Archive for April, 2012

St. Augustine Team Realty Wins National Marketing Award

Monday, April 30th, 2012

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

Winner of national marketing award: St. Augustine Team Realty

Winner of national marketing award: St. Augustine Team Realty

St. Augustine Team Realty has received the 2011 All Star Award from Constant Contact, Inc., the trusted marketing advisor to more than half a million small organizations worldwide. Each year, a select group of Constant Contact customers are honored with the All Star Award for their exemplary marketing results. St. Augustine Team’s results ranked among the top 10% of Constant Contact’s customer base.

“We’re happy to be recognized by Constant Contact with a national award,” said Sean Hess, Broker for St. Augustine Team.  “Sales went through the roof when we really learned how to tie the service to the video segments on our properties, so it’s nice to have the award but the bottom line sales results make us even happier.”

Constant Contact customers using any combination of the company’s Email Marketing, Event Marketing, and Online Survey tools were eligible for this award. Constant Contact looked at the followingcriteria to select this year’s All Stars:

•       Frequency of campaigns, events, and surveys
•       Open, bounce, and click-through rates
•       Event registration rates
•       Survey completion rates
•       Use of social features

“There is nothing we like more than to see our customers finding success. It’s the reason Constant Contact was founded, and it’s a thrill to see the fantastic results that our All Stars are achieving,” said Gail Goodman, CEO of Constant Contact. “This group is really leading the charge when it comes to delivering relevant, engaging content that drives real business results.”

Do you want the marketing power that wins national awards to be put to work on the sale of your home? Hire St. Augustine Team Realty.  Contact us at or call Sean Hess, Broker, at (904) 386-8327.

New Commercial Lease: 4475 US 1 South, St. Augustine 32086, Plaza South

Monday, April 30th, 2012

by Sean Hess (, Broker and Manager, and Kate Stevens ( Broker Associate, Sales, for St. Augustine Team Realty ( Join us on Facebook.

We just listed a new commercial lease at 4475 US1 South, Unit 203, in St. Augustine’s Plaza South professional complex.  Here’s the skinny:

1000 square foot commercial lease. Current other office use includes legal, real estate, financial, and phlebotomy service professionals and/or offices. Possibility of additional adjoining 1000 sf space, please inquire. Location is in a high traffic area of US 1 South, across from St. Augustine Shores residential community, 32086, with easy access to I-95.

Please call Kate at (904) 377-2276 or email her to find out more at .  You can also watch this short video below:

Will Paying a Higher Commission Get You a Better Price for Your Home?

Wednesday, April 25th, 2012

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

Everybody wins.

Everybody wins.

Will paying a higher commission get you a better price for your home?

The short answer is “yes.”

A higher commission does three things:

The first is that it guarantees the home will get shown. 

For example, you have a 3-bedroom, 2-bath home for sale in the Shores.  There might be 20 other 3-bedroom, 2-bath homes also for sale in the Shores in similar locations with similar square footages.  What a higher commission guarantees is that your home will make the showing cut every single time.

More showings means more buyers, which typically means a faster sale.  The benefit to a faster sale is that a buyer can’t say, “this home has been sitting on the market for a long time and we can offer a lower price.” So the sales price is typically higher.

That being said, no matter how many looks you’re getting, an overpriced home won’t sell.

The second is that it will get and keep the unprofitable real estate agents in the game.

Real estate agents are strange birds.  In every other industry workers routinely change companies to get better pay and benefits.  Real estate is the only industry that I’ve worked in where people routinely stay with a company that offers the lowest pay (Realtors split their commission with their companies…a company that pays 50% or 45% of the total commission is considered low, a 90% split or transaction fee only companies pay the best).

Part of it has to do with a new agent coming into the market and not knowing any better.  After a period of time it’s a situation where staying with a low paying company is staying with “the devil they know” versus moving to another company, “the devil they don’t know.”  Add to that the fact that most new real estate agents won’t survive the business past two years anyway, it becomes a self supporting cycle.

