home buyer Archives - Page 18 of 41 - Real Estate News and Commentary

April 29, 2016September 23, 2019

When transfer tax becomes controversial

The legislative process encourages discourse for proposed legislation. The result is a bill that is passed or defeated. Regardless, proposed housing market and real estate legislation is not typically exciting; and in fact the minutia of the bill can be downright boring and/or confusing. However, there are occasions when proposed legislation has the potential to affect home owners and buyers such that it can create a brouhaha.

First, let’s review a few bills passed by the Maryland General Assembly: The first has to do with agency. Currently, “licensees” are required to provide the Maryland Real Estate Commission’s Understanding Whom Real Estate Agents Represent at the time of first face to face meeting and is a notice to the consumer. The disclosure explains seller’s agents, agents who represent the buyer, and dual agents. For many home buyers, the first face to face meeting of an agent is at an open house, and are supposed to be given the disclosure by the agent sitting at the open house regardless if the buyer has an agent or not. The new law is to simplify the disclosure, eliminating redundant notices and allowing agents at open houses to post who they represent instead of the asking every visitor to sign the disclosure.

Another change is how agents recommend service providers. The current requirement is for agents to check the licensing status of all recommended service providers, ensuring that the provider is currently licensed in Maryland. The new law will only require agents to annually check home improvement licenses of recommended contractors.

The General Assembly also passed legislation that will require home sellers throughout the state to disclose deferred water and sewer charges. Additionally, legislation was passed that adds requirements to the state brokerage licensing exemption for attorneys.

Still with me? Good. Local residents should be aware of the Montgomery County Council’s attempt to fast track a bill to increase the county’s recordation tax on real estate transactions. On April 14^th, Expedited Bill 15-16, Recordation Tax – Rates – Allocations – Amendments was introduced by Council President Nancy Floreen. Recordation tax is collected when a home is sold, and when a home owner refinances a mortgage. If passed, it will become effective July 1^st 2016 (which is about 2 months from now!).

The Greater Capital Area Association of Realtors® issued an April 18^th press release opposing the bill, stating that it unfairly targets home buyers and home owners by increasing a tax that is already among the highest in the state.

In an April 12^th memorandum to Councilmembers (page 7 of pdf) Councilmember Floreen stated: “While nobody likes the idea of increasing taxes of any kind, our needs are great, and this tax is less likely to affect those Montgomery County residents who are struggling most. On the up side, it will generate millions of dollars to support our desperate need for new schools and educational facility improvements. What’s more, a portion of the recordation tax is earmarked for affordable housing.”

Although aspirations for certain projects may be well intentioned, Councilmember Floreen should consider that further burdening home buyers in an already high cost area for real estate could impact homeownership and make “affordable housing” less affordable. Furthermore, the average Montgomery County home owner refinancing their mortgage may not be struggling, but they are trying to get by the best they can in a high cost of living area.

By Dan Krell
Copyright © 2016

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

April 14, 2016November 23, 2021

Subtext in buying or selling a home

Profile of home buyers and sellers from nar.realtor

It’s all in the subtext. “Buyers are liars” is a saying that many real estate agents seem to verbalize when things don’t work out with a home buyer. It’s an insulting false aphorism that is proclaimed as an attempt to shift all responsibility by saying that the buyer was deceptive and did not cooperate. And when things fall apart with home sellers, the same agents won’t take responsibility and start hurling insults such as wacko, ignorant, or greedy. Of course, if the relationship becomes contentious, then you can imagine that the name calling becomes increasingly harsh.

And it goes both ways, of course. Real estate agents, as a profession, have a bad rap; and conditioned consumers bring those expectations into their relationships with their agents. Many buyers and sellers have a low opinion of real estate agents while often having high expectations for the outcome of their experience.

You may begin to see that, unless the settlement is flawless, these mindset combinations don’t bode well for the agent-consumer relationship. The home sale transaction is full of pitfalls. And if there is an underlying distrust between you and your agent, then the outcome can become an ordeal for you both.

Writing for RealtorMag, Jason Forrest laid out why such buyer (and seller) repudiation by agents is wrong (Agents: Stop Saying Buyers Are Liars: realtormag.realtor.org; September 2015). He pointed out that agents often blame the buyer (or seller) when the relationship and transaction is unsuccessful. But in reality, Forrest stated, the agent is the one who fails by not taking the time to understand and coach their client.

Research of real estate outcomes suggest that your experience during a real estate transaction may depend on both the agent’s and your ability to communicate. Clear communication between you and your agent should leave no doubt about your intentions, as well as your agent’s ability to convey and interpret motivations from your transaction counterpart.

