Realtor Archives - Page 10 of 12 - Real Estate News and Commentary

August 26, 2010October 5, 2019

How would you choose your real estate agent?

by Dan Krell © 2010

Buying and selling a home can be one of the most expensive and complex transactions you may undertake in your lifetime. So if you plan to hire a real estate agent to assist you, conventional wisdom dictates that you should interview several. However The National Association of Realtors 2009 Profile of Home Buyers and Sellers (NAR 2009) tells a different story. The profile reveals that the majority of home buyers and sellers surveyed (66% of buyers and 64% of sellers) indicated they hired the agent they first encountered.

Although the logic may seem counter intuitive, the means by which home buyers and sellers encounter their agents may provide an explanation. Both home buyers and sellers reported that the top means of finding their real estate agent was through a referral from a friend or family member. Of those surveyed, 44% of home buyers and 40% of home sellers indicated they relied on someone else’s judgment for their choice of real estate agent; first time home buyers were most reliant on their friends’ and family members’ referrals.

Repeat business was the second most frequent way indicated in choosing a real estate agent; meaning that the home buyer and/or seller hired the agent that assisted them in the past. Oh, the internet was also indicated as a way of finding a real estate agent; however it was not one of the top means. However, more home buyers (10%) indicated they found their agent on the internet compared to sellers (3%).

Regardless of how you find your real estate agent, it is probably a good idea to find out more about them before they list or sell your home. A conversation about their experience, knowledge, and expertise is probably a good way to start. Additionally, knowledge about the local market is extremely important these days as market trends have become hyper-local. Two recent conversations with home owners revealed the importance of understanding hyper-local real estate trends; both discussed how the agent they wanted to hire did not have an understanding of the hyper-local impact which resulted in under-pricing or over-pricing their homes.

Because of the increase in number of transactions requiring specialized knowledge (such as short sales, 1031 exchanges, etc), it is probably a good idea to find out if the agent has the experience (or certification) if your purchase or sale falls in this category.

Although choosing an agent should transcend the “big name” myth, some people still get caught up in the name game. It has been many years since residential real estate has been proprietary, brokers now cooperate with each other to sell homes. Home buyers typically search for homes by characteristics, rather than searching for homes sold by individual brokers. Ultimately, your home purchase or sale falls upon the experience and skill of the agent you hire.

If you are considering hiring a real estate team to handle your sale, make sure there is one agent you can call as your point of contact. Questioning the point of contact about their experience and knowledge is also a good idea.

Asking friends and family for referrals as well as calling the agent you previously worked with is a good way to find a real estate agent. However, vetting out potential issues can be achieved by asking the right questions before you hire them.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of August 23, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.

January 13, 2010October 5, 2019

Shortcomings of the broker price opinion

A broker price opinion (also known as a BPO) is not an appraisal, nor is it a substitute for an appraisal. The BPO is the lender’s way of getting a “snap shot” of the subject market area. A BPO (not unlike a CMA) is an analysis to assist a buyer or seller in deciding a home’s offering, or listing price. BPOs have been used for many years, and for various reasons that range from quality control to making decisions on mortgage portfolios and loss mitigation.

A BPO is not a perfect tool and is limited to the information provided as well as the people involved in the process. The shortcomings that are inherent in the BPO process begin with the lender that orders the BPO and is extended to the BPO company that “farms” the BPO out to real estate agents, as well as to the agent that completes them.

The problem first begins with the lender who is usually not in the same market area as the subject property. Seeking a way to get a snapshot of a home’s “value,” the lender will pay for a broker price opinion. The lender’s employees who order and use the BPO is sometimes mistaken to think that they are getting a report that will say what the home will sell for, when actually the BPO is just an offering of possible listing prices based on area comparables.

The shortcomings of the BPO are extended to the BPO company (third party) that hires the real estate agents to provide the reports. BPO reports are typically completed over the internet these days using electronic forms that can limit the amount of information that is provided. A typical BPO report requires a limited specific number of comps (listing and sold comps), regardless of the availability of neighborhood comps; the report may have to exclude additional available comps while sometimes use comps that are hardly comparable to the subject property. The online forms used to complete BPOs also limit the amount of information that is input; which can limit the actual market data and conditions that is sought from the lender.

