Greetings. I spent yesterday getting certified to teach the new NAR Green Course. Great class. For any of you who have buyers who are into green building or even just living in an ecologically sound way this is the course for you. It will give you a leg up working with green-minded buyers as well as help you create ways to find them. If you want more information go to www.GreenResourceCouncil.org.
Now for today's Real Estate Summit. Starting at 8:00 this morning and lasting until 5 - we listened to - and had a chance to ask questions of the people who can make a difference in the progress we're making in the recovery of our markets.
Shaun Donovan Secretary of HUD, Dr. Robert Reich, former U.S. Secretary of Labor, Alan Greenspan and Sheila Bair the FDIC Chair - just to name a few. We had economists, redevelopment officials, Harvard professors, mortgage company executives and more giving us not just an overview but a thorough analysis of where we are, where we're going and what we need to do to get there.
Bottom line - it's getting better but we've got a way to go. Everyone agreed we need to get the inventory of foreclosures off the market and not create any more. That said - there will be more because right now over 20 million homes are 'underwater' - that's about 1 out of 5. If we keep seeing job losses and don't see any consumer confidence it's going to take longer.
It was open discussion. We had the opportunity to ask questions and bring up issues. Here's what was addressed:
1. We need to extend the tax credit and remove the income caps.
2. There has to be a shorter time frame for short sales (no pun intended).
3. Need to address FHA not allowing 'right of first refusal' for condos.
4. The system isn't working the way the legislators think it is. The lenders are not lending money to qualified buyers and they are not doing the loan modifications to try to keep people in their houses.
It was as great day - we had the opportunity to speak freely to people who can make a difference. Hang in there - we're working on it.
More tomorrow - will be attending meetings on Risk Management and RESPA plus an update on conventional finance and lending. More then.
Tuesday, May 12, 2009
Sunday, May 10, 2009
Will Keep You Informed From Washington
Hi Everyone - as I metioned to many of you in recent classes, we will be in Washington DC for the next week both at meetings and lobbying Congress on Realtor (and homeowner!) issues. I will try to keep you all posted from there.
Sunday, October 21, 2007
A Bit of a Rant on Net Sheets for Sellers
It seems that we have a considerable number of listing agents out there who are not doing their job. I know this doesn't come as a huge surpise to some of you and you could probably list a dozen different ways that they are shirking their duties to their sellers. But the one I specifically want to address is the not doing anything at the time of taking the listing to give the seller an idea of what their net will be at the closing. And the unfortunate situation is that many of the sellers will have a negative 'net' at the closing and this is causing their transaction to either not close - they need to bring money they don't have - or it closes with no compensation paid to the brokers.
It is unquestionably our job to do our due diligence at the time of taking the listing to bring to the sellers attention the costs of selling their homes. If there is not enough equity at the closing to cover commissions - the listing broker COULD BE HELD RESPONSIBLE for paying commissions he or she did not collect.
Even worse - if the seller is so upside down that there isn't enough to close at all you have now messed up the lives of both the sellers and the buyers.
It's imperative that we take a well written net sheet with us to the seller's home when we take the listing and go through it with them - ask questions to insure that there's enough money to close and question them as to where they're going to come up with any deficit there may be. A short sale can be arranged if they are so upside down they can't close - but that won't happen in time if you're blindsided by the sellers.
Besides the 'usual' expenses involved in the sale - title expenses, commissions, etc., you MUST ask or look at:
1. Current mortgage balance and whether the seller is behind with any payments
2. Equity loans, lines of credit or second mortgages
3. Prepayment penalties - we're seeing sellers who don't even know they have them!
4. Tax prorations - they think they're covered by what they've been escrowing all year
Put a statement on the bottom of your net sheet that says something like:
"all information above is true and accurate to the best of our knowledge"
and require that the seller sign it.
Many companies now are pulling title reports on their listings right away. Talk to the title companies in your area to see what the expense for this would be. A few companies are even subscribing to the on-line foreclosure sites and checking each time they take a listing to see if the address appears in any of their reports. (Caution: They're not always accurate - but it will give you a heads up and an opportunity to further discuss it with your seller)
Bottom line is - we need to get our heads out of the sand and address the problem. We too long ago abdicated our responsibilities regarding financing and many of us are now abdicating our responsibilities regarding our sellers. Shame on us - we put them in those houses they can not now afford and we have an obligation to at least prepare them for what they now have to do to get out of them!
And remember - not doing so could put you as the listing broker in a situation where you'll be digging in your pockets to pay commissions the seller wasn't able to cover.
For more info on that situation - take a look at the Code of Ethics, the latest edition of NAR's Arbitration Manual, or talk to your local Association of your attorney.
It is unquestionably our job to do our due diligence at the time of taking the listing to bring to the sellers attention the costs of selling their homes. If there is not enough equity at the closing to cover commissions - the listing broker COULD BE HELD RESPONSIBLE for paying commissions he or she did not collect.
Even worse - if the seller is so upside down that there isn't enough to close at all you have now messed up the lives of both the sellers and the buyers.
It's imperative that we take a well written net sheet with us to the seller's home when we take the listing and go through it with them - ask questions to insure that there's enough money to close and question them as to where they're going to come up with any deficit there may be. A short sale can be arranged if they are so upside down they can't close - but that won't happen in time if you're blindsided by the sellers.
