Why Hire a Realtor when I can use Zillow?

Do This Not That, Q&A, Sellers No Responses »

May 102011

Well, okay. I’m biased. I’m a Realtor®, but I’m also a young professional with constant internet access. I know how to get information on almost anything without speaking to one person. About the only thing I can’t rely on the internet for is automotive help. Apparently mechanics don’t like to spew their expertise all over the internets quite like Realtors do.

A little known fact about Texas Realtors®: We have one of the strongest political action groups on Capitol Hill. Our industry is heavily protected because we are such a large group that pays such a large amount of money each year.*

A little known fact about Texas Homestead Laws: Texas is a “non-disclosure” state. What this means is that the purchase price/sale price of your home is not of public record. The reason for this stems back to Mexican heritage, back when were owned by Mexico. Mexican law holds homesteads in very high regard. I tend to agree. Incidentally, this is the same reason Texas is a “community property” state and most others aren’t.**

I digress. Moral of the story: Because of very specific Texas Law, the sales price of your home is not released to the public. The county appraiser doesn’t know. The guy next door doesn’t know.*** Zillow doesn’t know.

Background

The market price for a property is determined by one thing: the sale prices of similar properties in the last 3-6 months in the same area as the subject property. It’s basic economics (don’t mind me, I just LOVE economics!): market price is the point at which buyers are willing to purchase the commodity and at which sellers are willing to convey the property. Recent history will tell us this price point.

Who has the sales prices and a complete list of sales history? Market appraisers and Realtors®. I repeat: Market appraisers and Realtors® have access to these numbers. Part of my dues every year pay to subscribe to and contribute to our regional database where we are bound by our governing entities to convey accurate, timely information to this system. One noncompliance and my access to this could be revoked.

Scenario

Realtor® fees are usually the highest fee a seller must pay in closing costs. Easy way to get around it: FSBO, baby! But wait, how will the seller know the recent history of his area? Maybe he’ll visit his local appraisal district’s website to see tax appraised values (see more about this misnomer here), or maybe he’ll take a look at Zillow that will give him his Zestimate (scary how closely the tax appraisal and the Zestimate are! If you still think a tax appraisal is an accurate representation of market value, you should see this). Armed with this number and his arsenal of marketing (sign in the yard, ad in the paper), this FSBO is ready to go.

Outcome

NAR studies show that 2% of For Sale By Owners actually ever close. The other 98% either list with a Realtor®, or choose to take their home off the market. Why? NAR studies also show that it takes over 100 hours to sell a home. This, coupled with our advanced marketing portfolio, access to buyers, and insider market information (unavailable via Zillow or whichever other website you’re perusing thanks to homesteading laws), validates our fee for most sellers.

*Last year, my yearly dues surpassed $500 and my quarterly dues are $125.

**Part of protecting the homestead, if you share a homestead with your spouse, he/she is entitled to half regardless of if they have ever paid one dime toward the mortgage.

***Unless you tell them.

15 Steps to Move In

Buyers, Financing, Q&A No Responses »

Mar 092011

I use this in my buyers packet and it struck me today that I need to share it with you guys! It’s a perfect tool to use when you’re just beginning to think about purchasing a home. And it’s not just for newbies! Most home buyers have not been through the process in over 5 years, so a refresher course is always great (plus, procedures and steps may have changed).

15 Steps to Move In

Find one Realtor that suits your needs
Obtain a credit approval letter from a lender
Preview homes with your chosen Realtor
Find The One
Submit a written offer through your Realtor
Negotiate price and terms
Come to a meeting of the minds with the seller
Realtor will execute the contract (this is the reference point for all time frames set forth in the contract)
Turn earnest money and option checks into your Realtor the day of execution
Work with your Realtor to immediately set up inspections
Settle on a lender that best suits your needs (based on closing cost amount, interest rate, and closing rate)
Order the appraisal (lender obligation)
Survey (lender obligation)
Final approval (lender obligation)
Meet at the title company for closing!

Numbers 1 through 4 can happen very rapidly or over a period of time and numbers 1 & 2 are interchangeable. Numbers 4 through 11 will happen in a period of 5-7 days–very quickly. Finally, numbers 12 through 15 will take 30-45 days to complete.

