Get that buyer!!!

How does one attract the buyer for the home he/she is trying to sell? Giant bug zapper and hope that they have a bunch of money in their wallet? Could work- might try it.



It's illegal to grab a buyer by the scruff and force them to buy a home....I haven't tried it and won't tempt the penal system until I have confirmed that legislation has passed allowing me to do that. Until then there are three things that you can control to get buyers to look at a home and make offers.

1. Marketing


2. Presentation


3. Price

• Marketing- I can assure you that you NEED to have your home marketed well. You can have the nicest home around at a phenomenal price- but if no one knows it's for sale, it's not going to sell. This one is on your agent/ brokerage to get done for you unless you are selling unrepresented, in which case, it's all yours!

• Presentation- A home needs to look good enough from outside (curb appeal) for people to want to go in. The home needs to continue to look good for showings. This really should go without saying- but I show far more homes that are not "showing ready" than I do that are ready. You can have a good price and let everyone in the world know about it- but if the home isn't nice, who's going to want it? I'll sell you my smelly old gym shoes for $5. It's probably an appropriate price for what remains a halfway decent pair of NB running shoes- but if they smell like 100 hours of my sweaty feet, does that make them something you want to buy, just because it's priced right and you know it's available? I doubt it. This one's on the owner- make that house sparkle!

• Price- Your real estate professional should be able to give you a price range value for your home and reasonable evidence to support it. What you do with it is your choice. If your home is overpriced, no amount of marketing is going to overcome it- even if it shows beautifully. WHY? Because there's a ton of other homes available! If a buyer doesn't like yours- even in the smaller markets like mine- there's two or three other options. This is a joint venture. Ultimately the owner will pick a price- hopefully it's in line with his/her real estate professionals market analysis conclusion of value.

Interest Rates- they are a fallin'

Freddie Mac, one week ago, released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.93 percent with an average 0.7 point for the week ending September 11, 2008, down from last week when it averaged 6.35 percent. Last year at this time, the 30-year FRM averaged 6.31 percent. The 15-year FRM this week averaged 5.54 percent with an average 0.7 point, down from last week when it averaged 5.90 percent. A year ago at this time, the 15-year FRM averaged 5.97 percent.
What's it mean to you?

If you are an active buyer of real estate- it means not only is inventory extremely high, but now interest rates are at a ridiculously low rate too! If you're on the fence to buy, I can promise that this opportunity will not be around too long and who knows how many years it'll be before we have a buyers market like this again... If you're a seller, it's a great thing because there should be more buyers out there with the potential to purchase your property!

Size DOES Matter!

One of the most misunderstood and erred upon matters in real estate is square footage. It's a dinosaur of a way of evaluating homes in the opinion of many. I've been a REALTOR for a little over 5 years and I would say those using (or not using) square footage in their listings in this area has consistently been less than 20%. I don't think I'd be too far out on the ledge saying the number is probably closer to 10% of MLS listings in the greater Coal City area actually use it.

WHY?

It could be a multitude of reasons, really. The biggest of these is that very few know how to do it properly. I just relisted a 1350 square foot home that was previously listed at over 1500 square feet. There may be a matter of only 200 feet difference, but that's about a 16% larger home and a difference in about $20,000 to those that base solely on square footage (a mistake).

There is a rising amount of legal action being pursued because of errors in square footage reporting. MOST of these are due to inability/ lack of proper knowledge to do it correctly rather than any attempt to dupe home buyers.

So how do you figure it?

Unfortunately there is NOT one universally agreed upon way to measure a home's square footage- a likely reason for such disparity. However, I think that most elementary school children can use a ruler and that all who can become licensed to sell real estate should surely be able to measure....the question is less on HOW to measure and more on WHAT COUNTS!

LIVABLE SPACE!!!

