The economic recession had finally caught with the Charlotte housing market and prices have been gradually falling since January of 2008 until the federal tax credit provided some welcome relief to a weak housing market. Track the average home sales prices by month for the past year:
Dec '09: According to the Charlotte Regional Realtor Association statistics, the average home sales price for Dec was $211,705. The average sales price was up by 5.7% over the same period last year. December sales totaled 1,527 out of approximately 21,727 listings, so it is taking about 14 months for the inventory to turn over. Average home sale values have ticked up due to the deadline on the new $8,000 federal tax credit available to first-time homebuyers and existing home owners, but homes in the upper price ranges are taking longer to sell.
August '09: According to the Charlotte Regional Realtor Association statistics, the average home sales price for may was $209,245. The average sales price was down by 9.2% over the same period last year. August sales totaled 2,221 out of approximately 24,842 listings, so it is taking about 11 months for the inventory to turn over. Home sales have picked up due to the new $8,000 federal tax credit available to first-time homebuyers.
May '09: According to the Charlotte Regional Realtor Association statistics, the average home sales price for may was $199,243. The average sales price was down by 11% over the same period last year. May sales totaled 1,912 out of approximately 25,429 listings, so it is taking about 13 months for the inventory to turn over. Home sales have picked up slightly due to the new $8,000 federal tax credit available to first-time homebuyers.
April '09: According to the Charlotte Regional Realtor Association statistics, the average home sales price for April was $201,352. The average sales price was down by 9% over the same period last year. April sales totaled 1,773 out of approximately 25,254 listings, so it is taking about 14 months for the inventory to turn over. Home sales have picked up slightly due to the new $8,000 federal tax credit available to first-time homebuyers.
According to the Charlotte Regional Realtor Association statistics, the average home sales price for March was $191,433. The average sales price was down by 13% over the same period last year. March sales totaled 1,671 out of approximately 25,023 listings, so it is taking about 15 months for the inventory to turn over. Home sales have picked up slightly due to the new $8,000 federal tax credit available to first-time homebuyers.
February '09: According to the Charlotte Regional Realtor Association statistics, the average home sales price for February was $182,865. The average sales price was down by 15.5% over the same period last year. February sales totaled 1,348 out of approximately 24,416 listings, so it is taking about 18 months for the inventory to turn over. Homes are taking much longer to sell due to mounting foreclosures taking their toll on the economy.
January '09: According to the Charlotte Regional Realtor Association statistics, the average home sales price for January was $189,048. The average sales price was down by 13.5% over the same period last year. January sales totaled 1,258 out of approximately 22,964 listings, so it is taking about 18 months for the inventory to turn over. Homes are taking much longer to sell due to mounting foreclosures taking their toll on the economy.
December '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for December was $200,226. The average sales price was down by .8.3% over the same period last year. December sales totaled 1,350 out of approximately 22,701 listings, so it is taking about 17 months for the inventory to turn over. Homes are taking much longer to sell due to the worsening economic conditions.
October '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for October was $216,777. The average sales price was down by .3% over the same period last year. October sales totaled 1,848 out of approximately 25,561 listings, so it is taking about 14 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
September '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for August was $214,927. The average sales price was down by 9% over the same period last year. August sales totaled 2,239 out of approximately 22,262 listings, so it is taking about 12 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
August '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for August was $230,472. The average sales price was down by 4.5% over the same period last year. August sales totaled 2,469 out of approximately 22,716 listings, so it is taking about 11 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
July '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for July was $230,632. The average sales price was down by 5.8% over the same period last year. July sales totaled 2,721 out of approximately 27,062 listings, so it is taking about 10 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
June '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for June was $233,670. The average sales price was down by 5.8% over the same period last year. June sales totaled 2,734 out of approximately 2,7191 listings, so it is taking about 9 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
April '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for April was $221,497. The average sales price was down by 2.2% over the same period last year. April sales totaled 2,400 out of approximately 26,790 listings, so it is taking about 11 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
March '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for March was $220,620. The average sales price was down by 3.5% over the same period last year. March sales totaled 2,659 out of approximately 26,466 listings, so it is taking about 10 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
February '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for February was $216,292. The average sales price was down by almost 1% over the same period last year. February sales totaled 2,179 out of approximately 24,666 listings, so it is taking almost 11 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
January '08: According to the Charlotte Regional Realtor Association statistics, the average home sales price for January was $218,610. The average sales price was down by 3% over the same period last year. January sales totaled 2,009 out of approximately 23,813 listings, so it is taking almost 12 months for the inventory to turn over. Homes are taking longer to sell due to the sluggish national housing market.
December '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for December was $218,399. The average sales price was down by 3.7% over the same period last year. December sales totaled 2,559 out of approximately 22,098 listings, so it is taking almost 9 months for the inventory to turn over. Homes are taking longer to sell as we move into the middle of winter.
November '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for November was $233,141. The average sales price was up by 6% over the same period last year. October sales totaled 2,447 out of approximately 21,823 listings, so it is taking almost 9 months for the inventory to turn over. Homes are taking longer to sell as we move into the middle of winter.
