Archive for the ‘Agent-Off-the-Record’ Category
July 17, 2008
A lot of our customers ask what’s different about buying new construction.
First of all, you’re buying from the person who built it, not the person who called it home. Often, the property is just one of many they are trying to sell.
We asked our agents who specialize in new construction for the most important things to consider when buying a new house or condo.
1. Hire an agent
One that specializes in new construction and isn’t affiliated with the builder.
2. Be creative during negotiations
Builders don’t like to drop their prices. Instead, ask them to cover closing costs or upgrade the kitchen for free.
3. Get it in writing
Don’t sign until everything has been negotiated, agreed upon and written into the contract.
4. Be wary of upgrades
They’re where builders make the most profit. Don’t take upgrades you don’t want or can’t afford.
5. Research the builder
Visit other developments and talk to home-owners. Google the developer for reviews, testimonials and news.
6. Ask for a guarantee
You’re often buying a home that is not completed. What guarantees do you have the home will be ready on time?
7. Get the home inspected
New homes have problems too. Hire an inspector to make sure everytthing is safe and up to code.
8. Bumper-to-bumper coverage
New homes should come with a warranty from the builder. Know what is and isn’t covered and for how long.
9. Look to the future
Check with the city to see what is planned for the surrounding area. If you have a view, will it still be there in 5 years?
10. Find your own lender
Don’t use the builder’s lender. Shop around for the loan that is best for you, not them.
This is our list, but what do you think? If we’ve missed something, leave a comment.
Photo credit: SqueakyMarmot on Flickr.
June 9, 2008
As a Redfin agent, I’m on the phone with clients most of the day. First Time Homebuyers, Dealhounds, Investors, Upsizers, and Downsizers all make an impact on my daily life. The other day I realized something- most people would be either apathetic or cynical after dealing with this many people day in and day out. I’m not, though. “Why is this?” I asked myself. I would like to think that its a statement about my extraordinary patience, or supernatural graciousness, or general love of people. I would like to think that. I would be wrong. The fact is, I am lucky to interact with some of the finest and most diverse people in the Seattle area, and conversing with them on a daily basis makes my life richer.
Oh yeah, and they’re not boring either.
Since the birth of my son 3 years ago, my knowledge of the literary works of Dr. Suess has skyrocketed. In fact, you could probably call me a Seussologist. My most recent favorite is And to Think That I Saw It on Mulberry Street. If you haven’t had a chance to read this masterpiece, I recommend that you spend the 13 – 15 cents necessary to make it happen. It is the journey of a young boy named Marco, who on his way to school runs into chariot drivers, Eskimos, a Rajah, a brass band, the Mayor, Sergeant Mulvaney (a motorcycle policeman), a magician, and of course a man with a ten foot long beard. So, leave it to me to visualize my Redfin clients as part of this caravan of uniques that make their way down Mulberry Street. Now, I think at this point it would be wise for me to clarify what I mean by that. I’m not saying my clients have ten foot long beards or ride blue elephants or belong in the company of Hurley from Lost, but what I’m saying is that Redfin clients are just unique enough to make you fall in love with them.
Last year when I was taking a trip through the Rockies, I made a stop in Missoula, Montana. I love that town. There is a big letter M on the side of a hill, and apparently everyone in town has taken the time to hike to the top of it. This “let’s climb a mountain, own some land, and be a part of our environment” spirit is one aspect of what makes Missoula unique… but there is something else which makes Missoula unique too – people get along there. I mean they really get along – Republicans, Democrats, Constitutionalists, Libertarians – everyone. You’re just as likely to run into a gun slinging cowboy as you are a sandal wearing Harvard grad, and in some cases they end up being the same person. You see, its not political beliefs or fashion or financial status which unite these very different demographics, rather it’s the respect of allowing people to do things their own way. It is this independent spirit which exudes from Redfin’s Clients, and in the end, it is this spirit which makes me root for them, respect them, and attempt to give them the best experience I possibly can.