Exciting note about my humble little hard working office–we won the title as #1 DFW office for the third straight year! How’s that for awesome?! We had a huge group photo this morning and a BBQ cookout in our Tanglewood parking lot at lunch today. It takes skill, hard work, and determination to be the best. My number 1 favorite thing about my office: team work. There is never a question I have that I can’t find two people to walk me through the answer. That’s the secret to our success. Our success=your success.

We are Coldwell Banker Tanglewood and we’re located at 45oo Hartwood Drive in Fort Worth.

Top 2 Pricing Pitfalls

Financing, Q&A, Sellers No Responses »

Jan 182011

Hey current or previous home sellers: has a Realtor® ever uttered the phrase, “at that price we run the risk of not appraising”? Wonder what exactly that means?

As a pricing expert, I always take two things into consideration with each property:

1)the market price of the property

Short definition: what the seller is willing to accept as the final price and what the buyer is willing to pay. There is an industry-wide rule of thumb for testing the market and I employ it regularly: two weeks and no showings means you’re priced over market value or ten showings and no offer also means that you’re priced over market value. If either of these happens, we need to set a new price. The best plan: Create Drama through pricing! See the explanation here.

2)the appraisal

Appraisals, in theory, find the market price of the home based on recent comparable sales in your property’s area (this could be subdivision, school district, or larger geographic area). I studied economics in college. The biggest lesson I learned then was that economic theory rarely came through in real life.

Theory

This is how a typical appraisal takes place: a real life person (a.k.a. Not Always Accurate or Correct) walks through your home and around the outside for about an hour making notes and taking photos. They then run back to the office, pull three recent sales from our MLS system, and write up your appraisal. Did they appraise the three comparable sales? Probably not. Have they been in those other homes? Most likely, no.

Appraisers are licensed and regulated by the state and do the very best job they can, but at times, values are lost, and deals fall through because of this lender required practice of checks and balances. Appraisals are usually required and it is necessary for your Realtor and yourself to understand this situation.

Harsh Realities

Market value? You set a price for a home and a buyer offers to pay full asking price for it. Then the appraiser shows up and the value is found $20,000 under contract price. This scenario is fairly common lately. It really doesn’t matter if Dr. Joe drove up to your house yesterday and offered you $300,000 for it–if the comparable sales say the home is only worth $275,000, your property won’t appraise and the contract will not close as-is*.

Privacy laws prevent it

Texas is a non-disclosure state. That means, among other things, no one can release to the public what you paid for your home. Its part our our laws to protect one’s homestead. This is why consulting a Realtor is key. We are the only group–not Zillow or Sawbuck or any other site you refer to for home searches–that knows what the sales prices are for homes in your area; thus giving us the knowledge of not only what a buyer will pay for your property, but also what an appraiser will be looking at in evaluating your property’s value.

*does not apply to cash offers or Conventional financing with over 20% down.

“I Don’t Wanna Live Near Trains or Planes”

Events, Personality Please No Responses »

Jan 122011

An Abridged Histoy of Fort Worth: Aviation

Occasionally, I have this request from folks relocating to good ol’ Cowtown. Being a transplant myself, I get it. Trains, though mild in decible levels, will really disrupt sleep, quiet time, and trains of thought (pun intended). Air planes, for mere seconds, are louder and much more disruptive. Who wants them? Who needs them?

Answer: We do.

Aviation has boosted this little town since 1911. In fact, this Saturday, January 15th, the commemoration of Fort Worth’s First Flight will be held near the site of Roland Garros’ historical take off one century ago on January 12, 1911. Get the details of the event here. Attendees are encouraged to fly paper airplanes, kites, balloons and enjoy a free event for the entire family. The event is hosted by the Veterans Memorial Air Park and Fort Worth Air and Space Museum (a new museum to join our cultural scene–near the Alliance Airport, set to open in 2016).

The milestone set by Roland Garros himself, has been largley forgotten by the citizens of Tarrant County and three groups are working to bring the history of aviation to the forefront of people’s minds.

“I think that aviation is so much a part of the fabric here that people don’t think about it,” said Jim Hodgson, president of the Veterans Memorial Air Park. “It’s always been here. They don’t think about that initial spark that got everything going. But aviation really did change the complexion of this area.”