The evolution of the real estate industry has not really improved the quality of communication between agent and consumer. Agents focusing on high volume sales along with the public’s reliance of the internet for home information reduce face-to-face interactions; which may allow for the creation of false expectations while decreasing overall consumer satisfaction.

In his book Re-examining The Art of Sales: Broadway Style (AuthorHouse, 2006), real estate broker Nilton De Macedo asserted that the key to communication and understanding lies in the subtext of the dialogue. Having stated that subtext is “what you really mean under what you say,” he provided an example: saying “I’m going to bed” may sometimes imply “I don’t want to talk to you now.”

De Macedo explains that as a sales professional, it is essential to discover the subtext of the conversation. The real estate agent should not only attempt to decipher the client’s subtext to reveal their “unspoken intentions” – but they should also work to discover the subtext of their own communication. He proclaims that this approach deeply influences how we relate to each other and will greatly improve communication.

Although De Macedo places the responsibility of communication square on the shoulders of the real estate agent, it really goes both ways. Your agent may also be communicating something else through subtext, implied by what or how it is said. You can improve your outcome by becoming aware of the subtext in the communication between you and your agent.

Dan Krell
Copyright © 2016

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April 8, 2016December 13, 2022

Real estate confessions

“How Working with a Real Estate Agent Benefits You” from rsimedia.com

When asked about their real estate agent, consumers logically list characteristics such as savvy, sharp, and knowledgeable. Some may even describe their agent as efficient, or someone who made the process easy for them. These descriptions usually attest to the agent’s business acumen and typically focus on the agent’s ability to market a home and/or negotiate a contract. However, one trait that is often overlooked is “authenticity.”

And it’s not just in the real estate industry. Authenticity just isn’t the trait that most seem to care about in a sales person. The reason may seem obvious; for most consumers and salespeople, it’s about money. So what role, you may be asking, does authenticity have in real estate sales?

In a recent article, Don Kottick wrote about the need for authentic leaders in the real estate industry (8 examples of authentic leadership in real estate; inman.com; March 17, 2015). Kottick talked about authentic leaders as creating their “legitimacy” through honest relationships. These are individuals who “remain true to themselves;” they are positive, truthful, empathetic, “introspective and aware of their own strengths and weaknesses.” Kottick reminds us that authenticity doesn’t come from what’s learned at business school, but what is gained through life’s journey.

Keeping that in mind, we agents are in an advantaged position. As real estate transactions tend to be associated with life events, we often experience these events as well; sharing in the promise of a new family, the joy of a new baby, the sadness of the loss of a loved one, and even the ambivalence of a divorce. And we spend a good amount of time with our clients, regardless if it is in person and/or on the phone. We become acquainted with who our clients are; we learn their vulnerabilities, and sometimes (whether they know it or not) we also become aware of their “dirty laundry.” Being in such a position, we become trusted advisers if not treated as part of the family (at least for the duration of the transaction).

The nature of the real estate transaction, and our involvement with our clients, places us (real estate agents) in a fiduciary role. Regardless of our feelings (positive or negative) toward our clients, or our personal and financial situation – we are to look out for our clients’ best interests. Unfortunately, many in the industry have forgotten that.

Similar issues about agent competency and ethics were discussed last year in The National Association of Realtors® DANGER report. And although concerns about agent competency and ethics have been discussed for years, the media glommed onto such quotes as “the real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents…” as if to say “we told you so.” But the truth is that competency does not guarantee ethical behavior, and vice versa. Additionally, competency and ethics do not assure a positive buying and selling experience for the consumer. The answers, like the issues, are complex; and advancement in the subject is debatable.

Don Kottick’s point, that authenticity is a foundation upon which agent competency and ethics is built upon, is overlooked by many industry leaders, brokers, office managers and agents. Considering authenticity, competence, and ethics together may not only facilitate an environment that creates a meaningful transaction for the agent and consumer; it may also be a response to treating consumers fairly, and putting clients’ best interests first.

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March 31, 2016September 17, 2019

Buyers and sellers – Mentally prepare to be in real estate market

Realtors® are guilty of romanticizing, if not glorifying, the idea of buying and selling a home. And it’s probably true for many, that initial thoughts of buying or selling a home (and everything that goes along with it) are sanguine. And yet, shortly after they are faced with details of the move, many are hit with the reality that the process is full of potential pitfalls and setbacks. Buying and selling a home can be a confusing endeavor, that can become overwhelming if you’re not mentally prepared.

Getting through the process of buying and selling requires organization and planning to seek the best outcome. As a home buyer you organize before viewing homes by having a mortgage approval in hand, as well as determining a price range and area in which you are looking. As a home seller you have a plan in place before the home is on the market; which includes a pricing and marketing plan, as well as having your home in its best possible condition so as to give the best impression.

