Hiring a Real Estate Agent in 2012 - Part 1

It’s hard to say which has changed the world of real estate more—the state of the economy, or the Internet revolution. With more power and knowledge going to the buyer than ever, the old rules no longer apply. Before you hire a real estate agent in this new climate, here are some things you need to know.

Number one: just because your cousin, friend or cousin’s friend just got her real estate license and joined a firm does not mean they know what they are doing.  Unfortunately, real estate school is about learning to pass a government exam, which includes a puzzling section on ethics. If I need to study up so that I can prove that I don’t discriminate based on race, sex or handicap, then I sure as heck shouldn’t be trusted with anyone’s home!

This is all to say that real estate courses teach you nothing about solid deals and good business, which are what really matters in real estate. An agent fresh out of school is like a hairdresser who has just learned all about the history of hairdos.  And here’s something to think about—your hairdresser has almost certainly spent much longer in professional training than your real estate agent. 

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Number two: the amount of listings your real estate agent has doesn’t matter. Anyone can list a house—the real issue is selling it.

I have a friend who has over 40 listings. She must be a top producer, right? Wrong. I run with her a few days a week and every time, as we’re running, she gets calls from angry sellers who feel neglected. She signs the listing up, then the seller never sees her again. You want someone who will care about getting your house sold, not getting listed on the firm website as part of the Top Producer Club.

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Number three: more time on the market will get you less money. If your agent asks for a 12 month listing, run!

I’ve seen my fair share of real estate firms teach their agents to take listings at a high price and walk the client down later, once they’re locked in. So don’t let an agent’s high number give you an unrealistic idea about value. Even if they list your house at an incredibly high price, they’ll often accept a low offer for you and tell you it’s the smartest move you could make. It’s fun to dream sometimes, but this market is not the time for dreaming. If your house is overpriced, all you're doing is helping your neighbors sell their more realistically priced home. 

Target Marketing at its Best

Marketing is one of my favorite things. When I watch TV, flip through a magazine or visit a good webpage, I praise good marketing...especially target marketing. I have learned over the years that it never hurts to play to an audience when you are trying to sell something. I found myself in stitches and, dare I say, impressed when I saw this charming for-sale-by-owner sign being covered by the news.

If this isn't target marketing, then I don't know what is! After I picked myself up off the floor, I couldn't help but think this woman, though somewhat bitter, is a genius! Her sign not only appeals to a slew of potential buyers, but got her on every major news source in the US! I found a few other signs I liked that I hope you can get a kick out of also.

Though my tastes are refined, I can drink a beer with the best of 'em! This sign makes me want to call up the sellers and take them out for a cold one.

Believe me, if you have something to sell, you have something to market. Find your audience and sell to them. No need to please the masses...they are not going to buy your house.

10 Deal Breakers ... Revisited: Part 2

6. Lender changing the deal: This is a tough one to avoid, since this falls in the buyer’s court. Still, you can emphasize to your buyer the importance of working with a reputable and reliable mortgage broker, not someone’s cousin or a friend of a friend.

7. Spooked buyers: It’s very common for buyers today to get spooked by cocktail party talk. Jealous friends and relatives (who typically bought real estate at the peak of the boom and are suffering) tell buyers what a terrible time it is to buy a house, and they start to worry. Never forget that in real estate the best advice to follow is, “When the news is the best, sell it, and when the news is the worst, buy it.”

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8. Lender dragging the buyer over the coals: Today’s lending environment is very different from the environment even a year ago. Chances are good that your buyer will get scared by the everything-but-the-rectal-exam approach that lenders are taking these days. Many buyers take the lender’s tactics as a sign that they shouldn’t be buying a home. They fear they will not get approved and do not want to go through the humiliation. Reassure them that it’s normal these days, and they just have to get through it.

9. Lenders will close on the 30th: The 30th of which month? Always make sure you know the lenders closing date. Double and triple check it. 

10. Waiting too long to respond: Always get back to your buyer within 24 hours. Procrastination is a deal killer.

10 Deal Breakers ... Revisited: Part 1

As you may remember, in September of last year I wrote about the "9 Big Deal Breakers in Real Estate." With a new year comes a new deal breaker. But before I get ahead of myself, I find that the remaining nine are more important than ever! Let's quickly review numbers 1 through 5, shall we?

1. EXCLUSIONS: As a seller, you need to make it clear which furnishings and fixtures come with your house and which don't. You should disclose these items when you show your house, or remove them beforehand. These days, wall-mounted TVs seem to be causing an overabundance of disputes. Don't let the deal fall apart over a TV or a chandelier!

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2. FAILURE TO DISCLOSE: In relation to deal breaker number one when in doubt, DISCLOSE IT, and the earlier the better. A problem will seem much bigger to a buyer when they have discovered it on their own or are already under contract.

3. APPRAISAL: The days when a home always appraised for the contract price are gone. Sometimes the appraisal comes in "short," and this can be a deal breaker.

4. SURVEY: As you approach closing, you might get your survey back only to find out that your fence stretches 5 feet into your neighbor's property, marking your lot short of the 7,000 square-feet your buyer desired. Know your boundary lines! Many contracts call for a survey 3 days prior to closing, but you should have the buyer order the survey when they order the appraisal. Don't wait! If you take care of this in advance, you'll have time to work out a solution.

5. INSPECTIONS: Most inspectors call it like it is. Sometimes your buyer will want you to fix every single potential problem that your inspector sees. You don't have to do this! You both have choices.