Besides the 'usual' expenses involved in the sale - title expenses, commissions, etc., you MUST ask or look at:
1. Current mortgage balance and whether the seller is behind with any payments
2. Equity loans, lines of credit or second mortgages
3. Prepayment penalties - we're seeing sellers who don't even know they have them!
4. Tax prorations - they think they're covered by what they've been escrowing all year
Put a statement on the bottom of your net sheet that says something like:
"all information above is true and accurate to the best of our knowledge"
and require that the seller sign it.
Many companies now are pulling title reports on their listings right away. Talk to the title companies in your area to see what the expense for this would be. A few companies are even subscribing to the on-line foreclosure sites and checking each time they take a listing to see if the address appears in any of their reports. (Caution: They're not always accurate - but it will give you a heads up and an opportunity to further discuss it with your seller)
Bottom line is - we need to get our heads out of the sand and address the problem. We too long ago abdicated our responsibilities regarding financing and many of us are now abdicating our responsibilities regarding our sellers. Shame on us - we put them in those houses they can not now afford and we have an obligation to at least prepare them for what they now have to do to get out of them!
And remember - not doing so could put you as the listing broker in a situation where you'll be digging in your pockets to pay commissions the seller wasn't able to cover.
For more info on that situation - take a look at the Code of Ethics, the latest edition of NAR's Arbitration Manual, or talk to your local Association of your attorney.
Illinois - Office Addresses on Business Card
The question had come up in one of the Broker Management courses regarding whether an agent could put both of the company's office addresses on his or her business card. I did some checking with IAR and IDFPR and it seems that, although there is no prohibition on putting both office addresses, indicating which of the offices is the primary location is being recommended to avoid any charge that the information is misleading.
Sunday, August 5, 2007
Agency - Feedback Calls
We've been getting a lot of questions lately about feedback calls - whether buyer agents have to, or should, give feedback and what the listing agents should expect. I guess when the market was a little 'hotter' we didn't care as much about feedback. Now we have agents who've never given nor asked for feedback ever getting involved and I thought I'd share some of what I sent in an email to a broker in Louisiana on this topic.
As far as feedback is concerned - here's the latest "conventional wisdom". Under 'old' rules I owed the listing agent feedback when I showed her listing because I was technically and legally an agent of the seller thru subagency. Since I am no longer working in any way for the seller I don't "owe" them anything. That being said - our working relationship with each other would suggest that I give feedback when it is appropriate. There is no prohibition against doing it - it just has to be done carefully.
I now represent the buyer and if anything I say to the listing agent gives away any of my buyer's negotiating power - or in any way compromises his position, then I have violated my legal duties to my buyer client. That is where some of the agents have been dropping the ball. We also have listing agents 'hounding' the buyer agents for feedback and getting angry when they don't give it. Shame on them. They're expecting me as a buyer agent to deliver bad news to their seller that they are not wanting to deliver themselves. I know this isn't true of all agents - but it sure is of some of them!
If my buyer has purchased another property and giving straight to the gut feedback won't hurt him - I say give it. But - if he's still looking and your listing may be one he's interested in - how beneficial to the seller can the feedback be? My job is to do the best for my buyer and I can position my feedback call to start the negotiations now. As a matter of fact, I've been suggesting the buyer agents make feedback calls - be careful what they say - and listed carefully to what the listing agents are saying - some of them are giving away their seller's position!!
We have had some problems in this area - with agents giving away confidential information and the clients finding out and filing complaints and lawsuits. Maybe we need to do a little more work on how to talk to each other without compromising our clients.
All of this having been said - I guess it's both a company policy as well as training issue. I think my position is somewhere in between you and the others in the discussion - although your statement 'it's not a good thing' is certainly true if not handled properly - and are the agents handling it properly?
As far as feedback is concerned - here's the latest "conventional wisdom". Under 'old' rules I owed the listing agent feedback when I showed her listing because I was technically and legally an agent of the seller thru subagency. Since I am no longer working in any way for the seller I don't "owe" them anything. That being said - our working relationship with each other would suggest that I give feedback when it is appropriate. There is no prohibition against doing it - it just has to be done carefully.
I now represent the buyer and if anything I say to the listing agent gives away any of my buyer's negotiating power - or in any way compromises his position, then I have violated my legal duties to my buyer client. That is where some of the agents have been dropping the ball. We also have listing agents 'hounding' the buyer agents for feedback and getting angry when they don't give it. Shame on them. They're expecting me as a buyer agent to deliver bad news to their seller that they are not wanting to deliver themselves. I know this isn't true of all agents - but it sure is of some of them!
If my buyer has purchased another property and giving straight to the gut feedback won't hurt him - I say give it. But - if he's still looking and your listing may be one he's interested in - how beneficial to the seller can the feedback be? My job is to do the best for my buyer and I can position my feedback call to start the negotiations now. As a matter of fact, I've been suggesting the buyer agents make feedback calls - be careful what they say - and listed carefully to what the listing agents are saying - some of them are giving away their seller's position!!
We have had some problems in this area - with agents giving away confidential information and the clients finding out and filing complaints and lawsuits. Maybe we need to do a little more work on how to talk to each other without compromising our clients.
All of this having been said - I guess it's both a company policy as well as training issue. I think my position is somewhere in between you and the others in the discussion - although your statement 'it's not a good thing' is certainly true if not handled properly - and are the agents handling it properly?
Friday, June 15, 2007
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