Archive for June, 2012

Do Realtors Tell Buyers About the Negatives on a Home?

Thursday, June 28th, 2012

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

Do Realtors tell buyers about the negatives on a home?

That’s a tougher question than it sounds.

If it’s an obvious negative I always make the customer aware of it.

Don't expect the Realtor to tell you if this view will last. Make sure to ask.

Don't expect the Realtor to tell you if this view will last. Make sure to ask.

For example, if a house is pretty close to the railroad tracks, and I am not sure if the customer knows it, or likes railroad tracks, then I’ll point that fact out.

I, on the other hand, love being close to a railroad, so it’s not a negative to me.  But that’s where Realtors get into trouble.

I just happen to be aware that these things are a negative to some people.  Some Realtors may not be.

And in most cases it’s not because they are less astute, it’s just that they have never encountered a situation where a railroad is a negative to someone.  Or they may have never sold a house near a railroad before.

I typically let customers ask me, or tell me, what are their negatives are, because they usually tell me right off the bat anyway.

“Don’t want to be near this.”

“Don’t want to hear traffic.”

“I want to be in this school system.”

“I don’t want to be in a home that is near X, Y and Z.”

When it’s important, the customers generally let me know that it’s important ahead of time.

And it works the other way, too.  A lot of times I see things in a house that I would consider a negative…a floor plan for example…that my customer falls head over heels in love with.  If I get all negative on something that my customer loves, I’m being a buzz kill and raining on their parade.

We’re all human.  “Negatives” are a very subjective thing, and if you don’t know it’s hard to guess.

The Seller’s Disclosure

A buyer should always ask for, and a seller should always provide a standard Seller’s disclosure that provides facts about the house (does it have a sprinkler system, for example) and discloses any latent defects (such as, does the roof leak, is the pool pump not working, is it sitting on a sinkhole to your knowledge, etc.).

A “latent defect,” by the way, is a defect that you can’t see with the naked eye.  You couldn’t just look at the roof and tell it leaked without someone telling you, unless there were water stains, for example.  In Florida, Sellers are required to disclose latent defects to the buyer.

So in this way you should be able to find out about any structural negatives of a house and/or the land it sits on.  And in this way you are protected.

Communicate With Your Realtor

We had a home for sale a few blocks back from the ocean and a potential buyer asked me, “Will I always have an ocean view?”

The question never occurred to me until the customer asked it.

While the home had a an ocean view, it wasn’t a great one, and though we made note of it in the marketing because it signaled how close the home really was to the beach, we never really promoted the view as such.  We promoted it as a beach house where the ocean view was just kind of a bonus.

So I did a quick mental calculation, figured pretty strongly that there was at least one vacant lot between the house and the water, and gave my opinion.  Which was that there should always be view between “there and there,” because those lots were already built up, but you might lose that view “there” because it looks like there’s a vacant lot.  It could be 50 years, but chances are that lot will be built on.

The same customer asked me if his truck would fit in the garage.  Also something I would never consider.  So we took my Jeep with it’s bike rack on the roof and it wouldn’t fit inside.  Question answered.

But it took the buyer to ask the right question because I had no idea he had a truck (he was driving a car that day).

So ask a lot of questions, and make sure you inform the Realtor what your negatives are.

Hire St. Augustine Team Realty for a group of Realtors that will always give it to you straight.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327. 

 

 

Who Do I Write the Deposit (Escrow / Earnest Money Deposit / Binder Check) To?

Tuesday, June 26th, 2012

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

When I make an offer on a home, who do I write the deposit (escrow deposit / earnest money deposit / binder check) to?

That is a very good question.

Who do I write the deposit, aka binder deposit, escrow deposit, or earnest money deposit to on a home purchase?

You can write your binder to a real esate company, an attorney, or a title agency, but never to an individual.

By the way, the terms “escrow deposit,” “earnest money deposit,” and “binder check” all mean the same thing in Florida real estate.  It’s the money you put down at the time you make an offer on a house (or the money you put down when a seller accepts your offer).  I’m going to use the word “binder” for this article.

You will typically write the binder to a Real Estate Company, a Title Agency, or an Attorney’s Office.

If you are a buyer, your Realtor will typically direct which agency to write it to.

At St. Augustine Team Realty, we have our buyers write it to one of the local title companies.  On the day of closing, our agent goes to the title company and picks up the check and takes it to where the closing takes place.  In some cases the binder has been deposited at the title company where the closing is taking place, so in that case the binder is already there.

