Sep
01
Don’t Let Emotions Ruin Your Purchase or Sale of A Home
Posted By: Ramon Rivas on September 1, 2010 at 7:14 amDon’t Let Emotions Ruin Your Purchase or Sale of A Home
One of the biggest stumbling blocks in the sale of a home is the emotional reactions of the parties. It doesn’t matter if you are buying, selling, using a real estate agent or handling it on your own. If either party lets emotions rule the day, things will fall apart. If both parties let it happen, the transaction will get very ugly.
For sellers, emotions arise from the fact that they typically have lived in the home for some time. Major life events may have occurred in the property including raising a family, weddings and so on. In simple terms, sellers don’t view the home as a property to be sold. They view it as a part of themselves, which they are letting go like a child going off to college. This personal attachment leads to ruffled feelings when a buyer offers practically any criticism of the property.
For buyers, emotions arise from the conscious or subconscious nervousness about taking on such a big debt. Whether you like to admit it, committing to a ton of debt is a scary experience. Inevitably, this emotion is expressed as suspicion that the seller is trying to pull a fast one or there is something wrong with the property. Regardless of the manifestation, such emotions are the stuff of failed, nightmarish real estate transactions that often end up in court.
For example, a couple I am friends with recently sold a very pricey home they had lived in for over 14 years. Simply put, there were a lot of memories from that time period. On the other side, the buyers were making a major step up in price from their previous home. In fact, they were committing to well over seven figures of debt with their mortgage loan. Put in simple terms, both parties were keyed up and sparks eventually flew.
I will not get into the details in respect for their privacy, but the deal almost fell through over an argument about who got to keep three bar stools. Three…bar…stools. This was a million dollar home! In the end, the seller kept them and then realized they didn’t go with their new home. In retrospect, they now realize that the conflict with idiotic and really had nothing to do with the stools. Instead, it was emotions that almost ruined the day.
If you are going to buy or sell a home, make sure to control your emotions. The transaction is a business transaction, not a personal insult to your pride.
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We are real estate investors and work extensively in the pre-foreclosure market. Many times sellers are financed 100% or close to it and there is no deal to be had so we try to negotiate with their lender to do a short sale or short payoff. As part of the process the lender needs a BPO to determine fair market value.
What is a BPO? A Broker’s Price Opinion is a market value assessment usually performed by a licensed real estate agent or broker. These are most often done on properties that are in foreclosure. A lot of times when the property is not sold before or at auction, the BPO that did the opinion will get to list the property. Sometimes it can be a full time appraiser looking for extra work that may do the BPO. Because of the fact the agent may eventually get a listing they tend to sometimes give a high appraisal.
Now realize that market value generally assumes a home in great shape needing no repairs. 90% of retail buyers will not buy a home that needs any repairs. Many lenders will not finance a home that needs wood replaced or roofing done.
What is a Drive By? A drive by consists of a BPO going to the house and stopping in front, taking a picture of the outside and driving off. They never get out of the vehicle, never to see the inside or any damage or repairs needed on the property. Comparable sales, past appraisals and tax records will be used to determine the value of the home without taking needed repairs into account. A lot of houses have good curb appeal, once you step thru the front door it’s a different story. We have had the BPO agent miss the fact that a tarp was on the roof to stop the rain from coming in the house because the holes in the roof were on the back of the house and the agent never stepped out of their vehicle.
How can I get an accurate BPO Appraisal? Be there early. Bring pictures and the list of repairs from your first visit. Develop rapport and become best friends with the appraiser. Do your homework on the neighborhood. Look for true comps. Example: If you are looking at a stucco home and the rest of the neighborhood is brick. You can’t find true comps. For future reference if you are in a mid to high humidity area, get a moisture test on the stucco and bring the results with you.
How can I keep from being a victim? Arrive 45-60 minutes before appt. Do not allow the home owner to greet the BPO instead of you. Stay where you can see the road. If you see a vehicle pull up and stop, jump out and holler politely,” Would you like to see the inside of the home”? To make the experience better for yourself and the BPO offer help. Tell them what you have found. Don’t take it personally if they don’t want help from you. Do your homework. Don’t let the homeowner show them around as they will try to point out nice things. Your job is to point out the flaws of the house and drive the appraisal down. Make sure the lender knows you are the point of contact for the BPO agent and to contact you to set up the appointment for the BPO. The pictures that you took on the first visit need to be printed out; if digital take them to a kiosk that makes prints. Have 3 copies made. Put two to a piece of paper, go with colorful construction paper, yellow is a happy color, go to your local office supply store and get printable file folder labels. In detail tell what’s wrong in the picture. Give the BPO agent 1 copy. Let them know what you have found wrong with the house or yard. Give them a repair list. Any true comparable sales you have found within a 5 mile radius will also help. Always pick the lowest comps. You will document a lot more problem area’s with the house than the BPO will see. This will be the difference of making 30k or 5k on a house.
