Archive for July, 2010

Homes for Sale in St. Augustine: “Buy and Bail,” Then Get Ready for Deficiency Judgment

Wednesday, July 28th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

Word on the street this week from the mortgage brokers is that banks involved in short sales are hunting down “buy and bail” sellers.

A “buy and bail” seller is one that goes out and uses their good credit or cash to buy a new home, and then stops paying on the old home in order to short sell it (or just let it go into foreclosure). 

The short sales may still succeed, according to my sources, but banks are now specifically hunting for these “buy and bail” sellers in order to pursue deficiency judgments after the fact, or won’t waive the deficiency judgment in order for the home to sell.

Homes for Sale in St. Augustine: Energy Retrofit Chain Letter is a Lie

Monday, July 26th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

I got an e-mail chain letter last week that basically said some new law would require you to completely retrofit your home for energy efficiency before you sold it.  As with most e-mail chain letters, it was complete and utter horsesh*t.  I’ll quote directly from an article by Erica Christoffer and Robert Freedman in this month’s Realtor magazine:

“[This] e-mail chain is spreading misinformation about pending legislation, National Association of Realtors says.  It claims that the energy bill that’s working its way through Congress would require home sellers to obtain an energy audit or make energy retrofits before they can sell their home.  In reality, the bill includes a provision that requires new construction to be energy-labeled but prohibits states from requiring new ratings when the house is resold.”

Homes for Sale in St. Augustine: Should My Realtor Hold an Open House?

Thursday, July 22nd, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

Should my Realtor hold an open house?

To answer your question I’ll quote Dirty Harry: “The question is, do you feel lucky?”

The chances of your home selling from an open house is generally cited at less than 2%.  And these days (due to higher inventories) most of the time you don’t get any traffic at all.  I mean nothing, nada.

But Realtors still do open houses because, if there is any traffic, it’s a great way to meet buyers in the market.

So if you want to take that 2% shot, by all means ask your Realtor to hold an open house.  But understand that if your Realtor hooks up with a buyer at the open house, the agent is going to be obligated to that buyer for the forseeable future, and won’t be able to spend time marketing your house. 

Not only that the buyer will be will be working hard to find and buy your competition. 

Getting back to Dirty Harry, “Do you feel lucky?”

Well do you, punk?

Homes for Sale in St. Augustine: Don’t Release Pending Deal Details on Facebook

Tuesday, July 20th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

Okay, you’re selling your house and you just got it under contract.  Or you’re buying a home and the seller has just accepted your offer.

Before you go bragging about the details of your real estate deal on Facebook, remember that sharing those details on an open forum is a bad idea.  It’s a small world out there and one of your friends with might have a connection with the other party.

You’re a buyer and you would have went higher?  Keep it to yourself.  You’re a seller that would have went lower?  Same deal.

If I was on the other side and I found out those details I would keep looking for an opportunity for you to make good on your bragging.  “My goodness, this home inspection turned out much worse than I expected, I’m afraid I just can’t pay that $$$ for the house…we’ll have to renegotiate the price.”

“Lose lips sink ships” they used to say.  I wouldn’t even brag after a sale.  “Bury” that fact that you would have paid more/paid less, then “bury the shovel.”

Homes for Sale in St. Augustine: Are You Paying EXTRA Commission?

Thursday, July 15th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

Line 89-Extra Commission on Standard Florida Contract

Line 89-Extra Commission on Standard Florida Contract


If you want to see something ugly, just take a look at line 89 (a) of the standard Florida Association of Realtors Listing Contract pictured to the right.

The first part of line 89 (a) is normal…it spells out the commission percentage in the listing agreement.  Whether you love commission or hate commission, it’s how deals get done.  But then it goes on to add “plus $___________ ” .

This tiny little addition in the contract is there to charge you an extra commission.  If someone tries to get you to pay an extra commission, like Nancy Reagan famously said, “Just Say No.”

Back in the days of the boom market some real estate agencies felt that they weren’t raking in enough cash.  There were some real world reasons for this: commission percentages were declining a bit due to market competition, and to attract agents companies had to give the agents a better cut.  So they invented something called a “transaction fee” which was basically just an add-fee of a few hundred bucks that the seller and buyer got hit with at closing, and that was paid directly to the borkerage.  Some people would protest the fee but most people just went ahead and closed.

Then the federal government stepped in and said, “you can’t do that,” because the fee wasn’t part of any real work directly related to a real estate closing.  So the real estate agencies have to put it in the actual listing contract now.

My best advice is: don’t agree to any Extra Commission.  Any company that would turn down your listing because you won’t pay a few hundred bucks is not making sound business decisions.  AND, the listing agent and the agent who brings the buyer don’t see any of that money anyway, so it bypasses the purpose of commission…which is to motivate agents to do all the work in selling the home without getting paid a single dime upfront, or at all, until the house closes.

Homes for Sale in St. Augustine: Sellers Agent Ethics, or Lack Of

Tuesday, July 13th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

I ran across a blog post the other day in which an angry buyer blasted a Seller’s agent.  Apparently there were two offers on the house, and the Seller’s agent had one of those offers…so he coached his buyers to bring their offer up a little higher and get the house. 

