Crime Stats Online: SpotCrime
December 24, 2008
SpotCrime is an interesting new online research tool for potential home buyers. (If you want the national version of the website, visit www.SpotCrime.com)
It’s a map based tool that allows you to see crime reports in your area. The website claims the reports are in real time, i.e. they show up online within 3 to 24 hours of the occurence of the crime.
Mortgage Rates in the 4’s
December 18, 2008
From The Mortgage Porter,
“Based on the “true conforming” loan limit of $417,000 with 740+ credit scores and 80% loan to value for purchase or rate/term refinance – owner occupied….drum roll please….
4.375% priced with 1 point (apr 4.605)
4.625% priced with 0 points (apr 4.705)
For credit scores of 720-739
4.500% priced with 1 point (apr 4.731)
4.650% priced with 0 points (apr 4.831)”
If you’ve been thinking about buying real estate in the metro Phoenix region, I think this is the beginning of The Time.
Prices are down steeply in many metro regions over the past 18 to 24 months. Especially in outlying areas like Surprise, Avondale and Queen Creek, prices are downright silly affordable. Try a 3 bed, 2 bath, 1100 square foot starter home at Waddell & Reems for $85,000. Or how about a studio sized vacation condo in a downtown hi-rise with a 180 degree view from the 7th floor…. for $38,000? $38,000!
Search for your next investment or your first home on my Search the MLS page.
Real Estate Glossary – Earnest Money
December 4, 2008
WHAT IT IS
Earnest money is the amount of money a buyer submits with an offer to purchase a house. You actually write a check (or a copy of the check) and send it with the purchase offer.
Earnest money proves the buyer is ‘in earnest’, or serious about buying that house. If the seller accepts the offer, the earnest money is immediately deposited with the escrow/title office. It becomes part of the purchase price of the house.
A personal check is usually acceptable for earnest money.
Working with a lot of Canadian investors lately has taught me that many Canadians call it the “Deposit”.
HOW MUCH IS RIGHT?
A really common question I’m asked by buyer clients (especially first time buyers) is, “How much earnest money is the right amount?”
Technically, I’m not supposed to tell you. At least that’s what I remember from my rookie training classes. If I’m remembering correctly, I think this was a rule dreamed up by the legal eagles in our profession. They worry that if Realtors simply tell clients what to offer, how much to put down, how much earnest money to offer and so forth. . . . well, we’re essentially price fixing and could be sued later by disgruntled buyers who are having buyer’s remorse.
I used to be a paralegal and have lawyers in the family, so I’m pretty ultra-sensitive to the myriad of ways agents get themselves sued. Since I like to keep on the right side of my company’s legal department, and since I haven’t got a brass farthing worth suing me over, I won’t state a ‘proper’ earnest money amount here.
But it’s typical to put 1% to 2% of the purchase price up as earnest money.
HOW MARKET CONDITIONS CHANGE EARNEST MONEY
2005 and early 2006 were boom-boom years in the metro Phoenix real estate market. Sellers received multiple offers after only days or hours on the market. Sale prices were frequently above list price, and buyers often waived many of their usual inspections and contingencies just to secure the house. This is an extreme seller’s market.
In a seller’s market earnest money often amounts go up. Buyers are competing against each other to buy the few properties available and increase their earnest money and/or down payments to make their offer look better than others’ offers. I commonly saw earnest money amounts in the tens of thousands. It wasn’t unusual to see earnest money amounts that were 4% or 5% of the purchase price, or more.
Today we’re in an extreme buyer’s market. In many cases earnest money amounts have dropped as a result. I’ve recently seen purchase offers for average priced homes ($200,000 to $300,000-ish) with earnest money of only $1,000 (that’s less than 1%).
Properties that first time buyers typically buy (condos, any property under $125,000-ish) often bring earnest money amounts at $500 and under. Some cash-strapped first time buyers using FHA loans even ask that earnest money be refundable at close. They often apply that money to the closing costs. (see more about buying with little or no money down here.)
EARNEST MONEY EXAMPLE
For example: Buyer looks at a house with an asking price of $299,900. Buyer makes an offer of $280,000. That $280,000 is made up of – (1) $3,000 earnest money, (2) $40,000 cash down payment, and (3) a promise to get a home loan for the remaining $237,000.
