Archive for December, 2010

Should My Realtor Take Less Commission?

Thursday, December 23rd, 2010

We’re taking a break from the blog this last two weeks of the year to celebrate the holidays.  Here’s a reprint of one of our more popular entries. 

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 bur more popular entries:

ase 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!”

Tags: , , , ,
Posted in St. Augustine Homes for sale, St. Augustine Real Estate, should my realtor reduce their commission, should my realtor take less commission, why do realtors charge commission | Edit | No Comments

Homes for Sale in St. Augustine: The Meadows of World Golf Village (WGV)

Wednesday, December 15th, 2010

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

The Meadows of World Golf Village (WGV)

The Meadows, located next to The King & The Bear in the World Golf Village, is ideally placed for access to Jacksonville, St Augustine and all the area’s one of a kind attractions.

Built predominantly between 2002 and 2005 by national builders, this well maintained community of just under 400 single family homes is established with no ongoing construction.  Homes are between approximately 1,400 and 2,100 sq ft with the occasional larger property.  Many benefit from being located on a lake or preserve lot in this well thought out subdivision.  All homes have a 2 car garage.  Predominantly single story homes, there are some larger, two story homes making it likely that there will be a floorplan to suit just about everyone’s needs.

The Meadows benefits from being in the catchment areas for some of the county’s newest schools.  St Johns County was ranked the #1 School District in Florida in 2009 & 2010 and strives to maintain this top position.

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

A home on Ardmore Road in the Meadows, recently sold by St. Augustine Team Realty

A home on Ardmore Road in the Meadows, recently sold by St. Augustine Team Realty

G-Rated Versions of the Last Two Posts

Monday, December 13th, 2010

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

I work on the Board of Realtors Public Realations committee and we do the Sunday copy for the The Record’s real estate section.  I usually borrow from past blog posts and then re-work them to fit the paper.  Here are two blog posts from earlier this week toned down and cut a bit from the original.  Sadly, they sometimes read better cut down, though they lack colorful phrases “worthless git” and “human scumbag.” 

When buying a home, MUST I use the service of just one Realtor?

Technically you are not obligated to use any one Realtor, unless you sign a buyer-broker agreement (which is something like the listing agreement a seller signs, where you contract for services over a set period of time).  Buyer-broker agreements are uncommon in Florida.

The practical answer is you need to stick with one Realtor, at least through the offer stage. 

In Florida, Realtors are obligated to do certain things by law: the timely presentation of all offers and counter offers, limited confidentiality (transaction brokers), etc.  But when you are a great customer (i.e. loyal) a Realtor will answer the phone at anytime of the day or night for you, the Realtor will trudge out after dinner to show property to you, the Realtor will show up at 6 a.m. to pick up a key somewhere so you can see something before work, and he or she will pull out all the stops to get you safely to closing.

Truly, if you want an agent to provide the best service and support to you then you owe it to them to be a loyal customer.  So before you go out in the field do what sellers do: interview a few agents, get referrals, do your research, and then commit to one through the entire transaction.

As a customer, you expect that your Realtor will get you to closing safely, but it’s a two way street.  The Realtor expects you to get them safely to closing as well. 

If you hop around from Realtor to Realtor every weekend you’ll put yourself on the back burner.  In other words, if you don’t respect the time a given Realtor is dedicating to you the buyer, they won’t trust you to get them safely to closing.  Real estate is a business after all, and Realtors need to eat.  A Realtor is going to devote the lion’s share of their time and effort towards the customers who respect and value their efforts.

So when is it okay to dump a Realtor?

Let’s say you hook up with a Realtor and he or she pays no attention to you.  But somehow the Realtor mistakenly answers his phone while golfing and ends up showing you a home that you are smitten with.  You actually make an offer on the home but it doesn’t work out.  The Realtor has proved he’s an idiot.  Dump him. No credit for time served.

How much below list price is it reasonable to offer on a home for sale?

For this we are going to assume that you are not an investor who makes their living buying, selling and renting real estate.  An investor works with a different type of home, under different criteria and under different percentages.

I'm Okay, You're Okay: G-Rated Real Estate Blog Posts

I'm Okay, You're Okay: G-Rated Real Estate Blog Posts

There are a few things to consider.  In St. Augustine the average sale price typically runs above 90% of list price on a single family home.  That doesn’t mean you can’t buy for less than 90% (it’s just an average, after all) but it is a benchmark to look at.

