Tips For Finding A REALTOR®

This past week I met a colleague in the real estate business for coffee and conversation.

The topics included the latest tech items, commission structures, contact data base management, and the overall perception of the REALTOR® and real estate industry.  He went on to tell me about a recent get together attended by professionals including attorneys, physicians, and educators.

The conversation eventually got into real estate and how easy it is to get a Broker’s licensee to save money by representing themselves.  The overall consensus from the conversation would be a savings of between 5% and 6% of the selling price.  It was a simple as that.

Of course I shared with him my old favorite saying that an Attorney that represents himself, has a fool for a Client.

A good deal of the perception of the real estate industry is our own fault.  Too many of us clamor about being number 1 or “top producer” and drive fancy leased luxury cars, wear expensive clothes, and have a ego the size of a 3rd world country.

From the consumers point of view why wouldn’t they believe we were an overpaid bunch of buffoons?

The things that traps all of us in life is we don’t know what we don’t know.  We second guess our doctors recommendations based on a Google search, a teacher’s method of running a classroom, and our public servants.  And we do this with out all the facts – assuming our judgement is correct.  BTW sometimes it is!

When I first started practicing real estate, I thought fresh out of the Department of Real Estate test that I was qualified to advise people in undoubtedly the largest financial decision of their lives.

Some 20 years later I am still learning something new each day, and realize how much more there is to know.   In other words, I know more than I don’t know, which is what a professional should bring to the table in any field.  You need to be immersed in a field day to day to understand it.

Last week the big story on Twitter, Facebook, and the news was the former CEO of ForSaleByOwner Colby Sambrotto had listed his 2000 square foot New York apartment for sale by owner (FISBO).He advertised the condominium through on-line classified ads and FISBO sites.  After 6 months he gave up, hired a real estate broker, and sold the property with multiple offers going $150,000 over asking price.  You can read more about on Curb New York.

In part three of my 10 part article on successful traits of a REALTOR® I listed “experience.”  The story is about a melt-down at a power plant that could not be diagnosed, an outside expert was called in, and within 10 minutes time he had corrected the problem.  Everyone was really grateful until they received a bill for  $2,000 of what they perceived as 10 minutes of his time.

Later that week the Plant Manager received a bill from the expert. When he opened the statement he was surprised to see a bill for $2,000 and immedialty rang up the expert to inquire how 10 minutes of time could be worth so much money and could he please itemize his statement.

Later that week another amended invoice arrived for the plant manager.

10 minutes time assessing the problem and troubleshooting plus travel time $25.00

20 years past professional experience in knowing which instrument to tap – $1,975.00

To immediately view or download 9 Tips For Finding A REALTOR® click image below.

The process of purchasing real estate is a complicated one.  Each transaction is different and requires full investigation during your inspection time to make sure you know what you are buying.  More questions will always follow, but here are 8 questions I think you should always ask when you first start the process.

1. How long has the property been listed in the Multiple Listing System?
2. Is this the first time on the market or was it listed with the same or another Broker?
3. Have there been any status changes like price changes or pending sales?
4. What was the original price of the home and when did the current owners purchase the property?
5. How many loans are against the property?
6. What is the foreclosure and pre-foreclosure rate of the neighborhood.
7. Are there any substantial disclosures on the Real Estate Transfer Disclosure Statement or Seller Property Questionnaire?
8. Are the property taxes current or any other liens showing up on the Property Profile or public data?

We are pleased to announce that our new home search including lifestyle is now live on RealtyV2.com.  While you can search for homes on Zillow, Trulia, and Realtor.com, this systems allows you to expand your search to school districts, communities, amenities, and recent sales.

For example you want to find downtown condominiums within 1/4 miles of Starbuck’s, in the Marina District, and within 1/2 mile of a middle school district.

Here are some short videos on how the system works.

Start your search today and register for a complementary account.

http://www.youtube.com/watch?v=QwYT85Kx1xM

Continuing on with our series on understanding the California Residential Purchase Agreement we look at page four.  Please understand this series was done for the State of California.  Residential Purchase Agreements are different in each state and I would encourage you to consult a REALTOR® licensed in your state.  I am not an attorney but a Real Estate Broker able to advise on real estate issues in the State of California.  This video is very general in nature and is in no way complete, so consult your REALTOR® for any specific questions.

Page four of the California Residential Purchase Agreement includes the following:

• Condition of property – present condition or “as is”.
• Buyer’s investigation of property and matters affecting property.
• Attached Seller Disclosures, addenda, advisories, and other terms to the Residential Purchase Agreement.
• Title & vesting – importance of holding title.
• Sale of buyer’s property.