October '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for October was $217,504. The average sales price was down by 1% over the same period last year. October sales totaled 3,262 out of approximately 23,150 listings, so it is taking almost 9 months for the inventory to turn over.
September '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for September was $236,061. The average sales price was up by 9.2% over the same period last year. September sales totaled 3,067 out of approximately 23,018 listings, so time on the market jumped up to 7.5 indicating a major slowdown going into the winter months.
August '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for August was $241.323. The average sales price was up by 3.9% over the same period last year. August sales totaled 3,769 out of approximately 22,177 listings, so it is taking about 6 months for the inventory to turn over.
July '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for July was $239,696. The average sales price was up by 4.1% over the same period last year. July sales totaled 3,875 out of approximately 21,776 listings, so it is taking about 5 1/2 months for the inventory to turn over.
June '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for June was $248,048. The average sales price was up by 3.3% over the same period last year. June sales totaled 3,852 out of approximately 21,354 listings, so it is taking about 5 1/2 months for the inventory to turn over.
May '07: No statistics available.
April '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for April was $225,748. The average sales price was up by 4.2% over the same period last year. April sales totaled 3,534 out of approximately 20,189 listings, so it is taking about 5 1/2 months for the inventory to turn over.
March '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for March was $228,665. The average sales price was up by 11% over the same period last year. March sales totaled 3,573 out of approximately 18,917 listings, so it is taking about 5 months for the inventory to turn over.
February '07: No statistics available.
January '07: According to the Charlotte Regional Realtor Association statistics, the average home sales price for January was $219,270. The average sales price was up by 6.9% over the same period last year. January sales totaled 2,615 out of approximately 17,187 listings, so it is taking about 6 1/2 months for the inventory to turn over.
December '06: According to the Charlotte Regional Realtor Association statistics, the average home sales price for December was $226,966. The average sales price was up by 5.3% over the same period last year. December sales totaled 3,283 out of approximately 16,213 listings, so it is taking about 5 months for the inventory to turn over.
November '06: According to the Charlotte Regional Realtor Association statistics, the average home sales price for November was $219,681. The average sales price was up by 3.6% over the same period last year. November sales totaled 3,067 out of approximately 16,723 listings, so it is taking about 5 1/2 months for the inventory to turn over.
October '06: According to the Charlotte Regional Realtor Association statistics, the average home sales price for October was $219,268. The average sales price was up by 1.5% over the same period last year. October sales totaled 3,471 out of approximately 17,372 listings, so it is taking about 5 months for the inventory to turn over.
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Wednesday, January 13, 2010
Monday, August 10, 2009
'Lying Listings' Fool More Homebuyers
Most homebuyers have encountered a "lying listing" -- the house for sale that doesn't even remotely resemble its colorful description in the Multiple Listing Service or classified ad. Jon Boyd, an exclusive buyer's agent and broker for The Home Buyer's Agent in Ann Arbor, Mich., recently showed a self-described "stunner" to one of his clients.
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Wednesday, April 1, 2009
$8000 First Time Home Buyer Tax Credit
Late on Wednesday February 11th, Congress approved a tax break of up to $8,000 for first-time homebuyers, so just think: if Congress had passed this bill back in October of 2008, they could have saved the taxpayers the $700,000 billion that the banking industry squandered on themselves instead of investing it in economic incentives that would circulate through the private sector. At least the taxpayers are getting something back this time around - and the flagging Charlotte real estate market is finally getting a jump start.
- Julie Read more on this article... Read more!
- Julie Read more on this article... Read more!
Saturday, November 1, 2008
Search for Charlotte homes with an Exclusive Buyer's Agent!
What exactly is an "Exclusive Buyer's Agent"?
A: An agent who represents only buyers, never sellers, with no risk to their buyers of dual or designated agency on any home they want to buy.
B: An agent who gets permission from their buyer in advance for the agent's company to also represent the best interests of the seller (or a competing buyer) on the same home.
C: An agent whose buyer signs an "Exclusive-Right-to-Represent-Buyer" Agreement regardless of whether or not the agent gets permission in advance from their buyer for the agent's company to also represent the best interests of the seller (or a competing buyer) on the same home.
Buyer agency has become very popular since it was introduced to consumers in the early 1990s. However, consumers need to ask some questions of their buyer's agent to better understand the level of representation they will be getting.
Questions need to include if the agency relationship is exclusive or non-exclusive and if dual and/or designated agency is practiced by their buyer agent's firm. Some buyers request that their buyer's agent provide "exclusive representation" so they would not risk divided loyalty with a seller client or another buyer client who is represented by the same firm. Buyers need to have a clearer understanding of the three ways that the term "exclusive buyer's agent" is used by real estate agents before they choose an agent to represent them on their next home purchase. Let's discuss each of the following scenarios:
A: An agent who represents only buyers, never sellers, with no risk to their buyers of dual or designated agency on any home they want to buy.
