The Cary Real Estate Frenzy...

.

.. has already begun.  Last year, the crazy Cary real estate market of multiple above asking price offers and homes selling before they even hit the market started in April. This year, it started last week. On Wednesday, my clients and I were the first people to tour a home that had just hit the market. Thursday morning I called the listing agent to ask a few questions only to find out that the house was under contract, sight unseen to an out of state buyer. Her words were - it went WAY over asking price.

Luckily, my clients weren't absolutely in love with it, so we set up a schedule of homes to see on Saturday.  Early Saturday morning, I got a message from the agent of one of those houses, saying they already had multiple offers, and were asking us to submit our highest and best offer by 5pm. It had been on the market less than 24 hours.

Something new popped up on the MLS Saturday night, so we scheduled a showing for noon on Sunday.  I got a call from the agent cancelling it because they already had two offers. Ugh. What's an agent to do?

The main issue is that while we have buyers chomping at the bit, there is very little for sale. Most people wait for spring to put their homes on the market, but if it is in the right LOCATION, LOCATION, LOCATION (Cary) and priced right, I suggest you give me a call today, so we can get it on the market and with a little tiny bit of luck, sold by Sunday. Of course, I cannot guarantee I can actually sell your house in a weekend, but if this buying frenzy holds up, it could happen.

Fall is a Buyer's Season

Autumn. The days are cooler. The kids are back in school. It is a great time to walk through a corn maze,  to enjoy a pumpkin spice latte, and to buy a house. According to Jonathan Smoke, chief economist at realtor.com, buyers who are willing to close in the off-peak months of fall and winter may very well have the upper hand in negotiations.

As usual with economists, it all comes down to supply and demand.  He says that normally inventory peaks in August and begins to slow as the nights grow longer. But this year the typical seasonal decline will start a bit later. There will be more choices in September than any other month in 2015. On the demand side, now that school has started, fewer people are interested in moving, so the number of contracts decreases. This means the sellers have fewer offers, so buyers may be able to negotiate a better deal for themselves.

I can attest to this with the real life example of selling my house last year. Yankee and I had big plans of putting the house on the market in June. Quickly June turned into July and then August, and still we did not have to house ready to sell. We finally had a firm marketing date in the beginning of September, but the day before it was to go live on MLS, Yankee went under the house and found water dripping. Our dishwasher was leaking. It took another six weeks to get everything fixed, so it was October before the house was on the market.

By this time, the type of buyers looking for a 3500 square foot, five bedroom home had either bought already or were waiting until spring because the school year was well underway. When an offer finally came in after six weeks on the market, we had to take it seriously even though it was way off our target price. We needed to sell and with no other offers, we accepted a deal we would have scoffed at in July.  Our loss was the buyers' gain. They got a beautiful home (with a brand new dishwasher and kitchen floor as a bonus) for an excellent price.

So if you are on the fence about buying, right now may be the best time to climb off that fence and buy your new home. If that buying is going to be in the Triangle, I am more than happy to help find the perfect house for you and negotiate a great deal on it.

Who's Your Agent? Part III

I forgot that I had already written a Buyer's Agent Post, so you should go there to find out all about buyer's agents.

Today, in my final chapter of Who's Your Agent? we will forge ahead to Dual Agency.  Dual occurs when the real estate agent represents both the buyer and the seller. This is different than a seller's agent selling the house to someone she does not represent. That scenario is like my example in Buyer's Agent: Don't Buy a Home Without One.

In Dual Agency, both the seller and buyer agree to be represented by the same agent, and the agent's job changes. She is supposed to become an unbiased facilitator.  She is not supposed to advocate for one side over the other. She does not negotiate but instead basically only communicates the parties' demands without offering an opinion on them. This is why I am not a fan of dual agency. I believe the reason you have a real estate agent is so you have your own personal advocate in the process.

Most sellers agree to dual agency in their listing contract because it increases the chance of the house's being sold.  Remember that every agent in the listing agency represents the seller, not just the listing agent, so for example, if any agent employed by Fonville Morisey were to sell my listing, they would be a dual agent in the deal. Since we have over 700 agents, the seller would greatly decrease the chance of selling the property if he does not agree to to dual agency.

In order to help solve this problem, there is one more type of agency called Designated Agency. Designated Agency is actually a form of dual agency in which agents from the same agency are assigned to solely represent the buyer or the seller in a particular deal. For example, if I have a buyer who wants to make an offer on a house listed by another Fonville Morisey agent, I can represent him as his designated agent. In this scenario I will represent him just like I would Buyer Client.

I believe this is a fair way to deal with the problem of dual agency. Designated agency is taken very seriously. The designated agent should have no prior confidential knowledge about the property. At our agency we talk about square footage and updates; we do not talk about seller's motivation, in case we get into a designated agency situation.