So these agents are extrodinarily fixated on each individual sale, and each individual commission.  Because it takes a bigger overall commission to make these low-paid agents profitable, they will pay more attention to the highest commission.

These agents will still show homes with lower commissions, but because they are in the business to make a profit, they are not legally, honorably or ethically bound to show a commission that will result in a break even or money losing sale.

So in the same way that a higher commission guarantees everyone will look, a lower commission will guarantee at least a few agents will drop out and not see your home.

The third is that it will keep the deal together.

Since the commission is on the higher side anyway, and since Realtors are so fixated on it, they will do pretty much anything to keep the deal together.  Conversely, in a deal where the commission is on the lower end, it is sometimes in an agent’s best interest to let the deal die when the buyer and seller can’t together on an issue, because the agent knows the next deal will almost certainly pay better.

Over the years I’ve discovered another unintended (positive) consequence of a higher commission for the seller.

When a seller knows they are paying a higher commission they are super motivated to do whatever it takes to get the highest price for the home.  So when something breaks, they fix it.  If the feedback comes back that the orange wall in the living room is turning buyers off, the wall gets painted.  In other words, when a seller feels they have skin in the game, they do what they have to do to get the best price.

A commission myth busted: Just because you agree to a higher commission doesn’t mean you’re getting better marketing.

Commission is the engine that drives real estate sales.  It’s the pay scale for real estate agents.  It has nothing to do with whether or not the agent can actually market a home well.

I can’t tell you how many homes I’ve seen on the higher end with grainy, out of focus, or tilted-sideways photos.  Or just a single photo.  And no video, and no virtual tour or other still photo gallery.  And no real internet exposure except what comes automatically with inclusion in the MLS.

I would argue that sometimes it’s the commission and only the commission that keeps a house in the game when the marketing effort is base level.  So research your agent’s listings and their absorption rate before you hire them.

Next week we’ll be exploring the biggest commission myths, so stay tuned.

Hire St. Augustine Team the next time you go to buy or sell.  Email us or call Broker Sean Hess at (904) 386-8327.

Don’t Smoke Inside Your Home When It’s on the Market

Tuesday, April 24th, 2012

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

How important is it not to smoke (inside the house) when the house is on the market?

Here’s how important it is.

If you smoke inside your home while it is on the market you will not sell it.

I’ll repeat that: if you smoke inside your home while it is on the market you will not sell it.

I’ll clarify that even further: you would have a better chance of selling your house with rugs soaked in cat urine than you would if you continue to smoke inside.

To recap: Don’t smoke inside your home if you want to sell it.

Don't smoke inside your house if you want to sell it.

Don't smoke inside your house if you want to sell it.

Hire St. Augustine Team Realty when you need good advice when it comes time to sell. Email us or just call Broker Sean Hess at (904) 386-8327.

How to Break a Real Estate Contract, Florida. Or, How Do I Get My Money Back if I Don’t Want to Buy the House?

Friday, April 20th, 2012

by Sean Hess (, Broker and Manager, and Kate Stevens ( Broker Associate, Sales, for St. Augustine Team Realty ( Join us on Facebook.

First off, understand that we are not lawyers and this is not legal advice, so do not take it as such.

How to break a Florida real estate contract? 

For as long as we’ve been in real estate it seems like we get that question as soon as a buyer’s pen hits paper.  It’s usually phrased as “How do I get my money back if I don’t want to buy the house?”

There are two common contracts in this part of Florida, the FAR/BAR (which is common everywhere in Florida), and the NEFAR (which is common only in Jacksonville).

Each of these contracts provide legitimate ways for a buyer to do his or her due diligence (within a certain number of days), and then bow out with no penalty if a home doesn’t meet the buyer’s expectations.  For example, a bad home inspection.

Each of these contracts also provides the buyer a legitimate out if their financing is denied for some reason.  However, the NEFAR contract may require the buyer to pay some of the seller’s expenses incured as a result of the sales contract, before they can be released.

So what if the home is already through it’s inspection period, etc., and for whatever reason you just decide not to buy, or sell?

If there is no legitimate out, for a buyer or a seller, then our advice has always been, “You need to talk to an attorney.”

