How Big a Home Do You Truly Need? 5 Questions to Ask to Figure That Out

When it comes to homes, the popular credo is that bigger is better. More square feet = a larger slice of the American dream, right?

Not necessarily.

For one, bigger homes obviously cost more, and oversized McMansions can be harder to sell. As such, you’ll want a home that’s neither too big nor too small. But how do you strike that balance?

Here are five questions to ask yourself that will help you determine how much space you really need.

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1. Is this my ‘forever’ home, or is ‘right now’ good enough?

While you can’t predict the future, it is possible to evaluate the likelihood you might be moving in coming years. If so, then maybe you don’t need to buy that perfect “forever home” where you’ll grow old; maybe a “right now” home is good enough.

There’s a common perception that you should be searching for your ‘forever home,’ and that pressure to find a place that has all the space you might ever need often leads buyers to purchase a home that might be too big. It’s OK to know that you’ll only live in a home for the next five or six years, and to buy a home that will serve your needs during that period. You can always re-evaluate and upgrade to a bigger space later.

2. What will my income look like later?

If you’re early in your career, odds are decent that your income will increase over the years. Or, if you’re reaching the end of your career, you may be looking at flattened or declining income. In either case, it’s never a good idea to get a mortgage at the max of what you can afford; it’s better to go small and have some wiggle room.

Nothing causes more stress than financial strain and a mortgage on a home that is a size too large is most likely to be your biggest burden, and a hard one to overcome. Happiness is often one size smaller than your dream home. That way, you can enjoy your home without dreading your monthly mortgage payment.

Also, remember more space means more time and money spent on upkeep and improvements, more rooms to fill with furniture, and higher utility bills to heat and cool the home.

3. What are my priorities?

Another question to consider is what you’ll use all that space for—and be honest: While you might dream of hosting epic dinner parties in that big formal dining room, will you really? Can you say with certainty that your in-laws will descend on you during the holidays and need a guest bedroom to crash in, or might they be just as comfortable in a nearby Airbnb?

Aside from justifying what you’ll use each space for, ask yourself what you’re giving up. If you dream of having a secret “travel fund” so you can see the world, that may be possible only with a smaller mortgage (and house). Or, perhaps you value things other than space, like school district or a walkable location. So make sure to factor in those variables, too—and make sure you aren’t sacrificing them for space you don’t need.

4. How much space do I want from my own family members?

If you absolutely must have privacy—to, say, get work done in a home office or chill out in your man cave—then that extra square footage may be well worth the money. But if you’re more the type who loves having their family members nearby, a large home gives people plenty of alone time… sometimes too much.

Recently when speaking with one of our buyers, she commented: “I’ve found that my daughter’s friends who live in large homes rarely even run into their parents.” So her preference was for something a bit smaller, because she prefers her kids a bit underfoot.

She was also seeking a more cozy vibe and a close-knit family environment a smaller home encourages. This was what the preference was for her family dynamic. You’ll have to determine yours.

5. Does this home feel spacious even if it doesn’t have much space?

Keep in mind that even small homes can feel spacious purely based on an open floor plan and lots of light. Meanwhile, large homes can still feel cramped if they’re dark or poorly laid out. So, when shopping real estate listings, know that the little number next to square footage may not tell the whole story.

For example, features like a long hallway may increase the total square footage, but they are spaces you pass through, not a true destination within the home.

So instead of focusing on total square footage, focus on the size of individual rooms where you see yourself spending the majority of your time. If all you do in your bedroom is sleep, does it matter if its massive or not?

YOUR TURN

In your experience, how much space is too much space? Or, did you find you underestimated how much room you actually needed? What did you learn about space when buying your current home? Sound off on The Patrick Parker Realty Facebook Page or our Twitter or Instagram feeds. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.

7 Pricing Myths to Stop Believing If You Ever Hope to Sell Your House

Pricing your own home is hard. Of course, you want to make a profit. Of course, all that money you spent installing a swimming pool or a half-bath will be recouped, because you’re leaving your digs in better shape than when you bought it, right?

Well, not necessarily. Too many home sellers fall prey to myths about home pricing that seem to make sense at first, but don’t jive with the reality of real estate markets today. To make sure you haven’t bought into any of this—since the buyers you’re trying to woo sure haven’t—here are some common pricing myths you’ll want to rinse from your brain so you kick off your home-selling venture with realistic expectations.

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1. You always make money when you sell a home

Sure, real estate tends to appreciate over time: Home prices increased by approximately 5% by the end of 2017 and continue rising 3.5% in 2018. But selling your home for more than you paid is by no means a given, and your return on investment can vary greatly based on where you live.

2. Price your house high to make big bucks

We know what you’re thinking: “Hey, it’s worth a shot!” But if you start with some sky-high asking price, you’ll soon come back to Earth when you realize that an overpriced home just won’t sell.

While the payday might sound appealing, you’re actually sacrificing your best marketing time in exchange for the remote possibility that someone will overpay for your home.

RELATED: Home Won’t Sell? Check The Price

While certain buyers might be suckered in, this becomes far less likely if they’re working with a buyer’s agent who will know all too well when a home is overpriced, and advise their client to steer clear. And this can lead to problems down the road (as our next myth indicates).

3. If your home’s overpriced, it’s no big deal to lower it later

Sorry, but overpricing your home isn’t easily fixed just by lowering it later on. The reason: Homes that have lingered on the market for months make buyers presume that something must be wrong. As such, they might still steer clear, or offer even less than the price you’re now asking.

Bottom line: Price your home appropriately from the beginning for your best shot at having a quick and easy sale.

RELATED: The Importance of Proper Pricing

4. Pricing your home low means you won’t make as much money

Similarly, sellers are often leery of pricing their home on the low end. But as counterintuitive as this seems, this strategy can often pay off big-time. Here’s why: Low-priced homes drum up tons of interest, which could result in a bidding war that could drive your home’s price past your wildest dreams.

