Tag Archives: agent

It’s Hard Out There for Buyers, Lesson 2: Make Sure You’re Dealing with the “Agent-in-Charge” (It May Not Be Who You Think)

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Here’s another quick tale from the trenches as I continue to work with clients at my new real estate firm, this time from the rough-and-tumble market of South King County.  Yup, it’s tough everywhere…

My client identified a home in Kent for purchase.  It had been on the market for 200 days, with a couple of failed contracts in the meantime (one due to “buyer remorse” and one to failed financing) and nary a price drop. The listing showed an Agent and a Co-agent (both from the same office). I promptly reached out to the Agent, who told me they had no offers and none expected.  Within a day or two we submitted our offer at $10k off list.  Having heard nothing in response, I followed up with a  call two days later.  Her voicemail told me she was the managing broker for the office.  Good, I’m dealing with the boss…

The Agent called back and explained that the sellers were having health issues and thus the delay in responding.  I asked about other offers and was assured there were none.  I noted that our offer amount was predicated on us being the only offer, and if another offer appeared to please let us know.  In that event, obviously we would take a different tack in the negotiations.  I also said that we had no problem at all being patient with the sellers given their health issues, assuming they were indeed acting in good faith and negotiating only with us.  The Agent assured me that was the case. Yeah.  She said that the Co-agent was trying to meet with the sellers and they would get back to us in a day or two.  She said the sellers were likely to counter at $4k off list.  Riiiiiight.

The next day, I got a call from the Co-agent.  With “the bad news.” Sellers had received a full-priced offer, so they accepted it. Another “WTF?!?” moment.  Although signed, it had yet to be returned to the buyers, leaving me a tiny bit of room to maneuver.  So I tried to salvage the situation, and the Co-agent at least pretended to be sympathetic.  I called the client and got authority to draft a new offer at $1k OVER list – thus beating the offer in hand – but the sellers had made their decision and had no interest in giving me or my clients the time of day.

When the smoke cleared, and the rage had subsided, I though about the lesson to be learned.  Always go with full list in this market if it’s within shouting distance of fair?  That seems extreme and not consistent with my professional obligations to my client. Recognize that assurances of “good faith” are rendered meaningless the moment a new offer comes in?  Yeah, but that’s a little obvious, this is after all real estate.  🙂  Then it hit me: Know who is really “the agent.”  You know, the person with the seller’s ear who is actually driving the ship. It may be the “Agent” or it may be the “Co-agent,” assume nothing based on title (even if the “Agent” is also the managing broker!).  Listen for clues.  When the Agent says, “Oh, the Co-agent will be meeting with the sellers tomorrow,” immediately hang up and call the Co-agent.  Don’t waste your breath talking to anyone else.  It is a waste of time that will not be helpful going forward.

Another lesson learned. And confirmation that the Quill model strikes the right balance between protecting the client (by keeping an attorney on board and behind the scenes) and getting a deal done (by allowing the Quill agent to take the lead when negotiating a contract).

The pain of over pricing and poor photos… and how not to get bit by them, 9+ questions to ask your listing agent.

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I’ve noticed a trend in my business lately.  Several consumers are contacting our team for help in re-listing their home after having a poor experience with a prior agent.  While it is true that selling activity in Puget Sound is lower this year than last, there is still some positive selling activity occurring with some areas of Puget Sound continuing to grow in housing values.

So, with there still being some sales activity why is it that these folks are contacting us?

What I’ve seen as key factors in the lagging sales of these homes is poor pricing and presentation of the properties.  In one case the price had been overinflated by hundreds of thousands of dollars, plus it had poor presentation in photos and staging, so the home languished sitting on market for over a year.

In the majority of these situations things could have been handled differently with the past agent.  And, while I believe that me and my team provide a higher level of service than many others, we know we aren’t the only game in town that can figure out the right mix of marketing, presentation, and pricing for a property.  However, in these instances, I do believe the former listing agents could have done a better job – for certain – but, as a seller, it is also up to you to do a good job of interviewing a prospective agent.  A few good questions by the seller might have led to a different decision about how the house was marketed and led to a better discussion about what impacts the value of a home.  This, in turn, could have led to a more informed decision about where to place pricing.

So, to try and help those of you out there who are considering putting your home on the market, here is a list of 9+ questions you can use to qualify and interview your prospective listing agent.

1.   What methods of advertising do you use, and why?  Can you tell me which will likely be the most effective?  How comfortable are you using Internet advertising methods?

2.   Do you think my home will need prep work or staging to get it ready for market?  What types of things do you suggest for sellers and why?