According to the National Association of Exclusive Buyer's Agents, (NAEBA), this is the only correct answer. This is also the definition you would find for "Exclusive Buyer's Agent" in "Don't Risk It! A Broker's Guide to Risk Management", published by the National Association of Realtors® in 2000: "Exclusive Buyer Representation - Also called exclusive buyer agency, this is the practice of representing only buyers, never sellers. The company never lists a seller's property and thus never has a seller as a client."
The definition above is also the definition used by the news media in articles written for the benefit of home buyers who are looking for consumer advice in preparation for the purchase of real estate. Internationally acclaimed finance specialist Suze Orman endorses the National Association of Exclusive Buyer's Agents in the "Finding a Buyer's Agent" section of her popular web site, Suze Orman.com.
Consumer advice columnists Ilyce Glink and Robert Bruss recommend exclusive buyer agency as an alternative to buyer agency to consumers who want to avoid the risk of dual agency - when one broker represents both parties. Ilyce Glink advises: "If you're trying to eliminate potential conflicts in your deal, you may want to try (exclusive buyer agency). Exclusive buyer's agents never represent sellers. They only represent buyers, and they typically will take buyers wherever they want to go in a metro area."
Robert Bruss differentiates between the different types of buyer agency services in his article Do Home Buyers Need Their Own Agent?: "Any real estate agent can be a buyer's agent to help locate your home purchase. In addition, there are a few exclusive buyers' agents who represent only home buyers, never accepting listings from home sellers."
And June Fletcher from the Wall St. Journal.com writes:
"Exclusive buyers agents can focus on their customers and their needs in a way many sellers agents can't. They don't have to spend their time holding open houses, staging properties, or doing all the other marketing tasks that consume much of a listing agent's time. They can concentrate on previewing homes, investigating comparable houses, helping the buyer understand financing options, negotiating the deal and making sure all the inspections and escrow items are done in a timely manner.
What's more, home shoppers who use exclusive buyers agents don't run the risk of falling in love with one of their agent's own listings. When that happens, the agent becomes a dual agent -- beholden to both the seller and the buyer, and thus, beholden to no one. Because this limits the amount of advocacy and advice the professional can give either party (for instance, a dual agent can't tell the seller the highest price that a buyer is willing to pay), it's illegal in some states.": Wall Street Journal.com.
B: An agent who gets permission from their buyer in advance for the agent's company to also represent the best interests of the seller (or a competing buyer) on the same home.
The news media is doing a great job of advising consumers to ask for an exclusive buyer's agent in order to avoid the the conflict of interests that exists with dual and designated agency (which legally is "dual agency" in NC, since the same broker represents both parties.) But the problem now is that consumers have started asking for an exclusive buyer's agent, so listing agents are representing themselves to consumers as "exclusive buyer's agents," and are advising consumers they can provide exclusive buyer agency representation - even when their company represents the seller too!
The reason for this is that the NC Real Estate Commission does not recognize the definition for exclusive buyer's agent published by NAR in 2000, and since then, picked up and popularized by the mainstream news media. As a result, many real estate agents whose companies represent buyers and sellers at the same time regularly advertise themselves to consumers as "exclusive buyer's agents".
C: An agent whose buyer signs an "Exclusive-Right-to-Represent-Buyer" Agreement regardless of whether or not the agent gets permission in advance from their buyer for the agent's company to also represent the best interests of the seller (or a competing buyer) on the same home.
The NC Real Estate Commission, for example, allows NC real estate agents to call themselves "exclusive buyer's agents" if their buyers sign an "Exclusive-Right-to Represent-Buyer" Agreement, even if their company will be representing the seller on the same home that the agent's buyer wants to purchase. So just because you have an "Exclusive-Right-to-Represent-Buyer" Agreement with your agent, that doesn't mean that your agent's company is only going to represent you. Your agent may start out representing only you, but in the future if you ever wanted to make an offer on a home listed by your agent's company, you would be required to permit the company to represent the seller, too.
The NC Real Estate Commission does not consider it a deceptive practice for agents to use the term: "exclusive buyer's agent" in this way because this usage is so pervasive throughout the real estate industry in NC. So the doctrine of "Buyer Beware" still applies to NC consumers who want an exclusive buyer's agent to represent them in their next real estate purchase transaction. NC agents are required to disclose the following agency representation options to consumers in NC: "Buyer's Agent, Seller's Agent, Dual Agent and Designated Agent", as defined in the NC Consumer Disclosure Brochure, but disclosure of the option of "Exclusive Buyer's Agent" is not required, so the definition varies according to each agent's own interpretation, if it is disclosed at all.
A refreshing exception is Ohio, where their state legal disclosure, "Consumer Guide to Agency Relationships," was developed jointly by the Ohio Association of Realtors and the Ohio Division of Real Estate & Professional Licensing. Under Ohio license law, each brokerage must disclose which of five agency policy options their company practices and offers to consumers, including an option for exclusive buyer agency: "Under this policy, your brokerage only represents buyers, and does not take listings, practice subagency or dual agency."