Living area (sometimes referred to as "heated living area" or "heated square footage") is space that is intended for human occupancy and is:

• Heated by a conventional heating system or systems (forced air, radiant, solar, etc.) that are permanently installed in the dwelling - not a portable heater.
• Finished, with walls, floors and ceilings of materials generally accepted for interior construction (e.g., painted drywall/sheet rock or panelled walls, carpeted or hardwood flooring, etc.) and with a ceiling height of at least seven feet, except under beams, ducts, etc. where the height must be at least six feet four inches
• Directly accessible from other living area (through a door or by a heated hallway or stairway).

Closets, entryways, foyers and hallways, garages and attics are subject to the above criteria for determining if they count or not. In a "typical" home a garage and unfinished attic would NOT count but a hallway, foyer, entryway and closet would because it is heated, has flooring walls and ceiling- although I could see one's argument that you don't really "live" in a closet too.

REALTOR Code of Ethics (part four)

This is part four in a four part series on the REALTOR Code of Ethics. As always, to keep you from falling asleep, it's just a tip-of-the-iceberg deal. Go HERE to check out the full code.

#13) Shall not practice law unless they are a lawyer.

• Should be enough said. If I had a law degree, I probably wouldn't be a REALTOR, haha.

#14) Shall cooperate if charges are brought against them and present all evidence requested.

• If charged with an unethical practice, we merely must display the facts and prove innocence---or guilt, as I suppose could be the case.

#15) Agree not to bad mouth competition and agree not to file unfounded ethics complaints.

• I won't say much anything about a competing agent. I think there are very few in my region that could actually compete and do the job as well as I can- and those that could...why would I have anything negative to say about them?
• In all seriousness- there's no reason for this talk. It's like dirty politics and not my game. I'll let you know what I will do for you and nothing beyond that really matters to me.

#16) Shall not solicit another REALTOR'S client nor interfere in a contractual relationship.

• Any agent that attempts to sway another to use him or her while under contract with another basically falls into this. If you read my blog while your house is listed with another agent- I'm not trying to steal you. The same if I send you a general piece of mail or run into you up-town and mention my services (IF I don't know you're under contract).
• Now if you're under contract and you come to me, we may discuss the terms upon which we might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement. I cannot and will not tell you "how you can get out of your current listing." It's in your contract and should be discussed with your current agent/brokerage.
• The fact that one agent sold you a home does not preclude any agents from soliciting you for your future business.
• As a buyer's agent on unlisted property, we must disclose that relationship to the seller and make any request for anticipated commission at first contact.

#17) Shall submit to arbitration to settle matters and not seek legal remedies in the judicial system.

• Instead of taking it to the courts, we settle disputes "in house" through our board of REALTORS...a nice break on taxpayers money, I'm certain.

I hope this four part series was able to educate you on the REALTOR Code of Ethics and what separates us (REALTORS) from regular old sales agents. If you have any questions that I can clarify- don't hesitate to ask me!

REALTOR Code of Ethics (part three)

This is part three in a multi-part series on the REALTOR Code of Ethics. Parts one and two can be found in previous posts. As always- this is just tip of the iceberg kind of stuff, to inform yourself even further I urge you to check out the code HERE.

#8) Shall not co-mingle client funds with their own.

• I don't think you REALLY want us to co mingle your funds with ours do you? Don't want your earnest money check going to pay my satellite bill now!

#9) Shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.

• I cannot help SOME legalese in contracts and whatnot- but WILL explain things in layman's terms. I'll also provide you a copy of everything you sign, if I'm not able to immediately where we are (for lack of copier), I will make when when possible.

#10) Shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.

• It's utterly disgusting in the "melting pot" of America for anyone to do this under any circumstances- I don't think I need to expound further on the topic sentence.

#11) Expects agents to be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.

• When REALTORS® provide consultative services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given. For instance, I could charge you $200 for a comparative market analysis...but I couldn't do it on a sliding scale depending on my report back to you.

#12) Must engage in truth in advertising.