It’s been an adventure since I began working at Redfin. My clients have ranged from local TV personalities to MIT professors to ranchers. They fight just as hard for their $120,000 condo in Lakewood as they do for their 1.2 million dollar home on Mercer Island. They do things like negotiate barn cats into $900,000 transactions and put unlimited escalation clauses into contracts. They blog about their experience when they’re happy and they do the same when they’re unhappy (see comments). They agonize over data about whether they should list their house on a Tuesday or a Friday, and they spend their Wednesday nights eating pizza with us in downtown Seattle in order to learn the Yoda-esque secrets for getting the best deal on a home. Simply stated, they don’t even march to the beat of a different drummer. They refuse to march at all.
What’s so perfect about this whole situation is that Redfin’s agents have the same revolutionary quirkiness about us. Consider the background of our agents: one is an Opera singer, another is a volunteer firefighter, and another just got back from traveling the world (literally the whole way around the world). Some speak Spanish and another speaks Arabic. We have experts on manufactured homes (that would be me) and experts on Belltown condos. Some of us own investment properties, and others of us are waiting to buy until the market further softens. All of us though hope to make the real estate industry better through our unique approach to serving clients.
And so it turns out we’re a good match for each other. We eccentrics can stick together, do real estate a little different, and in the end make the whole industry a little better.
So here is to the notoriously quirky, meticulously analytical, boisterously different cavaliers that are Redfin’s clients and agents. You have made my job more rewarding and my mind more thoughtful. Each day is an adventure as I work together with you to help you buy your dream home.
Until next time…. when we see each other on Mulberry Street.
Bonus: Did you know there is a Dr. Suess National Memorial?
Photo Courtesy of thepocket.com
May 28, 2008
The two most dreaded words in real estate today must be “low” and “baller.”
So publishing a how-to guide for lowballers is a little like hanging a kick-me sign around our neck. We’re the ones who have to make deals happen, even when our client is convinced a house in Palo Alto is overpriced by 15%.
Yes, we know that especially in outlying areas the market stinks. But so does the seller, who priced his house in the first place. And the likelihood that he’ll lop another 5% or 10% off his asking price isn’t just determined by the house’s “intrinsic value” or its “fundamentals.”
It’s also a matter of the seller’s state of mind, which can drive him to stick to a high price, or to drop an already-fair price. So as brokers, we don’t just look at the cards on the table but also at the people playing them, searching for “tells” that the seller is ready to cut a deal.
Now as part of our Agent-Off-the-Record series, where our agents get together to assemble a greatest-hits list of insider advice on a topic, we’re outlining what we think are the six major signals and eleven minor signs that a seller is motivated to negotiate.
To get a significant discount, of say more than five percent from list price, we would typically expect to see at least two major signals or one major signal and two minor signs.
For example, just because a seller is going through a divorce doesn’t mean he’ll sell his house at a 10% discount. But if the place has also been on the market for a few months, or it’s in a neighborhood with a big inventory pileup, he might consider it.
So these signals say nothing about whether a property is fairly priced, only about what the seller is willing to accept now.
The Seven Major Signals
- The seller must move: the seller’s agent occasionally posts a message in the MLS that the seller is motivated. Bingo!
- The home’s previous sale price was much lower: the seller may accept a discount if he can still come out ahead. On the other hand, few sellers will accept less than what they owe on the mortgage, unless they’re already in default.
- The home has been on the market 90 days without a price change: Redfin displays days on market for each listing.
- The neighborhood has many homes languishing on the market: use the listing statistics below Redfin’s map to see if the neighborhood’s listings average 90+ days on market.
- The property is vacant: the seller’s probably paying two mortgages.
- The owners are getting a divorce: look in the property tax records for recent title transfers.
- The property is the first or last home in a development: new-home prices are difficult to negotiate, but extras and closing costs aren’t. Builders are anxious to sell the first home for marketing buzz and the last so they can move on.
The Ten Minor Signs
- The home is staged: staging can costs hundreds every week. It increases the listing’s appeal but also increases the seller’s motivation to sell. (We argued about this one, as some Redfin agents see it as a sign of strength)
- The property has been re-listed: when a property is relisted, Redfin.com resets days on market. But your agent can query the MLS directly for the listing’s entire history.
- The seller is offering special incentives to buyer’s agents: tell a seller to keep the incentives in lieu of a lower price.
- The listing is a short sale: to avert foreclosure, the seller will take almost any price, but the trick is getting bank approval prior to foreclosure.