Real Estate industry expert and columnist Peter Miller sums up the argument best for including exclusive buyer agency as an additional agency option in the NC Consumer Disclosure Brochure: "Brokerages should always include listing brokers and buyer brokers, exclusive or not, so that individual professionals can pick the practice strategy they prefer while consumers can find the widest array of services. Exclusive buyer brokers changed the marketplace by popularizing the core concept of buyer brokerage. That's a transition which now helps millions of purchasers get a better deal in the marketplace - and that is a significant accomplishment."
Since no legal regulation for exclusive buyer agency exists in NC, before proceeding with a self-proclaimed "Exclusive Buyer's Agent," consumers are advised to question their real estate agent's interpretation of this loaded real estate term.
Julie P. Tuggle is broker-owner of Carolina Buyer's Agent, an exclusive buyer agency in Charlotte, North Carolina that represents only buyers, never sellers, on the purchase of Charlotte real estate with no risk to their buyer-clients of dual or designated agency on any home they want to buy.
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Sunday, June 8, 2008
How to Craft a Lowball Bid
They're a couple in their mid 20s -- a computer programmer married to an administrative assistant. Saddled with college loans, they're still struggling to secure themselves financially on starter salaries. Until recently, the idea of buying a home seemed impossible. But thanks to their smart bargaining strategy, along with moderating home prices, they recently realized their dream.
'It all started with a 'lowball offer' -- Read more on this article... Read more!
'It all started with a 'lowball offer' -- Read more on this article... Read more!
Thursday, December 6, 2007
Freebies From Home Builders
Builders are trying to lure reluctant buyers with plane tickets, new cars and even a pet peacock! In Seattle, a homeowner is offering round-trip airplane tickets to anywhere in the world, plus a six-night stay at a Four Seasons hotel to anyone who will just, please, buy the house he has on the market.
In New Jersey, a builder is trying to entice prospects to purchase condominiums and attached homes with a free two-year lease on a Mercedes-Benz. And in Michigan, a homeowner told potential buyers he'd throw in his peacock. Read more on this article... Read more!
In New Jersey, a builder is trying to entice prospects to purchase condominiums and attached homes with a free two-year lease on a Mercedes-Benz. And in Michigan, a homeowner told potential buyers he'd throw in his peacock. Read more on this article... Read more!
Monday, October 1, 2007
Tips on working with an agent - BE CHOOSY ABOUT YOUR AGENT
1. Interview several buyer's agents and ask how they will represent your best interests before you start looking at homes. Otherwise, the first agent who showed you the home you later decide to purchase may claim the buyer agency commission, regardless of whether or not you signed a buyer agency agreement with that agent or even want to work with that agent.
2. Ask what the policy of your agent's firm is if you want to purchase an in-house listing. If their policy is dual or designated agency on in-house sales, then you would be required to sign a dual agency agreement which would allow your agent's firm to represent the seller's best interests too.
3. Be wary of any agents who work for a firm that takes listings and claim they can represent you as an "exclusive buyer's agent". If their firm's policy is dual or designated agency on in-house sales, legally neither agent can provide either party with information that would give one party a negotiating advantage over the other.
4. Ask what the policy of your agent's firm is in the event the seller offers a bonus amount in addition to your agent's commission. Your agent must get your permission to keep any bonus amount over the commission amount agreed upon in the buyer agency agreement.
5. Make sure your agent explains the risks associated with dual agency and reviews the NC agency disclosure brochure, "Working with Real Estate Agents" with you prior to showing you any homes. According to the according to the National Association of Realtor's 2007 Legal Scan, over the past two years, agency - specifically breach of fiduciary responsibility by agent and issues surrounding dual agency and buyer's agency representation - accounted for the largest number of residential real estate-related court cases: http://www.realtor.org/rmomag.NSF/pages/lawdec07?OpenDocument .
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2. Ask what the policy of your agent's firm is if you want to purchase an in-house listing. If their policy is dual or designated agency on in-house sales, then you would be required to sign a dual agency agreement which would allow your agent's firm to represent the seller's best interests too.
3. Be wary of any agents who work for a firm that takes listings and claim they can represent you as an "exclusive buyer's agent". If their firm's policy is dual or designated agency on in-house sales, legally neither agent can provide either party with information that would give one party a negotiating advantage over the other.
4. Ask what the policy of your agent's firm is in the event the seller offers a bonus amount in addition to your agent's commission. Your agent must get your permission to keep any bonus amount over the commission amount agreed upon in the buyer agency agreement.
5. Make sure your agent explains the risks associated with dual agency and reviews the NC agency disclosure brochure, "Working with Real Estate Agents" with you prior to showing you any homes. According to the according to the National Association of Realtor's 2007 Legal Scan, over the past two years, agency - specifically breach of fiduciary responsibility by agent and issues surrounding dual agency and buyer's agency representation - accounted for the largest number of residential real estate-related court cases: http://www.realtor.org/rmomag.NSF/pages/lawdec07?OpenDocument .
