Let’s Talk About Qualifying Buyers

One of the many jobs your Realtor should do is to qualify buyers who have an interest in purchasing your home. While interviewing agents to list your house for sale these are situations you may want to discuss to determine the listing agent’s level of expertise.

Buyers will usually provide a copy of their pre-approval letter with their offer. Pre-approval letters are great and let you know the buyer has been qualified by a lender and is prepared to purchase. However, is this really enough to help you decide whether you want to go into contract with them? Not usually, there is a solution.

Some buyer pre-approval letters will state conditional underwriter approval and indicates that a loan is not guaranteed. One method your agent should know about and practice while negotiating offers is to contact the loan officer who has issued the pre-approval letter to discuss the aspects of the loan the buyer is applying for. Having this discussion with the loan officer allows your agent to discover facts about their financing that are not disclosed in the purchase agreement, also where in the process of applying for the loan that the buyer is in. This discussion also sets the foundation for the working relationship the loan officer will have with your agent should you accept an offer. This option should be practiced by your agent with every offer to help you decide who the strongest buyer is, especially in a multiple offer situation.

The other method your agent should offer during the listing presentation is to cross-qualify buyers with a preferred lender. The process for cross-qualification is simple and information can be exchanged between loan officers at the approval of the buyer. This allows the buyer to be confirmed as financially able to obtain the loan as well as perform the Loan Contingency while in contract. As a seller, the peace of mind you will have knowing the buyer is financially able to purchase your house is invaluable. As a buyer, once pre-approved by both lenders, they have the peace of mind that should their first-choice lender fall through, they have a second lender to rely on to enable them to perform the Loan Contingency in the contract.

For more information call or email me for your personalized comparative market analysis and marketing presentation.

Cheers to your success!

Brandy Christensen, Realtor / Realty One Group Complete

CA BRE# 01971181 / C: 916-600-1239 / E: christensenluxuryestates@gmail.com

Let’s Talk About That High List Price

When selling your home it is critical that you have confidence in your Realtor’s evaluation of your estimated market value. Some tactics of other agents to obtain the listing may not be in your best interest. From an objective point of view let’s talk about what pitfalls you can avoid when selling your home with me.

Competition among agents is very high and is currently being driven by the low inventory (number of homes for sale on the market). Some, not all, agents will entice sellers to list their home for a higher than market value price to gain the listing. This has the tendency of putting dollar signs in your eyes and raising your expectations of how much money you will walk away from the table with.

Please listen carefully, I am not being negative about any other agent’s strategies. I am making you aware of the tactics others may be using to manipulate you, causing you to miss out on valuable time and money.

My first point is when listing at a much higher price than comparable sold listings would substantiate, 2 weeks later, 30 days later and 60 days later the agent calls…”You need to reduce your price in order to sell this house!” The house sits on the market for weeks, even months, with few showings and no offers. The point of listing your house with a Realtor is to GET IT SOLD with the highest possible profit in your pocket.

It is imperative to list your home with competitive pricing to attract buyers and their agents, get showings and negotiate offers. Your listing price is the first and foremost part of the marketing process. Everything else that is used to market the listing is significantly less important.

Statistically, the first 14 days of your house being on the market are the most important in terms of getting the best offer. If the list price is too high buyers will not consider making a fair market value offer that will be rejected by an offended seller.

The next point I bring to your attention is that price reductions create a negative connotation about the house itself. Buyers will ask, “What’s wrong with this house that they lowered the price X number of times?” As a seller you can easily avoid this scenario by pricing your house reasonably and competitively from the very beginning.

The last point I am about to make is about perception. Buyers often have a negative perception about sellers and agents whose listings are priced too high. The buyer’s mindset is they do not wish to negotiate with a seller whose price is unreasonable…what else will they be unreasonable about?

To avoid the pitfalls of listing high, not selling your house or selling for less than fair market value call me or email me for a personalized needs analysis and marketing consultation. Together we will GET IT SOLD!