Your Realtor can provide you a list of homes that have sold (and not sold) in the neighborhood you are looking at that will give you a good indication of the home’s true market worth.

If you are thinking of making a low offer it’s best to do it when you can reasonably support your reasons for doing so. In other words, if you have a list of similar properties that have sold in the area and the list price of your target home is obviously too high. There may be other reasons as well, for example, if the property needs a new roof or other work done.

Going further, does this home have a much better location or features than the other homes that have sold?  Is the home actually worth more than the other sales would indicate? 

But maybe what you really want to do is steal this home…hey, everybody wants a deal, right?  You want to come in so far under list price that that you have to dig the offer out with a shovel it is so absurdly low.

You can do it, but to be successful either the condition of the home or the location of the home has to be as absurd as the price you are offering.  Shotgun shack next to the railroad track in a high crime neighborhood…that’s the home we’re talking about. 

The thing you have to separate in your mind is “list price” and “market price.”  You can’t be concerned about how much you get off the list price if you’re looking for a good deal.  What you need to be concerned about is where the list price is in relation to the market price.  If the home is priced well, especially if it’s priced under market–and you know it–then jump on it.   

You are going to feel really silly if you found the house of your dreams, priced right, and then lost it because you floated a lowball offer.

When Buying a St. Augustine Home, MUST I Use the Services of Only One Realtor?

Friday, December 10th, 2010

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

When buying a home, MUST I use the service of just one Realtor?

Technically you are not obligated to use any one Realtor, unless you sign a buyer-broker agreement (which is something like the listing agreement a seller signs, where you contract for services over a set period of time).  Buyer-broker agreements are uncommon in Florida.

The practical answer is you need to stick with one Realtor, at least through the offer stage.  I’ll give you an example of when to dump a Realtor later on.

Great customers get great service.

Great customers get great service.

In Florida, Realtors are obligated to do certain things by law: the timely presentation of all offers and counter offers, limited confidentiality (transaction brokers), etc.  But when you are a great customer (i.e. loyal) a Realtor will answer the phone at anytime of the day or night for you, the Realtor will trudge out after dinner to show property to you, the Realtor will show up at 6 a.m. to pick up a key somewhere so you can see something before work, and he or she will pull out all the stops to get you safely to closing.

In a recent Trulia forum, Sean Bonini, a Realtor from Scottsdale, Arizona, said, “If you want your agent to provide the best service and support to you then you owe it to them to be a loyal client…interview a few agents, get referrals, do your research, and then commit to one through the entire transaction.”

But if you’re having a conversation with a Realtor you’ve been working with (and they’ve just given you a very detailed answer to your question), and you pipe up and say, “Well I went to an open house and a Realtor there told me such-and-such, and another Realtor in Palm Coast said this-that-and-the-other.”  Guess what, friend, you just moved to the back burner.  You suddenly ceased to exist in the eyes of that Realtor.  Because you didn’t respect the time they’ve dedicated to you and now they can’t trust you.  They now don’t believe that you, the buyer, will get them, the Realtor, safely to closing.

Thought it ran just the other way, didn’t you?  Funny how that works, isn’t it?

So here are some examples of when to, and when not to dump your Realtor:

You hook up with a Realtor and he or she pays good attention to you.  This Realtor shows you 16 homes that are what you are looking for, but you still haven’t found the one.  So you’re driving around the next weekend, you go to an open house and love it, and then you write the contract with the agent holding the open house.  In the meantime, the Realtor who showed you the 16 homes is completely cut out and doesn’t get paid for services he already rendered to you.

If you do this to your Realtor you are a human scumbag (emphasis mine) and I’m sorry if that offends you.  What you should have done is call your Realtor so they could write the contract and get you safely to closing.  Karma has a way of working…as you fumble your way towards closing amidst a flurry of unreturned calls it may turn out the open house agent is working strictly for the seller and is completely incompetent to boot.  But you were too busy to call the good Realtor…it would have meant missing a rerun of The Office on tivo.

Second example:

You hook up with a Realtor and he or she pays no attention to you.  Somehow he mistakenly answers his phone while golfing and ends up showing you a home that you are smitten with.  You actually make an offer on the home but it doesn’t work out.  The Realtor has proved he’s an idiot.  Dump him.  No credit for time served.