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Thursday, September 13, 2007
Agent Disclosure Worse Than Ever
Although agency disclosure is required by state law that homebuyers are told the role of their real estate agent in the sales process, and most importantly, whom the agent represents, less than one-third of real estate agents comply, according to the National Association of Realtors' 2005 Profile of Home Buyers and Sellers.
Agency disclosure compliance has been on a downward trend since 2000, when 38 percent of homebuyers were disclosed at first meeting,
Link to article here: Read more on this article... Read more!
Agency disclosure compliance has been on a downward trend since 2000, when 38 percent of homebuyers were disclosed at first meeting,
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Tuesday, September 11, 2007
Dual-Agent Roles Cloud Some Home Sales
Question: If a selling agent neglects to inform a homeowner that a higher bid has been made and chooses instead to sell the house to a person he's also representing as a buyer's agent, what rights do the seller -- and the higher bidder -- have?
Can this agent be reported to anyone for unethical practices?
-- Natasha, Yorba Linda, Calif.
Natasha: It sounds like your agent is double-dealing. But your rights -- and your ability to collect damages -- could depend on which state you live in.
Generally speaking, real-estate experts caution buyers and sellers against using the same real-estate agent because of the conflicts it can create. Negotiating a final sales contract involves lots of give and take on both sides, and if your agent is also representing the other party in the transaction, that immediately puts you at a disadvantage. How will you know if the agent is doing more to serve your interests -- or the interests of the other party?
Despite the potential for trouble, it's still common for agents to represent both the buyer and the seller, especially since doing so greatly increases the agent's commission. In most states, such arrangements are legal, according to the National Association of Realtors, though these so-called "dual agents" have to get the consent of the buyers and sellers first.
The law gets trickier when two agents within the same real-estate company represent both sides of a transaction. In theory, that situation can lead to big conflicts if the two agents, who probably work in close proximity to one another, share information. But in some places, such arrangements are allowed without consent of the buyers and sellers, though local laws might still prohibit the agents from sharing information.
If you think you've been wronged, first contact your local realtors' association or your state real estate commission to find out what applicable laws exist in your state, and to report the possible abuse. If your agent didn't get consent for a dual-agent arrangement as required, for example, or broke some other law, you could immediately have grounds for a claim. In many cases, mediation can lead to a workable settlement; for example, you might be able to collect the difference between the sales price and the other, higher bid that you were not informed about. In other cases, mediation won't do the trick, and you'll have to sue.
If your agent did follow local laws, you could still have some recourse, but it will be harder to make your case. Although real-estate agents have a fiduciary duty to their clients to give them the best possible service, if they're acting within a sanctioned dual-agency arrangement, the agent could argue he or she was fulfilling obligations to the other party-an outcome you essentially agreed to in advance.
Obviously, it's often wise to avoid a dual-agency relationship from the get-go. No matter how you handle your sale, be sure to keep all the correspondence between you and your agent, and don't be afraid to snoop around to learn more about other possible bids -- and more about your agent's reputation. In many cases, sellers don't even know they've been taken advantage of, so it pays to know a lot about your local market, including the recent sales prices of nearby homes, before you get far along in the home-sale process. Doing some research on your agent and on recent nearby transactions can make you a more informed seller -- and keep the agent honest.
-- Mr. Barta is a staff reporter for The Wall Street Journal. His "House Talk" column appears every Friday exclusively on RealEstateJournal.com. Click here to e-mail him your questions about the residential real-estate market. Please include your first name and city and state. If your question is answered and posted, we will show your first name and city.
Originally published at Wall Street Journal.
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Can this agent be reported to anyone for unethical practices?
-- Natasha, Yorba Linda, Calif.
Natasha: It sounds like your agent is double-dealing. But your rights -- and your ability to collect damages -- could depend on which state you live in.
Generally speaking, real-estate experts caution buyers and sellers against using the same real-estate agent because of the conflicts it can create. Negotiating a final sales contract involves lots of give and take on both sides, and if your agent is also representing the other party in the transaction, that immediately puts you at a disadvantage. How will you know if the agent is doing more to serve your interests -- or the interests of the other party?
Despite the potential for trouble, it's still common for agents to represent both the buyer and the seller, especially since doing so greatly increases the agent's commission. In most states, such arrangements are legal, according to the National Association of Realtors, though these so-called "dual agents" have to get the consent of the buyers and sellers first.
The law gets trickier when two agents within the same real-estate company represent both sides of a transaction. In theory, that situation can lead to big conflicts if the two agents, who probably work in close proximity to one another, share information. But in some places, such arrangements are allowed without consent of the buyers and sellers, though local laws might still prohibit the agents from sharing information.
If you think you've been wronged, first contact your local realtors' association or your state real estate commission to find out what applicable laws exist in your state, and to report the possible abuse. If your agent didn't get consent for a dual-agent arrangement as required, for example, or broke some other law, you could immediately have grounds for a claim. In many cases, mediation can lead to a workable settlement; for example, you might be able to collect the difference between the sales price and the other, higher bid that you were not informed about. In other cases, mediation won't do the trick, and you'll have to sue.