• We've got to let you know we are REALTORS and thus, professionals in the industry. I had a situation the other day where a new newspaper ad ran and erroneously the newspaper publisher left all my REALTOR and brokerage information off the ad- needless to say it was remedied quickly.
• The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR making the offer. However, REALTORS must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR’s offer will have clear, thorough, advance understanding of all the terms and conditions of the offer.
• These truths also apply to the Internet: When it becomes apparent that information on a REALTOR’s website is no longer current or accurate, REALTORS shall promptly take corrective action.

REALTOR Code of Ethics (part two)

This is part two in a multi-part series on the REALTOR Code of Ethics. Part one can be found below this post. Again, this is a brief run-through of the code and the full thing can be found HERE.

#2) Shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant.

• If you have a leaky roof or faulty foundation and want to hide it...don't call me to be your listing agent. I won't hide it for you. I cannot, however, go beyond my scope of being a REALTOR....meaning, I can't be the judge what is good working, solid, safe building---that's what home inspectors are for. I WILL help you find the best home inspector in the area though.

#3) Shall cooperate with other brokers / agents when it is in the best interests of the client to do so.

• In my humble opinion- it's ALWAYS in the best interest to cooperate with other brokers. In no way, at all costs, do I step in the way of any brokers attempting to show/sell your property and I think it's an unwise business decision to not use the MLS to its fullest.

#4) Shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker.

• In selling property we own, or in which we have any interest, REALTORS® shall reveal our ownership or interest in writing to the purchaser or the purchaser’s representative. You'll find this in advertisements as well, AGENT OWNED is and will be displayed. All disclosing of this must be done prior to acceptance of contracts.

#5) Shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.

#6) Shall not collect any commissions without the seller's knowledgee nor accept fees from a third-party without the seller's express consent.

• When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation.
• We also shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. For instance if I co-owned a home inspection company with my spouse or brother- I'd have to let you know of my interest in the company beforehand.

#7) Shall refuse fees from more than one party without all parties' informed consent.

• My pay goes through Century 21 Coleman-Hornsby and Century 21 Coleman-Hornsby only for all real estate duties...no check under the table, no money for referrals from ANYONE that is not a REALTOR

This is part two in a multi-part series....Articles 8-17 will be covered in the coming days.

REALTOR Code of Ethics (part one)

Believe it or not; not all real estate salespeople are REALTORS. REALTOR is a registered trademark which is often, erroneously used to refer to the whole industry much like Kleenex is used to define tissue. Simply put, a REALTOR belongs to the National Association of REALTORS.

In belonging to said group, we subscribe to and live by the REALTOR Code of Ethics. The Code of Ethics is strictly enforced and contains 17 Articles and various underlying Standards of Practice. The Standards are much more restrictive and confining as to conduct than those governing agents who simply hold a real estate license.

In this multi-part series, I will explain the 17 articles and what they mean in layman's terms. I won't be able to hit every single standard without putting you to sleep- so it is recommended that you follow the link to check out the code yourself:

#1- Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly and fairly.

• There are many times in my line of work where it is in MY and my family's best interest that a property under contract closes and I get paid. In fact, that is probably always the case. However, I act on behalf of the best interest of my client. This is of particular interest in working with buyers...I cannot tell you how many 'deals' I've had go south (fall apart) because my recommended home inspector found problems/issues that were beyond what an initial showing or two found. Too bad for me. My duty is to make certain that the home you purchase is one that you're going to be happy in for as long as you want to be.


• It goes beyond this too- if I'm attempting to procure a listing, I cannot and will not deliberately mislead you into believing your home is worth a certain price just to get my sign in your yard.


• I won't reveal confidential information. If you have to hit a bottom line, I'd never let on to a buyer of your house or his/her agent unless you wanted me to. Vice versa, if I knew you'd pay a certain amount for a home- but offered less- I wouldn't give away that you're testing out a seller. Basically anything that puts you at a disadvantage- not coming from me.