The real estate contract is really just a promise between the buyer and seller that the buyer will buy and the seller will sell, subject to certain conditions.  If all of the conditions have been met, then one side may choose not to release the other from the contract.

In most cases the contracts state that the only thing that can be fought over is the binder deposit (also called the “earnest money deposit”).

In some cases the remedy calls for mediation first, and then arbitration before there can be any litigation.  The attorneys I’ve spoken to say this is because mediation and arbitration typically run about $300 an hour (the cost is split between the two parties).  If the binder is only $1000, meditation and arbitration will eat that money away in just a few hours.  So it forces the buyer and seller to agree to disagree and just work something out.

Though in the NEFAR contract a seller who breaks a contract could still be forced to sell…

Watch the video below, and if you have any more questions contact us (if it’s about real estate), or call an attorney (if you need legal advice).

Hire St. Augustine Team Realty the next time you go to buy and sell. If you are already planning to break your real estate contract please hire someone else. Seriously.

You can also contact broker Sean Hess at or call (904) 386-8327.

How Do You Know if You Are Paying Too Much for a House?

Tuesday, April 17th, 2012

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

How do you know if you are paying too much for a home?

If the sign doesn't say it, how do you know if you are paying too much?

How do you know if you are paying too much for a house?

A house’s value is what you are willing to pay for it, and what a seller is willing to sell it for.


Alright, let me explain that a bit further.

If you’ve looked at a bunch of houses and you finally decided on one, then you have a pretty good idea what it’s worth.  So you make an offer based on what you think it’s worth.

Now, if the seller thinks the home is worth more and he counters that offer at a higher price, you may accept that counter and decide to pay more for the house than you think it’s actually worth.

Why would you do that?

Well, if you’ve looked at a bunch of houses you may realize that this is the only one that will truly fit all of your needs.  And yes, you’re probably overpaying a bit.  But the alternative is that you pay a price that’s more in line with the market, but you get a house that’s lesser in your opinion.

The key is to make sure you see as many properties as possible.  This is truly the only way to know if you are paying too much for a house.

As a Realtor, every once in awhile I’ll see a recent sale that was grossly overpaid for.  And most times there is a story…someone once owned the unit and would pay anything to get it back, grandma lives right next door and the person paid whatever it would take.

But other times it’s simply  that the person who bought it never shopped around.  They didn’t ask if there was anything else on the market, and they didn’t ask to see anything else.

Lastly, if you are a seller, don’t push your advantage too much if you find someone is willing to overpay a bit…you know who you are.  This might be the one and only buyer that feels as strongly about the price as you do.  What is more likely to happen is that the buyer will reject your offer and make an offer on the next home in line.

As a seller how do you know your home is overpriced? Follow the method buyers use and go take a look at your competition.

Hire St. Augustine Team Realty, we’ll make sure you get the best price.  Email or call Broker Sean Hess at (904) 386-8327.

Stated Income Alt-A Loans: Is the Liar’s Loan Back?

Monday, April 16th, 2012

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

Is the Liar’s Loan back?

Is the liar's loan back?

Is the liar's loan back?

We’ve been seeing a lot on the internet lately about something called “Stated Income Alt Loans” or “Stated Income Alt-A Loans” being available again.  These loans earned the nickname “Liar’s Loans” during the housing bust.

Some Background

Getting really simplistic here there are 3 types of loans.

A-paper or “prime” loans are loans where everything is documented and verified, and the credit (FICO) score is typically above 680.  These loans have the best rates and the best terms.

Alt-A is a loan where you don’t have documentation or where some crucial component is missing.  The credit report is typically above 620 and may be as high as 800, but the tax returns might not reflect the income needed for a particular loan.  These loans have higher interest rates.  More on the Alt-A’s below.

Subprime is a loan where the FICO is typically below 620.  High rates, tough terms.

Why Alt-A, the Liar’s Loan?

The Alt-A we saw during the housing boom and bust was called “Stated Income / Stated Asset,” or SISA for short.