3.   What is the typical timeline for selling a home that you have represented and how does that compare to the local marketplace?  What percentage of selling price do you typically get compared to list price?

4.  Do you offer any particular programs or services for each home that you sell such as a home warranty, professional photos, etc?  Does your fee determine whether additional services are included or not?

5.  If you don’t provide these additional services yourself – do you at least have companies you can refer me to that if I choose to use them directly to prepare my home more effectively, I can do so?

6.  Are there any special considerations I should have while selling my home such as security, prep for showings, etc?

7.  How often will you communicate with me about the sale of my home?  What kinds of reports can I expect?

8.  Will I get a chance to review and approve any of your advertising or marketing materials such as the flyer, MLS ad, or otherwise?  If not, why?  If I am not satisfied with a piece, will you work with me till I am?

9.  How will you determine the price that should be advertised for my home?  Will you include me in those pricing decisions and explain to me any reasoning for a price above or below my own estimate?

This list isn’t meant to be exhaustive but it will definitely open up a lot of good (or what should be good) conversation between you and the agent you are interviewing.  If the agent is unable to respond to any of these questions then you should seriously reconsider whether or not you will use him/her regardless of if it is a “family friend” or otherwise.  In today’s marketplace it is important that you make the right choice the first time, if you can.  The buying public is much more sophisticated today than even 10 years ago because of the Internet and because of the onslaught of home focused television shows and channels like HGTV.

Starting with Community Outreach

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Even before we were done building out the InsideBu website, I recommended that Madison start doing some research. And I started by advising him to fill up his sidepanel with links. My logic is that the process of building up a blogroll forces a new blogger to read other bloggers. The fact that it also also has the benefit of building up some good will with prominent local bloggers is just icing on the cake!

Here is the advice I gave him:

In the first week, there is no need for any blogging (although you should be writing a few posts just to get the blogging muscles exercised!). My recommendation is to spend a few hours this week researching the online competition for your area. At the end of Week 1, I would expect for your sidepanel to be filled with a bunch of links! (For background, see this blog post on Linkation!).

To give you an idea of where I’m going, I recently revived a bit of the neighborhood focus on RCG, which resulted in these Neighborhood Roundup posts. You simply will not find as many neighborhood blogs in Malibu (any?), but that doesn’t mean you should slack on the links… In terms of where to start, here is where my gut says should be the order of importance:

  • Local Bloggers
  • Celebrity Bloggers
  • Project Blogger Participants
  • Local News sites
  • Local Real Estate Professionals
  • Los Angeles bloggers

Some places to start looking for bloggers and other sidepanel links:

To see how Madison has implemented these recommendations of Project Blogger, check out the sidepanel of InsideBu!

Do YOU have a durable power of attorney?

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So, I haven’t been on RCG for a while because I am gone from Seattle to Wichita, KS where I and my siblings are on hospital watch. My parents were hit by a drunk driver on Monday night and so I caught a flight here immediately since both of them were in the hospital with injuries. My dad has a brain injury and has been unconscious for several days now. For anyone that is interested in reading my blogs about the experience feel free to do so at this link: http://blog.myspace.com/teamreba
When I’m working with clients there are always situations that come up where we have to deal with difficult circumstances. My partner, Michael, and I frequently ask our clients if they have a durable power of attorney. Typically we make it for a specific property based on the transaction and usually the title company has to approve the POA to insure the purchase. Sometimes the POA is put in place under in the context of just making sure we are able to get signatures if there is a spouse or partner that travels a lot or an out of country trip is planned that would make it difficult to get notices or addendums signed. I’ve used these when I have siblings in multiple states as well who are buying or selling property.

Thankfully my parents did put together POA’s about 4 years ago. My mother is a REALTOR(R) in Wichita and my dad works with her as a licensed agent. They also own several rental properties and they had just received mutual acceptance on an offer for one the day they got in the accident.  My mother is conscious, although on pain medication for her broken bones, and she is aware enough that she knows what is going on and can sign things for herself. However, while I am my dad’s medical POA one of my siblings is his financial POA.  I’ll likely have my sister sign for my dad just so there is no question about mental faculties with my mom when the additional paperwork for this transaction is turned in.

It’s been a relief for me (and I think my mom too) to be able to come in and help out with her business while she and dad are in the hospital. I can’t practice real estate agency in Kansas but I have contacted some other agents that know my mom (she’s been an agent 20 years) and they’ll help with any items that require licensing and I’ll be a knowledgeable “gopher”. This also relieves stress from my siblings who may not know what they should do for her contracts and listings. I hadn’t really considered I’d have to help out in this way, but I sure am glad that I can.  It helps to also give me something else to think about rather than my dad in ICU.