RULE OF THUMB
One rule of thumb about earnest money is, “put up as much earnest money as you can afford to risk.” The risk bit is important. Earnest money is forfeitable if the buyer breaches the contract. In plain English this means that if you, the buyer, back out of the purchase after your Due Diligence period, the seller has the right to keep your earnest money as compensation for the lost time on the market.
Related Posts -
Credit “Repair”? Not Likely.
November 11, 2008
NPR did a great little piece this morning on how many Americans are being sucked in by various credit repair advertisements.
Most of these firms promise to raise your credit score by hundreds of points in a just a few days or weeks. They claim to do this by disputing the incorrect information on your credit report. Many of them even dispute information on your report that you (and they) know for a fact is true. These credit repair “experts” claim that they’ll continually question everything on your report, and eventually the credit reporting agencies will “just get tired of dealing with it and remove the information from your report,” thus raising your score.
You can listen to the NPR audio here. (Click on the little “listen now” icon at the top left, near the headline)
The highlights of the NPR audio:
- These firms don’t do anything you can’t do yourself
- No one can raise your credit score by hundreds of points in mere weeks
- It’s illegal to ask you to pay an up-front fee to “fix” your credit
- If the information on your credit report is factual, it cannot and will not be removed
As I’ve written before, these firms are almost always a sham and a scam.
Instead of falling for credit repair scams, consumers worried about their credit report and score should consult a nonprofit credit counseling service through the AICCCA (Association of Independent Consumer Credit Counseling Agencies). Find a credit counseling service near you.
Related Posts
Phoenix Crime Statistics Are Interactive
November 10, 2008
In trying to answer a question posed to me at an Open House yesterday, I found out that the Phoenix Police Department has an interactive website where you can look up crime statistics by choosing a location on a map.
For many buyers, being able to see this data will give them a great sense of control over their potential home purchase.
My only criticism of the Phoenix Police Department’s crime stats website is that it’s a little hard to figure out where on their site to click to get to the crime stats. Here’s a picture so readers will know where to go:
(Click to enlarge)
Visitors looking for the interactive crime stats maps should click on the item on the right called Interactive Crime Statistics. The link’s purple in my picture above. Maybe it’s me but I thought the link was a little buried in a text-dense page.
For some other useful links, see my “For Buyers” web page.
Another Valley Builder Gone
October 27, 2008
Brown Family Communities shut their doors, reports Builder Online. They were one of only two private builders left in the Valley market. Brown’s website isn’t functioning at the time of writing, but from what I can tell, they mostly built in the East Valley and had a building site in Prescott. The 76 year old CEO, Dave Brown, told Builder Online in September of this year that the company closed 826 homes worth $156 million in 2006 and 522 homes in 2007, but expected to close only 225 homes in 2008. Brown cited lack of buyer interest as the major factor in his decision to shutter the company’s doors.
The Arizona Department of Real Estate maintains a list of home builders known to be in financial distress.
All About Mortgage Insurance
October 27, 2008
All about Private Mortgage Insurance (PMI) by one of my favorite lenders, Jeannie Bolger of Suburban Mortgage.
It’s not a pretty looking link, but it IS helpful. Trust and click.
Interview the Expert: FHA Loans
October 21, 2008
Today begins a periodic series of posts spotlighting an interview with a local expert on topics related to the housing market. First up is Jeannie Bolger of Suburban Mortgage. Jeannie’s been in the mortgage game for 20+ years and in that time has seen it all. She specializes in first time homebuyers, does a little credit counseling prior to purchase for those in need, and is an expert on FHA loans.
Contact Jeannie:
Jeannie Bolger, Senior Loan Officer
Suburban Mortgage
Office: 602-216-2300, ext 115
eFax: 602-343-6894
email: jBolger@SubMort.com
web: SubMort.com/JeannieBolger
Interview the Expert
Jeannie Bolger on FHA LOANS
First, FHA loans are great options for first time homebuyers, those with no credit rating or poor credit, and those needing down payment assistance. Interest rates are competitive and the loan application process is similar to ‘regular’ mortgage applications.
The FHA program is very forgiving when it comes to medical debt and student loans, and in some instances will ignore these items on your credit report altogether. FHA also allows those buyers who have literally no credit history to establish credit (for the purposes of the mortgage) by showing a history of on-time payments to utilities, cell phone companies, car insurance companies, and the like.
There’s a TON more information available, so please don’t hesitate to contact me or reach out to Jeannie! On with the interview….
