Archive for July, 2012

The buyer walked away from my counter offer! Is that breach of contract?

Tuesday, July 31st, 2012

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

“I’m selling my home.  The buyer made an offer that I countered at a higher price, but then I changed my mind and took the original offer.  But the buyer walked away and made an offer on another house.  Is that breach of contract?”

I saw this question on an online forum the other day and I thought I’d answer it here.  I’m not an attorney so don’t take the answer as legal advice.  The following is just my opinion based on contract and core law continuing ed classes I’ve taken…

There is No Contract

A counter offer becomes a new offer.

A counter offer becomes a new offer.

It doesn’t sound like you have a contract.  So there can’t be breach of contract.

Let me explain.

It is my understanding that to have a contract you first have to have a “meeting of the minds.”  In other words, both sides have to agree to the same offer at the same time.  And for that offer to be enforceable it has to be in writing and signed.

When you countered the buyer’s original offer with a higher price, you effectively killed the buyer’s original offer.  Your counter offer actually became a new offer, which the buyer was free to accept, decline, counter or ignore.

And then when you went back and said you would take the buyer’s original offer, that became another new offer (killing your original counter offer to the buyer, by the way).

And since the buyer was free to go anyway, the buyer went out and found another place to live.

The upshot to this is that once you decide to counter an offer on any single point, and then communicate it, it becomes a new offer and the other side is free to walk.

Hashing It Out

Sometimes there are a lot of points in conflict in a real estate offer: the price, the closing date, personal items, repairs…it goes on and on.  When a bunch of multiple conflicts come up Realtors usually get on the phone and hash them all out at once.

In the example above I might get on the phone and tell the other Realtor, “Okay, we can do X for the price and we’ll go as-is on the repairs, but we need X for the closing date and we need a seller contribution of X for closing costs.”

And then the other Realtor calls her seller, and then calls me back, saying something like, “Okay we’ll do the as-is, they don’t like the closing date but they’ll live with it, and they’ll do the closing costs but we need to raise the price by X to do that.”

And then I get back on the phone with the buyers, see if they can live with those terms, and then I finally call the seller’s agent back and say, “It looks like they’re good with it, I’ll write it up and send it over.”

Then, once both parties sign the written agreement that was originally hashed out over the phone, it’s my understanding that only at that point only do we have an enforceable contract.

And, my guess is that when we go back and forth like this over the phone, each back-and-forth is an offer and counter offer.

Enforceable

I’ve used the word “enforceable” twice now.

As I understand it, contracts in Florida can be done verbally, but verbal contracts can’t be enforced.  So Charlie might agree to sell you a home in a handshake deal, but if Charlie backs out a court won’t enforce it because it’s not in writing.

If a buyer writes you an offer on your home and you verbally counter it, it is my understanding, however, that even though the counter isn’t in writing it still effectively kills the original deal, because it’s a new offer.

The way I try and handle this situation is to, if at all possible, put it in writing anyway.

In other words, if you verbally tell me to counter on a certain point, I will do it verbally with the other agent, but I will also put it in writing as an email or fax back to you and to the other agent just so that the record will reflect that the counter was done in writing, and so that the record also reflects it was put back in writing to you just in case I didn’t hear it correctly.

I hope this sheds some light on the subject and I would love to hear your comments!

Hire St. Augustine Team Realty when you make an offer.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

Florida Realtors Names Ron Barry of St. Augustine Team to State Committees

Monday, July 30th, 2012

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

Ron Barry of St. Augustine Team

Ron Barry of St. Augustine Team

Our very own Ron Barry, St. Augustine Team Realty partner and owner, was recently named to state committee postions for Florida Realtors.

Ron will be joining the Multiple Listing Service Practices Forum and the Local Board Education Directors committees.  These state level committees form policy for Realtors across Florida, in these cases focusing on continuing education for Realtor members, as well as creating the standards for MLS.

Ron said, “I am incredibly honored to represent St. Augustine Team and the St. Augustine Board at the state level.  I truly look forward to working on these
committees.”

Ron serves on several committees at the St. Augustine and St. Johns County Board of Realtors, and is Chair of the Education Committee.  He teaches several classes there, including instruction on how to use the MLS.

Join us in giving Ron a huge hand for being such an incredible Realtor and educator!