My comments to all that read RCG is that if you don’t have a durable power of attorney for your personal affairs you really should do it and the sooner the better. You never know when a truck will slam into you and render you unconscious and you’ll need help with your medical and personal affairs such as paying bills. We stress this kind of long term planning to pretty much all of our clients and we host a client event every year that covers things like this to prevent more cases like Terry Schiavo. I hope you’ll consider it and go do it soon yourself.

Get out your boxing gloves! Attorneys vs. Agents

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Hi Russ, thanks for taking me up on the request to put a blog together on this subject. Sorry I’ve been slammed with work to read it till now, but, I guess that’s a good thing. I’ll try to stick to the nature of what you started with in your original post as I see several folks have tried veering away from your target discussion. To your remark “Where I have to scratch my head is with the deals that are a bit out of the ordinary. Where the blank addendum becomes a significant part of the deal. My guess is that most of these deals also don’t get to the attorney. And yet I have seen many of these deals when the transaction blows up or after closing and everyone (many times including the agent) are in wonder why they tried to go it alone.” I’d have to say that you are likely right that the majority of these don’t see the light of an attorney’s office. My personal guess is that many people wrongly believe that the cost will be exorbinant. Others are afraid of becoming embroiled in a long and tedious lawsuit that will consume their lives and financial resources. Personal experience so far with numerous residential and commercial clients is that this isn’t the case typically. I truly believe that fear of the unknown is what kills off a lot of people from getting representation from an attorney.

So, that leaves a lot of people relying on their agent to put together these addendums that cover the items that aren’t covered in boilerplate NWMLS contract language. Most agents don’t get much training in how to write these types of addendums although there is a good class that is taught through SKCAR (or at least there was) by Larry Christensen. In it he covered the topic of what elements should be considered when writing on Form 34 or the blank section of Form 22D (section 10). How he put the material to the class was great because he got people thinking critically about what should be used in these situations if there was no way to get an attorney involved – that was the “if, then” concept and the reminder that any monies associated with the transaction must be address (ie. earnest money). Example: If Seller does not perform (x) by (insert date), then Buyer may cancel the Agreement and Earnest Money is returned to the Buyer. Because of some the initial questions Larry asked in the session you could tell many agents in the room had been writing some pretty poor addendums in the past and I truly hope that they all walked away with some new knowledge and that they listened to his advice of building a relationship with an attorney.

This class got me to modify a little bit how I draft addendum language although the majority of the difficult cases go to our real estate and business attorney, Berrie Martinis of Garvey Schubert Barer http://www.gsblaw.com for drafting. I frequently pay for this service for my clients as an added value to them but if it’s going to get sticky in a particular transaction I do refer them directly. I’ve done this as well with an estate planning attorney at the same firm, Tim Burkart, when the right situations call for it (such as dealing with an estate). We usually discuss it in advance and determine what will work – often with discussion including Berrie or Tim on this decision. To go back to another posting on this subject someone said they frequently write addendums that state a seller may be taking an object with them upon closing. Well, my first thought was are you only writing “Dining room chandelier to go with Seller”? If you’re writing only these words a lot of unstated concerns come up – such as: 1) is the seller responsible for replacing the chandelier with another light fixture?, 2) is that fixture to be of the same quality and price point as the current chandelier?, 3) If seller is replacing the fixture, does Buyer, who will take possession, get to determine the style of the new light fixture? and so on… I think you get my drift.  If I were the seller’s agent in this situation and the seller had said that they would be taking the chandelier but they’d compensate for it, I would draft something more along the lines of “Dining room light fixture to remain as personal property of the Seller after Closing, allowing through to Possession for removal of the item. Costs to remove the light fixture will be borne by Seller. Additionally, Seller to credit Buyer ($ sum) for the cost of a like-kind replacement light fixture. Any costs for labor or other associated installment costs for replacing light fixture to be borne by the Buyer. If Seller fails to remove light fixture by the Possession date, then this addendum will automatically default and the light fixture will become the property of the Buyer. No compensation will be due from the Buyer to the Seller if the Seller does not meet the terms and timelines of this addendum for removal of the light fixture.”