.
Q: Is it true you must be a first time buyer to get an FHA loan?
A: No. However, FHA rules allow homeowners to have only 1 high ratio FHA loan at one time. If a 2nd home is desired, at least one of them must be at a 70% or lower LTV (loan to value). Some exceptions apply, so you should check with your lender.
Q: Are FHA loans still ruling the marketplace?
A: Yes. For loans under $357,000, FHA is king.
Q: What are current FHA loan limits?
A: In Maricopa County, the current FHA loan limit is $346,250. That’s the max amount buyers can borrow, for now, and represents a temporary increase in the upper limit. We’ll have to wait and see what Congress does to these limits in the future.
(NorthPhoenixAgent Note: The max FHA loan amount is $346,250. With a 3.5% down payment, this loan amount translates into a $357,000 purchase price. Buyers with more money to put towards the down payment can shop at a higher price point, put more down and still get a max FHA loan of $346,250.)
Q: Is it true that down payment requirements are getting stricter in the future?
A: Yes. For now, But, that ruling only effects mortgages assigned a case number after January 1. So, you can write a purchase offer on December 20, with a closing date of January 15, and still put only 3.0% down. (NorthPhoenixAgent Note: the mortgage officer orders your case number, buyers need only be concerned about completing the application paperwork).
Take Home Lesson! Planning on using an FHA loan to buy? Pick a property and make the loan application before the end of the year! Wait and you’ll have to have a bigger down payment.
Q: What are the down payment requirements for investor puchases?
A: For the most part, investor loans right now require 25% down payment. If the buyer is a repeat investor and they plan to rent out the property, we can offset their future loan payment with expected future rent payments, after completing an appraisal and Rental Analysis Schedule. Investors buying their first rental property must qualify for the purchase without taking future rent into consideration.
Q: Can foreign nationals still get purchase loans for Arizona property?
A: We have a program for Canadian buyers which requires 25% down, it must be a 2nd home, full documentation is required and we pull an International Credit Report. Unfortunately, I have nothing right now for other foreign nationals.
Q: Tricky question: will the US Presidential election have any immediate affect on the housing market?
A: Presidential elections always affect the market, and therefore affect everybody. Now that we’re 2 weeks away from picking our next president a lot will happen and once the new Presdient is elected the markets will react in a positive or negative way… it’s a waiting game. Who has the Magic Crystal Ball??
Update on Landmark Towers
October 20, 2008
June 2, 2009
Hello All,
Thanks for finding me and coming on over to read. There has been a TON of interest about the Landmark Towers and the comment thread is wonderful – full of info from actual residents. Thank you all for reading and taking the time to comment!
Please note that all new comments (and the entire blog) have been moved to:
http://thephoenixagents.com/landmark-towers-even-more-updates-opinions/
The rest of the blog is available at www.ThePhoenixAgents.com
- – - – - – - – - – -
I’ve got some updates on the info in my August post about the troubles plaguing Landmark Towers.
I got this info through various buyer showing appointments, talking to some HOA management representatives, talking to some residents in the elevators and lobby, and quizzing a local Realtor acquaintance who lives there.
Regarding the A/C issue. A resident I met in the elevators said they need a new chiller and the expected cost was $1M. I’m unsure if the Landmark has a chiller instead of an A/C system, or if the chiller is a component of the existing A/C system. Wikipedia makes them seem inter-related: a chiller is either air-cooled or water-cooled and pumps cold air through ducts to cool buildings, and a chiller can be stand alone or part of an integrated HVAC system.
Mechanical engineering aside, my inside informant confirmed this. Plus his inside tipster on the HOA Board says they’re cutting some other areas of the budget so that they can absorb the chiller repair cost without raising HOA dues for 2009. Some of the expected cuts for 2009 are the valet service is gone, and the Direct TV satellite service will be changed a bit too. Since there are 2 central elevators that run from the parking spots in the basement to rooftop, the valet service always seemed a little silly to me, but what do I know? My informant said the valet cost about $125,000 a year to maintain. Holy Short Trip Driving, Batman!
I can tell you from personal experience that the climate control system at the Landmark currently works like gangbusters. No matter whether it comes from a chiller, an A/C or a group of hamsters running treadmills in the basement, that air blows cold!
