I wanted to let you know I may not be writing again until Monday or Tuesday of next week. I am off to Monterey today, then to San Francisco for a couple of days, then passing through Paso Robles on the way home.

I am due back home on Monday June 4. I may do some writing enroute...but maybe not!

Have a great weekend!

You've received your first offer on your home (woo hoo!!) and now you need to respond to the buyers. What are you going to do?

I won't tell you what to do since each situation is unique, as is each offer, so you need to ponder the points in the offer that are most important to you. What is acceptable? What is not? Is there a way to find a common ground on which to agree?

Here in California there is a form (Counter Offer No. ___, or C.A.R. Form CO) used to communicate a counter offer. There may be one in your state, too, or it might be done verbally, as it often was in MA. If there is no form or requirement to put it in writing, putting YOUR response to the buyer in writing is smart, even if you make a copy of the offer, make the changes and use that.

Here is what you can do:

1. You can accept the offer as it is (in a sellers market you might get a full price or better offer; in today's market this is unlikely). But the offer MIGHT be good enough for you to accept ALL the terms and condition.

2. You can accept some of the terms and conditions, but not all, and so you make a counter offer with the terms YOU are proposing (say a different price). I generally advocate making a counter, even if the offer is so low it is laughable. Who knows what the buyer's might do?

3. You may reject the offer. Some people just don't respond, as the offer expires after a certain time (either set by the buyer or by default - in CA it is 3 days). Personally, I think this is just plain rude - the buyers made their offer in writing, even though it might be ridiculous, and they deserve a response. I recommend you put your rejection in writing - the bottom of Page 8 of the CA form allows you to do this.

The process of responding is pretty easy. Just make sure you are clear as to what terms and conditions have changed. But you will find, as first time sellers, that making the decision of HOW to respond is not so easy. Just another reminder - DON'T TAKE IT PERSONALLY.

Your agent will provide the counter offer in writing to the buyers' agent. The buyers can then respond to YOUR COUNTER, with the same choices that you had. The process continues until there is a meeting of the minds and everyone agrees on final offer terms and signs the contract. [I have seen some negotiations over in a few hours, or less. Others can take days or even a couple of weeks.]

Congratulations!

FIRST TIME HOME SELLER SERIES:

Article 7 First Time Home Sellers – It’s Offer Time

Article 6 First Time Home Sellers – Make Yourself Scarce

Article 5 First Time Home Sellers - Showings

Article 4 First Time Home Sellers – The Fun Begins

Article 3 First Time Home Sellers – Don’t Forget These Questions

Article 2 First Time Home Sellers – The Agent Interview

Article 1 First Time Home Sellers – Getting Started

Great news! Your REALTOR called to tell you that an offer has come in and needs to be presented to you.

Some Listing agents will do this in person, others may simply call you, email you the highlights (price, closing date, down payment, etc.) or fax you a copy of the offer. However it happens (and don't be afraid to let YOUR agent know how you would prefer the discussion to occur), you should be pleased to have your first offer, especially if the property has been out there a while or you have timing issues with a relocation.

What next? Well, the agent will review the offer with you and you must make a response (this might be done verbally but oftentimes the response is written).

Let me caution you on a few things (I will assume you are in the market most folks are...a buyer's market):

1. Be prepared that the offer will NOT be full price and may be a lot lower than you would like or would be able to accept.

2. Be pleased to have an offer and prepare to discuss the terms and conditions that have been outlined (price, closing date, financing, any concessions, dates)

3. Keep your emotions in check. It is NOT the time to get angry, depressed, or insulted. The buyers have made you a proposal and you get to decide how to respond. You need to be objective and focus on the ISSUES not the EMOTIONS (remember how YOU felt as a buyer submitting YOUR offer, and how you hoped to get a response?)

4. Consider the issues that are most important. Is it price? The date of closing? Are there things you can accept if other concessions are made?

5. I would NOT reject the offer, even if it is low. Make a counter, even at or close to full price. You never know what the buyers might do. And don't be discourteous like some sellers and not respond at all (remember being a buyer yourself?)

6. Some sellers decide to wait and see if they get a better offer. Well....could happen, but so many times the first offer IS the best. And the longer the property sits on the market the more likely any other offers will be lower.