• If and when you list with me you'll know the cooperating commission paid (portion of the listing commission that is paid to potential buyer's agent) and be aware of any possibility of dual agency (which you'll have to agree to prior to my showing your house).

In the coming days, I'll knock out the remaining 16 articles in the REALTOR Code of Ethics.

Not-so Secret Agent Man Part Five...the end

This is the final segment in a five part series on The Consumer's Guide to Real Estate Agency in Illinois. The final part has to do with exclusive brokerage agreements.

Exclusive Brokerage Agreements

• Sometimes, your agent will ask you to sign an exclusive brokerage agreement this means that you are agreeing to work only with the real state brokerage company and designated agent(s) named in the agreement to the exclusion of other real estate firms and agents
• If you are the seller, the contract will likely be called an Exclusive right to Sell or an Exclusive Agency Agreement
• If you are the buyer, the contract will likely be called an Exclusive Right to Acquire, Exclusive Right to Purchase or Exclusive Buyer Agency Agreement
• Under an exclusive brokerage agreement, the designated agent(s) is required by the Illinois Real Estate License Act of 2000 to provide certain minimum services. These services generally include:
• ***Accepting and presenting offers and counteroffers
• ***Assisting you in the preparation of offers, counteroffers, etc. and
• ***Answering your questions related to negotiations in a real estate transaction

And that's about the bare minimum any agent could offer- service-wise. And if that's all you're getting from your agent, you may consider upgrading.

Not-so Secret Agent Man Part Four

Today is the trickiest of trickies in regards to real estate agency. What separates a customer from a client?

Treatment of Customers as Opposed to Clients

Sometimes someone on the opposite side of your transaction will not be represented by a real estate agent, in which case your agent will give that party a notice that tells that person the agreement represents you only.

• The notice might be called a Notice of No Agency Relationship
• It will allow the agent to do certain clerical or ministerial acts for that party for your benefit
• Some examples of ministerial acts might include:

1. Talking to an inquiring consumer about availability and pricing of brokerage services (If someone calls me to inquire about my services they are NOT a client....yet)
2. Responding to phone calls from a consumer about price or location of a property (I can answer questions about my or other listings without you being constituted as a client)
3. Setting an appointment to view a property
4. Completing business or factual information on a contract for the consumer but on your behalf (This would come up in a situation where I represent a buyer purchasing an unrepresented seller aka: for sale by owner)

• If you are a customer and not a client you should receive a Notice of No Agency Relationship
• ***You should not disclose anything to the agent who is treating you as a customer that would be confidential to you, i.e. anything that might hinder your bargaining position, or anything you would not want the opposite party to know (It would really be in your best interests to NOT say what price/ terms of a potential deal would be good for you)

This is part four of a five part series on The Consumer's Guide to Real Estate Agency in Illinois. Parts one through three are below.

Not-so Secret Agent Man Part Three

Today, we get a little bit tricky in learning about agency disclosure. Again, real world applications in parenthesized green italics:

Required Agency Disclosure Under the Illinois Real Estate License Act of 2000

No later than entering a brokerage agreement (can be a verbal agreement), you must be advised of the following from the brokerage company:

• That a designated agency relationship exists
• The name of your designated agent(s) in writing
• What the brokerages company will be paid and the company's policy regarding payment of other brokerage companies that might be involved in your transaction (This is more prevalent in a listing agreement. You wouldn't let your agent list your property without negotiating a commission to be paid, would you? Make certain you know what your agent intends to pay out to a buyer's brokerage-should there be one.)