I showed about 10 or 12 condos there on October 9 and 10 when it was still really hot and sticky. The units with A/C on and blowing were our favorites. Standing in front of those blowing ducts was like an icy blast from a wind turbine. That stuff blows cold! We also visited several condos with the power off completely and therefore no A/C blowing. Those units were fairly comfortable to stand in for 10 minutes at a time or longer. Considering that 1 entire wall of every condo is floor-to-ceiling glass, and these units have been on the market for months without power, I was impressed by the building’s overall ability to hold in the cold and keep out the heat.
My buyers and I calculated that at most, the cost of absorbing some increases to the monthly HOA dues to cover repairs to the climate control would be either $0 as the HOA Board indicates, or at most a thousand or two spread over time.
Considering we were looking at a 6th floor 1-bedroom unit with 180 degree views off the North side of the building, from the White Tanks to Camelback Mountain, and the asking price was $42,900 – we were all pretty sure it was still a great deal.
Bottom line – I’d buy in the Landmark. In fact, I was trying to figure out where to scrounge $42,000 to buy that 6th floor view once my buyer client took a pass.
(BTW, this bit I can’t confirm… my friend the Landmark resident says there has been a lawsuit either considered or filed over the local newspaper story covering the Tower’s troubles. I can’t confirm or deny that, but wouldn’t be surprised. Prices at the Landmark have plummeted in the past year, more so than other nearby towers that were also affected by the Light Rail construction.)
Related Posts – Century Plaza Condos
Glossary – Fixtures
October 10, 2008
My broker Jay Thompson explained “what’s a fixture?” on his real estate FAQ blog, which I’d like to expand on. Normally I think everything Jay does is perfect and no expanding is needed. Buuuut, I’m running a little low in the inspiration department, even lower in the time department, and I realized that I haven’t written a Glossary post in a long while. Plus, some new trendy household items can cause confusion.
Briefly, fixtures are items attached to the house using screws, nails, glue or similar means. Where things get a little tricky lately is with items some of the newer must-have pseudo luxury items, such as:
- satellite dishes
- flat screen TVs
- those fancy new bathroom mirrors that look like art because of their beautiful frames
- the trendy new bathroom cabinets that look like a piece of free-standing antique furniture and often have (expensive) marble tops
Two other possibly confusing items are
- above ground pools (OK, they’re uncommon these days, but not extinct by any means)
- heavy concrete patio benches or garden gnome type decorative items
If you follow the rule of thumb – is it attached using screws, nail or glue – all of the items in the first list are attached, are therefore are fixtures and therefore must stay with the house when it’s sold. Following the rule of thumb again says all the items in the second list aren’t attached and therefore go with the sellers.
If one were of the attorney persuasion, one could make an argument that the antique-look bathroom cabinets aren’t technically attached, it’s the plumbing that’s attached, and so the plumbing stays but the cabinets don’t… and [insert lawyerly babble here].
Court room arguments aside, I’d bet that most sellers with these items in their home expect to take at least some of the items when they move out. In my experience, satellite dishes have become almost disposable and most sellers expect to leave them behind, while most buyers expect them to stay. So we generally have agreement there.
But sellers often spent lots of time and money tracking down the fancy schmancy bathroom mirrors and expect to take them with, while buyers don’t want to spend said time/money tracking down a replacement and therefore expect the mirror to stay. Many buyers don’t want the above ground pool… but then again many sellers don’t want to take it down and take it with and are secretly hoping the buyers will just take the darn thing and spare them the misery of dealing with it. And so on.
It can put you in a pickle if you assume too much on either side of the deal. Save time and trouble up front! Sellers – it’s best to specify in the listing agreement, and the MLS, and on flyers in the home whether these items go or stay. Better yet, get it out of the house and replace it with something that stays. Buyers – ask your Realtor to specify in the written purchase offer whether you expect these things to go or stay.
When’s The Money Due?
September 23, 2008
Like a lot of metro Phoenix Realtors, lately I’ve been working with lots of out of town buyers (especially Canadians). These buyers are often used to the way purchase transactions are handled in their hometowns, but somewhat baffled by the way we do things in metro Phoenix.
From the standard AAR contract, line 13, “Close of Escrow (“COE”) shall occur when the deed is recorded at the appropriate county recorder’s office.”
Notice it doesn’t say anything about the buyers and sellers being present. Recordation is handled by the folks at the escrow office who record the sale documents online with the Maricopa County Recorder’s Office.