You probably have time to consider the terms and decide how you want to respond (check the date of the offer expiration so you don't miss this). The buyers will likely appreciate a response fairly quickly. Dawdling over it does not do anyone any good. It's YOUR decision but discuss this with your agent. Keep in mind that you and the buyers want to meet on happy grounds...there is no winner or loser.

Next step? The response.

It is not unusual for buyers or sellers to uncover the fact that they have credit problems when attempting to secure a mortgage. Or perhaps in the pre-approval process you learn that there are some issues that need to be fixed before you can qualify for a loan.

Beware of credit fixing solutions! There are companies out there that offer to help you fix your credit, for a fee. But these solutions may actually cause more problems than they fix.

You are smart to address the credit problems you have, but this may NOT be in your best interest.

Read more on this at Consumer Credit Counseling - the world's best sale pitch.

Sellers! In the buyer's market you are likely in (a few precious few are in a seller's market), there is a good chance you will be faced with an offer that has a contingency - the buyer is making the offer contingent on selling their home.

What should you do?

Yep, it's great that you have an offer, especially if your home has been out there for some time. And if you are relocating and really need to get going, this is great news. You very likely will be inclined to accept it.

But be aware there are some downsides or risks. If the buyer's home does not sell then they will not be able to go ahead with the deal. And how long are you willing to wait to see if it DOES sell.

More importantly, when a home has an accepted offer that is contingent, it tends to reduce the amount of traffic continuing to look at the home, often significantly (showings may actually stop completely). This is true even if the home remains ACTIVE on the MLS but it is noted that there is an accepted offer with a contingency or a 47 or 72 hour opt-out clause or first right of refusal (this must normally be disclosed). Most folks don't want to bother seeing the home, unless it really is exactly what they want, when they know there is an accepted offer, unless the market is very competitive. Consider what YOU would do if you were a buyer looking and there were lots of options.

However, you have to weigh this against the fact that there perhaps have been no offers at all. And if it is a good one financially (offer price, down payment, financing, etc.) it MAY be OK to accept.

But give it careful thought, and discuss the options with your agent before you decide.

• Ethics – is it not important to you that your agent be ethical?
• Integrity – does this person exhibit integrity? Can you tell what their values are? Are their principals obvious? Are they accountable? Does their behavior mirror their values?
• Follow-up – do they return your calls promptly, or your emails? Do they call even if they don’t yet have the information? If they don’t, I would write them off the list. You aren’t even working together; what do you think wull happen when they get the business?
• Punctuality – are they timely and punctual, or are they always late?
• Do they do what they say they are going to do – do they keep their commitment? Do they get the information for you that they promised?
• Honesty – are they honest and truthful with you. Or do they lie, distort, and tell half the story.
• Knowledge – are they knowledgeable? Do they know the things they are supposed to know? How do you know? And if they don't know, will they find out?
• Focus on what the consumer wants and needs – do they focus on YOUR needs? Or are they more concerned about theirs? Remember WIIFM?
• Interest and concern – are they interested in your welfare and concerned about you? Does their interest and concern how in their actions and behavior? In their questions? Is their willingness to listen to you?
• How do they reveal themselves?  In their conversations, website, blog, advertising? What message are they sending? What do you know about them?

Primacy, an international company that focuses on relocation, and ERC (Employee Relocation Council), just published their 2007 report on the Best Cities for Relocating Families.

Since you are reading this you MAY be considering a relocation, or are in the process. Thought you might find this report interesting. BTW San Deigo is #37 on the top 50 for large metropolitan areas. Must be the sunshine!

Enjoy!

A couple of other points about showings. This may not be obvious to you now, but if you think back to the time you spent as a buyer, you will likely agree.

PLEASE, make yourself scarce when a showing is taking place. And I don't mean sitting in a corner of the room or hanging around outside on the patio. In order to maximize the opportunity for the potential buyers, you need to NOT BE PRESENT at showings.