If you have any questions or would like to speak with me personally just send me an e-mail or give me a call at 619-800-8312.  I hope this series gives you some education and the importance of understanding the Residential Purchase Agreement before writing an offer.

The California Residential Purchase Agreement is the kingpin of all contracts in residential real estate transactions.  Using a REALTOR® that has a full understanding and experience may result in a more successful transaction.  While the video may appear overall to be very simple, it is the experience of your REALTOR® to know what best to fill in for your unique situation.

View or download page four of the Residential Purchase Agreement.

In my over 20 years of Real Estate, I have seen more changes in the last few years than the rest of my career. Over the next week, I am going to be writing a series of articles regarding how difficult financing can be and how to improve your odds.

Back in the day I was pretty relaxed about what lender a Client would choose. Remember these were the days that the main qualifications was you were breathing. Most everyone got the job done and the lenders were considering changing to trained monkeys.

Today I can no longer be so unconcerned with the choice of the lender. I have seen too many good Clients relying on incompetent loan agents to get the job done. These agents are your human face into the bank or lender that you are using, and the ones responsible for gathering all the data and preparing the file for underwriting.

If they don’t do a excellent job, the road ahead will be exceedingly difficult at best, and possibly loose your “Good Faith Deposit” at the worst. Early next week I am going to describe a real live experience with a major bank and a Client with high credit scores and extremely low debt ratio.

The current Residential Purchase Agreement allows for 17 days to do all the inspections and investigations that the buyer would like to make. Also, unless, expanded this is the deadline for loan approval and the appraisal contingency.

Being the active removal contract that it is the Buyer must either remove the mortgage and appraisal contingency, negotiate and extension with the Seller, cancel escrow, or be faced with the Seller giving them a Notice To Perform to remove the contingency. While the “Good Faith” is not at risk until removal, this opens up the potential for the Seller to cancel the escrow.

Here is the problem that I am seeing more often than not. The lender or bank has issued the pretty much useless prequalification letter and verification of funds at the start of the escrow. They start collecting the necessary documentation, but don’t fully understand all the underwriting changes that have recently been put into place.

Many lenders and banks don’t have final underwriting approval until a few days prior to close of escrow. Poorly prepared files reach these stressed out underwriters, and all manner of conditions or a denial came come back. The buyer is in a difficult position since he or she have removed all their contingencies. Whatever “Good Faith” Deposit is at risk since the Seller has a right to create a Notice To Close Escrow to the Buyer, and ultimately the ability to cancel the escrow. More about this process in an upcoming post.

Here is the single most important piece of advice I can give to you.

Listen to your REALTORS® recommendations for lenders they have used in the past that are excellent and get the job done. Most of us have lenders in every price bracket and know which would be best for your personal circumstances.

Being in the crazy real estate market we know the good, the bad, and the ugly. By law, we cannot profit from a referral to any given financial organization (RESPA) and our only interest is getting you a loan at a competitive rate that will get done and not leave you in danger of losing your transaction.

Photo courtesy of Flickr and Michael E. Grass.

Will The Real Estate Agent Become As Rare As A Travel Agent?

I hear the argument all the time…

Of course a few years ago in Southern California real estate licenses were more common than a drivers license.

The internet killed the travel agent and it will kill the need for a real estate agent? Real Estate sales are simply another commodity that can be easily traded?  Real estate agents are a thing of the past, an unnecessary component of the process.

Stefan Swanepoel is one person I have a great deal of respect for in his study of the real estate industry.  Stefan has written over 19 real estate related books and produces the annual Swanepoel Trends Report.  Recently he posted this article posing this very question:

Purchasing a home is a very complex transaction, almost like a tapestry woven together with many players. It takes into account multiple laws, while it dances around endless vested interests. Often its progression creeps forward over a long period of time as if it were a thriller novel shrouded in mystery and large sums of money. Making changes is of epic nightmare proportions.

Almost every dot com company of the late 1990’s, whether its an international franchise, a new innovative upstart, a national title company, a technology company or a VC funded real estate initiative all share two things in common. First, they have all burned through thousands of hours and millions of dollars, and secondly, they all have fallen into that same trap – that purchasing a home is still a very complex transaction.

I however still remain very positive that change is happening, just slower than you think. Understanding how commodities differ will help you understand why I think real estate will not go the way of travel agents or booksellers.

To understand the commodity argument you must first understand the four major types that his article outlines.  They are standard commodities, choice commodities,  intangible commodities, and unique commodities.