Cheers to your success!

Brandy Christensen, Realtor / Realty One Group Complete

CA BRE# 01971181 / C: 916-600-1239 / E: christensenluxuryestates@gmail.com

Let’s Talk About…For Sale By Owner

Are you thinking of selling your home without agent representation? Among a minority of sellers this is a popular option when sellers perceive they are saving money on a transaction. After all, one of the motivating reasons for selling on your own is to walk away with more money in your pocket.

Perhaps you’ve bought and sold homes using agent representation and you don’t see the value of the work they did, so why shouldn’t you do it yourself? Maybe you had a bad experience and felt the commission you paid was not worth the hassle. This in and of itself is very disconcerting considering the behind the scenes work your agent may have done that you were not aware of.

My most recent experience with representing a buyer in a For Sale By Owner (FSBO) transaction reminded me of why it is so important to hire the right agent to sell your home.

The seller in this case seemed to have priced the home competitively according to my market research. I started a conversation with the seller and found out her primary source of advice was her sister, a licensed agent in Texas. California and Texas real estate laws differ greatly. The seller declined to consider signing a single party listing agreement with me because of the advice she was receiving from a family member licensed outside of California.

Not a big deal…I continued forward with negotiations representing my buyer only and sent her the Non-Agency Representation Agreement along with my client’s offer to purchase the home. A day later we received the seller’s counter offer…it was on an outdated form. I had to send it back to her explain the form was outdated. She couldn’t “find” the current forms so I sent her an updated form to sign and send back.

Lesson #1…CAR (California Association of Realtors) forms are not available to the general public unless you pay per form and can be difficult to know which ones to use because there are so many. They are also expensive considering how many forms a seller must complete in the disclosure process. Most sellers don’t know this or where to even look. There are hundreds of forms and revisions and new forms are required constantly.

Lesson #2…Advice from an out of state licensed agent is not the same as hiring the right agent licensed in your state to do the job.

During many of our conversations the seller stated advice she had received from the Texas agent and it was not consistent with California real estate laws and procedures. This could have landed her in hot water legally because of the thorough disclosure process that occurs in California. Relying on incorrect information could have caused her not to disclose material facts about the home, property, title, etc. I would hate to see this happen to you and be served with a lawsuit for which you could be responsible to pay thousands of dollars in attorney fees and settlements. It’s just not worth it for the sake of protecting your financial future.

Lesson #3…The money the seller saved in commission was not worth representing herself. Let me explain.

By representing herself the seller potentially “saved” $9,750 (give or take another half percent) in commission paid to a listing agent. But in the end she ultimately lost money which far outweighed the “saved commission”. After the sales price was negotiated the lender’s appraisal indicated that the actual market value of the home was $30,000 higher than what the seller agreed to for a purchase price. The seller could have had $20,250 more in her pocket at the end of the transaction if she had hired a Realtor who would have protected her best interests.

Can you afford to lose $20,000 on the sale of your home? You are probably saying “NO”! I agree!

If this hasn’t convinced you to contact me to help you sell your house, then here is a little more information to consider.

Firstly…Bad experiences are bound to happen because humans are involved. No matter what, it should never be your agent who creates the problem. Problems will arise within a real estate transaction and your agent has been hired to be a problem solver. How do you avoid risking a bad experience? Interview multiple agents, ask the right questions and ask for references from past clients. Then do your homework.

Research online reviews and find the dirt. You can even check with the Bureau of Real Estate to find out if there are any complaints filed against agents you are considering. The details of these complaints are not available, however; just knowing they are or are not there lets you know what kind of experience you may be heading into.

Research the broker the agent is working under and find recent news and reviews about their financial stability or complaints that may have been filed against them.

Secondly…There are many reasons sellers don’t see the value in hiring a Realtor to sell their home and paying them an average of 5-6% of the selling price to compensate both your agent and the buyer’s agent.