Many buyers from the East Coast, the Midwest and even Canada are used to “closing” describing a giant conference table with the Buyer, the Buyer’s Realtor, the Buyer’s attorney, the Seller, the Seller’s Realtor, the Seller’s attorney a notary public and a title officer. Oh, and donuts too.
Buyers and Sellers in metro Phoenix don’t have to hire lawyers to represent them. They can, but don’t have to. Documents can be handled via express mail and email/fax. Money can be wired. No need to come to Arizona for your Arizona closing.
If buyers do plan to come to town for their closing, it could be helpful to arrive about 2 or 3 days before closing and plan to stay for 2 to 3 days afterwards too. That way you can sign the documents in person, pick up the keys in person, and then spend a few fun days moving stuff in and decorating.
Now, down to brass tacks. When’s the money due?
Earnest money is due immediately upon contract acceptance. Usually the buyer’s Realtor delivers it to the escrow officer in person or through a messenger. The escrow officer issues a receipt for the money received. Personal checks are acceptable unless negotiated otherwise by the parties. Buyers should note that their earnest money is cashed right away, so it must be liquid funds.
Any cash down payment is due on closing day. (Buyers paying all cash should apply this paragraph to their situation.) Arizona is a good funds state, which means that money for closing real estate deals must be “immediately available.” Cashier’s checks and wire transfers are acceptable. Contrary to logic, cash is not acceptable. Buyers who send a wire transfer should note that the USA Patriot Act slowed down the US wire system significantly. Expect your wire to take an entire day to transit the system. It will probably take less than 8 hours, but if it takes the whole day, at least you’ve planned ahead and not delayed your own closing. Got insomnia? You can read all 132 pages of the actual Patriot Act here. By the way, if you read the entire Act (and especially if you actually understand it) you should run for Congress immediately.
Buyers getting a home loan should be aware that by signing the standard AAR purchase contract you’ve agreed to sign all loan documents “no later than three (3) days prior to COE” (line 69). This language has been in place for 3 years, but I still sometimes encounter lenders who aren’t aware of the requirement. Buyers should also note that lines 68 of the standard AAR purchase contract binds them to two further responsibilities: (1) making diligent and timely efforts to provide their lender with all the documentation requested, and (2) ensuring that their lender provides status updates to both agents. This means that the seller’s Realtor is approved to talk to the buyer’s lender about the progress towards getting a loan approval.
That should cover all the angles on getting money to the table in a metro Phoenix residential real estate purchase. Got more questions? See the FAQ files or related posts below.
Down Payment Assistance Coming Back?
September 16, 2008
Longtime readers will know that I’m a big supporter of and believer in the Down Payment Assistance programs (“DPAs”) like AmeriDream and Nehemiah, which were effectively killed by the housing stimulus package passed by Congress back in July 2008.
Below is a quote from a press release sent out today by AmeriDream, talking about the effort to re-instate DPAs which is making it’s way through Congress right now. Known as H.R. 6994, it’s a bill designed to reauthorize and reform Down Payment Assistance programs nationwide. The bill got a particularly important Thumb’s Up today from the vitally important House Financial Services Committee.
Ann Ashburn, President of AmeriDream, said today: “Today’s committee vote was a positive step toward preserving downpayment assistance, but our work is far from over. Now more than ever, members of Congress need to know that Americans are watching their vote on H.R. 6994. I encourage members of the public the tell their representatives in the House and the U.S. Senate that a vote for H.R. 6994 is a vote for the next generation of homeowners.”
Related Posts
- AmeriDream’s End
- HUD Continues Efforts to Shut Down DPAs
- AmeriDream Gets Judicial Reprieve
- How DPAs Work
Or Visit SupportHomeOwnership.com
Not What It Seems
September 16, 2008
FDA warning: Short sales aren’t always what they seem. (Of course that’s not really courtesy of the FDA, but you get the idea.)
I’ve been thinking for about 2 weeks about how to write a post explaining the epiphany I had recently regarding short sales. Today’s graphic finally gave me the inspiration I needed. It’s courtesy of GiggleSugar.com; you can see the brief post accompanying this fabulous graphic here.
I’ve been showing homes to investors seeking “a great deal” and of course we looked at a lot of short sales because they’re often priced so darn low. We put offers in on short sales. Sellers accepted our offers and sent our offers to their lenders. Then we waited.
