Real estate services personality

The “one-size-fits-all” service model is becoming an all too familiar experience in every day life. You encounter it when you go to the doctor’s office. A day at the mall is certainly a one-size-fits-all adventure. Now, there is also the pressure towards automated buying and selling systems in the real estate industry. Real estate services that is one-size-fits-all? The idea of a one-size-fits-all real estate transaction is becoming trendy from both online companies and local real estate companies.

How do real estate services treat clients?

The move toward systematizing consumer encounters comes from the corporate goal of profiting from efficiency. Don’t get me wrong, there is nothing wrong from a business making money. After all, making money is the basis of our economy. And the one-size-fits-all system for home buying and selling is a business solution during a healthy housing market where homes sell quickly.

However, the systematization of the service industry, including real estate, is not welcome by all consumers. There is some acknowledgement that a systematized real estate transaction can have unfortunate outcomes when the plan is derailed. Not all real estate transactions are easy, nor do all homes sell quickly. It is a fact that that most home buyers and sellers still want an expert they can count on to help them navigate one of the most expensive and stressful transactions of their life.

Customer service research

Gauging the effects of a systematized service industry on the consumer is a growing interest. One recent study examined customer service reactions when the provider system fails (Diaz, Gomez, Martin-Consuegra, Molina; The Effects of Perceived Satisfaction with Service Recovery Efforts: A Study in a Hotel Setting; Ekonomie a Management; 2017, 20:4 p.203-18). The study suggested that customer issues are inevitable. They conclude that customer service models should have strategies to address and resolve issues to maintain positive customer relationships.

Another study suggested that when it comes to automated service, some service industries are better suited than others (Scherer & Von Wangenheim; Man Versus Machine-How the Service Channel Affects Customers’ Responses to Service Encounters; AMA Winter Educators’ Conference Proceedings; 2016, Vol. 27). The authors suggest that a consumer’s expectation is guided by how a service is provided. Satisfaction levels are increased when personal services are delivered by a human. Furthermore, they found that consumers who prefer technology or automated services tend to be ego-centric. These “self-service” consumers attribute success to their abilities, while shifting blame to externals when there is a failure.

Real estate services for all personalities

The growing body of research may explain why real estate agents have not become extinct in a technological world. Instead, the profession has endured. Moreover, Realtors have embraced technology (for better or worse). As new technologies make the home buying and selling process easier, the industry will undoubtedly adapt. The fad of systematizing the real estate transaction, as well as buyer and seller encounters, is in reality a “one-size-fits-some” solution. In other words, there is a place for the automated and systematic real estate transaction, but it’s not for everyone.

Before you embark on your home buying or selling journey, you should think about your needs. What are your expectations?

As a real estate consumer, you have a duty to explore your options for real estate services. You should interview and compare real estate services. Questions to ask your real estate agent before you buy or sell a home:

Is there one point of contact, or do you have to deal with a “team” of people for different situations.
What do you do if the point of contact is not available?
How do they handle unexpected obstacles or emergencies?
Ask for recent client references whom you can call.

By Dan Krell
Copyright © 2018.

Original is located at https://dankrell.com/blog/2018/10/19/real-estate-services-personality/

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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.

September 27, 2018July 23, 2019

Rent vs Buy puzzle

For some, committing to buying a home is an easy decision. However, some struggle rationalizing homeownership. Adding to the confusion are the attempts to persuade tenants to be home owners by flaunting its benefits and financial savvy. To be sure, there are personal and financial factors that go into deciding Rent vs Buy. However, the reality is that the Rent vs Buy question is a complicated personal puzzle.

Are you weighing the decision of Rent vs Buy? Consider that homeownership does have benefits over renting. Besides having a place to live, the consensus is that homeownership provides stability and belonging to a community. Numerous studies have associated being a home owner with increased well being and better health outcomes. Research by the Harvard University’s Joint Center for Housing Studies concluded that homeownership and growing wealth are associated (Herbert, McCue, and Sanchez-Moyano; Is Homeownership Still an Effective Means of Building Wealth for Low-income and Minority Households? Was it Ever? Joint Center for Housing Studies Harvard University, September 2013).