  • Lack of communication
  • Lack of marketing
  • Bad pricing advice
  • Too much time on the market
  • Poor customer service
  • Less than average negotiation skills
  • Passing responsibilities to inexperienced agents/assistants
  • Lack of timely responses to your calls/inquiries

I’ve heard over and over again from prospective FSBO sellers that these are the most common reasons they would rather represent themselves aside from the commission they pay. While all of these are unfortunate, the Real Estate Agent community should take notice and simply do better!

Lastly…whether your expectations of your listing price are higher or lower than the average market value, you owe it to yourself to consider the financial benefits of hiring an experienced agent to help you net the most profit possible. Commission aside, the right agent will help you expertly navigate through the process and help avoid possible legal repercussions.

To recap, whether you are trying to save money on commissions, avoiding the frustration of hiring the wrong agent and the possibility of future legal ramifications I highly recommend that you research all your options and hire me to protect your best interests.

I trust this post has been helpful for you and that you will call me right away to talk about all your options. I am there for you because I care!

For more information, call me at 916-600-1239 to schedule a visit or email me at christensenluxuryestates@gmail.com. For information on the value of your home visit my site at greatersachousevaluations.com.

Let’s Talk About…FHA Appraisals

Don’t let an FHA appraisal kill your deal. FHA loans are federally funded mortgages and come with stricter underwriting and property condition requirements. While preparing to sell your home it can be easy to overlook some property conditions to get your house on the market fast.

When you accept an offer from a buyer with FHA financing keep in mind that in addition to their own inspections the appraiser may note repairs that the appraised value is dependent on. In this case the lender will require repairs before loan documents are released or the loan is funded.

Prepare your home for sale, don’t just clean the carpets and put our deodorizers. Get a home inspection and pest inspection!

Ask the inspector to go through the home with a fine tooth comb to point out any safety issues that could cause you to have to negotiate repairs and in some cases the purchase price of the home. Pest inspectors will point out areas where termites may be present causing damage and/or areas of dry rot that will need to be replaced. Providing a Section 1 & 2 clearance to your Realtor when you list your home will increase the perceived value of your home. Roof inspections are also vital.

Buyer agents will know the home is in tip top shape and encourage their clients to offer higher purchase prices. This also saves you time and frustration during the contract period not having to negotiate repairs and money you might have to spend to close the deal.

HUD approved appraisers are required to confirm property value and inspect health and safety inspections. Here are a few things HUD appraisers will be looking for…

  1. Chipped or peeling paint
  2. Exposed wood siding/trim
  3. Stucco cracks larger than the width of a quarter
  4. Evidence of arcing or smoke/burning in the main electrical service box
  5. Loose handrails

This list is not all inclusive of areas of concern may arise. Please refer to the HUD Inspection checklist at fhahandbook.com for more information.

Landscaping can even present an issue…there must be sufficient slope to allow water to drain away from the house. Standing water in your yard may be indicative that there is not enough slope to drain the water away from the home.

Attic spaces may also present a problem if a full attic inspection is required. Let’s be honest with ourselves, how many times do you go into your attic to make sure there are no leaks or undiscovered damage?

The competition for pricing your home to prepare you to receive multiple offers over your list price depends on how ready your home is to sell and whether buyers will have the confidence in the property’s condition.

For more information on selling your home and its market value contact me at brandy.christensen@kw.com or call me at 916-600-1239.

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Let’s Talk About… Expired Listings

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Have you ever signed a listing agreement with an agent who promised you the moon and stars only to have your house sit on the market for months? This scenario is common in the real estate market and is frustrating for many sellers.

You have strong motivation to sell your home and now your plans have been thrown off track because your house isn’t selling. It is a disappointment no homeowner wants to face.

When this happens you deserve answers…ask your previous agent these questions.