In North Carolin,a dual agency  must be disclosed to all parties involved. It is mentioned in the Working with Real Estate Agents Brochure, and your agent should discuss it with you.

I hope this series has made agency a little less confusing. Below is a video published buy The North Carolina Real Estate Commission that explains the brochure.

Who's Your Agent? Part II

What is an agent anyway?

The Business Dictionary defines an agent as: Party that has express (oral or written) or implied authority to act for another (the principal) so as to bring the principal into contractual relationships with other parties.  If that cleared everything up for you, I will be back next week with some exciting photos of my new bathroom. If you are more confused than ever, read on.

 Seller's Agent
The most straight forward agency relationship in real estate is that of a seller who has a signed listing agreement with a real estate agent. If Sarah Seller signs a listing agreement with Anton Agent to sell her condo, Sarah is the principal and Anton is her agent. That is simple enough, but since nothing can be that easy, let's say Anton, like most agents, works for a real estate agency.  Even though only Sarah and Anton are sitting in her living room signing the papers, she has actually signed an agreement with Anton's entire agency. Every single agent that works for that company now represents Sarah. If Anton dies in a tragic rhinoplasty gone bad, Sarah is still in a listing agreement with his company, and his broker-in charge will send over a substitute named Gerald to take his place. 

Once you have signed a listing agreement, the listing firm and its agents must • promote your best interests • be loyal to you • follow your lawful instructions • provide you with all material facts that could influence your decisions • use reasonable skill, care and diligence, and • account for all monies they handle for you. The firm and its agents may not give any confidential information about you to prospective buyers or their agents without your permission so long as they represent you. 

Caution: Remember last time when we talked about Anything you say can and will be used against you? This comes into play here because until you have signed the listing agreement, you are not in an agency agreement and the loyalties in the above paragraph do not apply.  If you interview three agents before signing a listing agreement with one, the other two owe you no loyalty at all, so do not mention any confidential information in the interviewing process that can be used against you later. For example do not say I'd be willing to re-sod the entire yard, paint the outside purple and install a swimming pool to get the asking price, because you better believe if one of the agents you did not hire ends up representing a buyer, she will tell him to ask for all of that in the contract. 

It is late and I really need to get back to my binge watching of Fringe (Fauxlivia just found out she is got pregnant with Peter's baby while she was on assignment in our universe).  I will be back tomorrow to talk about buyer's agents.

Who's Your Agent? Part I

Who's your agent? That should be an easy question, right? Most people would answer with, "It's the guy driving me around showing me houses." Maybe. Maybe not.  The rules of agency make a seemingly easy question complicated. But never fear, I am here to clear it all up for you. This will be a multi part series because, well, it is a complicated subject, so those of you who are here to see what colors I'm painting my walls will just have to wait.

The North Carolina Real Estate Commission asks more questions about agency on the real estate exam than anything else, which means not understanding it is the downfall of many REALTOR wanna-be's .  It is ironic then, that they expect real estate agents to explain the rules of agency to any potential client in just a few minutes when only about 40% of the students who have a professional instructor in a 75 hour course can get it.

This brings us to the North Carolina Working with Real Estate Agents brochure.  This page turner must be presented and explained to any potential client at the first substantial meeting. What the heck does first substantial meeting mean? Basically this means that it should be presented before personal details concerning the buying or selling of real estate are discussed. Personal details include salary, motivations for buying or selling, the amount you are willing to pay for a property you want to buy or the amount you are willing to take for a property you are selling.

So it is okay to say, "I'd like to buy a house between $150,000 and $200,000." But you should not say to a real estate agent you do not have an agency agreement with,"OMG! This is the best house ever! I would pay $10,000 over asking price if that's what I have to do to get it."

Think of this brochure as your Miranda Rights. As we all know - hopefully from watching countless police shows and not personal experience - the first thing a police officer does after arresting a suspect is read him his Miranda Rights. The first of those rights is your right to remain silent, which you should do because anything you say can and will be used against you. The same holds true of any personal information you give to someone who is not your agent. When it comes to real estate, you should always assume anyone you are talking to is not your agent until you have made an agency agreement with him.

After an agent goes over the brochure with you, she will ask you to sign it. THIS IS NOT A CONTRACT! Your signature just shows the Real Estate Commission that the agent went over the brochure, so sign away.

In the next post we will start to talk about the forms of agency, but I want to say one other thing about the brochure. Personally, I think you can judge to quality of real estate agent by when she presents this brochure to you. She should go over it with you at the beginning of your relationship. I believe if she waits until you are about to sign a listing contract or an offer to purchase, she has not done her job correctly, and she may not have your best interests at heart.