Once submitted, the BPO typically undergoes a review for “quality.” BPOs are usually reviewed for procedural standards as well as comp quality. Interestingly, quality reviews are usually conducted by reviewers not familiar with the subject market area; it is quite possible that some quality reviews are not only conducted in another state, but in another country. Ironically, quality and substance is sometimes sacrificed for quantity or a “specific result.” (Past agent complaints, posted on agent bulletin boards, indicate that they realize some of their reports are altered after submission by someone other than themselves).

The ultimate shortcoming of the BPO stems from the real estate agents who complete the BPO. In recent years, with the explosion of short sales and foreclosures, there has been an increase in the need for more agents to complete BPOs. Some agents seek out BPOs because they are under the impression that they will get an REO listing, other agents seek out BPOs because they solely rely on the BPO business as income, while others just take on BPOs to supplement their brokerage income.

Time and care is necessary to complete a quality BPOs. Many real estate agents performing BPOs have little or no training in conducting BPOs; many agents do not have the expertise to provide a CMA to a home owner let alone completing a BPO. What may be more alarming is that some agents boast about the number of BPOs they complete per week (I recall one agent boasting that they complete over 100 per week!).

“Turn’em and burn’em” should not be the motto of anyone in this process. Because quality BPOs are useful and needed, the future of BPOs may rely on local licensing or registration which can ensure competence of those performing BPOs as well as maintaining standards of those who use them.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell

December 25, 2009October 5, 2019

Evelyn Harper, our favorite TV real estate agent

Television doesn’t often portray a realistic view of life, especially in a sitcom. That’s probably why reality TV has a huge following. And what’s more interesting than real estate?

A couple of well produced reality shows that presents the “realistic” drama of buying and selling homes include Bravo’s “Million Dollar Listing” and HGTV’s “Real Estate Intervention.” These two shows depict the daily ins and outs of real estate in two markets on opposite coasts of the country, as well as illustrating how hard a real estate agent works for their clients. For example, while demonstrating the slowdown in the market (Million Dollar Listing’s) Chad endlessly waits for prospects to show up to his open house.

But no matter how hard Realtors work at maintaining a positive image, leave it to a sitcom to stereotype the personification of the real estate agent. Credibly played by Holland Taylor on CBS’s “Two and a Half Men,”, the fictional character Evelyn Harper appears to be the quintessential real estate agent.

Ok, Evelyn is portrayed as selfish, opportunistic, unloving, and sometimes pushing the ethical envelope. But personality traits aside; she is always wheeling and dealing, always thinking, and appears to be a very hard working real estate agent. For example, in the 2007 episode “Media Room Slash Dungeon,” Evelyn attends a charity event with her son Charlie. When asked by Charlie:“…If you don’t like any of these people, why do you come to these things?” Evelyn quips: “ Do you read the paper? Do you know what the Los Angeles real estate market is like now?…No one is selling unless they have to…that’s why I have to be working these rooms to learn who is getting divorced, who’s dying, who can’t make bail, who’s crappy sitcom got cancelled…”

If the fictional Evelyn were a real person she might not be your best friend, but you could possibly say that she does know real estate, about networking and the art of making the deal. But the real reason that Evelyn Harper is our favorite TV real estate agent is that she allows us to laugh at ourselves by seeing the humor in typecasting a real estate agent; although exaggerated personality traits (and personality disorders) are not pleasant in real life- it makes great TV comedy!

This article is about fictional TV characters and not to be confused with any real person or real estate agent with similar or same names. This article is not intended to provide nor should it be relied upon for legal and financial advice.

November 28, 2009June 27, 2019

Can you know your real estate agent by the car they drive?

