Archive for November, 2010

Selling Homes in St. Augustine: What is a Transaction Fee, Do All Realtors Have This Fee?

Monday, November 29th, 2010

by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

Don't pay a transaction feeMy opinion: a transaction fee is a bullsh*t fee and you shouldn’t pay it.  Find out right away if your agent has a transaction fee, how much it is, and if you’re not in agreement with it get out before you sign anything.

Unfortunately, in most cases it isn’t the agent’s fault but a company that is forcing them to charge the fee. 

Transaction fees came in when the real estate market was hot.  Even though homes were flying off the shelf and cash flow was higher than it had ever been in history, the real estate companies decided that they needed more money.  So they invented the transaction fee.  To be fair, there was a downward pressure on commissions during that time, however, as I mentioned, sales and cash flow had never been higher.  These companies were a bunch of greedy pigs.

So a transaction fee is basically a fee they charge you for doing business with them. 

If you are a seller you should be livid.  Paying a commission to an agent is simply paying them for the job.  The transaction fee is a way their company tries to take an extra cut for no work done whatsoever.

If you are a buyer an agent’s work is typically free…they get paid by the seller via commission and only get paid if the home closes.  So if you like the job they did the fee may not seem so onerous.  But understand the agent doesn’t see dollar one of that transaction fee.

There are other times you will see transaction fees.  There are some companies that charge the agent a transaction fee in lieu of a percentage of the commission: sometimes the agent will try and pass it on to you.  Or when you are buying a foreclosure, the contract that you have to sign (it’s a bank/lender generated contract) requires the buyer to pay a transaction fee.  This foreclosure transaction fee is tricky to get out of, but I’ve seen it done with a good attorney.

Just in case you think I’m crazy, here’s what some Realtors around the country recently said in an online forum about transaction fees:

“Simple tell [the Realtor] you are not paying that fee or any admin fee or any other fee. All fees are negotiable and they are already getting 3%+ from you. If you are going to pay above and beyond that they better have a damn good reason why, and ‘it our company policy’ isn’t a good reason,” said Dan Kingsley of Rochester, Minnesota.

Said Larry Tollen of Durham, North Carolina: “From my perspective it’s a fee that simply goes to the bottom line of the company (typically a large franchise firm) that charges it. There’s no reason anyone should be charging it or clients paying it. It’s nonsense and I’d ask anyone who charges it, ‘What do you do for this fee that you weren’t doing a year or two ago before you started charging it?’”

So when you sign a listing agreement to sell a home, or when you go to buy a home, look at the paperwork carefully and make sure there aren’t any hidden fees added in anywhere.  It can be on the sales/listing contract, it may be on the company’sown paperwork, and for a seller it may be called a “brokerage only commission.”

In any case, if there is no work being done for a fee, don’t pay for it. 

Homes for Sale in St. Augustine: Whisper Ridge

Wednesday, November 24th, 2010

by Kate Stevens (Kate@StAugTeam.com), Broker Associate for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

A home St. Augustine Team Realty sold at 1960 Silver Hawk, in Whisper Ridge

A home St. Augustine Team Realty sold at 1960 Silver Hawk, in Whisper Ridge

Whisper Ridge, located just west of the I-95/SR16 intersection on SR 16, is ideally placed for access to Jacksonville, St Augustine and all the area’s one-of-a-kind attractions.

Built between 2004 and 2007 by national builders, this well maintained community of around 350 single family homes is established with no ongoing construction.  Homes are between approximately 1,500 and 3,000 sq ft with most of them in the 1,700 to 2,200 sq ft range.  Many benefit from sitting on a lake or preserve lot in this well thought out subdivision.  All homes have a 2 car garage.  There’s a mix of single story and two story homes making it likely that there will be a floorplan to suit just about everyone’s needs.

With street lights and sidewalks, it’s not uncommon to see residents out for a stroll and enjoying their surroundings.  There are two community playgrounds which further enhance the community.

One of the great attractions of Whisper Ridge is its very low Homeowners Association Fee and the fact that it does not have an annual CDD Fee.  This can make living in Whisper Ridge several thousands of dollars a year less expensive than other, comparable neighborhoods in the area.

Homes for Sale in St. Augustine: Adding Video to a Listing

Monday, November 22nd, 2010

by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

Sean Hess, Broker, on the St. Augustine Team Realty channel at YouTube

Sean Hess, Broker, on the St. Augustine Team Realty channel at YouTube

Wow, its been a whole 12 days without a post from me, and that’s okay because we’ve been upgrading your experience.

We started creating and adding video content to our website in order for you to get a more “touch and feel” experience with the homes and land we are selling. 

We started with our beach and water view properties first.  You can hear the wind in the trees (especially at the beach listings), you can see the surf break from our ocean view homes, and in some cases we even shot videos of the pool, tennis courts, etc.