In the case of a travel agent they are selling a choice commodity.  If you go to the local bookstore and purchase a book that is a standard commodity. Pretty much any travel agent that you purchase a ticket on Delta Flight #99  to Chicago offers the same experience.   The Internet has allowed a much more efficient way for airlines to sell tickets.

So of course you no longer need a real estate agent to find a home for sale.  You can find them on Zillow, Trulia, Redin, Brokerage Websites, Yahoo, Google, and this blog.  In fact most consumers know more than the agent about a particular neighborhood inventory.  Buyer alerts, google maps, and virtual tours have changed that process forever, and might I say for the better.

And if this was all the real estate agent brought to the table it would be over.

However, real estate is a unique commodity.  No home or transaction is exactly like the last one.  Here is what Stefen has to say in his article:

Example: Purchasing a home. Each house is generally a one-of-a-kind item, it cannot be shipped, nor can more than one buyer purchase it simultaneously. This purchase is significantly influenced by the buyer’s details, is subject to numerous outside factors, is time sensitive and above all, entangled in a plethora of forms.

The real estate agent of the future is probably less of a salesperson and more of an advisor. Professional marketing abilities, legal understanding of contracts and disclosures, negotiation abilities, understanding market conditions, and assisting people through a very stressful and emotional time is why REALTORS® will continue to exist.  Everyone is free to sell their own home legally, yet most understand it’s probably not in their best interest.

I think it takes at least 5 years for a new agent to become somewhat competent at being a REALTOR®.  I live and breath real estate and lately most every transaction has taken all of my twenty years of experience and negotiation  abilities to close the transaction.  It is not easy and it is hard work.

So I guess the real question today is will there be a future for the bad real estate agent?

Will the non-tech savvy agent continue to be productive?

Will the fast talking pushy “car salesperson” type personality work in 2015?

Today their exists some high end travel agents that provide Clients an experience and service beyond imagination.  Those are few and far between because the business is based in a choice commodity.

Forbes magazine wrote 5 reasons you still need a real estate agent.  According to the article they are:

1. Better access and more connivence.
2. Negotiation is tricky business.
3. Contracts can be hard to handle.
4. Real estate agents can’t lie.
5. Not everyone can save money.

The REALTOR® of the future must continue to change with the times and provide what the Client needs and wants.  The industry must embrace technology, become more efficient, and less expensive.

The real estate agent is not dead.

Photo courtesy of Flickr

I have been doing a lot of thinking about my on-line goals for San Diego Lifestyle and came across this wonderful article written by Karen Mead titled Desperate To Be Seen: Learning To Shine A Steady Light. This was a real a ah-ha moment for me.  Thank you Karen and I could not say it better than the quotes below:

But I think this need speaks to such a greater challenge. It reminds me of the trust it takes to stay consistently in our personal truth, to be who we are we openly, to send a steady beam knowing that this is enough.

So the premise of the post is an analogy to business branding to a lighthouse…

The example highlights how a lighthouse doesn’t run up and down the coast, anxiously seeking any boats in the water. It doesn’t cast its beam north and south, right and left, desperate to be seen. It isn’t frantically searching for every possible boat, screaming “Let me help!”

What it does is remain steady, naturally drawing attention to itself by consistently beaming the same message “I am here.”

By remaining true to its purpose, the lighthouse guides the boats that need its direction. When they need it, they find the beam. There are no swaying lights and mixed reference points to confuse the other boats not needing direction. Everyone’s needs are met.

So many in our industry are desperate to be seen when what the consumer needs is helpful beam of light to keep them off the rocky shore.

The on-line strategy for most is to capture leads and spam them mercilessly. My personal belief is to provide the light and have those that need help come to me.  My e-mail policy is very simple, it is not shared with anyone without your permission.  You won’t be placed on an newsletter or drip marketing without you asking.  San Diego LIfestyle is here when you need it.

I am realizing that there is great power in being authentic—that there is strength in truth. As I honor my personal truth without stressing about getting or being more I’m naturally more confident and more successful.

I want to be a steady beam, to know that there is safety in my own truth—that my presence can provide a place for others to be authentic and secure in whom they are.

Happy Thanksgiving everyone, I am here and I am truly grateful.

How Important is the HUD-1 Settlement Statement in Closing?

The last of the 3 Housing and Urban Developement (HUD) videos covers closing the deal.  Perhaps the most important document in the closing process is the HUD-1 or Settlement Statement.  This document covers all the costs and credits associated with your real estate purpose and should be kept in a safe place.  You will need to a copy to file your taxes.