These loans were typically for small business owners who had plenty of cash flow, or investors who had a lot of rental income—in other words these borrowers could afford the loan—but due to documentation issues could not qualify for an A-paper or prime loan.

You basically went in and stated your income and your assets, but the bank never verified what you stated (though typically they verified your credit score).

The trouble was during the heat of the housing boom these loans went from a small niche product to something like 30% of all loans written.  People were simply going in and stating whatever income was neccessary to get the home they wanted.

I saw this all the time: a buyer would go to a prime lender, not like the loan because it wasn’t big enough for the home they wanted, or couldn’t get a loan because they had way too much debt, and then just go shop for someone who would give them the money.  The upshot was that if you were a bricklayer and wanted to live like a large developer, you just stated developer income and “poof!” you got the loan for a mansion.

I’ve read that when the housing market crashed the Liar’s Loans were only 10% of Freddie and Fannie’s portfolio, but accounted for 46% of the defaults.

What I’ve never been able to figure out…and I had a front row seat to the disaster…is why didn’t they verify the borrower’s gross income on these Stated Income Loans?   Too much reliance on credit scores?

So is the Liar’s Loan back?

I’ve seen ads on the internet for mortgage brokers who are offering the “Stated Income” loan again, except that this time the borrower has to “prove they can repay the loan.”  I haven’t seen the product locally, but I’m sure it’s on its way.

This may actually be a good thing.

It’s still a product that small business owners need.

For example, a small business owner is going to take his or her gross income (cash flow), and then write off the expenses.  The income level on the tax return (which will play a major role in getting a loan) will not reflect that the small business owner could have essentially redirected the cash flow towards income to pay for the house.

If the small business owner were to redirect the flow towards income two things could happen: the small business won’t have as much to invest in itself in terms of advertising, equipment, etc., and the small business owner will have a higher income tax payment because he or she will be taking income for themselves instead of spending it on expenses for the business.

Since a lender usually requires two years worth of tax returns to get a prime loan, the small business owner would have to redirect significant cash flow to income for two years before he or she could qualify.  And for a small business that would be insane, as there is no benefit to doing that until the business is well established and the owner feels comfortable that the business is well capitalized enough.  But by that time his tax return will probably reflect a more comfortable situation, and he could qualify for a prime loan anyway.

The important thing is that these loans are used for who they are intended for.

If the ability to pay is verified, this will be a good thing to have back.

Hire St. Augustine Team Realty when you go to buy or sell.  Email us at or call Broker Sean Hess at (904) 386-8327. 






Can a Credit Report Stop a Closing? Yes it Can!

Wednesday, April 11th, 2012

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

Can a credit report stop a closing? Yes it can!

Do not buy a new car when you're getting a loan on a house.

Unless Bob Barker gives it to you, do not get a new car when applying for a loan on a house.

When you are getting a loan to buy a house:




Seriously, do not make any major purchases or take out any credit cards while you’re in the process of getting a mortgage to buy a home.


Because it changes your debt-to-income ratio.

Here’s the deal.  A bank is giving you a loan based on the information you put on your loan application.  When you go out and get a car loan or a new credit it loan it changes that information.

The bank may think your income is fine based on your current application, but if you take on another $20,000 in debt (a new car, for example) or a credit card ($10,000 in potential, extra, high interest debt), it changes everything.  All of a sudden you might have too much debt to get the loan.

And no loan means no house (and no closing).  Which is really awkward.

So wait until after you close on your home to take on any new debt.

Hire St. Augustine Team when you go to buy or sell.  Email or call Broker Sean Hess at (904) 386-8327.




Should I Use the Listing Agent or My Own Agent to Show Me a Property?

Monday, April 9th, 2012

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

If your agent uses pay phones, dump him.

If your agents brand themselves as "The Pay Phone Team from XYZ Realty," I give you permission to call the listing agent.

Should you ask the listing agent our your own agent to show you a property?

This is easy: ask your own agent to show you the property.


Because your agent knows how to get YOU to closing.  They have a handle on what kind of loan you’re using, what kind of funds you have available, what condition the home has to be in to qualify for the loan, etc.