But frustrated home buyers are returning to their rentals because of inventory shortages, intense competition, and increased home prices can be aggravating.

The latest National Association of Realtors (nar.realtor) press release indicted a 1.5 percent decrease in home sales from the previous year. Although home sales were weak for the previous four months, home prices have increased for the 70^th consecutive month! Nationwide median existing home prices increased 4.6 percent from the previous year to $264,800. The lack of home sale inventory is partly to blame for the decreased home sales, which increases the upward pressure on home prices.

The Greater Capital Association of Realtors (gcaar.com) release of August housing data for Montgomery County is not much different from the national figures. Single-family home sales in the county decreased 0.7 percent from the previous year. Inventory is 8.3 percent below last year’s available homes for sale at the end of August. But median home sale prices jumped to $443,000, which is an increase of 4.2 percent.

Those who are dissuaded from buying a home because of increasing home prices are facing rent increases. The median rent for Montgomery County is $1,647. But according to Healthy Montgomery (healthymontgomery.org), there is upward pressure on rent. This is not just a local phenomenon, it is nationwide. According to the Census Bureau (census.gov), some metropolitan areas and cities have experienced increases well over $300. Rent increases are in part due to inflation and the increasing cost of owning a rental property. However, tenants are mainly experiencing rent increases because of supply and demand. Rental inventory is just as tight as home sale inventory. The Census Bureau reported that the vacancy rate decreased year over year. Additionally, the Census Bureau reported last year that the percentage of renters who moved during 2017 was the lowest recorded since 1988.

The robust economy has prompted the Fed to increase interest rates this year. Another rate hike is expected this week. According to Freddie Mac (freddiemac.com), mortgage rates have increased in anticipation of the Fed’s rate hike. According to Freddie Mac’s Mortgage Market Survey, the average 30-year fixed rate mortgage is 4.65 percent. Although mortgage rates are the highest in several years, rates continue to be historically low.

For many who continue to rent, they’re perspective may be justified by comparing housing costs. The Trulia Rent vs Buy Calculator (trulia.com/rent_vs_buy) is a tool that compares these factors. Paying rent for a long term may make sense if your rent is low. However, buying can be a better long-term decision when comparing similar size properties and housing costs.

Consulting with Realtor can help too. You can find out which is feasible Rent vs Buy. You can see if there are any homes for sale in your affordability range. You can also find out what rentals are available in your rent range. Regardless of your Rent vs Buy decision, your real estate agent can assist you with housing and the process for home buying or renting.

By Dan Krell.
Copyright © 2018.

Original located at https://dankrell.com/blog/2018/09/27/rent-vs-buy-puzzle

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September 20, 2018November 23, 2021

The copious home sale contract

If you’ve recently bought or sold a home in Montgomery County MD, you probably recognized that the home sale contract was quite lengthy. In fact, depending on the situation and additional addenda, a contract can be fifty-plus pages. It seems as if that the home sale contract gets fatter as every year passes. It’s no wonder why I am often asked “Why are home sale contracts long winded?”

Why is our home sale contract so long? Our local home sale contract has a number of required addenda and disclosures. There is a simple reason for this, but let’s look at the foundation and need for the contract.

It’s important to mention that property sale contracts around the country are not the same. Every jurisdiction has their own criteria for a home sale contract. A recent client who relocated from New Jersey shared their home sale contract, which was a fraction of the size of our local contract. Likewise, a colleague asserted the same about the property contracts in Arizona, where he was licensed for a number of years.

Property sale contracts go back into antiquity. Most likely, ancient contracts formed a basis of ancient record keeping. These ancient contracts were also “promises” that were enforced in some manner that was keeping with the time. For example, The History Blog (thehistoryblog.com) tells the account of the Mogao Caves which are located in the Gobi Desert and date back to the fourth century. One of the caves held a cache of financial documents from medieval China, including property sale contracts and records!