No doubt because of the events in 1911 and the origin of “Fort” Worth, TX itself, our community is largely supported by Carswell Joint Air force Base (located on Lake Worth, minutes west of town). Carswell is the site of the first non-stop flight around the world. Sixty-two years ago, a plane took off from and landed here. (Read more aviation milestones in Fort Worth.) Carswell alone brings millions of dollars of revenue to the city by employing over 17,000 personell and lending the facility to research and construction. It is a privileged to have the facility here and, despite mixed community opinions, the base should remain a lead employer and supportive facility in north Texas. (Let’s not forget Meacham Airport, Alliance Airport, and Spinks Airport!)

Bring on the jets! I say. It’s good for our economy and it keeps our roots deep in Fort Worth’s history. Don’t take it from me, read Mayor Moncrief’s letter written January 11, 2011.

See you all Saturday?

*Note: This post is full of links! See the pink colored words? That’ll tell you more of the story! Please disable pop-up blockers to view articles and links.

Puddle of Mud–How water claims can muck up everything

Do This Not That, Q&A, Sellers No Responses »

Jan 072011

There’s not a lot of days in my profession that I don’t want to wake up and go to work. Today is a rare day. Once the work day starts, answers will come about a closing, scheduled for 2 o’clock, that may or may not happen. My clients own the house and have a new house under contract as well–I really just want to bury my head in the sand and come out tomorrow.

Instead, let’s turn orange juice into mimosas or lemon into lemonade or something cheerful that I need at 7 am. It’s lesson learning time!

Insurance. It’s supposed to make our lives better…easier. It’s there for emergencies, disasters, bad days. It’s there to cause you a lot of grief if it doesn’t perform as you would have hoped. Homeowner’s insurance has changed in the past 5 to 10 years. Much like our lending practices, it has grown increasingly difficult to obtain and retain homeowners insurance. It has to do with the number of claims made and the type of claims made. Claims not only stick with the individuals, they stick with the home as well. Did you get that?

Santa, I’ve been bad this year

When you make a claim, you appear on the naughty list and so does your home…for three years at least. Not only does your chosen company know your home’s track record, but there’s a database called CLUE (Comprehensive Loss Underwriting Exchange) where the claims are shared industry-wide. The CLUE report reveals to prospective home owners and other insurance agencies the types of claims and the amounts paid out. Thinking of pocketing that money? Don’t.

Three years is a long time. People that are not thinking of selling their home today, will most likely consider it in the next three years. Your claim today will haunt you tomorrow (or in 365 tomorrows).

Blackballed

My unsuspecting sellers–I cautioned them on their decision, but their insurance agent did not–he cut them their three checks with no questions asked. No “If you ask me” advice, no disclaimers “WARNING: You, your home, or both may be blackballed as a result of this claim. Consider your costs before using your insurance,” nothing. So if you’re waiting for your agent to caution you, best to put on your patience panties.

Liz Pulliam Weston and Kimberly Lankford offer two pieces of advice for when and how to use your insurance. They both offer great tips about deductibles, when and how to reach out to your insurance company. The insurance industry is definitely “Consumer Be Ware” and these articles will help you.

So today, some buyers may lose their favorite home and 2 sellers will have to unpack boxes and decide to stay a while longer. The repercussions are still unknown. My fingers are crossed that we can make this work out, but it’s the ninth hour. I hate waiting to the last minute.

Buyer’s Survival Kit: Part 2

Buyers, Financing, Q&A No Responses »

Dec 292010

My latest YouTube videos give today’s buyers tips. Let’s face it: The biggest change in the real estate market has been lending requirements and practices. It stands to reason, then, that buyers are playing a whole new ball game while sellers have been here before. It explains why buyers are so hesitant these days and put up with more frustrations in the process. I see it, and I understand. That’s why I came up with this quick and easy Buyer’s Survival Kit. [See Part 1 here]

Part 2: Choose your lender wisely!

Mortgage Lender [mawr-gij] [lend-uhr]: Not only the person, but the entity that originates and processes the loan for the mortgagee (buyer).