Here are the two biggest reasons why buyers with an agent end up calling a listing agent:

“I can’t get in touch with my agent.”

Now, if your agent doesn’t have a cell phone then yeah, it’s probably a good time to dump him or her and call the listing agent (see photo).

But there’s a difference between calling your agent twice over a 48 hour period and hearing nothing, and calling your agent twice and hearing nothing in a 48 minute period.  For example, I don’t answer outside calls when I’m with other customers.  But I sometimes can respond to texts or emails.  And if I can’t I return your call I will do so as soon as I get free.

So are your expectations realistic?  Do you personally return calls in 48 minutes or once every 48 hours?

Just keep that in mind.

“My agent never contacts me.”

That’s because you don’t return calls either.  Seriously.

As an agent there’s a fine line between letting a customer know you’re ready and available, and still not bugging you to death.

Look, if you contacted me to buy a property and I called back to say “let’s go,” don’t worry if I don’t call back every hour to say “let’s go.”

I know you’re still interested.  I’m still interested, too.  I know you’ll get in touch when you’re ready.

But please, don’t just contact the listing agent because “I never contacted you.”

Hire St. Augustine Team Realty the next time you buy or sell real estate, or just contact Broker Sean Hess at or (904) 386-8327.  


What is a Short Sale?

Tuesday, April 3rd, 2012

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

What is a short sale?

What is a short sale?I had a customer ask me this the other day and I had to take a step back.  As a broker in the real estate business 24/7 I forgot that sometimes the general public doesn’t know about the things we deal with everyday.

And since we love our customers and the general public, :-) , here’s what a short sale is:

A short sale is where an owner owes more on a home than it is now currently worth.  The owner is now trying to sell it for the current market price, and is asking their bank to release the mortgage for that amount so it can be sold.

In most cases, but not all, a short sale home is in “pre-foreclosure.”  In other words, mortgage payments on the home are not current, and the bank has filed a motion to foreclose (called a “lis pendens”), but it has not foreclosed yet.

Here’s an example:

Owner A bought a home for $300,000.

Owner A has two mortgages on the home, one for $240,000, and second mortgage for $60,000.  The second mortgage is also called a “junior” mortgage.

The current market value of the home is $150,000.

Owner A is trying to sell the home for $150,000.  He has to get both banks to release the mortgages so the sale can take place.

The way we help the Owner A’s of the world to accomplish this is a time consuming process, but also relatively straight forward.  Here’s how we do it:

We market the home and get an offer.  The home is usually priced at the lower end of its range to find an offer quickly.  This is done because the foreclosure clock is ticking on the home, in most cases.

When we have the offer in hand, with a promise of financing and/or proof of funds from the buyer, we take it to a real estate attorney who negotiates directly with the bank (or in this case banks).

At some point, usually many months after the offer, the bank (or banks) will either accept the offer, or come back with terms or a price different from the offer.

If the buyer and seller accepts the bank’s new terms, or the bank didn’t adjust the terms, then the sales proceeds from there like a normal sale.

Alternately, the buyer and/or the seller, can reject the banks terms.  In that case….

If the seller walks away from the bank’s terms then that means their terms are either ridiculous, or even worse than foreclosure.  Sometimes that actually happens.

If the buyer walks away sometimes a second buyer is waiting, but their offer has to be submitted and the process starts all over again.  If there is no second buyer in the wings, then the home is placed back on the market and advertised with a new “bank approved price.”

In some cases the new “bank approved price” is not realistic.  In these cases the house sits without an offer until the price is reduced and a new offer is forthcoming.  It is hoped that the bank will “see” that the “bank approved price” did not work, and the actual market price is lower.

If the bank fails to accept any offer then the house can go into foreclosure, and will generally sell at a price lower than the short sale price, with the added costs of maintenance to the home once they own it.

If a bank tries to foreclose when a short sale offer is being considered, an owner can often get a judge to delay the foreclosure until the short sale terms are worked out.

Hire St. Augustine Team Realty when you go to buy or sell a home.  Email or just call Broker Associate Kate Stevens at (904) 377-2276.