According to the legal historian A. W. B. Simpson, modern English contract law has roots in the middle ages (A History of the Common Law of Contract: The Rise of the Action of Assumpsit; Clarendon Press; 1987). The contract was founded in the concept of “assumpsit,” which was the basis for resolving “broken promises.” Assumpsit allowed individuals to bring claims of broken promises to local courts. Although the practice was traced back to the thirteenth century, court hearings were routine in the sixteenth century. This model became the basis for enforcing a private contract.

It wasn’t until 1677 when the English Parliament enacted “An Act for the Prevention of Frauds and Perjuries,” known today as the Statute of Frauds. According to Russell Decker, the Parliament enacted the law that required contracts to be written, because parties obliged by a contract were not allowed to provide testimony in court (The Repeal of the Statute of Frauds in England; American Business Law Journal; 1973; 11:1 p55). The written contract was the “witness” to a promise. However, most of the Statute of Frauds was mostly repealed in England in 1954.

The Statute of Frauds is still alive and well in the US and the basis for the real estate contract in Maryland. Statute of Frauds is a subtitle of the Real Property Act of the Code of Maryland. Section 5-104 Executory Contracts states: “No action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing and signed by the party to be charged or some other person lawfully authorized by him.”

So ok, home sale contracts need to be in writing, but why are our contracts lengthy? The reason is because many of the addenda and disclosures are generated because of statutory requirements to provide specific information in a contract of sale. Besides the expected list of notices and disclosures (such as property condition), there is a compendium of additional required notices and disclosures that is found in Code of Maryland Miscellaneous subtitle of the Real Property Act section 14-117 Contracts for Sale of Property. Additionally, jurisdictions around the state include additional addenda and notices for home sales within the respective county and/or locality. Of course, Montgomery County has added a number of disclosures and notices (such as the Utility Cost and Usage History Form and the Real Property Estimated Tax).

Make sure your agent is knowledgeable about the jurisdiction in which you are buying or selling. As a buyer, you need to make sure you receive all the relevant notices and disclosures. As a seller, you may incur a fine for non-disclosure of certain notices.

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August 29, 2018June 3, 2020

Hire a reputable mover

mover checklist — Moving Checklist (from Federal Motor Carrier Safety Administration fmcsa.dot.gov)

Moving is stressful enough without having to deal with a rogue mover. Before your hire a mover, do your research and know your rights. Your rights may vary depending if your move is intrastate or interstate. An intrastate move is within the same state, while an interstate move is between states. Although intrastate movers are not licensed by the state of Maryland, there are a rules and consumer protection laws governing their business. However, interstate movers must comply with Federal regulations.

Hiring a mover to move within Maryland (intrastate)

The Consumer Protection Division of the Maryland Attorney General published The Consumer’s Edge: Hiring a Mover? Protect Yourself! The publication outlines your rights for a move within the state of Maryland (marylandattorneygeneral.gov). The pamphlet advises that estimates must be written, and must specify if it’s binding or non-binding. Binding estimates are prohibited to change, while non-binding estimates in Maryland are capped and cannot exceed 25 percent of the original estimate. Be wary of low-ball estimates, or a mover who does not ask a lot of questions about your possessions. Don’t sign a blank or incomplete estimate.

If your move is within Maryland, consult the Maryland Movers Conference. The MMC is a non-profit organization that is part of the Maryland Motor Truck Association, and works with “governmental authorities and consumer groups to promote the highest standards for the moving industry in Maryland.” The organization established a Registered Mover Program, where movers abide by a code of ethics and other rules. You can view valuable consumer info and the MMC’s list of member movers at their website (mdmovers.org).

Hiring an interstate mover

mover pamphlet — FMCSA Ready to Move Brochure
(fmcsa.dot.gov)

If your move is interstate, your mover is regulated by the Federal Motor Carrier Safety Administration of the US Department of Transportation. The FMCSA website “Protect Your Move” (www.fmcsa.dot.gov/protect-your-move) provides an abundance of information to help you choose a reputable mover as well as tips and a checklist to help make your move less hectic. The FMCSA maintains a registry of legitimate interstate movers from which you can search and view licensing, insurance, as well as complaints.