5. You can add the cost of any renovations you’ve made

Let’s say you overhauled your kitchen or added a deck. It stands to reason that whatever money you paid for these improvements will be recouped in full once you sell—after all, your home’s new owners are inheriting all your hard work.

RELATED: Home Renovations That Yield The Greatest Return On Investment

The reality: While your renovations might see some return on investment, you’ll rarely recoup the whole amount. On average, you can expect to get back 64% of every dollar you spend on home improvements. Plus that profit can vary greatly based on which renovation you do.

6. A past appraisal will help you pinpoint the right price

If you have an appraisal in hand, from when you bought or refinanced your house, you might think that’s a logical place to start to price your home. It’s not!

An appraisal assigns your home a value based on market conditions at a specific date, so it becomes old news very quickly. In fact, lenders typically won’t accept appraisals that are more than 60 days old because lenders know markets can change quickly.

7. Your agent might overprice the house to make a bigger commission

Don’t even go there.

While it’s true that an agent’s commission is based on the selling price of a house, the disparity will end up being negligible. For example, the difference in commission between a $300,000 house and one that’s $310,000 is about $150.

No real estate agent is going to lose a sale for the sake of a couple hundred dollars.

YOUR TURN

Do you have any home selling myths to add to our list? Sound off on The Patrick Parker Realty Facebook Page or our Twitter feeds. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.

Everything You Need To Know About Buying A Home This Spring

Blooming flowers and warmer temperatures don’t just mark the start of allergy season. Spring is also peak season for real estate sales. If you’re thinking of buying a home this year, you’re probably wondering what the current market is like and how to navigate it.

FREE DOWNLOAD: The Ultimate Home Buyer’s Guide

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The 2017 spring real estate season differs from past spring markets in some big ways. Here’s what you need to know…

1. Inventory Is Low

Home inventory has dropped for eight consecutive quarters, making it harder to find a home, according to Trulia’s research.

In 2017, homebuyers are up against a very competitive market, where there are fewer homes for sale that cost more than they did last year.

Hit hardest? First-time homebuyers. There’s a larger inventory of trade-up homes and luxury homes than starter homes. As prices rise, people who might have been looking for a luxury home may now be in the trade-up market. Those who would have been in the trade-up market are buying starter homes or hanging on to the homes they already have. This means first-time buyers have to put in extra effort to land a home.

RELATED: 10 Rookie Mistakes That Hurt First-Time Homebuyers

2. Homes Are Selling Fast

Understanding the current real estate market can keep you from being blindsided. Short supply is the dominant issue this spring. Homes that are priced at market and are in attractive condition sell in days.

You may want to act quickly when you find something you like, and be flexible with seller requests — two tactics that can help you buy a home in a competitive market.

3. Interest Rates Are Rising

Rising interest rates could price some buyers out of the market. The Federal Reserve announced in March that interest rates would be increased by a quarter point based on the growing confidence on the economy.

But interest rates are still historically low and affordable. Higher rates will likely decrease one’s home-buying power, but it’s unlikely to deter serious buyers who are actively looking for a new home. What’s likelier to happen, at least in the short term, is that more people will enter the market before rates get even higher.

4. Timing Is Everything

The hardest part of buying a starter home is saving the down payment. Once you have that in place, there are great options.

But should you wait to save 20% for a down payment to avoid private mortgage insurance (PMI), or should you buy now with only, say, 5% to put down before interest rates rise?

RELATED: Making Sense of Mortgage Rates, APR and PMI

In most cases, it becomes more expensive to wait. If it’s going to take you two years to save 20% and prices and rates rise, it’ll usually be better to go ahead at 5% and pay PMI.

RELATED: What Is The Cost of Waiting Until 2019 to Buy A Home

5. Consumer Confidence Is High

Rising interest rates signal a strong economy, and consumers, with renewed confidence in this strong job market, are buying homes. This is what most people call a comeback. People who found themselves underwater on their homes are now starting to see those homes gain value. They can now make — instead of lose — money on a home sale.

6. Try To Overlook The Little Things

If your ultimate goal is to become a homeowner this spring, you may wish to circle back to that older home with no upgrades that didn’t initially excite you.

Some available properties may lack modern layouts and amenities. Consider ignoring cosmetic issues like bad paint colors or poorly placed furniture and determine your budget for desired upgrades. In a competitive real estate market with low inventory, being able to overlook simpler flaws could be the difference between getting a good deal on a home and not getting a home at all.

7. Preapproval Is More Important Than Ever

You may need to offer more money to buy a home in this busy real estate season. First, figure out what you can comfortably afford. Don’t stretch yourself financially.

A good formula for a starter-home buyer would be to dedicate 38.3% of monthly income to your home — a 2.9 point increase from last year.

Once your budget is set, focus on prepping your finances for a home purchase. The more prepared in preapproval you are, the more value you add to yourself and your buying appearance. This means having all documentation in line so you can move fast.

YOUR TURN

Are you planning to buy a home this spring? Tell us why on our Facebook Page or Twitter or Instagram Feeds. And don’t forget to subscribe to our monthly eNewsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.

What is the Cost of Waiting Until Next Year to Buy a Home?

Over the course of the last 12 months, home prices have appreciated by 7.0%. Over the same amount of time, interest rates have remained historically low which has allowed many buyers to enter the market.

FREE DOWNLOAD: Your Guide To Home Buying
The Most Critical Steps To Take When Buying Your Dream Home

As a seller, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price, but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Index Report, home prices will appreciate by 4.7% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 4.7% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

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BOTTOM LINE

If buying a home is in your plan for 2018, doing it sooner rather than later could save you thousands of dollars over the terms of your loan.

Follow Patrick Parker Realty on Facebook, Instagram, Twitter and LinkedIn and subscribe to our monthly HOME ADVICEtm eNewsletter for articles like this delivered straight to your favorite media platforms.

Understanding Real Estate Agency & Agency Relationships

The term “agency” is used in real estate to help determine what legal responsibilities your real estate professional owes to you and other parties in the transaction.