Want to know a little about your agent, check out their car- right? When the market was hot earlier this decade, it seemed as if many real estate agents were driving some sort of Mercedes, BMW, and Lexus. So, at that time it was interesting to see what type of Mercedes or BMW being driven. Many of my colleagues drove the “S” class sedan, while some drove the less expensive “C” class. Of course, most of the cars were black, but I remember a few white and silver ones too. Of course, there were also agents who drove Hummers, land rovers and an assortment of SUVs. And of course, many drove and still drive their Camry’s.

According to Kathleen McCleary (The Car You Drive: USA Weekend Edition; 10/20/2002), a car says a lot about person’s personality (www.usaweekend.com)

The problem with ascribing a personality trait to a real estate agent because of the car they drive is that just like the clothes they wear and smile they put on when they leave their home, many agents want their car to personify a successful personality they may want to express to the public (sometimes making up for what they lack). Whether or not your agent is successful, if they drive a luxury car they want to let you know that they are successful (or at least they want to be). Of course, whether or not they can afford a luxury car, many agents opt to drive more practical cars- probably because they are sensible about money.

What does a car say about your agent? Success? Power? Assertiveness? Maybe and maybe not. Your agent’s car may tell you more about their station in life or personal aspirations than their ability and inter-personal skills. The agent’s car may scream practical, yet they’re a negotiating bull dog; or they may drive the latest Mercedes, yet not be a very effective agent. Judging a book by its cover may not yield you an accurate picture of your agent; you may not get a true picture of your agent until you see them in action!

So, what does your agent drive?

August 12, 2009October 5, 2019

Making the right decisions starts with choosing your agent

By Dan Krell &copy 2009
www.DanKrell.com

For a smooth transaction, choose the right providers

If you are a first time home buyer, you may feel a bit confused and certainly overwhelmed by the huge amount of information that suddenly seems to cascade over you. Let’s face it, the real estate industry has changed significantly such that if even if you’re an experienced home buyer you may feel a bit confused and overwhelmed too. Choosing your service providers before you begin searching for a home can assist you through the different phases of the process as well as build a foundation for a smooth transaction.

Taking the time to interview and choose a Realtor, lender, home inspector and title agent before you begin searching for a home will create a team of professionals to guide you through the major aspects of home buying. It may sound a bit much, but when you are embarking on (probably) the most expensive purchase of your life, it’s important to know you are well represented.

Although the Realtor is generally known to assist in home searching and negotiating sales contracts, the agent you choose should be by your side throughout the transaction to help when the road gets bumpy. Besides asking how long the agent has been licensed, you should also ask if the agent is full-time so they may be accessible throughout the day. Additionally, calling an agent’s list of references of recent clients can shed light on the agent’s strengths and weaknesses.

Consulting with a lender prior to making an offer on a home is important; narrowing your choices by interviewing loan officers can help you learn more about their attention to detail as well as focus on customer service. The loan officer will help you through the mortgage process and should be available to assist you from application to closing. Comparing mortgage costs is more than comparing interest rates, asking for and comparing lender fees and points can help you differentiate total lender costs.

After you enter into a contract, you will most likely want to conduct a home inspection to determine the condition of the home. Many home buyers don’t consider choosing a home inspector and rely on the real estate agent to arrange the inspection; however, experience and scope of inspections can vary significantly! Choosing the right home inspector can help you not only accurately determine a home’s condition, but also put you understand age related problems of a home (such as settling) and prepare you for future maintenance. Make sure that the inspector you choose is available by phone and willing to return to the home if you have questions about the inspection.

Like the home inspection, choice of a title agent is often left to the real estate agent. However, choosing a title attorney early in the process may provide you a strong and useful advisor- a title attorney. The title attorney will not only help you understand the closing process, some title attorneys will make themselves available to answer legal questions that may arise from your home purchase.

Taking the time to interview and choose the providers whom you feel comfortable with is important to help guide you through the ups and downs of the home buying process. For more information on the home buying process, please visit the Department of Housing and Urban Development (www.hud.gov/buying).

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of August 3, 2009. Copyright © 2009 Dan Krell.