[photopress:la_murrina_veneziano_murano_glass_chandelier_thumb.jpg,thumb,alignright]

Does this look like too much to cover the issue?  Some people would say “yes” but I personally like the comprehensiveness of the language because it covers a lot of the possible questions and problems that could arise if these steps aren’t taken up front. It would be interesting to get your opinion on my example here, Russ. I’ve seen enough situations where a seller has taken something as simple as a light fixture and the buyer assumed a replacement would be put in and then they were surprised when one wasn’t there and a fight ensues leaving both parties with a “bad taste” at the end. On top of all the costs of purchasing a place, to find out you need to pay another $300-2000 for a new light fixture (chandeliers can be pricey) can be frustrating for a buyer and it makes the agents look bad because they should have considered these questions. It’s this kind of thing that helps bring value to the transaction and the clients. I’ve often called myself “an optimistic pessimist” because I always hope for the best, but I plan for the worst. That kind of thinking gets me asking questions that wouldn’t even come to mind for a lot of people when they’re buying a property. And, when I bring up questions that helps my clients to think critically about what they’re doing in a transaction and they feel more involved in their contract rather than feeling like they’re just being shoved through and they don’t really know what happened when it’s all done. This helps in making sure that when we have to go off the standard forms that we’re all focused on a good outcome and for our client’s interests to be protected.

I’ve had a few agents ask me if the simple addendums I write have been completed by an attorney because of their comprehensiveness. However, I would never hold myself out as an attorney or being as educated in case law. I just got done telling a client today that I have to be very careful in even discussing the meaning and interpretation of contract language and that I suggest he use his attorney to review some upcoming language in a Public Offering Statement that we’ll be reviewing. When it comes to being considered a “peer” with attorneys or any of the other professionals we engage with on a daily basis, I consider that to be in the sense that I should be able to engage in an educated, experience based and professional discussion of terms, consequences, and concern for the best interests of the mutual client. Each professional brings something useful to the table and it’s being able to merge all of these skillsets into a successful situation for the client that should be the goal.  And sometimes that situation may mean killing a deal to save a client from a precarious purchase – not all deals should go through – but that doesn’t mean another property won’t come up that will result in a successful purchase.

This brings me to a subject I want to blog about in the near future – raising the level of professionalism of the real estate industry in general. That, and getting agents to stop those old sayings of things like “buyers are liars and sellers are worse.”  When I got in the industry 4 years ago I couldn’t believe people in the industry said stuff like this around me all the time. It seems like an “us vs. them” mentality. How messed up is that!?!? If you’re a professional you don’t walk into a meeting with a prospective client with this kind of mindset and I’m glad that I don’t.

$100,000 for the "no show" agent

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[photopress:thecast_biopict_jerry.gif,thumb,alignright]Joe asked: Ardell, I was wondering if you would care to comment on the Jerry Seinfeld case.

Thanks Joe, for the opportunity to sort out this “No Commission for You!” case. It’s a shame Seinfeld is no longer on TV, as this would make a great episode where they could play the “No Soup for You!” Soup Nazi theme in a different light.

There are a lot of missing facts in the linked story, so I have to expand the information first.

Gist of the Story:

The Seinfelds used a personal manager to view property with the agent, before they themselves viewed property.

From September of 2004, the Seinfeld’s real estate agent showed various properties to their representative.

In January of 2005 the agent showed the property the Seinfelds eventually purchased, to the personal representative of the Seinfeld’s.

On February 11, 2005 the agent again showed the property, to both the personal representative, AND Mrs. Seinfeld.

Then came the Sabbath, that same night, and the agent was not available for a 24 hour period either by phone or in person. That happened to be the day Jerry wanted to see it and he went there and struck a deal with the owner direct.

Seinfeld refused to pay the agent because she was unavailable for the 24 hour period he was ready to go, see and buy.

Joe,

My thoughts are that the agent should have had someone covering for her during her “24 hour shutdown”. It’s not like it was an unforeseen emergency, like she was rushed to the hospital. This “I don’t work on the Sabbath” is a weekly event. No reason she can’t hire someone to answer her calls, and someone to show property for her, during those 24 hour time periods.

I can see a buyer not wanting to risk losing a property during that time. What if there were another offer that day? Should a buyer lose a house so an agent can take a day off? Or should the agent provide a back up number for them, like a doctor would.

So I do fault the agent for not having a back up person. But it would appear from the facts that the agent was entitled to the commission, and the Seinfelds would not have lost the property, had they waited until Sunday.

Agent FIRED! – Lender Fraud

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[photopress:fired.jpg,full,alignright]Has Lender Fraud become the standard?

Very sad, but very true story. I received an email from a Rain City Guide reader yesterday. The reader happens to be a local agent who was fired, because of her efforts to both accommodate her Buyer Client, without committing Lender Fraud.

The buyer fired her for not wholeheartedly complying with their WANTS, and for even considering for a moment, the Lender fraud implications of their WANTS.