  • How many showings did your agent record?
  • What feedback did your agent obtain from buyer’s agents?
  • Why didn’t you get any offers for your house?
  • What marketing efforts and/or results did your agent share with you?
  • How much did your agent budget for marketing your house?
  • What advice did your agent provide about the listing price and comparable sales for your neighborhood?
  • What will the previous agent do differently if you list your house with them again?

When you have the answers to these questions it is time to consider your options. Are you dissatisfied with the explanations your agent provided? Did they back up their answers with data or did you feel like you were getting blown off?

Now is the time to ask yourself the hard questions…

  • Am I confident my previous agent will sell my house this time?
  • What will he/she do differently this time around to get my house sold?
  • Can I afford to go several more months before selling my house?
  • Do I want to continue causing stress for me and my family by missing out on selling my house now?
  • What is my original motivation to sell and is it strong enough to sell my house now?
  • Am I willing to reposition my house on the market with the right agent to sell my house?

Some of these things and more will happen when your home fails to sell when you list the first time. You will be flooded by phone calls from agents who are aggressively pitching their services. Some people can get more than 25 calls a day from salespeople telling you they have buyers for your house. You will want to change your phone number or stop answering it all together. Some agents will show up at your door hoping to talk you into listing with them. Your mail might get flooded with marketing materials.

I want to help you avoid the pain of missing out on your opportunity to make your next move and dealing with aggressive salespeople who are only interested in their commission pay check. While different methods may work for other agents my approach is truthful and client need based.

As your Realtor, I will listen to you and tailor a personalized marketing plan that is based on your needs. Avoid the pain, stress and frustration of not selling your home by listing with me today.

Call or email me to schedule your personal needs analysis and marketing strategy.

Cheers to your success!

Brandy Christensen / Realtor / BRE#01971181

916-600-1239 / brandy.christensen@kw.com

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Let’s Talk About… Negotiations

When sellers think about negotiation it usually refers only to the purchase price of their house. Let’s talk about how negotiation skills are important when choosing a Realtor to help you sell your house.

 

Price is the first and most important part of marketing your house. Depending on how much you list your house for in relation to other comparable sales in your neighborhood you could generate multiple offers above list price. It is also the most important part of negotiating offers with potential buyers. Your focus, as the seller, is on how much money you can walk away with when the deal closes. Your Realtor should have strong negotiating skills to help you with obtaining the highest price possible. One way you can know you have a strong agent is if you tried to negotiate a lower commission and that agent influenced you to accept their original sales commission when signing the listing agreement. If you were able to negotiate a lower commission chances are your agent will be weak when negotiating with buyer’s agents. That’s not what you want!

Negotiations don’t stop there…what about the other terms of the contract? I can already hear you asking, “What other terms could possibly be that important?”

Here are a few terms of the CA purchase agreement that will be important when considering what offer to accept on your house.