• I know you will be anxious to hear what buyers have to say
• And want to share information about your wonderful home
• And feel a need to answer questions
• Or provide details about all your improvements
• And perhaps you are nervous about them walking around your home even though they ARE with an agent (BTW if you are working with an agent do NOT allow unaccompanied buyers in the home - call your agent right away if someone stops by).

Remember how YOU felt when you wanted to tour a home and the sellers were there? Didn't you feel uncomfortable? Weren't you uneasy about walking around, opening closets, peaking behind closed doors, and making comments about the home, the decor, the yard? Didn't you sometimes just decide to leave?

Please allows buyers to take their time looking at your home and imagining themselves living there. They can't do that when YOU are there. And any questions they have can be relayed to YOUR agent through THEIR agent.

The OTHER REASON to not be present is that you may say something, unwittingly, that may jeopardize your ability to negotiate the best deal possible. Let your agent handle the sharing of information so that everyone gets the same message.

FIRST TIME HOME SELLER SERIES:

Article 5 First Time Home Sellers - Showings

Article 4 First Time Home Sellers – The Fun Begins

Article 3 First Time Home Sellers – Don’t Forget These Questions

Article 2 First Time Home Sellers – The Agent Interview

Article 1 First Time Home Sellers – Getting Started

Your property is now on the market and ready for showings to begin.

• The lockbox is in place (with a key that works)
• There are brochures in the brochure box (hopefully with extras that you can use to refill when it gets low - do NOT let it go empty, this is frustrating for buyers who stop by)
• The home is listed on the MLS with GREAT PHOTOS, a VIRTUAL TOUR, and no typos or incorrect information (details on the home and amenities, directions to the home, etc). Ask to see the MLS listing to make sure.
• Repairs have been done, the curb appeal is outstanding, there are no odors in the house, all the lamps have working lightbulbs, and you have completed everything your agent has suggested to make the house shine
• All the personal stuff has been put away and the house is STAGED for showing.

Depending now the arrangements for showing (appointments, accompanied showings, agents must call in advance OR can come whenever), you will hopefully see a good flow of people. Every morning before you head off to whatever you do, or even if you are home, you will need to make sure the house is in showing condition. You never know when someone will want to come by. It's a hassle but you need to make sure the home looks its best at all times. Remember what a turn-off it was for you when you were looking at homes and they were a mess, or smelled?

Unless you are in more of a seller's market, the competition is stiff, and buyers these days are being very fussy about the homes they look at, since they have so many choices. And many look for reasons to NOT BUY as opposed to reasons TO BUY. A messy house is a good reason to NOT BUY.

This can be a real challenge, especially if you are preparing for your relocation - looking for a new home, job hunting, starting to pack, and so on. Certainly if there are some things that cannot get done for these reasons, or some packing boxes are out, buyers will likely understand, especially if they know that you are in the process of moving. But try to minimize it. The faster you get your home sold the sooner you can move yourself to your new location.

FIRST TIME HOME SELLER SERIES:

Article 4 First Time Home Sellers – The Fun Begins

Article 3 First Time Home Sellers – Don’t Forget These Questions

Article 2 First Time Home Sellers – The Agent Interview

Article 1 First Time Home Sellers – Getting Started

Now that the decision was made as to which agent to hire, and the contract has been signed, the fun begins.

When you were buying, do you remember the excitement you experienced when a new home came on the market and you could hardly wait to go see it? Well, now that you are a new seller, the excitement is similar - you are probably anxiously awaiting the rush of potential buyers storming your home.

If your home is priced well that is what you should see in the first week or so of the listing, unless the buyer pool for your home, due to style, location, and price range, is limited. We see, over and over, that the first several weeks of a listing is when the largest number of buyers will come to visit the home, and it is exciting for the seller. It does mean:

• always being prepared to show the home
• keeping it picked up and show-ready AT ALL TIMES
• being as flexible as possible to allow buyers in.

This can be tough if you have jobs, kids, pets and other tasks nagging for attention - balancing it all, to get your home sold, IS a challenge. Somehow having lots of buyers makes it easier to bear.

It also means that if you have not taken care of minor repairs, decluttering, and other issues you need to do so immediately (it's best, of course, to have done this BEFORE the home went live on the MLS). You don't want to turn off potential buyers who are excited about the new listing).