The angry buyer didn’t get the house, of course, and called the Seller’s agent “unethical” and even questioned the legality of it.     

There are two issues here, the first is with multiple offers and the second is with the role of the agent.

The only difference in a multiple offer situation and regular situation is that there is no dickering.  Make your best offer first, but there’s no need to offer more than you think the property is worth. 

The exception is where the home is so special, or the situation is so unique that the property is “beyond price.”  In this case offer as much as you can or the bank will loan you.  Early in my career I had a home sell for full price as soon as the sign hit the yard…the person who bought it was moving in from out of state had a brother living in the house right next door.  It was very important for the buyer to get this house, so there was no fooling around. 

The second issue is the role of the agent.  In the case of the angry buyer the Seller’s agent did a great job.  Think about it: he created a situation where there were multiple offers for his sellers to choose from and got them a better price.  For his buyer he coached them to come up just enough to get the house, but not overspend.  It was a win-win for everybody, except the angry buyer.

I think the angry buyer was upset mostly because they didn’t get the house for the price they wanted.  I’m sure their agent coached them to make their “best offer,” and unfortunately their best offer wasn’t good enough.

It would only become an ethical issue if the Seller’s agent coached the sellers to take an offer that was the best offer for the Realtor, but the worst offer for the seller.

In Florida the only way the situation would have become illegal is if the Seller’s agent never presented the second offer, but there’s no legal or ethical imperitive for him to present the offer well. 

If you are in a multiple offer situation and you’re worried about your offer being presented well, then your agent can insist to present it to the seller personally.  However, the seller can refuse this request; it is his property after all and he’s not obligated to listen to anybody but the person he hired.

Homes for Sale in St. Augustine: Your Home Got Showed, Then It Got Trashed

Wednesday, July 7th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

So your home got showed, then it got trashed.  Okay, not really trashed, but someone left a door open, or the lights on…they trashed common courtesy in other words. 

Here’s some agent stories I found on the web recently:

“I had a listing once and a buyer’s agent left the side door of the house open and my client’s cat escaped. She found the cat, but I lost the listing and I don’t blame the client for canceling our contract. I’m lucky that her house wasn’t robbed. I contacted the buyer’s agent to let them know how displeased I was, but unfortunately didn’t get much remorse.”

“Recently after I returned to my condo after a viewing I found a large coffee stain on my white carpet.  Either the agent or the people viewing the house spilled coffee on the carpet and did not bother to even clean it up. Now I have to get my carpets cleaned…”

In a regular year we might see one door left open (this year I’ve seen three…a fourth turned out to be a faulty lock), and we might see one lockbox left open (we’ve seen four since December of last year).  But for the grace of God we haven’t seen any coffee stains or damage.   

What is a seller or their agent to do?

Unfortunately not much. 

The real estate business is built on networking.  The agent that leaves your door open today may sell your listing tomorrow.  Most agents alive today have to be good or they wouldn’t still be in business, so protecting the sale is more important than unloading on someone for leaving a door open.

And in most cases it’s unintentional anyway.

We know who the agents are showing our listings.  Usually when something happens I’ll call them and just let them know a door got left open, or a lockbox wasn’t closed…they are usually mortified.  These are professionals after all.  They were usually distracted by their buyers, answering questions, trying to make sure all the lights were turned off, etc. 

 Agents so cavalier and so bad that they do this routinely find themselves fired out of the business, and fast.

And look, if someone I knew left my own door open I wouldn’t unload on them.  In fact, someone I know (myself) closed the office last week, turned on the alarm, and forgot to lock the door…if I can do that to my own property I’m certainly capable of doing it at someone else’s.

So, yes it’s bad form, and it trashes common courtesy.  But it’s not intentional, and you’re trying to sell your house, right?  So, be thankful for the buyer chance and let it roll.

Homes for Sale in St. Augustine: Strategic Default? Fannie Mae is Poised to Put a Hurtin’ on Your Credit.

Monday, July 5th, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

My latest post on my personal website: If you owe more than your home is worth and you can still make the payments, but you just decide to walk away (called a strategic default), Fannie Mae is set to put a world of hurt on your credit. 

I hope you enjoy it, as best you can enjoy an article about Fannie Mae trying to destroy your credit.

Homes for Sale in St. Augustine: You Can Buy Flood Insurance Again

Friday, July 2nd, 2010

by Sean Hess (, Broker and Manager for St. Augustine Team Realty (   Follow us on Facebook.

Since June 1, you could not buy flood insurance.  Lucky for those of us who need or want flood insurance, Congress yesterday extended the National Flood Insurance Program (NFIP) through September 30th.  The bill is retroactive and will cover the lapse period from June 1, 2010, to the date the law is enacted. 

As I understand it, since 2004 the program has been renewed on almost a month-to-month basis.  This last time the program expired on May 30 and wasn’t renewed because it was part of a bill that included extending unemployment benefits.  The National Association of Realtors and Realtors at the grass-roots level lobbied hard to get this passed before the July 4th recess, and it is our hope that next time its renewed it will be for a number of years.  To paraphrase Winston Churchill, “You can count on the U.S. Congress to always do the right thing, after they’ve exhausted all other possibilities.”