Some agents that work for us prefer a different title company than the one I normally use, so they deposit it there instead.  Some companies have their own escrow accounts (we have escrows for rentals, but not for sales), so their agents will deposit it into the company account.  Some agents prefer working with closing attorneys, so it will go there.

In all cases the money is earmarked as part of your deposit for buying the house or property.

Can you lose your deposit? 

That question is really the subect for a whole different article.

I am not an attorney, but my expereince has been that if you adhere to the contract…in other words if you show up and buy the house…you don’t lose the deposit.  If the sale doesn’t go through it really depends on what the contract says (there are legitimate outs), and what the law says.

Under no circumstance should you ever write a binder check to an individual. 

If a real estate agent asks you to write a binder to them personally, it is illegal.  Report them IMMEDIATELY to their broker, and to the Florida Department of Business and Professional Regulation (DBPR). 

What if you accidentally write it to your agent and mail it?

That puts the agent and broker in a weird place.

By law, any monies handed to us have to go into escrow.  So when that happens, and it has happened us on some rare occassions, we have to call an attorney to tell us what to do!

Because even though we know it’s a binder for a property, and the title company knows it’s a binder for a property, it’s not written to either.  And then the law says it has to go into escrow.  That has made for some interesting mornings!

Oh, one last thing. It is the buyer’s decision where the money is placed in escrow.

It is not the seller’s decision and the seller cannot stipulate that you deposit it with their choice of real estate agency, title company or attorney.

The exception to that is when you buy a foreclosed property; the contract you have with the selling bank will typically stipulate that you put your deposit with their attorney or closing agency.

Thinking about writing a binder check for a new home?  Hire St. Augustine Team Realty to get you there.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

 

 

What is a Home Inspection Like?

Friday, June 22nd, 2012

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

What is a home inspection like?

My partner Kate and I break it down for you in this short video below.  One thing we forgot to mention, the wood-destroying organism inspection (aka the “WDO” or “pest inspection”) is typically done by another inspector, though it is often scheduled for the same time.  Ditto any septic or drainfield inspections.

Hire St. Augustine Team Realty when you buy or sell, we’ll make the process smooth and simple.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

What is Debt to Income Ratio? Why Does it Matter When Buying a Home?

Wednesday, June 20th, 2012

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

What is debt to income ratio? Why does it matter when you go to buy a home?

In this case it may be better to have a high ratio.

In this case it may be better to have a high ratio.

Basically it’s a measure of how much money you make vs. how much money you pay in loan payments and housing payments each month.

So you take all the money you make in a month (before taxes), and that’s your income.

Now, take the money you will spend on housing (on your new loan) each month (including principal, interest, property taxes, homeowner’s insurance, homeowner’s association fees, and private mortgage insurance): that’s called the “front.”

Now take all your consumer debt (car payments, student loans, credit cards, boat or motorcycle loans, etc.) that you pay each month and add it to your housing payments from above.  That’s called the “back.”

If you are getting a conventional loan your “front” can’t be more than 33% of your total income.  That’s called the “front ratio.”

If you are getting a conventional loan your “back” can’t be more than 38% of your total income.  That’s called the “back ratio.”

So for a conventional loan you need a “33/38″ debt to income ratio.

For an FHA loan, the ratio is “29/41.”  In other words, you have to have a lower house payment because you have higher consumer debt.

The upshot is that this is how they figure out what loan amount you qualify for (besides credit).

Now, DO NOT go get any other loans when you are in the process of getting a loan on a house.  DO NOT buy a car.  DO NOT buy a motorcycle or boat.  DO NOT take out a new credit card.

Why?  Because it will screw up your ratios.

Let’s say you go out and buy a new motorcycle and it pushes your “back ratio” from 38% to 39% on a conventional loan.  Guess what happens?  You no longer qualify for the loan.  Which means you can no longer buy the house you want.  Which will lead to a lot of very awkward conversations with everyone involved.

You’ll also have to requalify for a new loan at a lower amount for a different home.

So pay attention to your debt to income ratio.  It matters.

Native Plants Project Update

Monday, June 18th, 2012

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

Last year we started a native plants project.  Here’s the most recent news on how it’s going.