Your buyer has four basic choices after the  inspector report. The buyer can:

• Ask you to make their requested repairs
• Ask you to reduce the sales price in lieu of repairs
• Request no repairs at all
• Decline to buy the property

They can't force you to make repairs, but they do hold the ultimate power of walking away from the sale if they can't live with the decision of your repairs.

As the seller, you have three choices. You can:

• Agree to the buyer's request and make all of the repairs
• Agree to part of the request and make some of the repairs, or create an allowance for the repairs and stipulate in the contract, "the house is being sold 'as is'"
• Agree to make no repairs or credits at all

My Secret Crush on John Edwards

CONFESSED BY SISSY LAPPIN
All About Thin-Slicing, Accents and Handsome Sleazeballs

I know this has nothing to do with real estate—but who likes talking about their job all day, anyway?   

This post is about John Edwards, the incredibly handsome dirtbag who was so charming and successful that he almost won the Presidential nomination.

In Malcolm Gladwell’s book Blink, he discusses a concept called “thin-slicing”—or the automatic psychological process that allows us to make up our minds about a situation in under 2 seconds. Plenty of times, we’re right. But we can be wrong in huge ways too.

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John Edwards fooled us all, and he wasn’t the first one. Gladwell cites the example of Warren Harding, a womanizing party boy who served two years as President before dying of a stroke. Historians agree that he was one of the worst presidents in American history, but he rode to success on the back of his charm and notable good looks.

Here’s the first way we thin-sliced Edwards. Generally, we perceive tall people as powerful and intelligent. A majority of heads of big companies are over 6 feet tall, but the average American man is only 5’9. John Edwards is 6’2.

The second way: we also innately perceive good-looking people as more honest, more competent, and harder-working—a fact that has been proven time and again by data that correlates attractiveness with more promotions and higher pay. And let’s not pretend that John Edwards isn’t decent eye candy.

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The third way may apply only to me, but I don’t think so—it’s his accent. Edwards’ accent reminds me of that movie French Kiss, when someone asks Meg Ryan what Kevin Kline is saying (in French) and she replies, “I don’t know, but it sounds beautiful.”

Put all these things together, and you get a major WOW factor. But then you find out that he not only had an extramarital affair with a staffer and fathered her child, but that he also carried on all of this while his wife had breast cancer and used campaign contributions to cover up his affair. Would he have been able to deceive everyone for so long if he had been 5’4 and ugly, with a thick Brooklyn accent? Not to insult short men or ugly New Yorkers—but the answer is probably no.

Now he’s on trial, and I hope the jury is given a copy of Blink, so that there’s no chance of them falling for the well-worn shortcut of “tall, dark and handsome.”  As my mom once said, “No matter how much mayonnaise you add, you can’t turn chicken sh** into chicken salad.”  

I love Rick Perry...

Although he did not look too smart when running for President-- He did the best informercial for Texas since Gunthy Ricker’s Proactiv

Rick Perry was the greatest thing to happen to the state of Texas when he ran for president.  I know he took a lot of grief and has been re-named Ricky Bobby (from the hilarious Will Ferell movie, Talladega Nights: The Ballad of Ricky Bobby) But you could not pay for the great infomercial advertising he gave to the state of Texas. Even Guthy Ricker and their Pro Activ infomercials can not top what Rick Perry did.  Although he made Texans look closed-minded and unintelligent, he did enlighten the rest of the country to one little fact: There are states that do not have a state income tax!  And the cost of living is low. Shocker!

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Because of this and $100 oil, we are in the only state you would want to ride out this recession in.  I met a waiter several month ago at America’s and he explained that he had had 7 job offers since arriving in Texas. Pretty nice after being unemployed in North Carolina for months.

Thank you Rick Perry. Despite your seemingly homophobic-attitude you did a great service for Texas by pointing out some of our good qualities!

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What kind of idiot would buy a house right now?

The answer: a really smart one. The kind of idiot that’s bold enough to analyze the local economic trends and capitalize on a serious opportunity. The kind of idiot that, ten years from now, will host a beautiful dinner party in a home that’s already paid for, and shrug graciously when people ask, “How did you get this place for that price?” 

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I’ve been in real estate for over 28 years—that means I’ve seen two recessions and two bubbles. I thought I’d seen all of the buying conditions that could ever exist. But I’ve never seen anything like the market we have now in Texas. The stars are shining bright!

And before I start sounding like the queen of these aforementioned idiots, let’s just go into specifics. What are these stars I’m talking about, exactly? 

1. Price: Everything about the market has stayed steady. There have been no huge appreciation jumps like we had in 2002-2007.
2. Interest rates: This is a no-brainer. 3.7% is an unprecedented low.
3. In-migration: People are moving into Texas, not leaving. 40% of all US jobs created are located in this one state.
4. $100 oil: Whether you are for or against it, it’s becoming reality. This price spike means big things for oil companies.
5. Minimal building: Getting a loan for new construction is still tough—you’re guilty until proven innocent—so building start-ups are staying extremely low.
6. New normal: People are coming to understand that the economy has changed permanently. They’re taking stock of things and making moves.
7. No equity lines of credit: Easy money always ends up being bad money. Because Texans were not able to access our home equity with an ATM card, foreclosures have stayed down and our real estate market has been relatively stable.
8. Tax credit: Now, I do not believe that my tax dollars should supplement anyone’s home purchase. But this tax credit served as a sort of infomercial for young homebuyers who otherwise would not have entered the market.
9. Rick Perry running for president: It was a free infomercial for the State of Texas not having a state income tax. Many people in other states did not know there were states that did not have a state income tax.

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Buying right now, in this market, may turn some heads—but in reality, it’s the smartest move you can make.  In two years you will paying a lot more.