  1. Earnest money deposit (EMD): The EMD is a percentage of the purchase price that the buyer is willing to deposit with a Title/Escrow company to reserve the home for the escrow period. Many agents advise buyers to deposit a minimum of 1% of the purchase price. The higher the EMD a buyer offers the more serious and financially capable they are. You want a serious buyer for your house. When in a multiple counter offer situation this can help weed out the not so serious buyers.
  2. Loan Contingency: Most people ready to purchase a home will be relying on obtaining a mortgage to finance the purchase. The standard CA loan contingency is 21 days. Depending on the type of pre-approval letter that accompanies the offer I always review and recommend a shorter contingency if any at all.
    1. Buyers who have a fully underwritten approval may offer no loan contingency. These buyers are the best besides an all cash offer. They have secured financing and have capability of purchasing your house.
    2. Buyers who are not underwritten will usually submit a pre-approval letter “subject to underwriting”. These buyers have had credit checked and income verified, however; an underwriter has not reviewed their entire financial picture to determine they are truly qualified to pay the mortgage payments. The loan contingency offered is usually the standard 21 days and may be shortened slightly to make the offer more attractive. I don’t recommend taking a shortened time on these unless I’ve worked with the lender and have received written confirmation that they will be able to obtain full approval before the contingency time expires.
    3. Buyers who submit an offer accompanied with a Pre-Qualified letter are the weakest offers and should be approached with caution. These buyers have not had their income or credit report verified.
    4. Your Realtor should contact the lender to verify the loan contingency terms and status of the buyer’s financing prior to presenting the offer.
  3. Appraisal Contingency: The appraisal contingency allows the buyer to come back to renegotiate the price if the appraisal does not support the purchase price. The appraisal contingency in a CA purchase agreement is a standard of 17 days. When a buyer’s agent is confident in the lender’s process sometimes they will shorten the contingency with the lenders approval. Some buyers will remove the appraisal contingency, however; this is very rare. Every situation is different and if the offered purchase price for your house is higher than comparable sales I recommend a partial appraisal contingency release. The buyer will pay the difference between the purchase price and appraised value, sometimes with a cap on how much over the appraised value they will bring to the closing table. This will relieve you of having to stress about renegotiating the price of your home if the appraised value is lower. Your Realtor should contact the lender to verify the lender will be able to perform within the contingency period before presenting the offer.
  4. Inspection Contingency: The standard CA purchase agreement contingency period is 17 days. The shorter the period the more motivated a buyer will be to inspect and negotiate repairs and/or release the contingency. I recommend accepting offers with shorter inspection periods to give a buyer less time to potentially back out of the contract. This allows the seller to get the home back on the market quickly if a buyer finds something unfavorable about the condition of the house.
    1. You, the seller, can potentially avoid losing a buyer to an inspection contingency when you perform your own inspections prior to listing your house. You can repair any issues that could be a potential turn off for buyers and you create a higher perceived value for your house.
    2. Typical inspections are Pest Inspections for wood destroying pests and dry rot; General Home inspections; Roof inspections; Chimney inspections for wood burning fireplaces and stoves; Pool inspections. Other inspections may apply depending on the features of your house.
  5. Repairs: In California a buyer has the option to submit a Request for Repairs based on their inspections. You are not obligated to respond, however; if the request is reasonable and supported with copies of the inspections and quotes from reputable contractors you may want to respond in order to keep the sale moving forward.
  6. Contingency on Buyers Sale of Property: This contingency is most common when the buyer may or may not have listed their house for sale, however; their new mortgage depends on the down-payment they receive from their sale. Your Realtor should call to discuss the buyer’s listing with their agent to get as much information as possible to help you make the best decision.

Ultimately, all final decisions are up to you. I will advise you how to best respond in any of these contingency situations and negotiate the best purchase price and terms for you.

Call or email me for a personalized needs analysis and marketing consultation.

Cheers to your success!

Brandy Christensen, Realtor / Keller Williams Realty

CA BRE# 01971181 / M: 916-600-1239 / E: brandy.christensen@kw.com

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Let’s Talk About… Listing Price

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Everything will sell for the right price! I know…it is tempting to want to price your home for a price you think is realistic. That price is sometimes too high!

You say, “But, I know my house is worth more than my neighbors and that’s what I should get for it.”

And I say, “That’s great and very well may be true…let’s take a look and see what other homes just like yours are selling for.” Because only one thing determines the value of your house in today’s market. It isn’t how much money you need to profit after closing costs. It isn’t an emotional value because of the family memories, blood, sweat and tears you’ve poured into your house. It isn’t what your friends say it is worth. It isn’t even what a real estate agent says it is worth.

It IS worth what other homes just like yours are selling for within your neighborhood.

You ask, “Why?”

I say, “Have you heard of a mortgage?” I’m sure you have and you most likely still have one that you need to pay off when you sell your house. A mortgage requires an appraiser to determine the value of the house for the lender to provide money to any potential purchaser of your house.