To recap, since St. Augustine Team Realty opened in 2009  I’ve been making a donation to tree a planting organization with every sale that myself or my partners Ron and Kate closed.  The donations were going out of state to places like American Forests and the American Chestnut Foundation, which are both 4-star rated, but I really wanted to bring that money back to St. Augustine.

My yard was too barren even for the desert in Star Wars.

A location too barren even for Star Wars.

So I had an idea.

The most sterile soil in St. Augustine is in my own front yard, which I nicknamed “The Valley of Death.”  Even weeds have trouble growing in this sun blasted piece of earth.  It is such a forbidding place that scouts for the original Star Wars movie looked at it as a possible location for Tatooine.  It didn’t make the cut because it was too lifeless.

So I decided to start using the tree planting promo money to start a project in The Valley of Death–planting Florida native and drought resistant plants–to see if they could survive.

I started planting in June 2011, as sales allowed, with a few different varieties to see if they would take hold.  This was partly to keep the money local, but I also thought our customers and potential customers might see the project as a further benefit of using St. Augustine Team Realty.

After attending some native plant classes at the county ag center, I decided to plant Tender Fountain Grass “rubrum,” Society Garlic, Penta (an annual), and seeded Florida native wildflowers like Gallardia (Blanket Flower) and Black Eyed Susan in two separate batches.

It didn’t help that the county is/was experiencing a drought.  Drought is part of the normal cycle here, but this one has been especially long and especially rough.  The county has been short as much as 18 inches of rainfall for the year, and in some of the surrounding areas (like Jacksonville and Gainesville) it’s been even worse, with a deficit of 25 inches.  It is and was a hard time for planting.

The results?

Well, Society Garlic appears to be bomb proof…it’s thriving.  Now that I’ve planted it and know what it looks like I see it all around town in the professional landscaping beds.

Of the three Fountain Grass plantings only two survived, and the survivors looked pretty scraggly.  But they are at least hanging in there and with the recent heavy (and regular) rains the past few weeks they’ve really started to take off.  The important thing is that they survived and established their roots…hopefully they’ll start thriving.

The first wildflower seeding has been spectacular, though only Gallardia has shown up in abundance.  The second seeding, planted in November (30 days after the first seeding) and adjacent to the first, appears to have failed.  This is really odd…same location, conditions, etc., and the only difference was 30 days, which shouldn’t have mattered much with the really mild winter we had.  But we’ll watch it all summer and see what happens.

Recently we’ve been blessed with heavy rains which Tropical Storm Beryl kicked off in May.  I took the opportunity to do some more planting.

The new addition has been a Florida native called Coontie.  It looks a bit like a fern but it grows up and out a bit like a sago palm.  I also added some more Pentas for color, some more Society Garlic, and some Fountain Grass…just because I didn’t think it got a fair shot in the extreme planting conditions of last summer.

Below is a list of what I’ve done so far.  I’ll keep you updated on how it goes!

Property SalePlanting
1200 ArdmoreFountain Grass ‘Rubrum’
1820 WoodstoneFountain Grass ‘Rubrum’
2204 Blackstone WayFountain Grass ‘Rubrum’failed
601 Santa TeresaSociety Garlic
224 Brantley (buyer)Society Garlic
224 Brantley (seller)Society Garlic
414 PrinceSociety Garlic
501 Cabernet (seller)Society Garlic
501 Cabernet (buyer)Wildflower Planting 1
112 Gargonza PlaceWildflower Planting 2failed?
1575 Timber TraceCoontie / Penta
5169 MedorasCoontie / Penta
372 New EnglandFountain Grass ‘Rubrum’
4475 US 1 South 202/203Fountain Grass ‘Rubrum’
6170 A1A SouthSociety Garlic

Hire St. Augustine Team Realty for Realtors that will help your real estate needs flower!  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

Gallardia (Blanket Flower) growing from our first wildflower seeding here in St. Augustine, Florida.

Gallardia from our first wildflower seeding.

 

 

Buying New Construction from a Developer? How a Realtor Can Help.

Friday, June 15th, 2012

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

Are you buying new construction from a developer?

If you are, having a Realtor working with you can probably get you a better deal.

My partner (and fellow Broker) Kate Stevens and I did a short video below explaining how it works.

Hire St. Augustine Team Realty when you buy new construction. Before heading out email ReQuestion@StAugTeam.com or call Broker Associate Kate Stevens at (904) 377-2276.