Visit our Featured Homes page at StAugustineTeamRealty.com and we hope you enjoy it.  Come back often as we add more video to our active listings!

Homes for Sale in St. Augustine: St. Augustine Shores, 32086

Friday, November 12th, 2010

by Kate Stevens (Kate@StAugTeam.com), Broker Associate for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

772 Del Mora, a St. Augustine Shores home we have for sale currently.

772 Del Mora, a St. Augustine Shores home we have for sale currently.

St Augustine Shores, located to the south of Moultrie Creek between the Intracoastal waterway and US 1, is ideally placed for access to downtown St Augustine, the beaches, shopping and other one of a kind attractions in the area.

St Augustine Shores offers a very wide range of home styles – from modular homes built in the 1970s to Intracoastal-front condos (Conquistador) to brand new executive homes currently being built (Tuscany and Tuscany Ridge).  The community flows smoothly from style to style making it one of the most popular subdivisions in the area.  There are also a number of homes on the Intracoastal (San Remo section) with fantastic views of the water.  The more established sections of this community benefit from many mature trees.

The southern part of the neighborhood is set amongst St Augustine Shores Golf Club, a popular public golf course.  Many homes and condos (The Greens and Fairview Condos) benefit from sweeping open views of the fairway –a country club setting without the associated price tag.

This southern half of St. Augustine Shores also is close enough to W.D. Hartley elementary school that students can walk to the school.

For a low monthly fee, residents of St Augustine have access to a wide range of community amenities, including a clubhouse, community pool, sports fields, fishing dock, lakes, RV/boat storage, tennis courts and more.   Common areas of the community are exceptionally well looked after by the Homeowners Association.

Homes for Sale in St. Augustine: Should My Realtor Take Less Commission to Make a Deal Work?

Wednesday, November 10th, 2010

by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

Recent sold properties from St. Augustine Team Realty.

Recent sold properties from St. Augustine Team Realty.

Real estate is a unique industry in that we typically charge a commission for our services (versus charging a flat fee for or charging by the hour).  The commission is usually a percentage of the final purchase price.

Real estate is a hard business.  Real estate agents typically aren’t paid any salary or benefits, but make their living solely on commission. 

To find a buyer that is ready, willing and able to purchase a property, a real estate agent typically has to wade through 10 prospects just to get to 3 “solid” prospects to find the single real buyer.  But the agent still has to do all the legwork, phone calls, emails and research to find that one real buyer.

On the listing side, even the best agents typically have to interview three sellers just to get a single listing that has the potential to sell, based on the seller’s criteria.  And once the listing is secured there can be months and months of networking, advertising and marketing to attract a viable sales contract.

So a flat fee won’t work (typically) because the length of the job is uncertain.  A listing or buyer that looks like a “slam dunk” might take months longer and much more in terms of $$$’s and time than it would appear at first.  An trust me, you don’t want us to charge by the hour (like attorneys), becuase it would end up costing much more than commission.

Thus commission is the only viable way for an agent (who I remind you has no salary) to have enough incentive  to front their own money and time on a seller or buyer’s behalf to get a property sold.  If the property doesn’t sell, the agent doesn’t get paid, so it takes a powerful incentive to find quality people who will work as agents day in and day out.  Also, when an agent is successful and closes a deal he or she is immediately “unemployed,” and has to start the process all over again.

That being said, at St. Augustine Team Realty we base the commission we charge based on the difficulty of the job: we don’t have a flat commission rate for all listings.  If its obvious that the home is going to sell faster, we charge what we feell the job will cost, not what we could charge.  At the same time if we know there’s more work involved than the average sale, we will charge appropriately.  And if there’s something a seller might want that’s not part of our normal marketing plan, we’ll give the seller the opportunity to pay for it, and we’ll refund a portion of that cost at closing.

Our sellers (especially our investors) are fine with that.  They feel that the better we do, the better they do.  Because we are working on their behalf, our customers know that if we as agent are appreciated they will get the best service and financial gain.

So should we as Realtors take less commission to make a deal work?  The situation comes up some times when unexpected repairs or fees arise near the end of a transaction.

From a personal standpoint, my name isn’t on the contract.  When the the buyer buys the home and gains equity as the home appreciates I don’t recieve or benefit from that.  And when the seller gets their payoff from selling the home, I don’t enjoy any of their equity gain.  I simply get paid for the job that I was hired to do, and I don’t see a reason to pay for a repair who’s responsibility is already covered in the contract. 