To recap: Good Realtor (keep), Idiot Realtor (dump).  

Question answered?  I hope so.

Homes for Sale in St. Augustine: Why Won’t My Home Sell?

Wednesday, December 8th, 2010
by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com).   Join us on Facebook.

Why won’t my home sell?

I was trolling the online forums this morning searching for a topic and I came across this question.  A Broker named Jeffry Goldsmith from Baltimore answered it rarely have I heard something so well said.

“There aren’t bad houses,” Goldsmith said.  “Not one.  There are bad prices.  It might not be a price you like, or can even afford to sell for.  It may, however, be the reality of the situation.”

I will add that while it is true that there are some price ranges that are discretionary (high-end beach front homes or oceanfront condos in our market, for example) price is still key.  When a you place a high list price on a property and offers are not forthcoming, it doesn’t mean a discriminating buyer hasn’t showed up yet.  It means all the discriminating buyers don’t think the home is worth what you are asking. 

There are no bad houses, just bad prices.

There are no bad houses, just bad prices.

Homes for Sale in St. Augustine: How Much Below List Price is It Reasonable to Offer?

Monday, December 6th, 2010

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

How much below list price is it reasonable to offer on a home for sale?

Good question, but a loaded one. 

I’m going to make an assumption: you are not an investor who makes their living buying, selling and renting real estate.  An investor works with a different type of home, under different criteria and under different percentages.

But if you are a standard residential buyer I’d say never offer lower than 10% for a standard home for sale.

Haggle, but don't lowball.

Haggle, but don't lowball.

Your Realtor can provide you a list of homes that have sold (and not sold) in the neighborhood, that will give you a baseline of what the true market value of what the home is worth.

Said Dorene Slavitz, a Realtor from Culver City, California: “It’s best to offer below asking price when you can reasonably support your reasons for doing so. In other words, if you have comps of similar properties that have sold in the area and the prices reflect the price that is being asked is too high. Or if there are other reasons you want to offer less, for instance, the property needs a new roof..or other work.”

Use the baseline market value to add and subtract from.  Does this home have a much better location than the other homes?  If so it should sell higherthan the baseline.  Does it have negatives?  For example: closer to a busy road than the others, power lines in the back yard, etc.  Subtract value for those.  That should give you a price to offer.

But that’s not really the answer to the question you’re asking, is it?

No, you want to steal this home.  You want to come in so far under list price that that you have to dig it out with a shovel it is so absurdly low.

You can do it, but to be successful either the condition of the home or the location of the home has to be as absurd as the price you are offering.  Shotgun shack next to the railroad track in a high crime neighborhood…that’s the home I’m talking about. 

The thing you have to separate in your mind is “list price” and “market price.”  You can’t be concerned about how much you get off the list price if you’re looking for a good deal.  What you need to be concerned about is where the list price is in relation to the market price.  If the home is priced well, especially if it’s priced under market–and you know it–then jump on it.   

You are going to feel really stupid if you found the house of your dreams–listed below market—and then lost it because you tried to lowball.  Not haggle…everybody does that…but lowball.

On the other hand, if the home of your dreams is listed at $300,000 and it the market value is more like $220,000, then you might come in at $200,000 or $210,000 as a place to start.  The seller might consider the offer absurd and not answer it, however, the offer is in line with market price.  In this case you may be tempted to offer over market price to get the home.

The Three Biggest Mistakes Real Estate Agents Make with Their Websites

Friday, December 3rd, 2010

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

Can we get some contact info please?

Can we get some contact info please?

Okay, this week I was trying to get in touch with another agent because I had a question about a property they had listed.  I’m a broker after all, real estate is what I do.  Anyway after googling them and hunting through 100 different profile pages on their company website, their blog, their active rain profile, etc…no email contact address could be found.  Sure I could have called (probably would have taken less time).  Sure, I could have looked it up on the NEFAR website (an exercise in itself).  But I got a bee in my bonnet because, seriously, why was this guy making it so hard to find an email address?

Which leads us to today’s topic, The Three Biggest Mistakes Real Estate Agents Make with Their Websites.  When compiling this list my assumptions were real estate agents are in business to make money, and that to make money customers need to be able to contact them quickly.  I know, I know, after looking at a lot of agent sites it must be a crazy assumption.

Number 1: Using a company profile page as a website. 