And waited.
And waited. Five months passed without the bank accepting our offer.
Just like the graphic for this post, short sales aren’t always exactly what they seem.
Short sales can seem like an outstanding deal! But the reality is that you, as a buyer, are negotiating a price now for a home that you don’t know when you’ll actually own.
You’re making a stab in the dark, trying to predict the future price of an asset but you don’t know exactly when “future” is.
If the market were going up this would be a great opportunity for buyers! Buyers would be crowing about their investing brilliance, like they were in 2005 and early 2006. “We bought a home in May that was worth $40,000 more than we paid by the time we moved in on July 1st!”
Sadly, the market (at least in my corner of the world which is North Central Phoenix) is still drifting down. What’s worth $200,000 in September might be worth only $180,000 by next spring depending on which corner of the vast Valley you’re in. Or things could stabilize and it’ll be worth $197,000 next spring. Nobody knows. Like many blogging Realtors, I keep a careful eye on the MLS stats and I’ll be able to call the recovery when it happens, but I can’t predict the future. No one can.
If you’re looking at short sales as a marvelous investing opportunity, you must factor in the time value of your money. At least factor it in the best you can, given that you don’t know exactly when you’ll be able to say “I bought it.”
For my dollar, lender owned homes are a much better deal. Lenders usually respond to purchase offers within a few days or a week. Once the buyer and lender have agreed to price and terms, the sale usually closes within 30 days. It’s vastly easier to predict the value of a home 30 days into the future than 4 to 6 months into the future. Considering a short sale? Consider lender owned homes instead.
Cash Buyer? Got Your POF?
August 27, 2008
POF? What’s that? Proof of Funds. By the way POF is an acronym I use, it’s not used by everybody or even by every Realtor or lender.
It might sound basic and redundant, but cash buyers sometimes don’t think about the fact that they really should provide a proof of funds statement when they make an offer to purchase real estate in the metro Phoenix region.
Why Use a POF?
There’s nothing in the Arizona Association of Realtors’ (AAR) Purchase Contract that requires that proof statement. But it’s just good business and a good idea to do so.
When buyers who are getting a mortgage loan make a purchase offer on a metro Phoenix property, they must provide a document called an LSR or Loan Status Report. It proves that the buyer has (at the very least) talked to a mortgage lender who verbally reviewed the buyer’s assets, liabilities and income and has come to a preliminary decision that the buyer is good for the loan. In fact the AAR Purchase Contract actually states on lines 62 and 63 that the Buyer’s LSR is attached to the purchase offer.
Cash buyers aren’t getting loans (of course) and so there’s no LSR to back up their ability to purchase.
Sellers are entitled to make a decision about accepting, countering or rejecting a Buyer’s purchase offer based on not only the price offered but the Buyer’s ability to pay for the home. Buyers who provide proof that their purchase funds are in liquid form present stronger offers.
With many bank owned homes in the metro Phoenix region selling in days or even hours, it’s important to demonstrate the strength of your offer right up front. The savvy seller/Realtor combination is going to counter an offer without a POF attached with a request for it anyway so it’s easier to get it done upfront.
What’s Sufficient as Proof of Funds?
Recent bank statements are the best and in this day of internet banking, are often the easiest to obtain. The statement should be dated within 30 days of your offer date.
Brokerage statements are a good POF too.
In my opinion, letters from your bank(er) are acceptable, but not nearly as convincing as the first two, which show not only that the Buyer has liquid funds, but where they’re located. A letter from a banker usually doesn’t specify just how liquid the funds are. The last thing Sellers (and Buyers for that matter) want is to get to the closing day only to find out that the Buyer’s purchase funds are in a retirement account that can’t be touched for weeks.
Your Realtor should be careful to obscure all account numbers, personal ID numbers, social security numbers and the like from the POF document. Really with-it Realtors shred these documents when the deal is complete and before putting the file into archives. I provide client with a short video of me shredding their documents as part of my closing gift. 
Got POF? Then let’s shop! Search the metro Phoenix MLS here
I Am Interviewing For A Job
August 2, 2008
Found this interesting post over at Bloodhound Blog. Normally I just lurk over there from time to time, skimming and browsing and trying to avoid the flying fur from the commentary wars that erupt all too often.
For those too busy to click over, Greg Swann’s post is simply advice to Realtors that you buy gas with clients in the car. Why? It reminds them that you’re spending your money for their benefit.