If your agent did follow local laws, you could still have some recourse, but it will be harder to make your case. Although real-estate agents have a fiduciary duty to their clients to give them the best possible service, if they're acting within a sanctioned dual-agency arrangement, the agent could argue he or she was fulfilling obligations to the other party-an outcome you essentially agreed to in advance.
Obviously, it's often wise to avoid a dual-agency relationship from the get-go. No matter how you handle your sale, be sure to keep all the correspondence between you and your agent, and don't be afraid to snoop around to learn more about other possible bids -- and more about your agent's reputation. In many cases, sellers don't even know they've been taken advantage of, so it pays to know a lot about your local market, including the recent sales prices of nearby homes, before you get far along in the home-sale process. Doing some research on your agent and on recent nearby transactions can make you a more informed seller -- and keep the agent honest.
-- Mr. Barta is a staff reporter for The Wall Street Journal. His "House Talk" column appears every Friday exclusively on RealEstateJournal.com. Click here to e-mail him your questions about the residential real-estate market. Please include your first name and city and state. If your question is answered and posted, we will show your first name and city.
Originally published at Wall Street Journal.
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Sunday, August 26, 2007
How and When to Bid Low on a Home
With stagnant prices and elevated inventory in many markets, home sellers are no longer automatically turning up their noses at offers that come in far below their asking price.
But buyers who do ask for deep discounts still risk offending sellers to the point where they quash any deal. So before making an aggressive offer, some homework is in order, real-estate professionals say. And buyers will need to effectively explain why the price of a home should be lower.
Pat O'Heron was able to negotiate a steep discount with a seller who relocated for a job, in a neighborhood in Ann Arbor, Mich., that had two year's worth of inventory on the market.
Mr. O'Heron says before he even made an offer, the asking price had already dropped by about $80,000. He eventually bought the home for $270,400, with about $11,000 in other credits. The price ended up being $115,000 below the initial asking price.
Mr. O'Heron was able to take advantage of a market in which buyers decidedly hold the upper hand, with its excessive for-sale inventory due, in large part, to job losses in the area.
But even though housing is in a slump in many parts of the U.S., those tactics won't work in markets that remain healthy. And there's always an inherent danger in going too low. A low offer could insult the seller to the point that they'll refuse to counter, Realtors say. And the seller could easily make the assumption that the buyer isn't committed to making a deal.
"When you're making the offer," says Jon Boyd, Mr. O'Heron's agent and president of the National Association of Exclusive Buyer Agents, "if you justify that offer with outside data, then it's much less likely to be perceived as being an insult or [the buyer] not as serious."
Here are three guidelines on how -- and when -- to make an aggressive bid:
1. Learn how motivated the seller is to make a deal.
Certain sellers are going to be more willing than others to negotiate a low offer -- and there are several giveaways that might indicate more leeway on price.
For instance, if the sellers have already purchased another home and that sale has closed, they're likely to be more willing to make a deal, says Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists in Long Beach, Calif.
If the property has been on the market for a long time, sellers will be interested in entertaining any offers, he adds.
Mr. Gaylord says he talks to the seller's agent to get as many details as possible about how motivated the seller is.
Overall local market conditions also play a role. The housing market in which Mr. O'Heron bought, for example, was sluggish. The home he purchased had been on the market for about a year.
Because of the job relocation, the seller needed to move and wasn't in the position to take the home off the market until conditions were more favorable, Mr. O'Heron says.
2. Make your case with hard facts.
When putting together an aggressive offer for a client, Mr. Boyd doesn't just hand the seller a purchase agreement with the price the buyer is willing to pay -- he creates a cover letter explaining exactly where that number came from.
In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area, he says.
"If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall," Mr. Boyd says. "If we see two years' worth of inventory, we should be buying 5%, potentially 10% less than what houses have sold for in the past year in the neighborhood."
Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Mr. Gaylord says. That way, they can detail what they like about the house but express their fear of future dropping values.
3. Prepare for the possibility of rejection or negotiation.
Ultimately, a real-estate agent working on behalf of a buyer needs to honor and facilitate the offer that the buyer wishes to make -- even if it seems to be too low.
Mr. Gaylord warns buyers making very low offers that the seller might refuse to negotiate. On a "super aggressive offer," Mr. Boyd says he might tell a client "there's a one in five chance there will be a positive response."
Still, there's that potential for a seller to make a counteroffer, especially if there haven't been many other bids.
Danielle Kennedy, a real-estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as "a sign of interest."
It "begins the dialogue regarding the purchase of your house," she says.
Not all hope is lost even if a seller doesn't bite immediately.
Sometimes after time elapses, the seller comes around and decides to negotiate, Mr. Boyd says. New information -- such as the sale of a comparable home at a lower price -- also can nudge a seller to give an aggressive offer a second look and open the negotiation process.