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The seller’s representative (also known as a listing agent or seller’s agent) is hired by and represents the seller. All fiduciary duties are owed to the seller, meaning this person’s job is to get the best price and terms for the seller. The agency relationship usually is created by a signed listing contract.

RELATED: How to Interview a Listing Agent to Sell Your Home

The buyer’s representative (also known as a buyer’s agent) is hired by prospective buyers to and works in the buyer’s best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.

RELATED: How To Tell If A Buyer’s Agent Is Right For You?

A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. The subagent works with the buyer to show the property but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer customer can expect to be treated honestly by the subagent.

A disclosed dual agent represents both the buyer and the seller in the same real estate transaction. In such relationships, dual agents owe limited fiduciary duties to both buyer and seller clients. Because of the potential for conflicts of interest in a dual-agency relationship, all parties must give their informed consent. Disclosed dual agency is legal in most states, but often requires written consent from all parties.

Designated agents (also called appointed agents) are chosen by a managing broker to act as an exclusive agent of the seller or buyer. This allows the brokerage to avoid problems arising from dual-agency relationships for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties.

A transaction broker (sometimes referred to as a facilitator) is permitted in states where nonagency relationships are allowed. These relationships vary considerably from state to state. Generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

YOUR TURN

Understanding Agency and Agency Relationships is an important part of how you perceive the success of your Real Estate transaction. What questions do you have about Agency Relationships? Sound of on our Facebook Page, Twitter or Instagram feeds or connect with us on LinkedIn. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for great tips for homeowners and sellers delivered straight to your inbox. You may unsubscribe at any time.

Why the Holidays Are A Great Time to Sell Your Home

When it comes to real estate, many believe the ideal time to sell your home often falls in the spring months. After all, people often hunker down during the winter or are too busy with the holidays to think about purchasing a new home. Not to mention that people like to start shopping in the spring to make sure they are settled in their home before the start of a new school year.

FREE DOWNLOAD: Home Selling Essentials: The Ultimate Guide

But putting your house up for sale around the holidays has its benefits. Sure, you may not get into a bidding war, but you are going to deal with serious buyers who are ready to pull the trigger.

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Consider these major benefits to selling your home this holiday season:

1. There’s Less Inventory

Conventional wisdom says people should wait until the spring to get the most from a home sale. But studies have shown that homes listed around the holidays can not only command more money, but can also sell quicker than ones listed in the spring.

One of the reasons is there is less competition during the holidays. For a multitude of reasons people won’t put their houses up for sale when the holidays are coming up, and so the ones shopping aren’t going to have dozens of houses to choose from. In the spring, inventory usually picks up, and price wars break out in coveted neighborhoods. But during the holidays, there will be limited choices which means a homeowner can have a higher asking price.

2. Buyers Are More Serious

Anyone who is shopping for a new home around Thanksgiving, Christmas or New Year’s is undoubtedly going to be a serious buyer. While hitting open houses is a favorite pastime for many Americans, they aren’t going to spend their precious time around the holidays seeing how the other half lives. In the spring, when open houses are a regular occurrence, people may check out homes without a clear plan to buy.

If your house is up for sale in the winter and someone is looking at it, chances are that person is serious and is ready to pull the trigger. That can often result in a quicker sales process.

3. You Can Make the Home Warm and Cozy

The holidays are often a time when people gather around fireplaces, have hot chocolate and make nice smelling cakes and pies. For homeowners who put their house up for sale during the winter months, they can stage their house to give off the comfy and homey vibe that appeals to many home buyers. Some people may argue that showing a house in the winter is hard to do because there’s snow on the ground, the house is drafty and the curb appeal is lacking. But keeping the heat up, having a pie baking in the oven to give off a pleasant smell and keeping the sidewalk and driveway clear of snow and ice can boost a home’s appeal.

Not to mention that buyers tend to be more emotional during the holidays and will make decisions based on the feeling a house conjures up. During the spring there is a lot more foot traffic in homes that are up for sale. Buyers may not be able to do a thorough walk-through, may get frustrated because of the number of people looking at it and can leave with a bad feeling about the home.

4. Timing Is Perfect for Transfers

The end of the year is typically the time when people get notified that they will be moving because of a job transfer. Those people are going to need a house sooner rather than later, and as a result will be hunting for a new home during the holidays. These buyers can’t wait for the spring, which is why listing during the holidays can get the home sold and sold quickly.

5. Your Neighborhood May Look More Appealing

One of the staples of the holiday months, particularly Christmas, is that many people adorn their homes with festive lights and decorations. That is also true of local communities where lit-up snowflakes and wreaths can be found on lamp poles and up and down the main streets. People purchasing a home during that time may see the neighborhood in a different light and may be more willing to consider an area that they may have been on the fence about.

6. End-of-Year Tax Breaks

Reducing the tax bill is not the main reason buyers purchase a new home, but it could be the reason serious buyers make a move during the holidays. That’s because if the home sale closes before Dec. 31, buyers can deduct the mortgage interest, property taxes and interest costs of the loan. The tax deductions can be significant and could prompt a home buyer to move during the holidays instead of waiting until the spring.

YOU TURN

Nobody wants their home to languish on the market nor do they want to have to lower the price they are asking for. And while many fear that will happen if they list their home during the holidays, often that isn’t the case.

Are you planning on selling your home? Contact us to find out why selling your home during the holiday season can mean less competition, more serious buyers and a quicker sale.

5 Things Real Estate Agents Wish You Knew About Buying a House

Buying a house isn’t like buying a Grande Americano at your regular Starbucks. Infinitely more money, thought, and prep work go into acquiring real estate – and given that it’s not a purchase you make often, it’s understandable if you might not be adept at wheeling and dealing.

But guess what? There is someone who can show you the ropes well within reach: your Real Estate Agent! Odds are (we hope), you’ve hired an Agent to help guide you through the home-buying process.

RELATED: How To Hire A Buyer’s Agent

But even then, there might be things you end up doing that make your Agent sigh deeply—and get a strong urge to sit you down and say, “Look, here’s the deal!”