The 1st video covered shopping for your home while the 2nd discussed understating the good faith estimate or GFE.

Here are some tips for your settlement process.

• Be sure to take your good faith estimate to escrow or loan document signing.
• Compare GFE with estimated HUD-1.
• Request a copy of the HUD prior to settlement process, usually at least the day before.
• Make sure you have homeowners insurance.
• Take in a certified cashiers check for downpayment and closing cost or have money wired into escrow.

The Settlement Statement has been recently revised and previous versions are obsolete.  You can view, share, print, or download a sample version below.

The HUD-1 contains the following information:

• Type of loan, file number, loan number, and mortgage insurance case number if applicable.
• Name and address of borrower (buyer) and seller.
• Nane and address of lender.
• Property location.
• Settlement agent or escrow agent, place of settlement, and closing date.

Page 1 of the has two columns, one for a summary of the borrowers and sellers transaction. The columns are broken down into categories.  Page 2 is a summary of the settlement charges including real estate broker fees, items payable in connection with the loan, items required to be paid in advance by the lender, reserves deposited with lender, title charges, government and recording/transfer charges, and any additional settlement charges.

Page 3 of the HUD-1 Settlement Statement starts with a compassion of the good faith estimate (GFE) and estimated HUD-1 charges.  Next it lists the charges that cannot increase more than 10% from the estimate, and charges that can change.  The remainder of the HUD-1 Settlement Statement contains a consumer friendly loan terms to easily identify loan amount, prepayment penalties,and more.

http://www.youtube.com/watch?v=8IQ7Bl0VGTs

The video covers the following:

• Settlement Process.  In Southern California it is called escrow.
• Good Faith Estimate or GFE.
• HUD-1 or Settlement Statement.

Sample HUD-1 Form.

You can find out more information by visiting HUD on the web.

Real estate complaint with the California Department of Real Estate (DRE) – How To File

Complaint Process:

Investigations are done by the Department of Real Estate based on written complaints revived by the public.  First the DRE must determine that the individual or company is under the DRE jurisdiction and secondly that the real estate complaint relates to possible violations of Real Estate Law or Subdivided Lands Law.

One of the first things you should do is check that the individual agent or broker is a licensed.  You can do that easily by searching on the DRE website.  You can also check by telephone at 877-373-4542 or any of the enforcement offices.

Starting The Real Estate Complaint Process:

The DRE has a complaint form (RE-519) which will help them evaluate and process your complaint.

The Department of Real Estate investigates complaints against real estate brokers and salespersons who are accused of mislead- ing or defrauding consumers. If we can prove a violation of the real estate license laws within our jurisdiction, a formal hearing may be held which could result in discipline of the agent’s license.

We also investigate complaints against subdividers who are accused of violating subdivision laws and, if we can prove a violation, further sales may be stopped by the issuance of a Desist and Refrain Order until the violations are corrected.

All complaints must be in writing. Upon receipt, your complaint will be reviewed and you may be requested to provide additional information. If your complaint is assigned for investigation, you will be notified of the name of the investigator as well as the outcome of our inquiry.

Please understand that we cannot act as a court of law, thus we are not able to order that monies be refunded, contracts be cancelled, damages be awarded, etc. If you have this type of concern, you should consult with an attorney since we are not authorized to give legal advice or act as your counsel. Most county bar associations in the state have lawyer referral services which are able to arrange a consultation for a modest fee.

Completing the Real Estate Complaint Form:

When completing the real estate complaint form you will need to provide a written explanation of the exact nature of your real estate complaint.  You will also need to provide copies of all documents involved in your transaction.

The real estate complaint form (RE 519) will require information about you, information about the person or company that you are making the real estate complaints against, if you have retained an attorney, and if the real estate complaint is involved in a civil action (lawsuit).  Additional requirements would e any witnesses, type of documents that are attached, and a full written statement of the real estate complaint.

You will sign and certify the the foregoing statements and attachments are true and correct.  You can mail or hand deliver the real estate complaint form RE 519 to the following locations.  Please check DRE website for any changes.

2201 Broadway, P.O. Box 1770000, Sacramento, CA  95818-7000 or 916-227-0864

1515 Clay Street, Suite 702, Oakland, CA  94612-1462 or 510-622-2552

2550 Mariposa Mall, Suite 3070, Fresno, CA 93721-2273 or 559-445-5009

320 West 4th Street, Suite 350, Los Angeles, CA  90012-1105 – 213-620-2072

1350 Front Street, Suite 3064, San Diego, CA  92101,3687 – 619-525-4192

Some real estate complaints resources include calling the Broker of Record of the agent you are filing a complaint against.  This can be found on the DRE agent/broker lookup.  You might also start with a branch manager depending on the level of the real estate complaint.