Reason given..ALL OF OUR FRIENDS HAVE AGENTS AND LENDERS DOING THIS, AND WE FEEL YOUR SERVICES ARE THEREFORE COMPARATIVELY INADEQUATE. YOU DIDN’T FIGHT HARD TO GET US WHAT WE WANTED…

Suffice it to say, what they WANTED was cash back at closing under the table.

Apparently this has become so commonplace, that it is now the standard to which she was held. Money “off the sheet”. I can name more examples of commonplace Lender Fraud…but that is not the question here.

Sadly many told her she was being “a goody two shoes” about it. Very sad indeed.

Investigating Preapproval Letters

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(Editor’s Note: Today I get to introduce yet another contributor! Rhonda Porter is a successful mortgage broker from the Eastside who has been a frequent and much appreciated commenter on RCG as of late. I’m definitely excited that we get to learn more from her years of experience in the industry… She was formally a title representative before getting into mortgage. You can learn more about Rhonda on her personal blog or her website. She can be reached via email or by simply leaving a comment below!

Yesterday, I received a phone call from a Listing Agent regarding a preapproval letter I had prepared for one of the buyers I’m working with. She wanted to confirm that my clients are indeed approved and to find out a bit more information about me since, if she did accept their offer, we would all be working together. She informed me that she calls on all preapproval letters she receives and that often times, lenders may seem not to have all the facts straight on their borrower or respond as if it’s the only transaction they have in their pipeline. Regardless, she gets a better idea of who the lender is that might be involved with her Seller’s transaction. I am really surprised I don’t receive more phone calls from Listing Agents to check out preapproval letters.

[photopress:j0403639.jpg,thumb,alignright]When I sold my house last year, I actually called on one of the preapproval letters we received. The Selling Agent who was presenting the offer thought it was “highly irregular

Rain City Guide Year In Review

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The most popular articles on RCG from this past year as measured in total hits:

(I encourage all RCG contributors to do something similar):

  • 10 Great Conversations. This was the first of my “list” posts and was a lot of fun to put together…
  • The Best Online Real Estate Marketing Time Can Buy. Getting people to return to your site day in and day out is simple (but not easy)… Be interesting!
  • Improving Online Home Valuations? I like this article mainly because it jump-started a bunch of internal discussions at Move about real estate blogging.
  • Plus How to Link. I include this one because I’m often shocked at how many real estate agents think they can blog without linking…
  • Paying for the Privilege of Marginalization. I don’t think the real estate community at large has really come to grips with what it means to take part in some of these online classified sites and the tech-savvy agents seem to have given into their fatalistic instincts in terms of their industry as a whole. Fascinating stuff that borders on the “can’t tread there anymore” territory for me… 🙂

And finally, I found it particularly fun to read the slew of interviews I did at the beginning of last year. Lots of stuff has changed in a year in real estate blogging, but not as much as you might think!

An SEO Update…

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My guess is that there is still a lot of interest from real estate professionals on how to use SEO (search engine optimization) to drive (free!) traffic to your site. With that in mind, I thought I’d keep people updated on the little SEO experiment I started a week ago. As you’ll likely see, the results so far have been somewhat mixed.

First the worst news: Google dropped RCG out of the simple search [Seattle Real Estate] (at least on the first few pages). RCG has been in the top 10 for at least a year, so this is quite surprising! (Over the past year, this term has driven about 3% of the new users to RCG, which might not seem like a lot, but it is the most dominant driver of traffic to the site. No other phrase even comes close.

Better news is that after eliminating some of the pages and focusing on only a few tabs on the top of the page, the results for searching like [agent recommendations] has been much better. (RCG is #1 on Google!)

Also of interest, it took less than a week for RCG to now appear on the front page of some obvious searches like [Seattle Real Estate blog] on both MSN and Yahoo. I think this bodes well for the future as these sites do a better job indexing RCG thanks to the keyword and title changes I made.

For comparison purposes, I’ve decided to see how the site has changed using these days:

  • Pre SEO changes: Nov 12th through the 16th
  • Post SEO changes: Dec 10th through the 14th

Considering the changes in the status on the big search engines on the big search terms, not much as changed in terms of overall traffic:

  • Google. Pre: 1738, Post: 1568
  • MSN. Pre: 41, Post: 42
  • Yahoo. Pre: 28, Post: 25
  • Ask. Pre: 22, Post: 15
  • Technorati. Pre: 21, Post: 34

The overall Google traffic decreased 10%, while there was virtually no change from the other search engines. I included Technorati thinking that would be the “control” that wouldn’t be affected by SEO, but of course, that is the ONLY site that increased substantially! Go Figure!