These pages are typically awful and crammed so full of eye junk the consumer can’t find the contact info.  It looks cheap, and the consumer thinks they are going to get cheap service.  You’re in business now, invest in your own web page.

Number 2: NO EMAIL ADDRESS on an agent’s contact page! 

This is a web page.  Customers are searching on the web.  And there’s no way to contact the agent on the web!  WTF!?! 

Why would you go to all the trouble to attract someone on the web and not put your email there? 

“But, I’m afraid of spam, Sean!”

Then get a gmail account for business you worthless git, and protect your personal account that way.  Or use a jpeg image with your contact info so a robot can’t scrape it, if you are that worried.

Number 3: Contact only by a form. 

The Agent has no email address listed, instead they want you to fill out a form.  Consumers will fill out a form on the spur of the moment, say if they are looking house online and there’s a “contact me for more info” form…its generally faster than opening their mail program. 

But if they are looking for the agent specifically (like I was in the earlier example), they already have their mail program open because they want to ask a more personal question. 

Think about it, some agent’s customer is looking at a listing online right now and they want to find out more.  But they lost the agent’s email address, or they never had it, because the only way they could contact this agent was a form.  There’s no “sent” file or bcc they can refer back to when they fill out a form.

So, what does the customer do?  They just contact the listing agent because it’s easier.

Or, it could be a broker like me looking for the agent.  Let me tell you something, nothing screams “incompetent” like being forced to contact an agent via a form on their Trulia profile. 

You know, you’re an agent, supposedly a professional.  Act like it.

Homes for Sale in St. Augustine: How Can I View Homeowner’s Association Docs Online?

Wednesday, December 1st, 2010

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

So you’re looking to buy, but you want to read the homeowner’s association docs (or condo docs) first.

In real estate circles it’s pretty easy to get these docs.  We either have them on file, can get them quickly from a title company, or in most cases we can get them online from the Clerk of Courts.

If you’re sitting in Montana, however, you’re going to need to go online.

In St. Johns County, Florida, here’s how you find HOA docs online:

  • Go to the Clerk of Courts website at http://www.clk.co.st-johns.fl.us/
  • Place your pointer over RECORDING and click online records search
  • For this example I’m going to try and find the docs for Royal St. Augustine.  So I type in Royal St Augustine in the “Name” box, and then next to the “Document” box I click the gray box, and then scroll down and check the items between (85) and (91), most of which have to do with Covenants and Restrictions (the fancy name for HOA docs).
Searching on the Clerk of Courts Site

Searching on the Clerk of Courts Site

When I do this I only come up with three docs, all amendments to various HOA types in Royal St. Augustine.  But it turns out the first one is what I’m looking for…it appears that the covenants and restrictions were completely redone in 2009 for Royal St. Augustine, and because it’s been done after the fact, it’s classified as an “amendment” in the county records.  The actual title is “Amended and Restated Declaration of Master Covenants and Restrictions for Royal St. Augustine.” 

Now the neighborhood I’m really interested in is Keswick (a neighborhood within the neighborhood of Royal St. Augustine), and I want to see if any restrictions are on file specific to those homes.   So now I just type Keswick in the “Name” box.  Nothing comes up, and neither does anything for “Keswick Royal St Augustine.”  So there proabably aren’t any restrictions specific to Keswick that are different from the rest of Royal St. Augustine.  If I really need to know I call one of my friends in the title biz.

I also tried “Florida Club,” which is a set of condos inside Royal St. Augustine: when I typed the name in the condo docs came up no problem.

A few notes: covenants and restrictions filed before 1990 aren’t online.  To get those you have to go to a real estate or title source, or physically go into the Clerk of Courts office and view them on microfiche.  Also, as in the example above, a neighborhood within a neighborhood may have its own special set of docs so you may have to dig deeper.  In some cases both the condo docs and the HOA docs govern at the same time (Conquistador Condos in St. Augustine Shores, for example) so you have to look at both sets of docs.

In some communities the actual name of the neighborhood is different than what is recorded.  Palencia is known as “Marshall Creek” in the records, while Hidden Lakes is recorded both as “Rolling Hills” and “Chelsea Woods.”

Lastly, some neighborhoods actually have covenants and restrictions on file but the HOA was disbanded at some point or never established, so there is no authority to enforce any covenants (St. Augustine South and Creekside come to mind)…and the residents like it that way.