Every one wants the best deal, and let's face it we hear all the time how foreclosures are the best deals. Some one thought we ought to know. Have fun:-)
Wednesday, October 28, 2009
Monday, October 26, 2009
Getting the best price on your new home
The seller sets the list price of a house with the aid of their agent. In Richmond, VA this usually is very close to the selling price of the home, but not always.
The first step in the process of obtaining the best price is to learn about the values of homes and how different neighborhoods affect those values. This process starts with a broad exposure to homes in the market so you may judge value for yourself. Once you have an idea of the value of the market in general there will be an examination of current pricing trends and of the effect of the location of the home in a neighborhood.
The information above will allow you to determine the value of the home for yourself. Now is the time to consult a REALTOR® to see how the market is corresponding with the value you place on the home. To do this you need a comprehensive Comparitive Market Analysis. Much like an appraisal the CMA will let you know what other people are likely to be paying for the home and it may or may not agree with the list price.
If this is the home that you definitely want then the best price is the one that allows you to purchase it without giving away your money. Armed with the information on pricing above you will know what that number is so that you can negotiate for that amount.
The first step in the process of obtaining the best price is to learn about the values of homes and how different neighborhoods affect those values. This process starts with a broad exposure to homes in the market so you may judge value for yourself. Once you have an idea of the value of the market in general there will be an examination of current pricing trends and of the effect of the location of the home in a neighborhood.
The information above will allow you to determine the value of the home for yourself. Now is the time to consult a REALTOR® to see how the market is corresponding with the value you place on the home. To do this you need a comprehensive Comparitive Market Analysis. Much like an appraisal the CMA will let you know what other people are likely to be paying for the home and it may or may not agree with the list price.
If this is the home that you definitely want then the best price is the one that allows you to purchase it without giving away your money. Armed with the information on pricing above you will know what that number is so that you can negotiate for that amount.
Saturday, October 24, 2009
Real Estate Agency
This is a summary list of the duties owed the client in a real estate agency relationship.
Reasonable Skill and Care
Arriving at a reasonable purchase price and advising client of such
Affirmatively discovering material facts and disclosing them to the client
Investigating the material facts related to the sale.
Loyalty
The real estate agent must act in the best interest of the client
Obedience
Must follow the lawful instructions
Disclosure of all material facts
Examples but not limited to:
Relationships between agent and other parties
Existence of other offers
Status of earnest money
Seller's financial condition
Property's true worth
Commission split with other brokers
Confidentiality
Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.
Accounting in dealings
Reporting of where any money placed in the hands of broker is kept.
Copies of all documents pertaining to contract.
On the other hand when you are an unrepresented buyer, the agent only needs to be honest with you, disclose that they are working for the seller, and most importantly sell you the house.
Reasonable Skill and Care
Arriving at a reasonable purchase price and advising client of such
Affirmatively discovering material facts and disclosing them to the client
Investigating the material facts related to the sale.
Loyalty
The real estate agent must act in the best interest of the client
Obedience
Must follow the lawful instructions
Disclosure of all material facts
Examples but not limited to:
Relationships between agent and other parties
Existence of other offers
Status of earnest money
Seller's financial condition
Property's true worth
Commission split with other brokers
Confidentiality
Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.
Accounting in dealings
Reporting of where any money placed in the hands of broker is kept.
Copies of all documents pertaining to contract.
On the other hand when you are an unrepresented buyer, the agent only needs to be honest with you, disclose that they are working for the seller, and most importantly sell you the house.
Why have an agent?
You probably know that not everyone wants to have a real estate agent, and that is perfectly o.k., as long as the decision is made knowingly.
In the example of a journey, I have taken minor trips to a place I haven't been before and simply let the local events and culture guide me, with the result being a good time. However buying a home is not a minor trip, it is more like a long journey, half way around the world, where the consequences of not planning or not having accurate information, could lead to many unpleasant surprises.
Lets take a moment and review, what the implications are for going through the process of buying a home with no or partial representation (customer) versus full representation (client).