The best insight I’ve found so far I found posted in an online forum.  The Realtor, John Walin, of Libertyville, Illinois, put it succinctly:

“If i do a good job getting the house you sell or buy and a better than competitive price, should I charge you extra? The only time I make a commission concession is if it is a buy & sell or I need to make something right that went wrong. For example, the washer and dryer are supposed to be included at closing and the seller got sneaky and removed items between contract date and closing date. In that instance I gave my buyer half the cost of buying a new washer and dryer. $500 went a long way to make that buyer very happy and received two referrals since. Best $500 I ever spent!”

Tales from NAR: National Realtors Convention in New Orleans

Monday, November 8th, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

David Knox, Famous real estate trainer and St. Augustine Team's Sean Hess

David Knox, famous real estate trainer and St. Augustine Team Realty's broker Sean Hess

I just spent the last weekend at the National Realtors Convention in New Orleans, and in between stuffing my face with shrimp po’boys and ogling homes in the Garden District, I actually learned a few things.

The first is: real estate hasn’t changed.  It doesn’t matter if you’re selling luxury homes or if your selling to first-time buyers, price is still the most important factor.  What matters is how you convey that message.

I spent a lot of time learning how to price luxury listings (we have a sizeable group of $1M+ listings in St. Augustine), as well as learning to sell the lifestyle that goes with a luxury listing, and how to determine if  the price on a luxury listing isn’t working and how to move it correctly.

What has changed are the tools that are used to sell real estate.  QR codes, ‘droid aps, bit.ly URLs…do you know what these things are?  Well, they’re coming to real estate and we’re going to start using them to help St. Augustine Team Realty’s customers buy and sell properties.  The good thing is we are already using so many of the tech advances that people were talking about at the conference.

New Orleans itself is a great town.  I had some inside help finding great places to eat from my Aunt Connie (who lived here pre-Katrina), but even in the cases where I had to go off-piste the food I found was amazing.  She told me, “don’t worry about where you eat because it’s all good.”  You can see some of the place I ate at my profile on Yelp.

And if you’re in real estate the homes in New Orleans are unlike anything you’ve ever seen.  Everyone knows about the French Quarter, but the Garden District(s), Uptown and Riverbend are so chock full of beautiful homes and style it would take a month to see everything.  I’m serious.  You simply can’t comprehend it.  And then there are the dozens of beutiful churches…

I went down to the Upper and Lower 9th Wards, the areas hit hardest by Katrina, to see the real estate there.  The Lower 9th, while filled with a lot of overgrown vacant lots and still plenty of boarded up homes, was a neighborhood like any other.  It’s vibrant, plenty of people are living and working there, and the houses they are living in are just as well cared for and unique as anything else in NOLA.  In the Upper 9th on the west side of the canal there is a lot of new construction as part of two Development Districts and the Musicians Neighborhood, all in the New Orleans style.  Strangely, there is also a new construction project that looks abandoned.  You can see photos of the neighborhoods on our Facebook page.      

David Hassellhoff at NAR New Orleans

David Hassellhoff at NAR New Orleans

Finally, there were some strange things I saw in New Orleans: a toothless cowboy trying to shill people into a strip club on Bourbon Street, “fast food” style daquiri shops where you could stop by for a quick gallon or more, and the 20-year old dandy in a pinstriped suit complete with fedora and handlebar moustache in a Magazine Street burrito shop.  But the strangest thing was at the NAR convention itself: a meet-and-greet with David Hassellhoff.  Sure, you could meet David Hassellhoff, but would you meet David Hassellhoff?

Homes for Sale in St. Augustine: Can a Bank Auction A Home with Tenants?

Tuesday, November 2nd, 2010

by Sean Hess (www.SeanHess.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

Tenants in foreclosed properties are given 90 days

Tenants in foreclosed properties are given 90 days

Can a bank auction a home with tenants in it?

Yes they can.  But tenants are protected at least 90 days before they can be evicted.

In May of 2009 President Obama signed a law protecting tenants in foreclosed properties ( http://www.nlihc.org/doc/Memo-Renter-Protections-S-896.pdf ) which requires that “bona fide” tenants get 90-days notice prior to eviction, and allow tenants to occupy the property until the end of their lease term, except the lease can be terminated in 90 days if the bank sells the home to some one who will live in it. 

In other words, if the bank owns the property you are living in and you still have 6 months left on your lease, and a person that buys it at auction wants you out, they still have to give you 90 days notice…but they don’t have to honor the full 6 months left on the lease.  The bank may even lower the auction reserve just to entice a buyer to take the tenants. 

“Prior to the Federal legislation at the end of 2009 tenants could and were evicted upon foreclosure,” Said Tampa Realtor Lisa Reeves in a recent online post. “The banks are now forced to maintain the property until the tenant vacates or sell occupied. Trust me banks would rather evict – they aren’t management companies and aren’t set up to handle 100′s of 1000′s rents for a few 100 dollars.”