This is important because if the appraiser doesn’t find any homes in your neighborhood that have sold for the price you want then they are legally and ethically obligated to report a lower value to the lender. There are ways to negotiate a higher than appraised price for your house. That is a negotiation tactic not related to an agreed upon listing price. When we look at this from a buyer’s perspective, why would we want to pay more for a house than the appraised value and start with negative equity? We can NEVER predict what will happen with tomorrow’s real estate market and would be a poor choice for any buyer.

You say, “What about cash buyers?” Cash buyers are not exempt from obtaining an appraisal except when the property is majorly, physically distressed. Experienced cash buyers will pay for an appraisal and negotiate the right price.

Back to the original point…EVERY house will sell for the right price!

Pricing also takes into account other factors. Location is very important. Is your house located on a busy street or a cul-de-sac? Is your house behind a busy shopping center or in the heart of your neighborhood? What amenities does your home have that others may not have? Does your house have curb appeal or is the front yard a wreck?

I trust this information is helpful and gives you a balanced perspective on how buyers view market value.

Call or email me for your private consultation and marketing presentation.

Cheers to your success!

Brandy Christensen / Realtor / Keller Williams Realty

M: 916-600-1239 / E: brandy.christensen@kw.com

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Let’s Talk About…Commission

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When you are ready to sell our house and just met with a Realtor you might be shocked by the numbers on the net sheet they include with their presentation. Let’s look at the facts…the greatest expense when selling your home is that one line…COMMISSION!

Before you have a panic attack let’s talk about another fact…the time and expense your Realtor is about to embark on to market your home is not guaranteed to be compensated to them. Your house could potentially not sell due to any number of factors including price, location, condition, market, etc. Your Realtor is taking a risk in spending their own capitol on marketing your house with no guarantee of it selling and getting paid.

Let’s look at another fact…behind the scenes. Your Realtor is spending valuable time and resources prospecting for buyers and other Realtors with buyers. He or she (if they are like me) is making phone calls, knocking on doors, sending out mailers, holding open houses and paying for social media advertising to generate traffic (buyers) to sell your house. The countless hours spent on these efforts are all without guarantee.

You might even be thinking, “I should check with another Realtor to see if I can pay less commission to sell my house.” Just imagine working your full-time job and your employer says to you, there is no guarantee you will be paid for your work. And, you know, I’m just going to transfer your job to another person who will do it for me for a cheaper salary. Do you feel your time and skills are work that paycheck? Because you are worth that paycheck then you will find a company that will pay you what you’re worth. I am the same way, the commission is a representation of what my time and skills are worth to you.

Let’s talk about another important fact…the agent that charges you the least amount of commission will be more likely to spend very little time actively and aggressively marketing your house to sell it. That agent will also be more likely to negotiate a lower price for your house leaving you with less money in your pocket. Agents who charge less commission are less concerned with the quality of buyers than they are about the quantity of their listings.

Ok, here’s the last fact for today…commission is shared with cooperating agents who bring buyers with offers. Commission is also shared with the Broker’s involved in the transaction. Don’t forget about the IRS, they want their cut too! Add all this up along with the marketing costs and the Realtor is only left with a percentage of the total commission to support their family.

Here are some questions to ask about commission before listing with a Realtor:

  1. What percentage of this commission is budgeted for marketing my house?
  2. Where is the greatest money being spent on advertising my house for sale?
  3. What will you do besides spend money to market and sell my house?
  4. How is commission split? Co-operating agents split, Broker split, marketing budget, business expenses, taxes, etc.

This will be an eye opening experience and will help you understand the value of hiring the right Realtor to represent you to sell your house.

Who do you want working for you? A quality Realtor or a discount agent?

Call or email me for your personalized needs analysis and marketing strategy. I look forward to hearing from you.

 

Cheers to your success!

Brandy Christensen, Realtor / CA BRE#01971181 / Keller Williams Realty

M: 916-600-1239 / E: brandy.christensen@kw.com

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Curb Appeal…Does It Really Matter?

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