Another important consideration is the market. To be safe you want to allow yourself enough wiggle room to come down in negotiations, but if it’s a buyers’ market you will have to do more to make your home stand out. Pricing your home below the competition should ensure multiple offers, thus driving up the selling price. Other tactics include being flexible around financing options and offering incentives. In any case, you want to price your home low enough that you will get traffic through – the first three weeks are important. If the house sits longer than three weeks perspective buyers may assume something’s wrong with it.
In a seller’s market it’s safe to add 10 per cent to the last comparable sale in your neighborhood and in a balanced market you may aim to add an amount based on the last comparable sale plus the average market increase calculated over the time since that sale.
Remember, pricing your house is as much an art as it is a science. In the end the price is important, but marketing and staging your home plays a vital role as well. A good realtor can guide you through this process and help you get the best price for your house.
Aug
11Contracts When Selling Your Home Without An Agent
Posted By: Ramon Rivas on August 11, 2010 at 7:46 pmA recent survey revealed that approximately 30 percent of homeowners intend to sell without a real estate agent. I bet more would if they didn’t fear the contract side of the process.
Contracts When Selling Your Home Without An Agent
If a seller can save so much money by foregoing an agent, why don’t more people do it? Simply put, they are scared of the process. In particular, real estate contracts can be a scary issue for most homebuyers. How do you know if you are doing it correctly? What if you don’t? Will you lose the home? Will there be lawsuits? Frankly, most people have nightmares about the idea of dealing with these issues. This need not be.
First off, most real estate agents do not know anything more than you do about contracts. They are in the business of selling real estate, not being legal experts. Moreover, most real estate contracts are of the pre-printed form variety. All and all, you need not be overly concerned with this issue. Of course, it isn’t my property.
There is a very simple way to get around the stress associated with dealing with real estate contracts and documents. The answer is found in the legal field. Specifically, you can hire a real estate lawyer to handle everything. You will get a legal professional that is one your side and who knows the details of the real estate process inside out. Frankly, they are a heck of a lot more competent than real estate agents when it comes to the transaction.
Ah, but isn’t it true that attorneys are incredibly expensive? Well, yes. In this case, however, they are much less expensive than paying a six percent commission to a real estate agent. Keep in mind our example above where we are paying a realtor $18,000 in commissions. Most attorneys charge in the $200 an hour range. If it takes 20 hours to handle the transaction, which is probably on the high end, you are looking at $4,000 in legal fees. In practical terms, you get much better advice and save $14,000 on commissions. In such a scenario, hiring legal counsel absolutely makes sense. Frankly, I am surprised more people do not do so.
The biggest barrier to selling a home by owner is often the fear of contract documents. Follow the above advice and you should have no problems.
In 21st century, large number of people is generating income with commercial real estate. Commercial real estate business is based on certain principles. These principles are generally same for property owner, developer as well as for commercial real estate agent. Commercial real estate agent helps you to identify the best features of commercial real estate agent. Real estate agent enables you to make a finest deal of commercial real estate. Commercial estate agent is helpful to both buyers as well as tenants.
You should choose best commercial real estate as per your requirements. Choose your property at best location that has great future. Commercial real estate at good location will offer more benefits in the coming days. You’ve to choose finest piece of land that you can use efficiently. You may select commercial real estate nearby high traffic areas that can be easily used for full-service restaurants, hotels, stores or other shopping malls.
Investment in commercial real estate business is the best way to get more revenues. Always keep in mind that a right time investment is the best opportunity to earn more profits. You should consult financial advisors that will provide help to find the best commercial real estate. Investment in commercial real estate is good for large as well as small-scale businessmen.
Buyers should check the reputation of commercial real estate provider. Before any type of agreement or purchase, they should check rate, terms & conditions, and other essential aspects of commercial real estate for the best deal.