Now for some possible bad news. If you are NOT seeing many buyers, say only 3 - 5 in a several week period, then you may have a problem. And you need to talk to your agent to see what that might be. If it is very slow everywhere in your market it may simply be market conditions (especially if marketing times are several months on average) or buyer hesitation. But if other things are selling and buyer activity is steady, you may have a pricing problem. Did you, by some chance, insist on a higher price that what your agent recommended? Hmmm. It's also possible that while the comps suggested your price, the market is sending a message that the price may be off. It may be too early to be concerned, but perhaps not.

Try to recapture the feelings you had as a buyer when you went to see a house, OR perhaps saw a listing on-line and decided to pass. What were the reasons? Now look at YOUR home and YOUR listing and put yourself in a buyers shoes. Might there be some reasons why buyers are not coming to see your home?

So talk to your agent to find out what may be going on.

FIRST TIME HOME SELLER SERIES:

Article 3 First Time Home Sellers – Don’t Forget These Questions

Article 2 First Time Home Sellers – The Agent Interview

Article 1 First Time Home Sellers – Getting Started

Many people in today's market are finding that they can no longer afford the payments on their home Adan need to sell. And some are selling due to relocation, divorce or other family reasons. The dilemma many are finding themselves in is that the amount they owe the bank is MORE than what they can sell their home for. This is called a SHORT SALE.

Are you selling yourself short?

Short sales interest lots of buyers because there is the POTENTIAL for getting a good deal...the reality is often something else. (for more information on buying short sales, read More Tidbits on Short Sales, The Bank...and the Short Sale, and Buying a Short Sale Here in California). 

But there are some important things to know as a seller. You probably don't have a choice about selling in this manner because of market conditions, coupled with your financial and personal situation. And it's a better resolution to work out this sort of arrangement with your lender than going through a foreclosure.

Good news - provided the bank approves your hardship situation (this will have to be documented), they lender can "forgive" a certain dollar amount of your loan. You might have a mortgage of $500,000, but the market value of the home is around $475,000. The bank MAY approve selling the home, with a qualified offer, for $475,000, thus forgiving $25,000 of your loan. Sound good?

Bad News - Because the bank has forgiven a portion of the loan ("debt forgiveness"), unfortunately the current IRS regulations allow the IRS to come after you for income taxes on the money that was forgiven - it is considered receipt of income. Nothing like getting whacked when you are already down. 

Because of the problems in the sub-prime market, and the increase in foreclosures and short sales recently, the government is looking into ways to assist financially-strapped homeowners, and those who would like to obtain loans but have little or no money to put down. FHA loans may be a solution for these loans due to potential changes in the standards.

AND there is legislation (The Mortgage Cancellation Relief Act of 2007 (H.R. 1876) that is being considered by the House Ways and Means Committee that might exempt these homeowners from taxation on primary home loan debt-forgiveness.

For more information, read this article by Kenneth Harney that appeared in Realty Times.

Now that you are going to be a First Time Seller, there are some important questions to ask at the beginning of the process, perhaps before you make the final decision on who to hire.

If the agent you are talking to does not bring these up, I recommend YOU do. This is NOT an all-inlcusive listm but some important issues to discuss and understand.

• How will showings be handled? There are a number of options, depending on your preferences, the agent, and local protocol.
  • There may be a lockbox with a key, allowing acess to any agent with a buyer (easiest)
  • Appointments may be required with a call to you and/or the agent (even if there is a lockbox), or at least some sort of advanced notice (1 hour for example)
  • The listing agent may accompany all showings
  • Agents who want to show the property must pick up a key at the brokerage first (most restrictive)
  • Should I leave the house for showings?
• Should hours for showings be restricted and if so, to what and when? 
  • Being too restrictive in the availability of your home for showings, no matter what the reason, may frustrate agents and buyers and you might lose them.
  • This is especially true if buyers are relocating and are not from the area, and thus have limited time to look at homes.
  • In a buyer's market, and with lots of competition, you cannot aford to make this difficult. Remember what it was like when YOU were a buyer?
• What type of signage will there be? Will there be a brochure box on the sign?
• How will my home be marketed, in print AND on the Internet?
• Will you hold Open Houses, for the public AND for the local agents? When will these be? How often? What hours?
• How long a listing agreement do you want (be reasonable on this, especially given the average marketing time, but don't allow one that lasts for an extended period - you can always renew if needed)
  • What happens if I want or need to cancel my listng contract?
• What is your expected commission? Know that COMMISSIONS ARE NEGOTIABLE. Undertsand what you are getting for the fee you willl be paying - the knowledge, training, experience, and the services you will be receiving. A good agent is well worth the money, but a bad agent is not.