Ron can be reached via email at Ron@StAugTeam.com or at (904) 501-2424.  You can also find Ron on Google+ and Facebook.

Can I Ask for Repairs on an AS-IS Contract?

Friday, July 27th, 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+.

We canvassed our customers last week to see what questions they had about real estate.  One of the great questions that came up was, “Can I ask for repairs on an AS-IS contract?”

My partner Kate Stevens and I answered the question in video form below:

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

Just Sold in Heritage Landing: 3160 Trout Creek Circle

Friday, July 27th, 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+.

My partners Ron Barry, Kate Stevens and I just sold this amazing home at 3160 Trout Creek Circle in St. Augustine’s Heritage Section!

Extremely nice & very roomy home set on a preserve lot in the gated ‘Legacy’ section of Heritage Landing. Offering 5 bedrooms & 3 bathrooms as well as plenty of living space, there’s room for today’s Florida lifestyle. Upgraded kitchen with granite counters, island, 42″ cabinets & built in oven with separate range. Many upgrades including tile & crown molding. Heritage Landing has an outrageous amenity center including pool complex with water park/slide, clubhouse, gym, sports fields & more. Short sale.

Hire St. Augustine Team Realty when you need to sell in Heritage Landing.  Just email us at ReQuestion@StAugTeam.com or call Broker Associate Kate Stevens at (904) 377-2276.

3160 Trout Creek Circle 32092

3160 Trout Creek Circle sold by St. Augustine Team

Is it Reasonable or Common to Ask for New Carpet and Paint Before I Buy?

Wednesday, July 25th, 2012

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

Paint, the most overlooked item in a home sale.

Paint, the most overlooked item in a home sale. Image by Kablis.

Is it reasonable or common to ask for new carpet and paint?

No, it’s not common.  I think it probably would be reasonable if the carpet or paint needed updating, but it’s almost never taken care of that way.

Why is that?

Generally, if a buyer doesn’t like the paint or carpet in a home then they address it in the offer price.

For example, “I really love the house but it needs all new paint and carpet, so I will offer a lower price.”

Sometimes a buyer is cash strapped and won’t have the money after closing to put in new paint or carpet.  In these cases it’s usually addressed as a cash credit at closing.

It might be written into the contract to the effect of, “Seller agrees to credit buyer $2300 at closing for paint and carpet.”

In some cases that won’t work though, because some lenders don’t like to see that type of language on a contract.  The reason?  Well if you’re getting a loan for $138,000 the bank doesn’t like to see you getting $2300 of that back as cash in your pocket so to speak.

So in this case the workaround would be for the seller to credit the buyer $2300 in closing costs and pre-paid closing costs, and the buyer just keeps the $2300 they were going to put down at closing towards closing costs and uses the money for paint and carpet instead.

All this aside, I think the biggest reason that buyers don’t ask for the seller to put in new paint and carpet is that they want to choose what paint or carpet is being put in.  They don’t want the seller picking the colors and textures for their new buy.  The buyers want to pick it on their own.

A special note to sellers:

Paint and carpet matter.

A house will sell based on its size and condition, what neighborhood it is in, how big the back yard is, etc.  But it’s the paint and carpet inside that brightens the interior and gives the buyer that final “yes” signal.

I was showing property last week under similar conditions.  Great house, great neighborhood, and the price was right.  But the house just seemed “too dark” for my buyers.  And it was…lots of muted browns and tans.

If the home had been painted in neutral colors or off-whites it certainly would have spoken to these buyers more strongly.

I think the upshot is that while paint and carpet won’t add value to a home, what it will do is net a faster sale because the home will “speak” to more buyers that are on the fence about it, or are trying to decide between two houses.

If you’re thinking about buying a new house and you know you’ve got a week or two of painting ahead plus contracting for flooring before you can even move in, that’s a turn off.

Also, as in the examples at the very top of this article, if a home really does need paint and carpet, the buyer is going to take it off the asking price.  Would you rather have the buyer take $5000 or $10,000 off the price because the home is not looking its best, or get full price?

Lastly, one of the reasons I stated for buyers never asking for paint and carpet is because they want to choose the colors and textures.  But if you do it ahead of time, before they ever see the house, they will have no problem with it.  Funny, isn’t it?

Looking for a home with new carpet and new paint?  Hire St. Augustine Team Realty to find it for you.  Email us at ReQuestion@StAugTeam.com or call broker Sean Hess at (904) 386-8327.