Courtesy of Alan Cleaver

I advise all my buyers that the lender can make or break the process–speed up closing or slow it down. Here’s a short run down of the boring, intricate process:

Meet an individual representing a mortgage broker or bank.
Turn in paystubs, W-2s…any and all paperwork they need to qualify a buyer for a purchase.
Get qualified! This is the point where the Realtor gets excited. You can buy! **Note: This is the point where the lending process goes behind the scenes. The person the buyer met in step 1 really has nothing to do with the loan process from here on out. There’s a new guy in town, his name? The Loan Processor. He probably works offsite somewhere in a cubical with hundreds of others like himself. And the buyer’s name? Oh, it’s nothing more than a number.
The loan processor investigates more about the buyer–debt to income ratios v. credit score v. income v. the property itself.
The appraisal is ordered
The survey is ordered or accepted
Both the property and the buyer undergo final underwriting
Closing and funding

Tip 1: Choose a lender that has a good rapport with your real estate agent or you! They will be more eager to please if they know their reputation is at stake.

Tip 2: Don’t know a lender? Interview a few lenders and ask questions like: how many days does it take you to close a loan? How do you like working with real estate agents? Are you processors in the office or at a remote location?

Tip 3: Copy your Realtor® on anything discussed between you and your lender that pertains to the real estate transaction or property. That bridges the communication gap that can sometimes form and keeps everyone in the know.

Need a lender?

My preferred lender is Johnna Hutchins with Southside Bank in Tyler, Texas (it doesn’t matter where your lender is located, but it is beneficial to have one in Texas or who does most of their business in Texas). She makes the process seem casual and easy and will have your docs to the title company days before closing (most lenders wait to the very last second and that’s generally what delays closing). Her fees are reasonable and fall around $700 and you are never charged an origination point. To contact Johnna, call (903) 581-9732 or email johnna.hutchins@southside.com.

Buyer’s Survival Kit: Part 1

Buyers, Q&A No Responses »

Dec 232010

Part 1: Represent!

Buyer Representation [bahy-er] [rep-ri-zen-tey-shuhn]: a written contract between a real estate broker and a buyer that clearly outlines the obligations of each party to one another.

Courtesy of Dayna Bateman

As a buyer, it’s your right and privaledge to have representation! Entering into a written contract with your real estate agent binds them to offer you all fiduciary duties:

Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Responsibility

Tip 1: No representation agreement? The Realtor driving you around actually is a sub-representer of the seller. She owes you nothing more than honesty, disclosure, and fairness and owes all of the above bulleted list to the seller (whether Mr. Seller has listed with her company or not). Shocking, isn’t it? Protect yourself and enter into a written agreement with your agent.

On top of the bullets above, your agent will help you find the actual market price of the home despite the listed price, negotiate on your behalf to the other parties, offer emotional support, walk you through the legal documents (contract, settlement statements, title commitments, etc), ensure a timely close by coordinating inspections, appraisals, surveys, and lender goofs, and set you up to be a successful homeowner.

Tip 2: Still not sure about the agent you’ve been working with? Ask for a short-term buyer’s representation agreement (one to two weeks) and see how diligently your agent is at returning calls, finding and showing homes, etc. When you’re ready, extend that agreement, or find another Realtor®.

Tip 3: You have the right to be represented even when buying a For Sale By Owner or from a home builder–neither of these parties will look out for your best interest, nor are they licensed to sell real estate by the state (but your Realtor® is!).

If you have questions about your current representation or would like to have a brief consultation with me, click here.

Older Entries

She Sells Fort Worth

Why Hire a Realtor when I can use Zillow?

Background

Scenario

Outcome

15 Steps to Move In

15 Steps to Move In

Top 2 Pricing Pitfalls

Theory

Harsh Realities

Privacy laws prevent it

“I Don’t Wanna Live Near Trains or Planes”

An Abridged Histoy of Fort Worth: Aviation

Answer: We do.

Puddle of Mud–How water claims can muck up everything

Santa, I’ve been bad this year

Blackballed

Buyer’s Survival Kit: Part 2

Part 2: Choose your lender wisely!

Mortgage Lender [mawr-gij] [lend-uhr]: Not only the person, but the entity that originates and processes the loan for the mortgagee (buyer).

Buyer’s Survival Kit: Part 1

Part 1: Represent!

Buyer Representation [bahy-er] [rep-ri-zen-tey-shuhn]: a written contract between a real estate broker and a buyer that clearly outlines the obligations of each party to one another.

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