Originally published at http://online.wsj.com/public/article/SB118748897500002119.html
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But buyers who do ask for deep discounts still risk offending sellers to the point where they quash any deal. So before making an aggressive offer, some homework is in order, real-estate professionals say. And buyers will need to effectively explain why the price of a home should be lower.
Pat O'Heron was able to negotiate a steep discount with a seller who relocated for a job, in a neighborhood in Ann Arbor, Mich., that had two year's worth of inventory on the market.
Mr. O'Heron says before he even made an offer, the asking price had already dropped by about $80,000. He eventually bought the home for $270,400, with about $11,000 in other credits. The price ended up being $115,000 below the initial asking price.
Mr. O'Heron was able to take advantage of a market in which buyers decidedly hold the upper hand, with its excessive for-sale inventory due, in large part, to job losses in the area.
But even though housing is in a slump in many parts of the U.S., those tactics won't work in markets that remain healthy. And there's always an inherent danger in going too low. A low offer could insult the seller to the point that they'll refuse to counter, Realtors say. And the seller could easily make the assumption that the buyer isn't committed to making a deal.
"When you're making the offer," says Jon Boyd, Mr. O'Heron's agent and president of the National Association of Exclusive Buyer Agents, "if you justify that offer with outside data, then it's much less likely to be perceived as being an insult or [the buyer] not as serious."
Here are three guidelines on how -- and when -- to make an aggressive bid:
1. Learn how motivated the seller is to make a deal.
Certain sellers are going to be more willing than others to negotiate a low offer -- and there are several giveaways that might indicate more leeway on price.
For instance, if the sellers have already purchased another home and that sale has closed, they're likely to be more willing to make a deal, says Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists in Long Beach, Calif.
If the property has been on the market for a long time, sellers will be interested in entertaining any offers, he adds.
Mr. Gaylord says he talks to the seller's agent to get as many details as possible about how motivated the seller is.
Overall local market conditions also play a role. The housing market in which Mr. O'Heron bought, for example, was sluggish. The home he purchased had been on the market for about a year.
Because of the job relocation, the seller needed to move and wasn't in the position to take the home off the market until conditions were more favorable, Mr. O'Heron says.
2. Make your case with hard facts.
When putting together an aggressive offer for a client, Mr. Boyd doesn't just hand the seller a purchase agreement with the price the buyer is willing to pay -- he creates a cover letter explaining exactly where that number came from.
In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area, he says.
"If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall," Mr. Boyd says. "If we see two years' worth of inventory, we should be buying 5%, potentially 10% less than what houses have sold for in the past year in the neighborhood."
Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Mr. Gaylord says. That way, they can detail what they like about the house but express their fear of future dropping values.
3. Prepare for the possibility of rejection or negotiation.
Ultimately, a real-estate agent working on behalf of a buyer needs to honor and facilitate the offer that the buyer wishes to make -- even if it seems to be too low.
Mr. Gaylord warns buyers making very low offers that the seller might refuse to negotiate. On a "super aggressive offer," Mr. Boyd says he might tell a client "there's a one in five chance there will be a positive response."
Still, there's that potential for a seller to make a counteroffer, especially if there haven't been many other bids.
Danielle Kennedy, a real-estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as "a sign of interest."
It "begins the dialogue regarding the purchase of your house," she says.
Not all hope is lost even if a seller doesn't bite immediately.
Sometimes after time elapses, the seller comes around and decides to negotiate, Mr. Boyd says. New information -- such as the sale of a comparable home at a lower price -- also can nudge a seller to give an aggressive offer a second look and open the negotiation process.
Originally published at http://online.wsj.com/public/article/SB118748897500002119.html
Return to Home Buyer Alert main page
Read more on this article... Read more!
Tuesday, August 21, 2007
Fuzzy Distinction, But Clear Conflict of Interests
In May, 2004, I began interviewing real estate agents to assist me in purchasing my first home. I interviewed Julie Tuggle, an exclusive buyer's agent, and two other real estate agents (who represented both buyers and sellers). During each interview I asked the agent what they would do if I liked one of the homes that they were listing. I was shocked when the two dual agents replied that they would be able to represent both sides. I am an attorney (licensed in Florida) and I could not fathom how this was not a blatant conflict of interest. When I stated that I was uncomfortable with such an arrangement they suggested that they could turn over either the buyer or seller to someone else in their real estate firm (and how do they determine which client to drop?) -- as if this would resolve the conflict of interest! To me, that would be like one partner in a law firm representing a husband and another partner in the same firm representing the wife. In law, conflicts of interest are strictly regulated, but in real estate it seems that the conflict is often pushed under the rug. Also, one of the interviewees kept saying that she was often a "buyer's agent" - and suggested this was the same as an exclusive buyers agent. I think that the general public does not understand the concept of an "exclusive buyer's agent", and until a definition is created, real estate agents will have the ability to keep this distinction fuzzy.
Thank you,
Danielle Eckelt Read more on this article... Read more!