FIRST TIME HOME SELLER SERIES:

Article 2 First Time Home Sellers – The Agent Interview

Article 1 First Time Home Sellers – Getting Started

If you have already found your listing agent, plan to use the person who helped you in your purchase or sale previously, or have gotten a great referral, then this article may not really apply (and if you missed Part 1 in the series). But if not...

• Make sure you have a sit down meeting face to face with your prospective listing agents (I recommend talking to more than 1)
• And before the meeting review the listing kit each provided you (oh, they didn't? Hmm, I always do.)  This is a good way to learn more about them and the process beforehand so the meeting will be fruitful.
• I would develop a series of questions to ask each one (some of your questions may get answered along the way). For starters:
  • Years of experience, or number of transactions (just because they are newer does NOT mean they are not right for you - some newer agents are more motivated and creative)
  • Percentage of their listings they sell
  • Average asking price/listing price ratio
  • Credentials and training - what designations do they have, what classes have they taken?
  • List of references you can call
• Listen to what they have to say - is the presentation about THEM, or YOU and YOUR needs? How will they address the issues of marketing your home effectively. What are the pros and cons of your home? You want HONESTY here.
• Comparables - How does your home compare to the competition? Where do they see the home being priced and how does that compare to your thinking? What kind of market is it?
• Who is your target market (i.e., who is likely to be the buyer?)
• What is their marketing plan and is it written?
• Make sure they explain seller representation and what it means. How will they represent you? What wll they do on your behalf?
• How will they handle showings? Open Houses? Multiple Offers? Dual Agency? Will there be a lock box? What about scheduling appointments? Security?
• How do they and will they use technology to market your home, communicate with you, etc.?

That should be enough to get you started. You might also read this previous article about finding a listing agent and what to look for.

FIRST TIME HOME SELLER SERIES:

I want to take this opportunity to wish all the mother's a HAPPY MOTHER'S DAY.

My wife wrote the following piece and I wanted to share this as well. There are some nice thoughts about how we can each help someone less fortunate than ourselves.

Have a wonderful day!

Jeff

When you are moving, figuring out what neighborhood you want to live in is a challenge, but even more so when moving to a new area. If you know nothing about an area how do you start your research? I have a couple of thoughts based on experience.

Start with the general area and look at the town websites - you know you are moving to Denver, for example. This will give you an overview of the community but likely will also mention different areas, new subdivisions being built, etc. Wikipedia also will provide information on communities and often drills down to neighborhoods and subdivisions. Or just do a Google search for town or city of interest - this will likely reveal a wealth of sites to check out.

Check out Localism. This is a website dedicated to local real estate information on communities and neighborhoods throughout the country and populated with information written by folks who have lots of local information - real estate agents. You can start your search at a high level - say the city you are moving to - and work your way down into smaller communities and neighborhoods, depending on what has been written. Some areas will have lots of information (photos, market reports, details on housing, etc.) while others are more sparse. A side advantage to this site - you wll also learn a lot about some of the agents in the area and might be able to decide which one you want to call to figure out if THEY are the right person to help you relocate. Localism is fairly new and is constantly being updated - so check back often or bookmark it.

Another site to look at is Neighboroo. This site provides a wealth of information on communities throughout the US (not at the very local level but close enough) such as schools, housing market, climate, safety, demographics, income/work, and more. This is a great way to gather lots of details on a area you know nothing about, and perhaps compare it to your current to see if it feels compatible.

Of course the best thing is to actually spend some time exploring the area you like in person, on your house hunting trip. Statistics are one thing, but the emotional side of a particular area...how it makes you feel...is, in my opinion, of paramount importance.