3 Risks Realtors Hide From Sellers

We wanted to know what challenges consumers face today when they go to sell their home. After all, there have been so many market shifts and advancing technology has created more options for the consumer.  So we conducted surveys, tracked transactions, documented experiences, and even went uncover with a homeowner to get a front seat to the consumer experience.  What we found will likely shock you as much as it did us! 

First of all, here are the Top 3 Seller Risks . . . according to your Realtor. 

  1. Overpricing. So let me get this straight, Mr. Realtor. You convinced me the market is HOT and now is the time to sell. You said you expect my home to generate multiple offers and agreed when I said my house has more upgrades than the comps. But now that I’m ready to sign the listing agreement, you suggest a significantly lower price than planned? Confused yet? Yeah, me too.
  2. Buyer Demands. Lets give tconfused-woman-2hem some credit here. After all, from staging/presentation, readily accommodating showing requests, to correcting health and safety repairs that come up, buyers will have expectations when it comes to purchasing your home.
  3. Concede Over Cancel.  Every Seller’s famous last words, “I’ll put it back on the market before I agree to . . . ” We found that Sellers who experienced this situation in transaction felt their Realtor took sides with the buyer, pushing them to agree to compensate in lieu of cancel after a convincing argument that they’re home would be considered “damaged goods” after falling out and likely to sell for even less.

We identified the Top 3 Consumer Risks based on the results of our research. This is what we found . . . 

  1. UNLICENSED AGENTS.  Yes, you read that right. Example: Realtor identifies themselves as a Buyer’s Agent, shows your home, negotiates and agreement with your Agent, and you open escrow.  The Buyer’s Agent is affiliated with a legitimate Brokerage and displays a Department of Real Estate license number on their communication. Looks legit, right? However, the truth is that the Buyer’s Agent has their license officially in Non-Broker Affiliated status with the Department of Real Estate which means they are not allowed to conduct any activities that require a working Real Estate license. They affiliate with the a local prominent Brokerage as a “licensed assistant” who does not work as an Active Agent thus making them exempt from local/national association fees and Broker transaction dues. This Realtor then conducts business as a full-time Agent using another legitimate Realtor’s name and license on the formal paperwork stating “we’re on a team” when questioned. What a scam!   
  2. SAFETY.  While most Sellers expressed concern at the thought of potential buyers being complete strangers having access to their home and belongings during showings, ironically we found the bigger threat to their security was the Buyer’s Agent.  Example: Lookie Lou decides buying a house might be fun. He sees a home he likes and requests a showing through Zillow. Realtor Joe hasn’t had much luck getting business lately so pays Zillow to send him “leads” through Zillow. Realtor Joe accepts Lookie Lou’s showing request and shows your home, leaving his business card on the counter.  You send his information to your Agent who contacts him for feedback.  Your Realtor checks him out on the Department of Real Estate website and finds our Realtor Joe was charged with three felonies for drug trafficking, arrested for trespassing, and was busted for selling a fake prescription at a local bar. After four years of court cases, Realtor Joe getting his charges reduced to misdemeanors and is granted a “Restricted License.”  Now he’s using your home as bait, hoping to convert this “Lookie Lou” internet lead into Buyer Bob. 
  3. SECRET PROFITS. By now you already see where this is headed so let’s get right to the examples.  Example 1: The young couple buying their first home ask your Realtor if you are willing to sell them your washer and dryer. You agree and tell your Realtor you’ll sell the set for $500. Your Realtor tells the buyers that you’re willing to sell the appliances for $800 and buyers agree. Your Realtor delivers you $500 in cash and skims $300 right under your nose.  Example 2: It’s the big moving day and you decide you’d rather not move the refrigerator after all and ask your Realtor if buyer wants it as a welcome home gift from you. Your Realtor reports back that the buyer was thrilled and expressed appreciation for your generosity. You turn over the property to your Realtor so they can prepare for close. The Realtor removes the refrigerator to sell for secret profit and leaves Buyer blissfully unaware of your offer altogether.  

When people see my “title” they naturally assume I help people buy and sell houses.  But when asked what I do, I simply reply, “I protect people from people.” This statement is usually met with a pause then a look of understanding as they jump to the conclusion I am referring to protecting my Sellers from a Buyer taking advantage of them in contract. No, no, no . . .not at all.  “I protect my clients from other Realtors.”

If it’s not right, it’s wrong . . . unless you’re a Realtor?

What if you found out that your Realtor worked at a company where only 10 of the 100 company Agents followed recommended business practices?  Shocking as that might sound, 10% is pretty typical for industry standards.

Ok, I’ll give it to you . . .  “recommended business practices” is a pretty loose term.  So, for clarification purposes in this video we are referring to these key points:

“Documents” referring to State of California C.A.R. forms (required).  And “recommended business practices” referencing client care and customer service, i.e. using organized communication system, tracking and returning correspondence, regular transaction updates, quality marketing tools, etc.

What are your thoughts?  Should Realtors (as independent contractors), be allowed to practice without any substantial accountability in place?  Or should modern real estate mandate a more consistent and protected experience for the consumer?  I would love to hear your thoughts.