Image by Kablis.  See the Kablis portfolio on Flickr.

 

 

Sold in Island Hammock St. Augustine

Tuesday, July 24th, 2012

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

Our buyer’s agent Monica Nunchuck just sold this fantastic home at 501 Hoot Own Court in St. Augustine’s very toney community of Island Hammock.

501 Hoot Owl Ct, SOLD $415,000. Walk to the ocean and hear the ocean waves from your beautiful home in one of the most desirable neighborhoods on Anastasia Island. One of the best lots in Island Hammock. This home boasts 3 bedrooms plus an office and 2 1/2 baths, a gorgeous master bedroom and bath with 2 walk-in closets. Large chef’s kitchen with granite bar.

Want a great buyer’s agent working for you too?  Call Monica at (904) 669-1075 or email her at Monica@MonicaNunchuck.com .

501 Hoot Owl Court, Sold by Monica Nunchuck of St. Augustine Team Realty

501 Hoot Owl Court, Sold by Monica Nunchuck of St. Augustine Team Realty

Buy a Big House in a Poor Location, or a Small House in a Nice Location?

Thursday, July 19th, 2012

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

Should you buy a big house in a poor location, or a small house in a nice location?

I saw this question posted in an online forum the other day and thought I’d answer it.

Though I personally favor the “small house in a nice location,” it really comes down to your needs.

Bigger House or Better Location?

A great house, but if you have to drive further is it worth it?

Which do you need more, the bigger house or the better location?

Example:

If you find a house that will meet all of your needs, and then some, but it adds 30 minutes to your commute each way to work, only you can decide if the extra hour of driving time each way is worth it.

Or what if you find a house that’s only five minutes to work and just a short distance from where the kids go to school, but maybe it only has a one-car garage, or one less bedroom than you’d like?  Does the superior location trump the fact that the house isn’t everything you hoped for?

It might be helpful just to make a list with the positives on one side and the negatives on the other, and see which house or location comes out better.

And then…don’t laugh…throw the list out and go with your heart.  I’ve been in this business since 2001 and the people who go with their heart are always happier.

The people that go with their hearts can and do buy money pits, but they don’t mind spending the money so much on something they love so dearly.

And in some cases emotion and logic collide, and the house is not only the best house, but the house the buyer loves most.  I call these “grenade houses,” because the only way you are going to get the people to move away is with a hand grenade.  :-)

I’d love to hear your thoughts on this, just email me at the links above or 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.

 

Why Social Media is Important for Real Estate

Monday, July 16th, 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+.

Why is social media important to real estate?

When I was new to real estate 11 years ago, it was impressed on me that to succeed you simply needed to hand out 10 business cards a day, and ask if the person if they or anyone they knew needed to buy or sell real estate.

That’s it.

Social Media is Important for Real Estate. Infographic by Quara.

Used to be F stood for "Farm," T for "sales Trends," P for "Pending," and G+ for "Grands" (as in "How much in grands do you have to spend on a house?"). Not anymore. Infographic by Quara.

Ten  business cards a day, which makes 50 a week, which makes 2600 new contacts a year.  And to make $2 million in sales an agent only needs ten sales @ $200,000 each, which is plenty doable in the St. Augustine, Florida, market.

Well, social media is just another way to hand out an (electronic) business card.

The tricky part in real estate is that a “fast” repeat customer defined is a customer who buys or sells only once every two years. 

So as a real estate agent I constantly have to keep meeting new people.

But at the same time, my past customers will use me again…but only if I remember to keep in touch with them.

Social media accomplishes both goals…it gets in front of ten people a day, and, it keeps me in touch with my past customers at the same time.

The key, like handing out any type of business card, is to just do it.  Every day, every week, every month, for the whole year.  I’m doing it now.

That’s it.

Of those 50 cards an agent should hand out every week, maybe only 2 or 3 become appointments.  But that’s how an agent will make the ten sales.

The Numbers

As an example, jere’s how we use the social media platform of facebook to help us reach our goals:

St. Augustine Team Realty has around 600 facebook followers.  When we make a post about anything, approximately 110 of those 600 people will see it.  The minimum is usually 80, the max is usually 150, though we did have one post that hit 250 of our followers.

So that’s about 550 “business cards” right there…because it’s not always the same 110 people, and we get new people every day.

