of the current levels of Chinese cross-border investment as quaint,” Andrew Taylor, co-CEO of Juwai.com, a website that helps Chinese to buy properties abroad, said to The Wall Street Journal in July.

Source: The Real Deal
http://therealdeal.com/blog/2015/08/30/the-chinese-super-rich-are-about-to-flood-the-us-real-estate-market/

10 Things To Never Say To A Real Estate Agent

Great article from RealtyTimes. I've encounter everyone of these on the list, but for God's sake folks, we do this for a living. Many agents I know, myself included, LIVE, EAT and BREATH this business and to deal some uneducated client who argues with us about our expert assessment just frustrates us and drives us nuts. Number 8 especially drives me crazy.



Real estate is serious business, and it can be easy to forget when we're involved in a complicated and emotional financial transaction that the person we're working with is just that…a person. An agent might not always show you when he's feeling disrespected or offended, but you may pay for it—literally. Establishing a good relationship early on and maintaining it through honesty, open communication and mutual respect is key to a successful transaction. You can help ensure that happens by watching what you say.

1. That price is ridiculous.

If you're dealing with a professional agent, especially one who has a good track record in the business, it's fair to assume she's done her homework on comparables and is recommending an offer price based on the local market and your financial situation. Most agents are going to expect some conversation to take place around pricing, but insisting on a price simply because it's what you want to pay doesn't typically play out well.

2. But Zillow said my house is worth $40,000 more than what you're telling me.

Zillow has become an industry juggernaut. While their home pricing estimates, known as "Zestimates," aim to inform buyers and sellers, they've been proven to be off by a whopping amount—somewhere between the 8% Zillow claims and upwards of 20%, 40%, even 61% depending on the house and the location, according to a recent L.A. Times report, said Housingwire.

3. I know what my home is worth.

Not really. Your estimation of your home's worth may be based on neighborhood comps, but it's probably also colored by your emotions or by what you need to make from the sale. It's hard to separate out your personal connection. That's why it's important to let your Realtor be an impartial professional.

4. I have a perfect credit score.

"Unless you're part of the 0.5% of consumers who reach the 850 mark, it's time to be real about your credit score and your financial ability to buy a home," said Agent Ace.

Overvaluing your credit, your down payment, or any other aspect of your buying ability, is pointless. Everything is going to come out during the buying process anyway.

5. I'm not going to bother getting pre-approved.

To an agent, this can indicate that you're not a serious buyer. Or that you don't understand the process.

In tight markets, you're at a disadvantage if you aren't ready to pull the trigger right away when you find a house. You could very well lose out because another buyer was ready with their pre-approval and you were just getting in touch with your lender.

And, as Lighter Side of Real Estate points out, "An agent worth his or her salt won't agree to invest countless hours showing homes to someone who isn't approved for a loan."

6. I have between $200,000 and $2,000,000 to spend with any number of bedrooms in any location.

Open-ended budgets and limitless expectations are great, but giving your agent a little more guidance can help him zero in on viable options. When you have no idea where or what you want to buy, most agents won't embrace the idea of spending countless hours trying to narrow it down.

7. I'm not doing any repairs.

Sellers want to think their house is perfect, but inspections may show otherwise. Drawing a line before you even know what problems may exist can be frustrating for an agent. It's her job to get you the best possible price, but unreasonable expectations make that more difficult.

8. You can cut your commission. I mean, you make a ton of money.

While commissions are often negotiable, assuming an agent will cut it—especially when they've been approached in a callous or sarcastic manner, isn't the way to go about getting what you want.

9. I'm not ready to buy…I just wanted to see a few homes.

People looooove having their time wasted. Especially busy agents who could be out dealing with serious buyers instead of showing homes to someone who isn't sure they're even in the market.

"The best real estate agents are busy individuals for a reason. Their services are highly in demand and thus their time is valuable," said Agent Ace. "It's ok if you're just looking around and aren't sure whether or not you're ready to take the leap; but if that's the case, be upfront at the start not after several showings."

10. Can you give me some advice about my house? I don't want to hire an agent.

Most people wouldn't approach a CPA to do their taxes without hiring him or expect a lawyer to write up a divorce agreement without paying, but real estate agents often yield questions from people looking for free advice. Most will answer a question or two, but there is a limit.

Source: RealtyTimes, Jaymi Naciri
http://realtytimes.com/consumeradvice/sellersadvice1/item/37586-20150820-10-things-to-never-say-to-a-real-estate-agent

Here's Where Buyers Are Paying All-Cash

While the number of all-cash transactions is dropping nationwide, a few pockets across the country are still seeing a large share of buyers paying all-cash for their home purchase.