- A bank is selling a foreclosed property: banks don’t like owning homes, and are often eager to sell.
- The property is an estate sale: relatives may not want to hold out for top dollar.
- There are many foreclosures in the area: even if the listing isn’t a foreclosure, it competes for buyers with nearby foreclosures.
- The property is the most expensive in the neighborhood: an expensive home built on inexpensive land can easily be overpriced. Sellers value the wine cellar more than you will.
- The property is unique: sellers become emotionally attached to unique properties, which are difficult to price, and difficult to sell. But if the home is one of many in the same development, the seller’s agent is usually more confident about the asking price. And if the home is part of a new development, the builder will hesitate to set a low precedent for future sales.
- A contingent sale fails, or stalls for more than 45 days: after a competing buyer has rejected or delayed a deal because of financing or inspection contingencies, the seller may eagerly accept cash on the barrel, even at a lower price. Use listing alerts to track contingent property sales.
Our parting advice is to remember what Time-Warner’s CEO, Richard Parsons, says about any successful negotiation: that both parties have to feel like they won something. But who wants to hear such sage advice when the market’s going nuts? Tell us what’s worked for you. Once we’ve incorporated your suggestions, we’ll publish a final version to our main site, and link back to here.
May 20, 2008
Home-buyers may spend as much money on their real estate agent as on their car, but many will choose their agent in less than an hour. According to a California Association of Realtors report, nearly half of all home-buyers hire the first agent they meet.
This is probably because most of us would rather reject a car than a person. And some people just don’t know what to ask when evaluating an agent.As agents ourselves, we know what we’d ask. We went around the office to make a top-ten list and are now soliciting your suggestions on all the questions we avoided, rigged or just overlooked.
We’ll incorporate your comments to create a permanent page on our site, and link back to here so everyone can see the discussion.
Our top-ten list actually has fifteen questions:
1. Is this your full-time gig? How many clients have you served this year?
An active agent is more likely to be up-to-date on the market and the law.
2. How many sales have you handled in my target neighborhoods?
You want someone who knows the local market, with a few recent deals in your target neighborhoods.
3. When clients are unhappy with your service, what has gone wrong?
Asking why a client has been a bad fit for an agent can help you figure out if you’re a good fit.
4. Has a client ever filed a complaint against you?
If you’re uncomfortable asking, just check with the state licensing board.
5. What’s your fee?
The seller pays the buyer’s agent using the money you pay for the house, typically 3% of the sales price. Some buyer’s agents refund part of this fee.
6. What services do you offer beyond negotiations and escrow?
Make a list of what you’ll be paying for. Negotiations, paperwork and contingencies are the minimum.
7. When am I committed to working with you?
Many consumers start touring homes without realizing this can obligate them to work with the agent, contract or no contract.
8. How many foreclosure or short-sale transactions have you handled?
Distressed properties can be great deals, but the paperwork is complicated, and your liability is greater. The best agents have experience closing deals with banks.
9. Who else will be working with me?
An agent is often supported by a team. But the person you hire should do most of the work.
10. Will you show me all the properties for sale?
Good agents show all properties, even for-sale-by-owner properties that don’t pay a commission.
11. How quickly can you get me into a home?
Hot homes move fast. Ask how the agent handles tours on short notice.
12. Do you represent buyers and sellers on the same house?
No agent can fairly represent both. You need someone on your side.
13. What sets you apart from other agents?
Look for expertise, not just eagerness. You aren’t hiring the neighborhood kid to rake your leaves.
14. What if I’m unhappy with your service?
Agents get paid when you buy a house. But most customer complaints occur during the closing process. Ask for a guarantee.
15. Can I get references for your last five deals?
Every agent has clients he served well. But the best agents serve nearly all of their clients well. Getting an agent’s last five clients will give you a more balanced picture of his service than letting him choose his most favorable references. Call at least two of the five, asking clients some of the same questions you asked him. Look closely at these last five deals to see how they compare to similar sales in the neighborhood. Did he negotiate a good price for each customer?
So that’s our list. But let’s have all the DIY consumer mavens and Internet-savvy brokers who read our blog give the list a once-over so we can see what we missed.
And please check back next week for the questions every home-seller should ask their agent.
Photo credit: cambodia4kidsorg on Flickr.