CUSTOMERS are SOLD, CLIENTS are REPRESENTED.
Look at a scenario that occurs everyday. A buyer walks into an open house or a model home, they are greeted by an agent that quickly tries to establish some rapport. After the agent is able to establish rapport, they start to ask some probing questions, about what the buyer is looking for, and their ability to buy the house that the agent is selling. The questions will include such things as features, price range, mortgage qualifications and on and on.
Now it is the job of that agent to utilize the information they gather to sell the buyer the house, or one of the builder's houses with terms that are favorable to the seller. If the buyer has volunteered that they can afford the list price or more, and offers less than the list price, it is the legal responsibility of the agent to relay that information to the seller, so that the seller can negotiate price and terms favorable to themselves. On the other hand, if the seller is willing to take less than list price, it is the legal responsibility of the agent to withhold this information from the buyer.
Many times the buyer does not even know that this is occurring, because the seller's agent has established rapport and is working with the buyer to solve any problems that might prevent the buyer from purchasing the house.
Nevertheless, in this scenario, while the agent is working with the buyer, they are working for the seller and will represent their client's best interests, in this case selling a customer a home.
In the example of a journey, I have taken minor trips to a place I haven't been before and simply let the local events and culture guide me, with the result being a good time. However buying a home is not a minor trip, it is more like a long journey, half way around the world, where the consequences of not planning or not having accurate information, could lead to many unpleasant surprises.
Lets take a moment and review, what the implications are for going through the process of buying a home with no or partial representation (customer) versus full representation (client).
CUSTOMERS are SOLD, CLIENTS are REPRESENTED.
Look at a scenario that occurs everyday. A buyer walks into an open house or a model home, they are greeted by an agent that quickly tries to establish some rapport. After the agent is able to establish rapport, they start to ask some probing questions, about what the buyer is looking for, and their ability to buy the house that the agent is selling. The questions will include such things as features, price range, mortgage qualifications and on and on.
Now it is the job of that agent to utilize the information they gather to sell the buyer the house, or one of the builder's houses with terms that are favorable to the seller. If the buyer has volunteered that they can afford the list price or more, and offers less than the list price, it is the legal responsibility of the agent to relay that information to the seller, so that the seller can negotiate price and terms favorable to themselves. On the other hand, if the seller is willing to take less than list price, it is the legal responsibility of the agent to withhold this information from the buyer.
Many times the buyer does not even know that this is occurring, because the seller's agent has established rapport and is working with the buyer to solve any problems that might prevent the buyer from purchasing the house.
Nevertheless, in this scenario, while the agent is working with the buyer, they are working for the seller and will represent their client's best interests, in this case selling a customer a home.
Wednesday, October 21, 2009
Picking a Buyer's Agent
We discussed types of representation, and the reasons to have an agent, but how do you pick an agent to help?
Unfortunately, most people pick the agent that has a home for sale that they are interested in. Of course, that agent already has a relationship with the seller and a duty to sell the buyer the house.
The better way to pick an agent is based on 3 criteria, their skill, their integrity, and the strength of the services they will provide. In the example in the last post, we chose number 4 over number 3 because of that travel agent's ability to perform based on his skill and knowledge of the area, or in other words a stronger service than the local agent. The result an extraordinary experience.
Unfortunately, most people pick the agent that has a home for sale that they are interested in. Of course, that agent already has a relationship with the seller and a duty to sell the buyer the house.
The better way to pick an agent is based on 3 criteria, their skill, their integrity, and the strength of the services they will provide. In the example in the last post, we chose number 4 over number 3 because of that travel agent's ability to perform based on his skill and knowledge of the area, or in other words a stronger service than the local agent. The result an extraordinary experience.
Buying a Home…Why get help?
You have already decided that you would like to purchase a home. So the next decisions concern the type of agency or representation you desire, and who you want to have an agency relationship with.
The first decision is agency and whether you want full or partial representation. In the first message we discussed the similarity in home buying decisions and those made in preparing for a journey.