Even though the process of buying or selling a home is straightforward (after all it’s not rocket science), being prepared for various stages can help you through potential issues. If you’re a first time buyer or seller, having a checklist helps you be aware of where you are in the process. Even if you’ve bought or sold a home before, you should be aware of changes to the process that have been made in the last eight years.

You should also be aware that every transaction is different; each transaction has a different set of personalities, conditions, and issues. You no doubt have heard your relatives’, friends’ or coworkers’ account of their buying or selling experience. But chances are that they may not remember the snags they endured. Reactions among buyers and sellers, as well as their real estate agents, vary depending on their personalities and life circumstances. So, your experience may be similar to others’; however, be prepared that it could also be very different.

Additionally, many never realize how many individuals are involved in getting their transaction to settlement. Besides the buyer, seller and real estate agents, there is a lender, a title company, and a home inspector, (among others); each increasing the number by a factor of their employees, and increasing the opportunity for Murphy’s Law to interrupt your smooth settlement.

Although the process of buying or selling a home appears to be task oriented, there is also an emotional component. Did you know that having a major change in living conditions and taking on a mortgage are rated in the Holmes and Rahe Stress Inventory? This acknowledges that buying and selling a home is an emotional investment that could impact your emotional wellbeing (positively and negatively). Chances are that at some point you may feel the added pressure of your sale/purchase.

Mental preparation for your home purchase or sale may include moderating expectations and anticipating how you may cope with various circumstances that may arise. Mental preparation can help maintain a feeling of control over your transaction. It can be helpful to work with an agent who can address your worries and fears about the transaction through listening and empathy. Most of all, hire an experienced real estate agent, who not only has the ability to problem solve and work through problems, but will help you organize and prepare.

by Dan Krell
Copyright © 2016

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March 10, 2016December 13, 2022

Housing and presidential election

Another presidential election, and there will most likely be very little discussion and debate about housing policy. During the 2012 presidential election, housing seemed to take a back seat as the real estate market was still emerging from a foreclosure crisis and recession just four years earlier. Fast forward to today and homeownership is hovering near a 30-year low. Homeownership is out of reach to many due to tightened mortgage qualifying and increasing home prices; while Americans’ incomes are being squeezed by rising rents.

Enter Ron Terwilliger. A successful real estate developer and philanthropist, Terwilliger launched the J. Ronald Terwilliger Foundation for Housing America’s Families in 2014. The organization’s mission is to “…recalibrate federal housing policy to more effectively address our nation’s critical affordable housing challenges and to meet the housing needs of future generations.”

Giving the keynote address at The Affordable Housing Developers Summit in Chicago, Terwilliger described an evolving “silent housing crisis.” He proclaimed that “A legacy of the great recession, the rental affordability crisis is often overlooked by policymakers, ignored by the media, and underestimated, at best, by the general public.” And although affordable housing is a bi-partisan issue, he stated that candidates don’t talk about the issue (housingfinance.com).

So it should come as no surprise that the J. Ronald Terwilliger Foundation for Housing America’s Families and the Bipartisan Policy Center hosted a housing summit this past October. Speaking at the summit were a number of presidential candidates, policy makers, current and former Senators, a former HUD Secretary, local officials, and industry leaders and experts. Unfortunately, the presidential candidates that are still in the race, did not participate. The summit was held in New Hampshire, where housing costs for 36% of residents is more than 30% of their gross income; and median rents have increased 50% since 2000 (housingwire.com).

The housing summit seemed to inspire realtor.com chief economist Jonathan Smoke, who shortly afterward penned a statement declaring his candidacy for president as leader of the “Housing Party” (As President, I’ll Make American Housing Great Again—Really; realtor.com; October 21, 2015). Smoke believes that housing should be first on the national agenda stating, “The market won’t solve all of our housing problems on its own. And our government seems incapable of working together to find solutions that can help…” Laying out a detailed platform, Smoke proclaims that a vote for him would “…build our way to a stronger economy and more affordable housing for the middle class—a better America for all of us.” He said that he would work toward getting a home for every family.

But it may be that housing policy is a bit more complicated than just proclaiming “homes for everyone.” In a frank analysis of housing policy, Daniel Hertz laid out what seems to be diametrically opposed positions: policy should keep housing affordable so as not to price people out of the market; and policy should protect house values, because homes are an investment and wealth building vehicle (American Housing Policy’s Two Basic Ideas Pull Cities in Opposite Directions; theatlantic.com; October 14, 2015).

Hertz believes that these seemingly opposite policy positions can be “reconciled” by offering a wide variety of housing types for a broad range of incomes. Additionally, he discussed how local privately developed affordable housing programs (such as Montgomery County’s Workforce Housing and MPDU programs) is one avenue to a comprehensive housing policy.

By Dan Krell
Copyright © 2016

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