Another way is through an email we send to our past customer and leads list every wek.  There are about 1300 people on it.  When we sent out a video on our listing at Beachers Lodge recently, 224 people clicked through the email to watch the video.  The next weekend about 50 people watched a short little video asking for listings.  So it goes up and down, but that’s another 50-250 business cards a week.

And then, you know, we actually hand out business cards.  Which reminds me, I need to order some.

What to Post

What to post, and when, and how often, is the real art to this.

The important thing in real estate is that it is always about the customer.  What do they want to know?  What questions are they asking?  What’s in it for them?

So I tailor our posts with those subjects in mind, and we try to keep it an even mix of blog posts, video and images.

And as much as possible I always keep it “unicorns and rainbows,” that is, positive and friendly.  This is about the customer, after all.

When done correctly, the customers come through the door for us.  There is an art to the balance and the mix of our posts…I am good at determining the balance…and I think that’s why social media has been such a solid sales generator for us.

I Have Enough Money to Put Down, But Nobody Will Give Me a Loan!

Thursday, July 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+.

I have enough money and no one will give me a loan!

I have enough money and no one will give me a loan!

I got a call a few weeks back from an irate buyer who just wanted to vent.  This wasn’t a customer of mine, just someone who saw one of my videos on YouTube and thought I might lend a sympathetic ear.

The gist of the complaint was this: “I have X thousands of $$$ to put down and no one will give me a loan.”

I tried to get to the root of the problem.

It appears the person was self-employed…that can be an issue because cash flow a lot of times doesn’t show up on a tax return in a way that lenders like to see.  Lenders want to look at net taxable income, for example, instead of gross income.  But there are ways around that with the right type of loan or documentation.

The person also let slip that they might be credit challenged.  Should this be an issue if a person had enough to put down?  It could be that their credit was a lot worse than they let on.

Credit vs. Income

There are two basic things a lender looks at when a person applies for a loan that could sink them right off the bat, income and credit.

Income represents a person’s ability to pay.  In other words, do you have enough money to make the loan payment every month?

That’s pretty straightforward.

Credit represents a person’s willingness to pay.  In other words, if you have the money to pay off the loan will you pay it off?

Credit measures things like how timely you have been with things like credit card payments, car payments, house payments, etc.  If you’ve been late on payments, regularly, it’s going to make a bank less willing to work with you.  Would you loan money to someone who paid you back late?

Also, if you haven’t paid something…called a “charge off”…where the bill got sent to collections and never got paid, that will hurt.  Chances are even if someone is willing to give you a loan, you have to pay off the charge off first before they will actually lend you the money.  And if you have a lot of charge offs you’re going to need to be patient, rebuild your credit, and try again in a year or two.

Then there are foreclosures, bankruptcies, and the nuclear bomb (and you thought foreclosure was the nuclear bomb): eviction.

In the current climate lenders, to a degree, understand foreclosure and bankruptcy.  If you are elegible for a VA a loan you may only have to wait two years past a bankruptcy or foreclosure to get another loan.

But eviction is where a renter failed to pay and then failed to move.  They failed to move so much that the landlord had file a case in a court of law, pay legal fees, get a judge to order the renter to move, and then have a Sheriff’s deputy physically go to the property and remove the renter.  And then the landlord had to move the renter’s stuff to the curb him-or-herself.

Eviction is bad.  Everybody understands someone who has fallen on hard times.  What people don’t understand is a person who screws somebody else because they fall on hard times.

I secretly think the person who called me got evicted, but I let the person vent and didn’t say anything.

One more thing that could be as potentially bad as eviction: a criminal conviction for writing bad checks.  Enough said on that I think.

If you’ve got enough money to put down on a loan, Hire St. Augustine Team Realty.  Email ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.

 

I’m a First Time Buyer. Will My Student Loans Hurt My Chances for a Home Loan?

Monday, July 9th, 2012

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

I’m a first time buyer.  Will my student loans hurt my chances for a loan?

If by “hurt your chances” you mean “count against your borrowing power,” then yes it will hurt you.

Your student loans will be factored in to your debt-to-income ratio, which will determine how much a bank will lend you.

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

Student loan debt factored into his new home purchase: the real reason Bluto drank. Photo Universal Pictures.

Student loan debt factored into his new home purchase: the real reason Bluto drank. Photo Universal Pictures.