The San Diego County Bar Association also offers a Lawyers Referral and Information Service (LRIS).

Photo courtesy of Flickr

RealtyV2 - Digital Jet Fuel

Home Buyers Advantages.

Being that San Diego is a home buyer’s market, I wanted to tell you how I go about starting to work with new real estate home buyers.  While each Client is different, here are some of the same services that I provide.

Of number one importance, is who your REALTOR® is working for?

First, I like to meet with prospective Clients and make sure that we are a good match.  The first meeting is about finding out about your goals, timeframe, and preferences.  Usually I do this at a coffee house, over the telephone, webinar, or when I am showing property.  My preference is to meet personally to find out your home buyer needs.

If we decide to work together it is with the understanding of the relationship being exclusive.  REALTORS® are only paid upon successful close of escrow and our time is valuable, so I want to focus on those Clients that are loyal.  With that said, if the relationship does not work out my goal is to part ways on a professional basis.  More often than not, I do not require a home buyers agreement but ask for a gentleman’s agreement.

The process of home buyers can be a rather long process.  Depending on the price range that you are looking in, it may take a while for something to come up on the market.  While the inventory numbers are high in San Diego, quality priced homes are not for home buyers is not.  I may work with clients from 3 to 9 months to find the perfect home.

During our first meeting, we determine the price and specifications of the home.  Considerations for school district, home size, specific amenities, or other requirements are noted.  I will then provide a customized “base” list of all the homes that match your criteria on your complementary Box.net account.

To understand market value you must first understand it by the principle of substitution, or what I call the principle of looking around.  So to start out we may look at homes that don’t completely match your specifications but will give you some insight into pricing so that when a good opporuntity comes along you’ll recognize it.I have recently been using Box.net for my clients as an on-line cloud storage collaboration tool.  The system is very secure and accessible from any internet connected device including smart phones and iPads.  Below is a sample of Box.net in action.

RealtyV2 has a business enterprise account for home buyers.

The really cool thing about using Box.net during the process is that all the documents, resources, web links, and conservations logs are in one place.  After close of escrow you can return to find that document that you need for your tax return, accessible from anywhere in the world.  Your home buyers file is stored in the cloud in a digital file cabinet.

The next service that I offer is electronic signatures from Docu-Sign.  While this is optional, I find most Clients love the ease of use for signing contracts, addendums, and disclosures.  Docu-sign allows RealtyV2 to be virtually paperless with even the Broker reviewed files being posted back to Box.net.  Because of the open box nature of Box.net documents can be sent directly to Docu-sign for signature.  Normally I send out an Agency Disclosure using electronic signatures so you get a feel for the service.  You can now sign on smart phones and iPads too for home buyers.

The first few meetings in the field are to show you active homes on the market and educate you.  This is beneficial for me too as I start to learn your likes and dislikes, allowing me to know more about what you’re looking for.  Since most well priced homes sell pretty quickly, the homes that are currently offered have been passed up due to price, condition, or location.

We also set you up on a Sandicor MLS search with  your own client gateway.  Normally I will set up the system to alert both of us when a new listing comes on the market.  If you are using Zillow, Trulia, or other search engines it may be a few hours to a few days for the new listing to show up.

If the home looks really good I will usually take a look at it while you are at work. I can shoot additional photographs or and videos from my iPhone and make arrangements to get you in as soon as possible.

Another tool that I use is Fuze Meeting.  Rather than try and meet at a conference room or office, many times it is easier to structure an offer over the phone and webinar.  Together we can put together the offer in Zip Forms Professional 6, which provides the latest purchase agreements and addendums.  Once we have completed the offer on-line I will e-mail it for your digital signature.  This process allows everyone to view from their own computer screen and for us to work through all the decisions of putting together a successful offer.

A few other things that I do are to provide you with a example California Residential Purchase Agreement (RPA-CA) and other resources on your Box.net account.  You can sign up for automated market reports to be e-mailed on the community that you’re interested in by Altos Research.

Want to get started, just give me a call or text at 858-352-8280 today or send me an e-mail.

Additional Resources:

Client Bill of Rights | 9 Tips For Finding a REALTOR® | California Residential Purchase Agreement

Photo courtesy of Flickr