Disclosed Dual Agency

• Sometimes a designated agent can represent both you and the opposite party in the transaction (Example: I have a listing that a potential buyer contacts me to see)
• Before doing so, the agent must have the informed written consent of both parties (Usually this will be discussed with a seller at time of listing the property for sale)
• If your designated agent might act as a dual agent, he/she/they should speak with you about the potential for dual agency and give you a disclosure form entitled "Disclosure and Consent to Dual Agency" for your review
• ***You will see that the agent's role becomes limited when you have dual agency
• ***You are under no obligation to consent to disclosed dual agency
• If you do consent, you must sign the disclosure form before the agent acts as a disclosed dual agent
• ***Sometimes, this language will be included in your written brokerage agreement (Like it is usually discussed in the listing agreement- ALWAYS with me- it is also discussed at time of agreeing to use an agent as an exclusive buyer's agent)
• You will be asked to sign a confirmation of your consent to dual agency no later than when you sign a purchase or lease contract (This is a last gasp attempt at being legal. In reality you have read that it should be signed at listing and when becoming an exclusive buyers agent OR before viewing property with an agent that also has it listed)

I think it's important to note that this only applies in situations with an AGENT, not a brokerage. For example- if I show you a listing of MINE, the sellers and you would need to consent to dual agency. If you show you another Century 21 Coleman-Hornsby listing that is NOT MINE, it does not apply.

This is part three of a five part series on The Consumer's Guide to Real Estate Agency in Illinois. Parts one and two can be found below.

Not-so Secret Agent Man Part Two

Today I tackle some of the things you should expect your real estate agent to do (designated duties) and some things that if he/she does is not a violation of agency duties (so don't get mad).......In parenthesized green italics- I'll give some real-world, non-legalize, examples):

Designated Agency Duties Under the Act

• Perform according your agency agreement.
• Promote your best interests as follows:
• -Seeking a transaction that meets the terms of your agency agreement or that is other-wise acceptable to you.
• -Presenting all offers to you and from you unless you direct your agent to do otherwise. (Even those offers that my buyers make that could be considered laughable, I'm obligated to present. Flip side of that: if your representivie brings in a very low offer on a listing of mine, I'm obligated to present it to the sellers, even if you offer $1,000 on a million dollar listing!)
• -Disclosing material facts about the transaction that the agent actually knows about and the information is not confidential to someone else. NOTE: Material facts typically will not include information related to property that is not the subject of the transaction, that is a fact situation not related to the subject property or occurrences related to the subject property.

• -Accounting for all money/ property received from you or for your benefit.
• -Obeying your lawful instructions.
• -Promoting your best interests above the agent's or someone else's best interests. (I.E. doing what's BEST for YOU regardless of how it affects me. It would be easy, in a comissio-based business, to cut corners or hide facts to get deals closed so that we, the agents, could make money. This should be obvious that behavior like such as this is NOT ALLOWED!!!)
• Exercise reasonable skill and care in performing brokerage services.
• Keeping your confidential information confidential.
• Complying with the Illinois Real Estate License Act of 2000 and other laws that might apply, i.e. fair housing and civil rights statutes. (Please never tell me to NOT show or sell property to a minority or someone of a different ANYTHING than you. I will show/sell property to ANY interested, qualified purchaser.)

What are NOT VIOLATIONS of Agency Duties???

1. Showing the same or similar properties to more than one interested buyer or tenant client. (The house/property is going to be sold at some point...if you dilly-dally and someone else wants to see it- there's NO justifiable reason why I cannot help an interested buyer procure it.)
2. Being compensated a higher fee if the purchase/lease price is higher. (Since commission is based on percentages- it will almost ALWAYS be a higher fee if a higher priced property is purchased/sold. Example: 50% of $1,000 is $500. 50% of $8,000 is $4,000....I used 50% so as to avoid all price-fixing issues that may arise- but, by all means, if you ever want to pay 50% for me to represent you, I'll oblige.)
3. Providing false information to you if the false information was given to the agent by a customer and the agent did not know the information was false. (If a seller fills out a disclosure and it says there is no known electrical issues in a home and I report that back to you- you cannot blame me if there really ARE electrical issues. I don't have x-ray vision and will ALWAYS recommend a home inspection be done.)

This is part two in a five part series on The Consumer's Guide to Real Estate Agency in Illinois. Part one can be found HERE.