Curious about what those things are? Read on for some of the things that Real Estate Agents really wish you knew, since it would save them – and ultimately you – a ton of aggravation seeing your deal through.

1. Know What You Can Afford Before You Start Looking

Finding the perfect home would be a snap if money weren’t an issue, but let’s get real. For most people, money doesn’t grow on azaleas, which means their finances must be taken into account. So don’t waste your time shopping for real estate before you know what price range you can afford.

FREE DOWNLOAD: Your Guide To Home Buying

One easy way to get your bearings is to type your income, savings, and other details into a home affordability calculator. Better yet, get a mortgage pre-approval letter; the process involves a lender checking out your finances and determining how much it’s willing to loan you for a home.

Plus, a pre-approval letter helps you move fast when making an offer. Since you now have it in writing that your loan is guaranteed, it removes any possibility that you won’t secure financing.

2. Don’t Call The Listing Agent

In case you didn’t know, buyers generally have their own Agent, and sellers have theirs. And ideally, it’s the Buyer’s Agent and Listing Agent who interact with each other, conveying their clients’ questions and concerns to see if a deal can be done.

As such, when you do an end run and contact a Listing Agent directly, this seemingly innocent move can cause a whole ton of trouble.

RELATED: About the Negotiation Process

While you main not mean this, it’s almost an implication that you do not trust your Buyer’s Agent and/or that you do not have a strong working relationship. These things will impede negotiation. You’re actually giving power away to the seller’s Agent.

3. Please Do Not Talk Around Other Agents

Another time buyers may put their foot in their mouth is during showings and open houses. Since the Listing Agent may be present, this is a time when loose lips can sink real estate deals.

You might say things you are not supposed to say, such as how many houses you’ve checked out, how much you like or dislike the house, and, worst of all, how much you can afford or are willing to spend.

Sharing such info is akin to tipping your cards while playing poker: It gives the home sellers a whole lot of info they can use as leverage during negotiations.

So when in doubt, say nothing. Let your Agent be your voice at an open house or in any conversation with the sellers.

4. You Do Not Need To See Every Home Within A 50-mile Radius

You don’t have to look at hundreds of properties to find the right one.

The truth is, if you have an Agent truly working for you, you won’t be looking at tons of homes. Your Agent will screen properties for you and make sure you’re only looking at the ones that fit your needs. So if the first home you see is the one, that’s OK, your Agent did her job.

If you feel the homes you are seeing are not a fit for you, talk to your Real Estate Agent again about your wishlist and revisit your must-haves vs. like-to-haves, etc. They are there to serve and satisfy you. There is no harm in revisiting this conversation.

5. Don’t Let Fear Of Commitment Give You Cold Feet

This tidbit you can file more under helpful advice because Agent’s have seen this before. Yes, buying a house is a big commitment. Yes, it’s scary, and your mind might race with all sorts of worse-case scenarios. What if you make an offer on a house, and that very day another house – even more perfect for you – crosses your path? Or, what if you move into a house you’re happy with, then a layoff leaves you unable to pay your mortgage?

Sure, these are all possibilities, but uncertainty is a part of life. It is normal to ask these commitment-phobic-type questions. Just don’t let them get in the way of this important and exciting life change.

And if the worse happens, you can always sell a house later on; this need not be a death-do-you-part endeavor.

YOUR TURN

Did you recently buy a home and would perhaps do things differently if you had to do it again? We’d love to hear from you! Sound off on our Facebook Page or on our Twitter, Instagram or LinkedIn feeds. And don’t forget to subscribe to our monthly eNewsletter for articles like this delivered straight to your inbox. 

Is Every Offer Shown to the Seller? What to Do If You Think Your Offer Is Being Ignored

It’s unsettling to think your offer on a house is being ignored. After all, isn’t it only fair that every offer be shown to the seller? The real deal: While that might seem like a reasonable ask of the seller’s Real Estate Agent, it’s not necessarily required. Is it ethical for an Agent to present all offers to the sellers? Yes—and most do.

In general, written offers must be presented. This falls in accordance with the National Association of Realtors® Code of Ethics, which states that Realtors shall submit offers and counteroffers objectively and as quickly as possible. However, not all Real Estate Agents are members of NAR and required to abide by its code.

FREE DOWNLOAD: Your Ultimate Home Buying Guide

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Why A Seller Might Not See Your Offer

Some sellers set a limit for how low they’re willing to go in price and ask their Real Estate Agent to dismiss any offers below that price.

If the seller has specifically instructed their Agent not to bring offers that do not meet a certain minimum requirement, the Agent may not need to present any offer that falls short of the minimum.

RELATED: What Is A Backup Offer And Why You Should Consider One

Every state’s laws are different, but generally, if the seller has instructed his Agent in writing to withhold certain kinds of offers, then the Agent won’t present those offers.

The Shady Side of Withholding Offers

A Listing Agent withholding offers could be less than fully ethical if she is acting as a transactional broker (also known as a dual Agent), representing both the seller and the buyer. (Keep in mind that dual agency is illegal in some states.)

RELATED: Why You Need A Buyer’s Agent Representing Your Interests

The concern is that the Listing Agent might withhold one offer in favor of a higher offer that benefits the broker financially. Doing so is a big procedural breach and can put the Agent at risk of losing their license.

What To Do If You Think Your Offer Is Being Withheld

As a buyer, if enough time has passed and you suspect your offer is being withheld, talk to your Real Estate Agent about the situation. Agents deal with this kind of thing frequently and will know how to broach the subject with the Listing Agent. Advising you is your Agent’s job, right?

Here are some of your other options:

Ask for a rejection in writing. There should be a place on your written offer for the seller to formally reject your offer. You can request that your Agent ask for this formal rejection.

Contact the seller. It’s unlikely your Real Estate Agent will be happy with your doing this, but it’s not illegal for you to contact the seller directly to ask about your offer. However, be prepared: This might not go over well. If a seller wanted to work directly with the buyer, he wouldn’t have hired a Real Estate Agent in the first place. Proceed with caution, and maybe ask your Agent first.