Read more: Fewer Home Buyers Pay All-Cash
Nationwide, the number of all-cash sales making up transactions has plummeted since peaking in January 2011 when cash transactions made up 46.5 percent of total home sales nationally. Now, that percentage has dropped to 33.7 percent of total home sales, according to CoreLogic's cash sales report.

The year-over-year share of cash sales has fallen each month since January 2013.

Despite the drops, cash sales still remain elevated by historical standards. Prior to the housing crisis, cash sales made up about 25 percent of home sales, according to CoreLogic. If cash sales continue to fall at the most recent pace, the share should hit 25 percent by mid-2017.

The largest number of cash sales are through real estate-owned sales, with nearly 57 percent of cash sales being from REOs. Resales followed with the highest cash share at 33 percent, followed by short sales at 30 percent and newly constructed homes at 15 percent.

The following states had the highest share of cash sales in April, the latest data available from CoreLogic:

• Florida: 51.4% of transactions were from cash sales
• Alabama: 48.5%
• West Virginia: 48.3%
• New York: 45.4%
• Kentucky: 41.4%

By metro level, the following cities had the largest number of cash sales:

• West Palm Beach-Boca Raton-Delray Beach, Fla.: 59.1%
• North Port-Sarasota-Bradenton, Fla.: 58.5%
• Cape Coral-Fort Myers, Fla.: 58.1%
• Detroit-Dearborn-Livonia, Mich.: 58%
• Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla.: 56.9%

Meanwhile, Syracuse, N.Y., had the lowest share of cash sales at 11 percent, according to CoreLogic.

Source: Realtor Mag Online
http://realtormag.realtor.org/daily-news/2015/07/20/here-s-where-buyers-are-paying-all-cash?om_rid=AAFmZk&om_mid=_BVrTcoB9DsGkv7&om_ntype=RMODaily

Info Graphic of The Week

Source: California Association of Realtors

Why having a dual agent to represent you is not a good idea

Hello to everyone reading my blog. I hope you all are having a great day.

Below is a conversation I wrote down shortly after it took place (as best as I can remember it) because it is a good example of how working with an agent who is representing both you as the home buyer and also the seller (called dual agent/agency) is usually not a good idea. Here in the Silicon Valley I've seen many transactions go down this way, many of those with some, so called reputable, top producer real estate agents.

Below is my take on the situation. You're not gonna hear anyone else in the industry explain it to you as honestly and simply like me.

So why is dual agency not a good idea you ask? Because think about it; if you're selling your home, your agent has an obligation to you to sell your home for the most money possible, BUT if that same agent is represent both you and buyer there is a conflict of interest. The conflict comes from the fact that an agent representing the buyer also has an obligation to the buyer to sell the home for as little money as possible! 

So what's an agent to do? Well, you got to remember that real estate agents get paid on commission which is a percentage of the sales price. So the more money the home sells for, the more money we make.

As the home buyers, how can you get hurt? Well, because the agents gets paid on commission and that means that a higher sales price means more money for her/him. That agent who you think is looking out for your best interest may not be telling you the whole story. He might tell you to make a counter offer for more money because there are supposedly competing offers when there are not, and he's not gonna tell you the seller is OK with taking a lessor price. Remember, a higher sales price means more money - your bargain on the property be dammed.

As a seller, how can you get burned? As you will see from my conversation below with my client, one way a home seller can get burned from having their agent represent them and the buyer is when you have multiple offers an all of those buyers have their own agent excepts for one buyer who is willing to work with your agent directly to buy your property. These other offers might be a little higher, or those buyers might be willing to counter offer for more money, but your agent is only going to care about having you accept the offer from the buyer who she represents - because she will make TWO COMMISSIONS! Think about it. . . 

Anyhow, below is my conversation take took place with my client (whose name was changed to protect her identity) and you can read for yourself how she got burned by her agent who was only looking out for wallet first and not client.

My client, Sandy, found me from the flier that I gave her husband at my open house on the weekend of May 22 &23.

Mimi: Are you working with any agents right now?  If you are, I cannot help you.

Sandy: I am, but I don’t want him to help us to buy the house.

Mimi: Why?

Sandy: He is our listing agent for my condo right now. We will close the transaction soon. I don’t like him.  He told me when we met that my condo looks better than the other condo that he sold for $425K, and I can get more money.  My husband and I trusted him and listed the property with him.  After the open house, he said we only got two offers.  One of the offers is one in which he represents the buyer and the other is from another agent for little lower.  He wanted us to sign the offer. I asked him why he didn’t ask for more money. He said his buyer offer is higher than other offer, and we should take it.  I said to him that you told me my condo is better than other and that we should get more money.  He said $425K is good offer. I don’t trust him because he is representing us as the sellers and the buyer. He should work his best for me to get more money, but he didn’t. 