A few years ago my wife and I took a trip to Australia. When we made the trip we had some choices to be made. 1) We could have just flown over and picked hotels and drifted around. 2) We could have done some research and selected and called hotels and other destinations from home. 3) We could have gone to a local agent that had some of the information, and let them book for us. 4) We selected an agent that was intimately familiar with the areas we were interested in and had them select an itinerary based on criteria we discussed with him, and then book it after we approved.
In the first example we would have had no representation. In the second instance we would have had partial representation. Finally, in the third and fourth instance we would have had full representation, which is what we chose. In the full representation model, the travel agent gave us information ahead of time so that we could make good decisions.
The first decision is agency and whether you want full or partial representation. In the first message we discussed the similarity in home buying decisions and those made in preparing for a journey.
A few years ago my wife and I took a trip to Australia. When we made the trip we had some choices to be made. 1) We could have just flown over and picked hotels and drifted around. 2) We could have done some research and selected and called hotels and other destinations from home. 3) We could have gone to a local agent that had some of the information, and let them book for us. 4) We selected an agent that was intimately familiar with the areas we were interested in and had them select an itinerary based on criteria we discussed with him, and then book it after we approved.
In the first example we would have had no representation. In the second instance we would have had partial representation. Finally, in the third and fourth instance we would have had full representation, which is what we chose. In the full representation model, the travel agent gave us information ahead of time so that we could make good decisions.
Tuesday, October 20, 2009
Home buying
Buying a home is a lot like a long journey.
Before and during the journey, there are decisions that will impact everything that follows. Good decisions mean a journey that is rewarding both during the remainder of the journey, but also afterward in memories. Bad decisions could mean a disastrous trip that may even be aborted before it starts.
In purchasing a home, good decisions mean a smooth process for achieving your goals and the rewards that follow when living in your new home. A bad decision could mean not being able to purchase the home you desire, or quite possible any home at all.
There are literally dozens of decisions that you must be prepared to make. Some of the more common decisions concern:
Mortgages - which lender, which program, government backed, conventional, how much, how long, what rate…
Insurance - homeowners, homeowner warranties, title insurance, changes to life, health and disability insurance…
Terms - what's offered, what's needed, what's reasonable…
Offers - how to structure, how to present, what to include, what to avoid…
Closing - when, where, who does it…
Attorneys - should you use one, should you save the expense, what is their role, who is good, whom to avoid…
Agency - what type, what who to use…
Purchase price - how much, what is the home worth on the market, what is it worth to you, what is too much…
Earnest money – how much and what risk
Escrows – who holds
Moving companies – do it alone, use a local, national
Counter-offers - how to get what you need and want
Very few people make these decisions often enough to have a process developed for good decisions. That is why it is very important to start developing your plan now.
Before and during the journey, there are decisions that will impact everything that follows. Good decisions mean a journey that is rewarding both during the remainder of the journey, but also afterward in memories. Bad decisions could mean a disastrous trip that may even be aborted before it starts.
In purchasing a home, good decisions mean a smooth process for achieving your goals and the rewards that follow when living in your new home. A bad decision could mean not being able to purchase the home you desire, or quite possible any home at all.
There are literally dozens of decisions that you must be prepared to make. Some of the more common decisions concern:
Mortgages - which lender, which program, government backed, conventional, how much, how long, what rate…
Insurance - homeowners, homeowner warranties, title insurance, changes to life, health and disability insurance…
Terms - what's offered, what's needed, what's reasonable…
Offers - how to structure, how to present, what to include, what to avoid…
Closing - when, where, who does it…
Attorneys - should you use one, should you save the expense, what is their role, who is good, whom to avoid…
Agency - what type, what who to use…
Purchase price - how much, what is the home worth on the market, what is it worth to you, what is too much…
Earnest money – how much and what risk
Escrows – who holds
Moving companies – do it alone, use a local, national
Counter-offers - how to get what you need and want
Very few people make these decisions often enough to have a process developed for good decisions. That is why it is very important to start developing your plan now.
Subscribe to:
Posts (Atom)