Report the Agent. If you are truly convinced the Listing Agent is withholding your offer for selfish reasons, you can report the Agent to her brokerage or to the licensing agency in your state. Again, this is not an option to take lightly as it could have serious repercussions for the Agent in question. Seller’s are allowed to refuse offers for any reason they wish. So even if you feel your offer was fair, if the seller refused it and you didn’t hear back, it may have nothing to do with the Listing Agent at all. Accepting an offer is at the Seller’s discretion, not the Listing Agent.

Be fair. Remember the legal reasons why offers are allowed to be withheld. Do not report an Agent or leave a negative online review if you do not have all of the details about the situation.

Just move on. Whether there really are ethical issues or the Listing Agent’s communication style just isn’t working for you, it might be best to look for another house. And do you really want to work with an Agent you don’t trust? Unless this house is a picture-perfect, once-in-a-lifetime deal, it’s probably in your best interest to keep looking.

YOUR TURN

Are you a recent homebuyer who has experienced concerns over the status of your offer? Tell us about it on Facebook on the Patrick Parker Realty Facebook Page or sound off on Twitter, Instagram or LinkedIn. And don’t forget to subscribe to our monthly HOME ADVICE™ eNewsletter for articles like this one delivered straight to your inbox.

 

How to Interview A Listing Agent

Is interviewing a Real Estate Agent such a daunting task?

Not really.

Too many people rush into choosing a Listing Agent. Once the idea of selling pops into their minds, they may choose the first Agent that crosses their path, whether via postcard, a Facebook Ad or billboard. In fact, 72% of home sellers contacted only one Real Estate Agent before deciding on the ‘right Agent’ they like sell their home through.

The big question here is how does one avoid choosing the wrong Real Estate Agent for the job?

Either you interview a Real Estate Agent and decide to hire him right there and then; or you opt to interview a couple of Real Estate Agents. Whichever route you as a home seller decide to take, make sure you have prepared at least a handful of questions, which should quickly determine whether your decision to hire that Real Estate Agent was the good one (or not)!

Most Real Estate Agents will not expect you to be asking these types of questions!

FREE DOWNLOAD: The Ultimate Home Seller’s Guide

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This list of 10 questions to ask when interviewing a Listing Agent will come in handy in separating the wheat from the chaff:

Question #1: How long have you been a Real Estate Agent?

As much as enthusiasm and passion a beginning Real Estate Agent might bring to the table, when it is time for contract negotiation, it will be the (negotiation) experience of the Agent which will bring the deal to a successful close!

The more contracts a Real Estate Agent has written over the years, the more experience he will have in detecting, avoiding, preparing, anticipating potential pitfalls! As any experienced Real Estate Agent can attest, there’s no such thing a ‘simple contract’ – every contract is unique and will require a customized legal frame work, making sure the terms and conditions of the deal are ironclad!

Of course, you’ll always have these superstar Agents who are making a killing in their first year of real estate, but those are the exception to the rule!

The other nine questions below will filter through whether you’re dealing with such a super-talented Agent or just a fly-by-night individual!

Question #2: How many real estate transactions did you close last year?

This might perhaps be seen as a rude or inappropriate question to ask if it were asked in any other field than real estate.

Real Estate Agents are always talking amongst one another about production numbers, as it’s an integrate part of their business models, annual goals, and getting more business!

Whereas the abstract figure won’t necessarily tell you a lot (other than give you a rough idea how much commission the Agent made), it does give you an idea of how active the Real Estate Agent is.

It might be tempting to look at the total number and use it as the sole measuring stick on how successful the Agent was, but one needs to put it into perspective:

The Real Estate Agent who sold the lower number of properties over the past 12 months might not immediately be your first choice, neither should the Agent who sold 50 properties in a particular year.

And why might that be?

Agents who give the highest listing price, do get a lot of business from home sellers, who don’t necessarily know any better, until it’s too late and the property has been exposed to the market for way too long! The overpriced properties you see lingering about for months on end, and plenty of expired listings are proof of that.

In other words, the ratio of houses the Agent eventually sells versus the (overpriced) properties that he still has on the books (which is called the sales-to-listing ratio) will be an important number to watch.

Thus, while not immediately evident by hearing a raw number, put into context, it is very revealing who is the better Agent: a Real Estate Agent who sells 16 out of his 20 listings compared to another Agent who sells 35 out of 70 listings!

Question #3: Is being a Real Estate Agent your full-time job?

There is this misconception that being a Real Estate Agent must be such an easy job, which offers lots of free time, days off, and can make you bundles of money. But if you interview a Real Estate Agent who’s been around the block, you will more than hear something completely different!

While one might initially be going through training and learning the ropes on a part-time basis, providing a professional service to your clients does require a full-time Real Estate Agent.

How is the part-time Agent going to handle all the incoming viewing requests, specific property inquiries by home buyers or property valuations for home sellers if he’s too busy working another job?

Nevermind what might happen if there’s talk of writing an offer at the ‘wrong time’ for this part-time Agent. Time constraint? Availability? Imagine as a home seller to be losing such an interested home buyer because the (part-time) Agent’s agenda can’t accommodate!

Needless to say, hiring a part-time Real Estate Agent is not advisable!

Question #4: How often can we expect feedback from you?

Perhaps the line of questioning ought to go in the direction of who will be providing the feedback!

Is the Real Estate Agent working on his own, together with a personal assistant or is there an entire team behind the scene? And more importantly, who will end up being the person you, as the home seller, will get all the feedback from?

It’s only normal for a home seller wanting to know what the home buyers have been saying about their property during the viewings over the course of the week. Most well-oiled teams have this part covered with a feedback system to make sure the home seller gets proper, timely information about buyer feedback!

Not only before the property is sold, but also during and afterwards, it’s vital for the Agent to keep the home seller in the loop of where they stand in the process: is a home inspection due or is the bank appraisal taking place soon? Plus, will the Agent be present during those activities as well?