Readers. Dear Readers. I’m so glad you’re here! Thank you! I hope you come back often. I hope that you find what you’re looking for. I hope this blog is a useful tool for you and helps you figure out how to handle this topsy-turvy real estate market we’re all living through. I hope that my readers eventually become my clients.
If you don’t find what you’re looking for during your browse, email or call me and ask for it. I’m happy to provide any advice and information I can. That’s what I do, 8 or 10 hours a day, 6 or 7 days a week. You’re not bugging me when you call or email. If you’re in need of advice about real estate, please contact me. Contact me even if you’re “not ready” or “just looking” or “thinking about it”. Contact me even if it’s “your friend” you’re calling about. If I know the answer I’ll tell you, gratis. If I don’t know, I’ll find out for you.
I’m happy to speak with you and provide all the advice I can about your unique situation. But please remember that in every contact we have, I’m auditioning for a job and hoping for a future paycheck.
This is one of the few professions I can think of where all the expense comes out of the practicioner’s pocket up front and there’s no guarantee of payment. You pay your doctor before you leave the office. Lawyers take a retainer to cover out of pocket expenses. Accountants won’t release your taxes unless you pay them. Teachers, fire fighters and police are guaranteed a salary. That salary is lower than it might be, but that’s a topic for a different blog.
Realtors do not get a salary and most make middle-class wages at best. Realtors do not get sick days or vacation days. Most brokerages do not provide a Realtor with any help towards marketing, advertising or buying materials like signs & flyers, toner cartridges and businss cards, lunches and closing gifts. Those expenses all come out of my pocket, up front.
Ultimately, I do not get paid for the work I do unless you acknowledge me as your agent, in writing, when you buy or sell a piece of property. For most people, this seems like a reasonable proposition – I spend a lot of time and expend lots of my expertise to find you a home or sell your current home, and then I get paid at the end of it all. If you’re someone who thinks it’s OK to use someone else for their time and expertise without paying for it at the end of the deal, well then I invite you to keep reading but I implore you not to contact me.
Putting you in my car and driving you around town – at $4.00 a gallon and 112 degrees – is only fun because I know that I’m helping you find The One. I like watching people react to houses, I like finding the perfect home for you, and I genuinely like hearing about your kids, your dogs and your last summer vacation. I’m going to give you the most up to date information about area comps that I can find, and help you negotiate the best possible price and terms on the home of your dreams. I’ll watch your back and make sure you don’t inadvertently get into a situation where someone could sue the pants off you. But I’m also hoping that you’ll buy through me when the time comes, and then I’ll get to pick up that commission check that I worked so hard for.
If I provide you lots and lots of personalized staging advice, a comparative market analysis on your home, and a unique-to-your-house marketing plan, well that’s because I genuinely like spending time analyzing MLS statistics and creating individual marketing programs. But I’m also banking on being able to trust that you’ll list your home with me when you’re ready to sign the listing agreement. Just like you, I need to pay my mortgage, the electric bill, and buy food and clothing.
Plus I must pay the dozens of little invoices associated with my online presence. The Internet is free, except when I have to pay a little fee here and a little fee there to maintain my website, host this blog, network with colleagues so I have an extensive database to which I can market your home, advertise on various websites, continue my lockbox and MLS access, and so on.
Of course things can change while we’re working together and I understand that. Maybe you thought you needed to sell because of a job transfer, and then it didn’t happen. Or maybe you thought it was time to buy but a setback at work or at home shook your confidence, or a promised bonus didn’t come through. Please be honest enough to tell me why you broke up with me (so to speak). Otherwise, I’m left thinking I disappointed you but not knowing how.
If I spend time and money helping you find your way in this crazy real estate world, I’ll only ask for 2 things in return. Please acknowledge the time & money I’ve spent helping you by actually using me as your Realtor when you sign the contract. Then, when it’s all over and the keys are exchanged, please remember to encourage your friends and family to call me too.
Oh, and one more thing which (I admit) is totally selfish: please put me on your email distribution list when you send out pictures of the kids, the house, the dogs and your vacation. Your photo updates always make me smile.
Dear readers, thank you for visiting! Thank you for coming back! Thank you in advance for becoming my client someday when you’re ready to buy or sell! Finally thank you for remembering that I am working for you and no one will pay me if you don’t.