During the planning stage of your interstate move, Federal regulation requires your mover to provide you with a copy of the booklet “Your Rights and Responsibilities When You Move” and a copy of FMCSA’s brochure “Ready to Move.” These publications (available on the FMCSA website) offer insight to make an informed decision, as well as understand your consumer rights in case something goes awry.

The FMCSA suggests that estimates that sound too good to be true are often a way for scammers to get your business. What are the red flags for which to be on the lookout? Be wary of:

Estimates given without onsite inspection of your possessions
A demand for cash or a large deposit
Blank or incomplete documents
Refusal to provide a written estimate
Movers who claim to be insured without providing proof
A mover who generically answers the phone “movers” instead of using the company’s name
No address or insurance info on the company’s website
Use of a rental truck instead of a company branded truck.

Moving Rights and Responsibilities — Rights & Responsibilities Booklet (fmcsa.dot.gov)

Movers must deliver your possessions. Call the police if a mover threatens to not deliver for any reason. Interstate movers may be in violation of Federal law if they hold your shipment “hostage.” The FMCSA offers some recourse if you feel victimized by an interstate mover or broker. The Protect Your Move Website has an online tool to make complaints. A complaint may trigger a Federal enforcement investigation against the mover.

By Dan Krell.
Copyright © 2018.

Original published at https://dankrell.com/blog/2018/08/29/hire-reputable-mover/

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August 2, 2018July 23, 2019

Home buyer fatigue

Home Buyer Fatigue or Housing Derangement Syndrome?

Although home prices remain strong, the volume of home sales has dropped off during June. This is causing some in the media to exhibit “housing derangement syndrome” by reporting a pending housing collapse. However, there is a more sensible answer and that may be “home buyer fatigue.” Buyer fatigue is not solely used in real estate, rather it’s a term to describe consumers who do not engage in a market sector for a short duration for various reasons. Home buyer fatigue has occurred multiple times since 2013 after a period of sustained home price increases.

Let’s look at the facts.

The National Association Realtors (nar.realtor) reported in a July 23^rd press release that the total existing home sales for June decreased 0.6 percent, and is down 2.2 percent from the same time last year. Home sales in Montgomery County have also been retreating. The Greater Capital Area Association of Realtors (gcaar.com) reported sales declines for single-family and condos during June (-3.4 percent and -13.9 percent respectively). Year-to-date sales are also below last year’s transactions for the same time period.

NAR chief economist Lawrence Yun observed:

“There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining.”

However, his explanation for the home sales retreat sounds like home buyer fatigue:

“The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market. What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales.”

Although national home prices are increasing, the gains remain steady. The latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported on July 31^st (spice-indices.com) indicated a 6.4 percent annual gain during May, which is the same as the previous month. However, the 20 City Index showed a slight decline to 6.5 percent (from 6.7 percent). Seattle, Las Vegas and San Francisco continue to lead the nation with double digit gains (13.6, 12.6 and 10.9 percent respectively). The Washington DC region, however, showed a modest annual home price growth of 3.06 percent.

As home sales decline, many contribute home buyer fatigue to increasing home prices and mortgage interest rates. A few have already begun to ring the warning bells of bubble popping home price deflation citing Seattle and San Francisco’s housing woes.

However, those exhibiting housing derangement syndrome need to take a deep breath and look at the facts. Most of the country’s home values are increasing at a sustainable rate. Additionally, contrary to reports of inventory surpluses, home sale inventory continues to be low in most of the country (Montgomery County single-family and condo listings are below last year’s level by -9.3 and -12.8 percent respectively).

It’s also important to look deeper into what may be driving those overheated housing markets to experience the sharp price spikes and recent sale declines. For example, Seattle’s housing juggernaut may be tied to Amazon’s nine years of a seemingly hiring frenzy. According to reporting by Matt Day for The Seattle Times (Amazon’s employee count declines for first time since 2009; seattletimes.com; April 26, 2018), Amazon begun corporate layoffs, as well as a possible hiring freeze, earlier this year.

By Dan Krell.
Copyright © 2018.

Original published at https://dankrell.com/blog/2018/08/02/home-buyer-fatigue/

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