RELATED: 10 Ways to Prepare for A Home Showing in Under An Hour

Each of those events, as small or big as they may be, requires feedback to the home seller. This is where a professional Real Estate Agent (and/or team) stands out from the crowd! There’s no such thing as too much feedback!

Question #5: How do you normally communicate with your clients?

Depending on how the Agent responds to the previous question, you’ll lead right into this one.

Once you’ve established the frequency or timing of the feedback, you need to figure out which communication medium your Agent uses with other clients.

When you interview a Real Estate Agent, you need to make sure to inform the Real Estate Agent of your preferred method of communication!

Some people are stuck on a personal phone call following every showing appointment, others might be too busy and rather prefer you to send them a text message or email them a summary of what happened during the viewing.

Having said that, one of the biggest complaints people have against Agents is the lack of communication.

If an Agent happens to be in a client meeting and can’t pick up the phone, we all know that those things happen and a return call afterwards will set everything straight. However, I’m referring to the blatant lack of respect on part of a lot of Real Estate Agents who believe returning phone calls the same day is something of an unnecessary luxury. This Agent is in control of the sale of your life’s most expensive asset, so the least he can do is treat you with respect by returning your call(s) ASAP!

Question #6: Can you provide us with a recent list of client references?

There are pretty much two options you could go with:

(1) ask the Listing Agent for a list of recent client references, which is something he’ll more than likely have written out on a personal testimonial page on his website. You can also check sites like Zillow and Google for online reviews that the Agent cannot filter.

(2) maybe a better option would be to request the details of the last few homes he sold and consequently contact those people yourself. It might take a little bit more time and effort, but the feedback you’ll get from these previous clients will more than likely be quite informative, and more importantly, be unprepared by the Agent!

Question #7: How did you determine the asking price of our home?

Here, you have a couple of popular ways to arrive at the market value:

The most commonly used method (as well as the best one) is the Comparative Market Analysis (CMA), which allows the Agent to look at the recently sold properties in your immediate vicinity, as well as the current properties for sale, all within a similar size, look and price range, in order to arrive at a fair market value!

RELATED: The Importance Of Proper Pricing

As you interview a Real Estate Agent, nothing stops you from asking him to show you some proof regarding the CMA’s conclusions.

RELATED: About the Comparative Market Analysis

Question #8: Will you personally be taking pictures of our home?

How often have you browsed a property portal and come across some incredibly bad pictures? What was the Agent thinking? And how did the seller approve that marketing material?

This makes you stop and think who could have possibly have taken those unprofessional photos?

RELATED: Mega Tips for a First-Time Home Seller

Whereas there are Agents who have particularly good photography skills and appropriate equipment to present your home at its best, the majority of Real Estate Agents don’t.

The importance of having great photos as part of your marketing cannot be stressed enough!

Bottom line: unless this Real Estate Agent is half a pro at taking real estate photos himself, insist on a Professional Real Estate Photographer.

Question #9: Which advertising tools will you be using to market our home?

Besides the traditional advertising tools, such as ads in newspapers, magazines, postcards, billboards etc., any decent Real Estate Agents needs to have a strong online presence.

Marketing should be happening all over! Your property needs to get exposed to as many potential home buyers as possible!

As a quick reminder, 90% of the home buyers start their home search online!

RELATED: Your Unique Marketing Plan

The internet is where all the researching and reading up happens, months before the home buyer even contacts the Agent!

Through the Agent’s online activities across many social network platforms, his personal website, and an active blogging calendar, chances are very good that the home buyers will keep running into that Agent’s content during their information-gathering phase. And who will they more than likely be contacting to help them find homes for sale on the Jersey Shore once they’re ready? After all, without even having met the Agent, these home buyers already have quite the impression of him due to this dominant online presence!

Question #10: Do you provide any additional services?

Sometimes it’s nice to know whether the Agent can offer you something different from the other Agents.

Any experienced Agent will immediately suggest helping out with the presentation of your home: from the cleaning & decluttering, to some of the needed repairs to the house, to getting that garden up-to-date, with extra attention pruning the shrubs & trimming the lawn.

Provided that the Agent has been working in the local area for many years, he’ll be able to set you up with a list of vendors as well, ranging from local handymen, attorneys, moving companies, to name but a few.

Keep in mind that the better Agents have your best interest at heart and don’t mean anything personal or hurtful if they point out potential negatives throughout the house.

The Real Estate Agent’s advice shouldn’t be taken lightly, as it is in their interest as well to have a more desirable and saleable product to present to buyers!

YOUR TURN

Have you recently interviewed a Listing Agent to sell your home? What did you learn? Did you rush through the process with regrets? Share your story on the Patrick Parker Realty Facebook Page, on our Twitter, Instagram or LinkedIn feeds. And don’t forget to subscribe to our monthly HOME ADVICE™ eNewsletter for articles like this one delivered straight to your inbox.

 

What Is a Real Estate Agent’s Commission?

Ever wonder what exactly a Real Estate Agent does? Are they worth the commission? Ever wonder if you’re paying too much for commission? Even consider going it your own via FSBO?

You may have a great Agent and they don’t communicate with you all they’re doing. Or, you may also have a rock star agent and who’s doing so much it hasn’t even occurred to you all the fine details going into your home sale.

Is a Real Estate Agent Worth the Commission

Here are a few facts that might help you sleep at night and have some peace about residential real estate commissions:

1. Real estate agents are sole proprietors

That means that even if they are a part of an agency, they are small business owners and cover all their own costs and carry all the risk. Do you own or have you ever owned your own small business? Then you know you wear ALL the hats and all the responsibility falls to you. Not to mention, your rather high tax rate!

They invest in you and your home. If they take on a listing, that means they’ve calculated the cost of marketing, photos, and time – lots and lots of time. High quality marketing – online and offline – and maybe even virtual tours. All that cost money. There’s considerable overhead if you are active in the field.