Thank you,
Danielle Eckelt Read more on this article... Read more!
Making Double the Commission for Half the Representation
Dear Julie,
Julie, as you and I have been discussing your work as a real estate broker here in Charlotte, I thought I might share with you a situation that I experienced in the summer of 2005.
My wife and I had owned a condominium since 1996 at Surfside Beach S.C. Like most every other piece of coastal property, the appreciation in value was such that we decided to sell.
We engaged the real estate agent that had previously arranged the purchase. This was done as we felt comfortable with her real estate skills and demeanor although we had not spoken to her in eight years. Upon my verbal agreement to hire her, she immediately told me she had an anxious potential buyer for our specific condo. That evening after I engaged her as our agent, she faxed the contract to me. I read it and we did discuss briefly why I should or should not authorize her to be a co-broker.
Quite frankly, I do not recall receiving any information highlighting the advantages or disadvantages of a co-brokerage arrangement as a seller of real estate. Nevertheless I signed it and we ended up with a dual agent agreement. All went well until that anxious buyer didn’t like a couple of loose outlets and cancelled their signed contract after the inspection. At that point when I began to ask questions, she informed that because she was also representing the potential buyers, she couldn’t answer certain questions I was asking. In addition, when her boss later purchased our property, the attorney handling the closing also informed me when I asked a question, that he couldn’t answer it as he represented both buyer and seller.
Julie, I am a relatively sophisticated person in business matters, etc. but this one took me by surprise. I was wrong for not asking more questions as to what were the upsides and the downsides of authorizing my agent, who is engaged in selling my property, to act as the agent for both me and the purchaser or potential purchaser.
I can see no reason why anyone selling real estate should allow a dual broker arrangement. I paid a large commission to a real estate agent for selling my house. Unfortunately, while I felt the price I received was fair, I have no idea as to whether I should have received more. She made commissions on both sides, by not sharing any with a separate broker representing the buyers.
My concern in relation to others selling property is how many or few are aware what they are giving up when authorizing a co-broker agreement. I cannot imagine even one benefit to anyone in this type of arrangement except for the broker.
Whatever information is required to be given to clients by Realtors and other brokers (if there are any?), it should clearly spell out the disadvantages of this type of buy/sell arrangement. Extensive information is required to be given mortgage applicants as to their rights, what the terms of the contract means, etc.
All real estate brokers should be required to provide similar factual information, so the parties to a transaction can be well informed as to what the terms mean when they sign an agreement, and consequently, no one benefits except the broker.
Regards,
Larry Widis Read more on this article... Read more!
Julie, as you and I have been discussing your work as a real estate broker here in Charlotte, I thought I might share with you a situation that I experienced in the summer of 2005.
My wife and I had owned a condominium since 1996 at Surfside Beach S.C. Like most every other piece of coastal property, the appreciation in value was such that we decided to sell.
We engaged the real estate agent that had previously arranged the purchase. This was done as we felt comfortable with her real estate skills and demeanor although we had not spoken to her in eight years. Upon my verbal agreement to hire her, she immediately told me she had an anxious potential buyer for our specific condo. That evening after I engaged her as our agent, she faxed the contract to me. I read it and we did discuss briefly why I should or should not authorize her to be a co-broker.
Quite frankly, I do not recall receiving any information highlighting the advantages or disadvantages of a co-brokerage arrangement as a seller of real estate. Nevertheless I signed it and we ended up with a dual agent agreement. All went well until that anxious buyer didn’t like a couple of loose outlets and cancelled their signed contract after the inspection. At that point when I began to ask questions, she informed that because she was also representing the potential buyers, she couldn’t answer certain questions I was asking. In addition, when her boss later purchased our property, the attorney handling the closing also informed me when I asked a question, that he couldn’t answer it as he represented both buyer and seller.
Julie, I am a relatively sophisticated person in business matters, etc. but this one took me by surprise. I was wrong for not asking more questions as to what were the upsides and the downsides of authorizing my agent, who is engaged in selling my property, to act as the agent for both me and the purchaser or potential purchaser.
I can see no reason why anyone selling real estate should allow a dual broker arrangement. I paid a large commission to a real estate agent for selling my house. Unfortunately, while I felt the price I received was fair, I have no idea as to whether I should have received more. She made commissions on both sides, by not sharing any with a separate broker representing the buyers.
My concern in relation to others selling property is how many or few are aware what they are giving up when authorizing a co-broker agreement. I cannot imagine even one benefit to anyone in this type of arrangement except for the broker.
Whatever information is required to be given to clients by Realtors and other brokers (if there are any?), it should clearly spell out the disadvantages of this type of buy/sell arrangement. Extensive information is required to be given mortgage applicants as to their rights, what the terms of the contract means, etc.
All real estate brokers should be required to provide similar factual information, so the parties to a transaction can be well informed as to what the terms mean when they sign an agreement, and consequently, no one benefits except the broker.
Regards,
Larry Widis Read more on this article... Read more!
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