Mimi: Did you tell him?

Sandy: I did, but he said it is the best offer and wanted us to sign. I am not happy, but we signed.

Mimi: Oh! Why you didn’t use him to help you to purchase the house on 805 N. Main Street?

Sandy: We asked him to show us the property. My husband went to your open house, but we wanted to view one more time.  He said he wanted to schedule with other property (younger street) so we can view two together. It was on Monday and Tuesday. He didn’t help. I asked my husband to call you, but he is kind of reluctance and didn’t want to, so I called you.

Mimi: Did you sign any buyer agreement or any documents?  If you did, I would get in trouble.

Sandy: NO. I didn’t sign any documents and don’t want him to represent us anymore. All he thinks of is his commission check and how to make more money for himself, regardless if it doesn’t help us.

Mimi: I can only help you and your husband if you want to work with me and didn’t sign any agreement with your agent.

Sandy: NO. We didn’t sign any papers. We don’t want to use him. He only thought about what  benefits him in order to make more money from my condo even though it was not in our best interest.  If he had done the counter offer like we asked, we would have got $5 or $10 thousands more.  I am not happy with his service. I really don’t trust him with helping us.

Mimi: OK. I closed one transaction with him 5 years ago. I know him.  Well, I will try my best to help you. This property already went in contract on Thursday morning.  We can only submit a purchase offer as a backup offer.

Sandy: OK, we’ll go to meet my husband to sign the offer.

Mimi: Thank you so much.

Related:

DUAL AGENCY IS A DISASTER FOR BOTH BUYERS & SELLERS

ALERT: Wire Fraudsters Targeting Real Estate Transactions

I thought I heard of everything until I saw this article. I guess thieves are more inventive than I thought.

Now it seems, scammers will hack a Realtor's email account and monitor her/his email to see when a particular transaction is closing, the buyer's email address, etc. Once they know that they will send an email to the buyer with bank wire instructions. And of course that wire is to the bank account of the criminal, and the next thing you know the buyer's account will be drained.

So there it is in a nutshell. Another scam to keep an eye out for.



ALERT: Wire Fraudsters Targeting Real Estate Transactions

Even Inexpensive Homes Too Pricey for Many Workers

Great article from Zillow describing exactly the problem I see with some potential buyers. Most of my clients work in high tech here in the Silicon Valley, but some work for jobs that are not so sexy and not so glamorous. Some work for lower paying jobs. It are those people who are just as hard working as anyone else, but just don't have the income to buy in this valley, especially seeing how the median sales prices keeps going up for the moment. 

The market will go down, I am sure of that. When it does some of those buyers who were priced out of the market will be in a position of buy. The only question is, WHEN will the market go down?

Even Inexpensive Homes Too Pricey for Many Workers
The incomes of low-paid workers are not keeping pace with rising home values.

With rents eating up an ever greater share of people’s incomes, more renters are looking to buy homes. But that avenue isn’t possible for many lower-income workers.

Their incomes are not keeping pace with rising home values. Since 2000, incomes among the lowest third of U.S. workers have grown 15 percent, while home values have gained 41 percent.

Although renters spend an average of 30 percent of their monthly incomes on rent, and home buyers pay an average of 15 percent for mortgage payments, the situation varies considerably by market — and by how much you make.

One extreme case is in Los Angeles, where someone in the bottom third of earners would have to spend an average of 85 percent of her monthly income on a low-priced home. By contrast, middle-income earners would pay 41 percent for mid-priced homes, and the top third of earners would pay 30 percent for the most expensive homes.

Los Angeles is one of four markets — the others are Santa Barbara, Salinas and San Jose, all in California — where the top third of earners would pay 30 percent or more of their monthly incomes for mortgages on expensive homes. Mid-range earners have to pay more than 30 percent of their incomes for mid-valued homes in 11 markets.

But the lowest third of earners have to pay more than 30 percent of their monthly incomes on low-priced homes in 77 markets — effectively pricing many of them out.

Source: Zillow Blog, Melissa Allison
http://www.zillow.com/blog/housing-too-pricey-for-many-workers-175038/

Remember those sellers who lost their home to short shale or foreclosure - well about them. . .

In 2011 and 2012, many of the real estate deals I was involved with were short sales and bank owned homes. I reached out to these homeowners who were about to lose their home and I worked hard to help them sell their home before losing it the hard way. 

Anyhow, according to a new survey by the National Association of Realtors many of these same former home owners are are now in the market to buy. Of course some of them still can't buy due to poor credit, but apparently his is not the case for everyone and they are now looking to buy. 

1.5M Buyers Are Coming Back