They have no salary and no real predictability in income. One deal may have to last them many months or maybe even longer.

2. The sale of your home may be covering for the loss of another

Deals fall through ALL. THE. TIME. Your particular sale may go pretty smoothly – great! I guarantee you it has ended up covering for a major loss on another deal. It’s the nature of business.

3. The real work begins once a contract is accepted

It may feel like all an agent does is show up sometimes for an open house here and there and put a sign in the yard. Or every time they come over, they’re telling you things you need to spend money on. But the real work is done behind the scenes and is intensified once an offer is accepted. Getting to the closing table is more and more challenging.

CASE STUDY

 

Pat Vredevoogd-Combs, a former president of the National Association of REALTORS, testified before the House Financial Services Committee on Housing to stark federal complaints about residential real estate industry pricing.

She submitted a list of 184 things that Listing Agents do in every real estate transaction as a part of her testimony to the committee. She stated, “By all accounts the general public is not aware of all the services that agents provide to sellers and buyers during the course of the transaction, probably because most of the important services are performed behind the scenes.”

Here is the list of (just) 184 things residential real estate agents do:

Pre-Listing Activities

1. Make appointment with seller for listing presentation.

2. Send a written or e-mail confirmation of appointment and call to confirm.

3. Review appointment questions.

4. Research all comparable currently listed properties.

5. Research sales activity for past 18 months from MLS and public databases.

6. Research “average days on market” for properties similar in type, price and location.

7. Download and review property tax roll information.

8. Prepare “comparable market analysis” (CMA) to establish market value.

9. Obtain copy of subdivision plat/complex layout.

10. Research property’s ownership and deed type.

11. Research property’s public record information for lot size and dimensions.

12. Verify legal description.

13. Research property’s land use coding and deed restrictions.

14. Research property’s current use and zoning.

15. Verify legal names of owner(s) in county’s public property records.

16. Prepare listing presentation package with above materials.

17. Perform exterior “curb appeal assessment” of subject property.

18. Compile and assemble formal file on property.

19. Confirm current public schools and explain their impact on market value.

20. Review listing appointment checklist to ensure completion of all tasks.

Listing Appointment Presentation

21. Give seller an overview of current market conditions and projections.

22. Review agent and company credentials and accomplishments.

23. Present company’s profile and position or “niche” in the marketplace.

24. Present CMA results, including comparables, solds, current listings and expireds.

RELATED: Why You Need An Agent To Sell Your Home

25. Offer professional pricing strategy based and interpretation of current market conditions.

26. Discuss goals to market effectively.

27. Explain market power and benefits of multiple listing service.

28. Explain market power of Web marketing, IDX and MLS.

29. Explain the work the broker and agent do “behind the scenes” and agent’s availability on weekends.

30. Explain agent’s role in screening qualified buyers to protect against curiosity seekers.

31. Present and discuss strategic master marketing plan.

32. Explain different agency relationships and determine seller’s preference.

33. Review all clauses in listing contract and obtain seller’s signature.

After Listing Agreement is Signed

34. Review current title information.

35. Measure overall and heated square footage.

36. Measure interior room sizes.

37. Confirm lot size via owner’s copy of certified survey, if available.

38. Note any and all unrecorded property lines, agreements, easements.

39. Obtain house plans, if applicable and available.

40. Review house plans, make copy.

41. Order plat map for retention in property’s listing file.

42. Prepare showing instructions for buyers’ agents and agree on showing time with seller.

43. Obtain current mortgage loan(s) information: companies and account numbers

44. Verify current loan information with lender(s).

45. Check assumability of loan(s) and any special requirements.

46. Discuss possible buyer financing alternatives and options with seller.

47. Review current appraisal if available.

48. Identify Home Owner Association manager is applicable.

49. Verify Home Owner Association fees with manager–mandatory or optional and current annual fee.

50. Order copy of Home Owner Association bylaws, if applicable.

51. Research electricity availability and supplier’s name and phone number.

52. Calculate average utility usage from last 12 months of bills.

53. Research and verify city sewer/septic tank system.

54. Calculate average water system fees or rates from last 12 months of bills.

55. Or confirm well status, depth and output from Well Report.

56. Research/verify natural gas availability, supplier’s name and phone number.

57. Verify security system, term of service and whether owned or leased.

58. Verify if seller has transferable Termite Bond.

59. Ascertain need for lead-based paint disclosure.

60. Prepare detailed list of property amenities and assess market impact.

61. Prepare detailed list of property’s “Inclusions & Conveyances with Sale.”

62. Complete list of completed repairs and maintenance items.

63. Send “Vacancy Checklist” to seller if property is vacant.

64. Explain benefits of Home Owner Warranty to seller.

65. Assist sellers with completion and submission of Home Owner Warranty application.

66. When received, place Home Owner Warranty in property file for conveyance at time of sale.

67. Have extra key made for lockbox.

68. Verify if property has rental units involved. And if so:

69. Make copies of all leases for retention in listing file.

70. Verify all rents and deposits.

71. Inform tenants of listing and discuss how showings will be handled.

72. Arrange for yard sign installation.

73. Assist seller with completion of Seller’s Disclosure form.

74. Complete “new listing checklist.”

75. Review results of Curb Appeal Assessment with seller and suggest improvements for salability.

76. Review results of Interior Decor Assessment and suggest changes to shorten time on market.

77. Load listing time into transaction management software.

Entering Property in MLS Database

78. Prepare MLS Profile Sheet–agent is responsible for “quality control” and accuracy of listing data.

79. Enter property data from Profile Sheet into MLS listing database.

80. Proofread MLS database listing for accuracy, including property placement in mapping function.

81. Add property to company’s Active Listings.

82. Provide seller with signed copies of Listing Agreement and MLS Profile Data Form within 48 hours.

83. Take more photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography.

Marketing the Listing

84. Create print and Internet ads with seller’s input.

85. Coordinate showings with owners, tenants and other agents. Return all calls–weekends included.

86. Install electronic lockbox. Program with agreed-upon showing time windows.

87. Prepare mailing and contact list.

88. Generate mail-merge letters to contact list.

89. Order “Just Listed” labels and reports.

90. Prepare flyers and feedback forms.

91. Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability.