How WE Picked a Realtor

Tuesday, June 12th, 2012

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

How does a Realtor pick another Realtor?  Well, follow along.

Jennifer Glantz, excellent Realtor in State College, PA

Jennifer Glantz, the excellent Realtor we found in State College, PA.

My sister, living in State College, PA, was looking to buy her first home and she tapped me to help her find a Realtor.

Here’s what I was looking for: I wanted an agent with a manageable customer base.  I didn’t want someone with 26 listings.  Because I knew that as soon as the enthusiasm wore off or my sister went under contract, she would go from #1 to #27 and good luck getting a phone call returned.  In other words, I wanted someone who would appreciate her business.

The first thing I did was jump on Google and put in a bunch of keyword searches in all sorts of combinations for State College.  Things like “realtor state college,” “state college real estate,” “homes for sale state college,” “buyers agent state college”…literally all sorts of stuff, anything I could think of.  I wasn’t necessarily looking for buyers agent, I was just looking to see who or what popped up.

From there I came up with a list of names, plus another name from someone that my sister worked with.

Then we started diving deeper into the internet search, Googling the names, looking for online reviews, social media profiles, etc.  Essentially what I was looking for was the “online resume” of each person.  Some of the information was woefully out of date, and that helped us disqualify at least one agent.  Another agent who moved from company to company a lot was disqualified because we weren’t confident the person would be there through the transaction.

Then it came down to three, and that’s when we started making direct contact.  Using my real name but under an alternate email account, I emailed each of the agents with a question on an active listing just to see how fast they responded.  Then we called two and interviewed them, and then sent the recommendation on to my sister, who concurred with our choice.

One thing we didn’t do was beat up on a Realtor.  When we sent out the “see how fast they respond” emails we did it on a business day during early business hours…not on Saturday night at 7 o’clock.  And every Realtor got back to us within a few hours.

The agent we ended up choosing was a Realtor named Jennifer Glantz.  Jen did an excellent job and was the one my sister’s friend recommended.  The funny thing is, she wasn’t one we came up with on our online search!  But once we started looking for her online she was easy enought to find and vet…so clearly keywording may be overated.  But we would have felt strong going with our second and even third choices as well.

So when you search for your next Realtor, look online and after awhile you’ll narrow down some pretty good choices.  Then, if you know anyone in the market, ask for a recommendation.  Do a check up from the neck up on everyone’s online resumes, then contact the people on your short list to see if they respond to your emails in a time frame that you are comfortable with.  Then call and interview them.

That’s it!

Hire St. Augustine Team Realty for some great Realtors that you will be comfortable with.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327. 

 

 

Do You Get Upset When a Realtor Asks How You Will Pay?

Wednesday, June 6th, 2012
Sean Hessby Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com). Join us on Facebook and Google+.

Do you get upset when a Realtor asks if you can pay today?  Do you get upset when a Realtor asks how you will pay for a house?

When the subject of payment is broached, no matter how badly, honesty is the thumbs up solution every time.
When the subject of payment is broached, no matter how badly, honesty is the thumbs up solution every time.

If you do you’re not alone.

It’s the hardest question in sales to ask (also the most important), but it’s also the most botched.

The first time I heard it I was shopping for cars and…just as I was about to get in the car for a test drive…the salesman sprung the question.  “If this is the right car for you are you ready to make an offer today?”

Whoa!  I don’t even know if I like the car yet!

It really caught me off guard, and it put me on edge.

And it was a fair question, but the salesman’s timing was so awful it killed the sale.  I assure you I did buy a car, but just not from him.

Why Salespeople Ask

Salespeople get paid on commission.  In other words, they don’t have a steady paycheck to rely on at the end of the week.  Yeah, I know nobody does these days, but salespeople only get paid when they make a sale.

So when a person comes on the lot and wants to buy a car, or contacts a Realtor about seeing a house, at some point the Realtor or salesperson needs to know if the person can afford what they want to look at.

There’s an opportunity cost for the salesperson, you see.  If a salespeson takes a driver out in a new car, and it turns out the person can’t afford that car, then the salesperson missed an opportunity to sell a different car to a different person while they were out driving around.  And if the salesperson doesn’t sell a car (or the Realtor doesn’t sell a house), then they don’t eat…and their family doesn’t eat either.

If Your Looking to Buy a Home, Sooner or Later You’re Going to Get Asked

So from that standpoint it’s a very important question to the salesperson.