 

Citrus Heights Market Update

MLSCitrus Heights Market Update

The median list price in Citrus Height’s this week is $364,000.00.  The 120 properties have been on the market an average of 14 days.  This week 22 homes Sold and 46 houses went Pending. Inventory is up 7.1% compared to what it was last year at this time.  The market is still hot as we approach Fall.

Supply and Demand

Real Estate prices rise and fall based on the laws of supply and demand. When the demand for real estate is high, prices tend to rise.  If the number of available properties increases, prices tend to drop.  Supply and demand is difficult to balance in the real estate industry.  Often it is just not possible for the supply to increase in time to meet consumer demand.  Understanding the basic principles of supply and demand can help a consumer decide when the best time is to buy or sell a property.

Days on Market

The homes for sale in Citrus Heights have an average of just 14 days on market (DOM).  The number of homes going into escrow (pending) has increased by 4.7% from this same month one year ago (2016).  The number of Citrus Heights homes that have sold this month have not increased or decreased from this same time 1 year ago.

If you are thinking about selling your home, the Fall Market is traditionally known as the second best selling season of the year!

 

*Stats provided by the MLS.  All information is deemed reliable, but not guaranteed.

Real Estate Q&A

Q and AThis is a column dedicated to answering frequently asked questions we get from our clients  while working in real estate.

Question:  “Should I wait to buy a home over the holidays or winter time to get a better price?”

Answer:  This is one of the most common questions we receive and I want to just summarize the pros and cons of a winter/holiday purchase briefly.  We have all heard it said before that the best time to sell a home is in the spring/summer market.  Pricing in real estate is often influenced by supply and demand.  Usually homeowners will choose to avoid selling their home over the holidays because they want to get “top dollar.”  A buyer may find that there is less competition from competing buyers and that sellers price more aggressively when purchasing a home over the holidays/winter months.  However, a challenge that catches buyers off guard when house-hunting over the “slower” months, is low inventory.  Low inventory often results in buyers not having as many choices when trying to find a home making it difficult to purchase a home that meets their needs.

In summary, when is the best time to buy?  Many factors play into this decision including if you have to sell a home first, local market conditions, and ultimately personal goals and strategy.  The best time for you to purchase a home might not be the best time for your friend to buy a home.

Down-Payment Assistance Success!

Down Payment AssistanceIn the Greater Sacramento area, it is a brutal multiple offer market out there for the buyers that are maxed out at $275,000.00.  I have had buyers that wanted to write offers on properties that had any where from eight to twenty two offers per home!

I am known among my peers as the “Calhfa Girl” because so many of my buyers are 1st time Homebuyers that are using Down-Payment Assistance (DAP) financing.  Due to the lack of familiarity with this financing, many Listing Agents are terrified of DAP offers.  A Down-Payment Assistance offer also indicates that the borrower has limited funds so this is a red flag that there could be additional challenges during the escrow period when it comes to repairs, appraisal, etc.

When I first begin Real Estate, I made a commitment to help every person I could and promised myself to never get caught up in “chasing a paycheck.”  It seems many great people make poor decisions when it comes to money.  Many of my fellow Realtors have told me that they write offers without disclosing the Assistance and hope that the Listing Agent does not ask them for “proof of funds.”  But with my commitment to my value system, I have always chosen to disclose upfront to the Seller on the RPA (Residential Purchase Agreement) that my buyer is using Down-Payment Assistance.

I wrote an offer this week for my Buyer who had fallen in love with a beautiful investor flipped home!  This house was perfect for my buyer in every way.  Once again I found myself writing a Calhfa offer on a home with multiple offers.  I did my typical routine of disclosing my buyer’s financing, submitting the offer with a cover (motivation) letter from the buyer decked out in cute family photos, explaining in detail why we were confident we would close the loan and including a link to Calhfa’s turn around times.

Much to my dismay, the Listing Agent called our lender and shared that they would not accept a Calhfa because of the terrible experience they were having as they were currently on Day 60 of a 30 day Calhfa escrow with a buyer on a different property the seller owned.  I knew my buyer would be devastated to hear this news.  Many people commented things like “She just needs to save her money and try again when she doesn’t have to use assistance.” and “Well, Calhfa’s just don’t get accepted in today’s market.”

I refused to take “no” for an answer and we sprang into action!  I reached out to another Listing Agent that we closed a Calhfa loan on the past several months, shared my situation and asked for permission to list them as a reference.  I sent an email to the Listing Agent on the property and acknowledged their concerns.  I provided them a statement of why their experience with us will be different and then I gave them property information from the MLS including days in escrow and a list of former Listing Agents (contact information) that could be used as references.  We submitted this last attempt to save our chances and crossed our fingers.

I received the following email back:

“Cara,

I appreciate you elaborating further on our concerns. It helps reassure us that you and your team are capable and competent of closing quickly with Calhfa.”  This was accompanied with the fully executed contract and my buyer got the house!

Multiple offers?  Down-payment Assistance?  Through detailed preparation, experienced presentation, and skillful negotiation, helping buyers purchase homes using Calhfa financing is our passion!