92. Prepare property marketing brochure for seller’s review.

93. Arrange for printing or copying of supply of marketing brochures or flyers.

94. Place marketing brochures in all company agent mailboxes.

95. Upload listing to company and agent Internet sites.

RELATED: Your Custom Home Marketing Plan

96. Mail “Just Listed” notice to all neighborhood residents.

97. Advise Network Referral Program of listing.

98. Provide marketing data to buyers from international relocation networks.

99. Provide marketing data to buyers coming from referral network.

100. Provide “Special Feature” cards for marketing, if applicable/

101. Submit ads to company’s participating Internet real estate sites.

102. Convey price changes promptly to all Internet groups.

103. Reprint/supply brochures promptly as needed.

104. Review and update loan information in MLS as required.

105. Send feedback e-mails/faxes to buyers’ agents after showings.

106. Review weekly Market Study.

107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale.

108. Place regular weekly update calls to seller to discuss marketing and pricing.

109. Promptly enter price changes in MLS listings database.

The Offer and the Contract

110. Receive and review all Offer to Purchase contracts submitted by buyers or buyers’ agents. 111. Evaluate offer(s) and prepare “net sheet” on each for owner to compare.

112. Counsel seller on offers. Explain merits and weakness of each component of each offer. 113. Contact buyers’ agents to review buyer’s qualifications and discuss offer.

114. Fax/deliver Seller’s Disclosure to buyer’s agent or buyer upon request and prior to offer if possible.

115. Confirm buyer is pre-qualified by calling loan officer.

116. Obtain pre-qualification letter on buyer from loan officer.

117. Negotiate all offers on seller’s behalf, setting time limit for loan approval and closing date.

118. Prepare and convey any counteroffers, acceptance or amendments to buyer’s agent.

119. Fax copies of contract and all addendums to closing attorney or title company.

120. When Offer-to-Purchase contract is accepted and signed by seller, deliver to buyer’s agent.

121. Record and promptly deposit buyer’s money into escrow account.

122. Disseminate “Under-Contract Showing Restrictions” as seller requests.

123. Deliver copies of fully signed Offer to Purchase contract to sellers.

124. Fax/deliver copies of Offer to Purchase contract to selling agent.

125. Fax copies of Offer to Purchase contract to lender.

126. Provide copies of signed Offer to Purchase contract for office file.

127. Advise seller in handling additional offers to purchase submitted between contract and closing.

128. Change MLS status to “Sale Pending.”

129. Update transaction management program to show “Sale Pending.”

130. Review buyer’s credit report results–Advise seller of worst and best case scenarios.

131. Provide credit report information to seller if property is to be seller financed.

132. Assist buyer with obtaining financing and follow up as necessary.

133. Coordinate with lender on discount points being locked in with dates.

134. Deliver unrecorded property information to buyer.

135. Order septic inspection, if applicable.

136. Receive and review septic system report and access any impact on sale.

137. Deliver copy of septic system inspection report to lender and buyer.

138. Deliver well flow test report copies to lender, buyer and listing file.

139. Verify termite inspection ordered.

140. Verify mold inspection ordered, if required.

Tracking the Loan Process

141. Confirm return of verifications of deposit and buyer’s employment.

142. Follow loan processing through to the underwriter.

143. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale.

144. Contact lender weekly to ensure processing is on track.

145. Relay final approval of buyer’s loan application to seller.

Home Inspection

146. Coordinate buyer’s professional home inspection with seller.

147. Review home inspector’s report.

148. Enter completion into transaction management tracking software program.

149. Explain seller’s responsibilities of loan limits and interpret any clauses in the contract.

150. Ensure seller’s compliance with home inspection clause requirements.

151. Assist seller with identifying and negotiating with trustworthy contractors for required repairs.

152. Negotiate payment and oversee completion of all required repairs on seller’s behalf, if needed.

The Appraisal

153. Schedule appraisal.

154. Provide comparable sales used in market pricing to appraiser.

155. Follow up on appraisal.

156. Enter completion into transaction management program.

157. Assist seller in questioning appraisal report if it seems too low.

Closing Preparations and Duties

158. Make sure contract is signed by all parties.

159. Coordinate closing process with buyer’s agent and lender.

160. Update closing forms and files.

161. Ensure all parties have all forms and information needed to close the sale.

162. Select location for closing.

163. Confirm closing date and time and notify all parties.

164. Solve any title problems (boundary disputes, easements, etc.) or in obtaining death certificates.

165. Work with buyer’s agent in scheduling and conducting buyer’s final walkthrough prior to closing.

166. Research all tax, HOA, utility and other applicable prorations.

167. Request final closing figures from closing agent (attorney or title company).

168. Receive and carefully review closing figures to ensure accuracy.

169. Forward verified closing figures to buyer’s agent.

170. Request copy of closing documents from closing agent.

171. Confirm the buyer and buyer’s agent received title insurance commitment.

172. Provide “Home Owners Warranty” for availability at closing.

173. Review all closing documents carefully for errors.

174. Forward closing documents to absentee seller as requested.

175. Review documents with closing agent (attorney).

176. Provide earnest money deposit from escrow account to closing agent.

177. Coordinate closing with seller’s next purchase, resolving timing issues.

178. Have a “no surprises” closing so that seller receives a net proceeds check at closing.

179. Refer sellers to one of the best agents at their destination, if applicable.

180. Change MLS status to Sold. Enter sale date, price, selling broker and agent’s ID numbers, etc.

181. Close out listing in transaction management program.

Follow Up After Closing

182. Answer questions about filing claims with Home Owner Warranty company, if requested.

183. Attempt to clarify and resolve any repair conflicts if buyer is dissatisfied.

184. Respond to any follow-up calls and provide any additional information required from office files.

YOUR TURN

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