So they ask it, and as in the case above it can be botched badly.

How I Ask

Real estate is a numbers game.  I know that of the 10 people who contact me on the phone or email me about a property only three will turn out to be what I would classify as “serious” prospects, and of those three prospects, only one will actually buy a home.

So, before I take someone out to look, I generally ask, and I usually phrase it as, “Have you talked to anyone about a mortgage yet?”

It’s a gentle way to broach the subject and it gives my customer the opportunity to think about it before answering.  It also gives them the chance to inform me if they are paying cash.

This question has a real world benefit to the buyer as well.

After all, would you want to spend all day looking at houses, find one you absolutely fall in love with, and then discover only after the fact that you can’t afford it?  When you go out looking again in the price range you can afford, everything you look at will seem like a step down…even if the houses are just as good.

And Yet Sometimes We Have to Go All Hardball

Sometimes I do phrase it in the way that horrible car salesman did so many years ago, “If you see the home you like today are you prepared to make an offer on it?”

But I generally only do this when I already know the person can afford the house.

And here’s something that will blow your mind; I’m not asking it and then expecting them to make an offer today.

What I’m doing is mentally preparing the buyer to make an offer.  As a salesperson in his 12th year, I know when a customer is at the cusp of making an offer.  The thing is, the customer may not know.  So this starts the conversation, and it gets them mentally prepared.  When they see “THE” house it’s like giving themselves permission to make an offer.

And Some People Still Get Upset

I had a lady call me once and basically demanded to see a house over the phone.  “I am the wife of doctor so-and-so in Orlando and everybody knows me and I want to see the house blah blah blah…”

People who try and bluster their way into seeing a house generally get told, “No.”  But I was nice to the lady and eventually worked my way around to asking her about payment, and she was just as evasive about payment as she was insistent about seeing the house.  So my answer was, “No.”

And I wasn’t selling my Seller short either.  Because these people never buy.  But if I was wrong and this person really was serious, they would eventually call enough other Realtors who would ask the same question over and over…and eventually this very insistent wife of doctor s0-and-so would capitulate and simply answer how she was planning to pay for the house if she decided she liked it enough to make an offer.

Another time (on the same house actually) a gentleman from Atlanta emailed me about seeing the house.  I said, “Absolutley,” and as an aside at the end of my email added, “and do you mind if I get the name of your lender, there are some special issues with this home I need to talk to him or her about.”

I was being legit.  This particular house was really more of a 2nd home or vacation home.  And we had two near-miss offers on it already that got blown up by lenders.  For example, people who were going to use the home as a second home came in pre-qualified for a 30-year fixed loan on a primary residence…when the offer hit the lender’s desk it blew up.  So the next time (this was a potential next time), I was prepared to talk to the lender in advance, that way I didn’t waste the customer’s time by showing him a home he couldn’t buy, and didn’t waste my Seller’s time either.

But this guy, he blew up before there even was an offer.  How dare I demand I ask to talk to his lender?

I explained, “Look, we’ve had some issues with this house on the way the deal is structured…I just need to make sure we aren’t wasting your time.”

He still kept blowing up, so I chose not to work with him.  To this day I don’t know if he was a legit buyer or not…I think he was, actually…but he didn’t get to buy this house.  And it was an AWESOME house.

How to Avoid the Question

If you’re really not in the market, say so, right up front.

These days when I go onto a car lot just to look (and who hasn’t looked at a new Dodge Challenger?), as soon as the salesperson approaches I tell him right away “I’m a suspect not a prospect.”  That’s sales speak for “No Sale.”  I get to browse in peace, and the salesguy knows he doesn’t have to waste his time on me.

Tell the Realtor the same thing.  You may just be a nosy neighbor.  You may be here on vacation and just want to know what things cost here.  If you really must see the inside of the home, visit an open house, and tell them you’re a “suspect, not a prospect.”

And everyone stays happy!

Hire St. Augustine Team Realty when you buy or sell a home.  We’re prepared to ask the tough questions.  Just email us at ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

 

 

How Many Good Deals Do You Want to Miss? Making Offers in the Recovered Real Estate Market

Monday, June 4th, 2012

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

How many good deals are you going to miss out on?

Now that the real estate market has recovered here in St. Augustine, buyers are still a bit behind the curve sometimes when it comes to jumping on a good deal.

My partner Kate Stevens and I break down on when it’s time to jump off the fence in this short video below:

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