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I Screwed Up

Date: Apr. 14, 2010
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I'm sure it's not a surprise to anyone that I'm human and make mistakes. A real estate transaction requires an extraordinary attention to detail these days with the average contract paperwork running over 40 pages and managing relationships with home inspectors, pest control companies, lenders, title companies, and many more.

Last week I made a mistake on contract paperwork. It wasn't a small one. And I'll be beating myself up over it for awhile.

I'm not blogging about this in order to publicly flog myself. But to acknowledge that real estate agents, like all human beings, make mistakes all the time. It's not, whether, but when and the important thing is how they handle it when it happens.

The first rule is: tell your clients immediately. If your agent makes a mistake when writing the offer and you don't find out until settlement, that's a problem!

Next, obviously, it needs to be fixed, if that's possible.

Lastly, determine what remedies are available. Does the client need to withdraw an offer, find an out in the contract or amend it? If the client suffers economically because of the agent's mistake, I believe the agent should be making a list of what steps he or she can take to make things right.

I'm a firm believer that if handled correctly, even bad mistakes can result in a stronger, better working relationship.

I found this online and thought it appropriate.

 From "Decide to Say Sorry" By Jeanne Bliss:

“How you apologize is your humanity litmus test. Let’s face it, at some point; your business will suffer a failure that disappoints customers. How your company reacts, explains, removes the pain, and takes accountability for actions signals how you think about customers, and the collective heart of your organization. Grace and wisdom guide decisions of beloved companies toward accepting responsibility and resolving the situation when the chips are down—not accusations and skirting accountability. Repairing the emotional connections well is a hallmark of companies we love. It makes us love them even more.”

 

 

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Chemistry Matters

This is another in a continuing, occasional series on how to choose a real estate agent.

Previous posts have focused on more concrete, measurable things. But I think the softer side of this equation also merits some focus.

Perhaps one of the most important elements in choosing a real estate agent is to get one with whom you feel comfortable. You need to "click". The process of buying or selling a home is stressful, even under the best of conditions. And, heaven knows our current market, even if you're buying, can be tough. You want that interaction to be as comfortable as possible.

I know that "comfortable" is going to strike many of you as too soft and mushy. So, let me see if I can help you with a little better definition.

You want someone you can communicate with directly and honestly. You don't want to worry about hurting their feelings. You don't want to worry that they'll dismiss your fears and worries without listening. This stuff is important and you need to be able to talk openly what you're worrying about, where you have misgivings. If things things stay bottled up you can make a mistake because you didn't ask the right question. And, all those unsaid things can definitely poison a relationship!

There are people out there who take stress in, amplify it, and pass it on to everyone they meet. Then there are others who are good at taking the stress, absorbing it and killing it. They pass along their calm to those they come into contact with. You definitely want the latter as your real estate agent. When the little road bumps occur you don't need someone telling you the sky is falling!

Comfortable also means you have a good fit in terms of communication styles. If you love e-mail and hate the phone make sure your agent feels the same way. (Or at least is willing to modify her style for you!)  And, if you want long, chatty phone conversations and all you ever get are e-mails, there's probably a communications mis-match. It's a good idea to indicate early in a relationship how you like to communicate and making sure that works for everyone.

The soft stuff really does matter. Pay attention to this and the rest of the real estate experience will be much better!

 

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Who Will Survive?

Date: Mar. 7, 2008
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There is an old adage that says that in tough real estate markets the agents that survive are the best agents. I first heard this in one of my first real estate training classes. And, I absolutely, positively believed it.  It made perfect sense to me. In tough times, the best shine, right?

Except that now that we're well into a very tough real estate market, as I look around, I'm entirely unsure that this widely believed wisdom is at all true. Yes, there are lots of good real estate agents who are doing just fine. (Although I don't know that I've talked to anyone in the last six months who hasn't complained about slower business.) But I've also seen a large number of excellent agents leave to pursue other careers or return to previous careers.

So maybe the question is, what constitutes the best real estate agent?

If you define the best agent, by those who do the most business, then the old adage is perhaps true. If you've done high volumes of business during the boom times, if you were smart, you put away a fair amount of cash for a rainy day (or year!)

But, if by best, you mean those who are best able to serve the needs of their clients, I'm not sure that they are always the survivors. Some of those excellent agents are just too new to have built up the client base or the financial wherewithal to survive this market.

The ability to attract new business is a prerequisite for surviving as a self-employed real estate agent. But it's not a prerequisite for doing a good job taking care of your clients. Those are different skill sets.

Lawrence Yun, the chief economist for NAR has just released a blog post talking about the current surplus of real estate agents. Unfortunately, that number is not adjusting downward nearly as fast as home sales and home prices! But it surely will.

And, I suspect that some of those who survive will be the cream of the crop. And, some will simply survive because of a fat bank account and lots of time in the business.

 

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Friends and Real Estate

Date: Mar. 3, 2008
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I've had several instances recently where a potential client had to choose between working with a friend or family member or working with me. In the majority of those cases, they've chosen me, thankfully. But those decisions haven't been without consequences. Feelings have been hurt. And given the number of real estate agents out there, it seems worth a discussion.

The Greater Piedmont Area Association of REALTORS (the local assocation for the counties I primarily work in) has more than 700 members. That's a lot given the number of transactions happening these days. In all likelihood, most people know someone who had a real estate license.

And, as soon as you start thinking about buying or selling and mention it to them, they will, of course, want you to do business with them. I've been that friend or relative and I've definitely asked for the business. However, there have also been times when I felt that the friendship would be best served by that person using another agent.

If you're trying to make a decision and are torn, I'd recommend first of all, talking to the friend or relative and let them know that however much you care about them, you'll be basing your decision on who can best help you achieve your goals in this area. A person can be a wonderful human being and not necessarily the best in their professions. Or, you may feel that you don't want to mix business and pleasure. But treat the individual fairly, give them a chance to interview for the job. That's all anyone can ask.

Having been on the receiving end of not getting the business in this kind of situation, I know how important it is to be gracious. I also know how hard it is, especially right now. There are real estate agents fighting to stay economically viable in a very tough market. Rejection is hard to take under those circumstances. Grace does not come easily in such situations!

In the end, making the best decision for yourself and your family is what's important. Whether that's using a friend or family member or the professional you believe can best get the job done, don't be afraid to do what's right for you!

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Teams

Nationally and on a local level we've seen an increase in real estate teams. Usually a team starts when one agent has more business than they can handle. And, generally, the first person hired is an administrative support person. If business continues to grow, the agent moves into handling more listings and fewer buyers and hires a buyer's specialist for that piece of the business. Some teams eventually grow to have quite a few buyer specialists. And, in some cases, the original agent assumes a "rainmaker" role and functions more in a business development/management role while others handle the actual real estate transactions.

From a real estate agent's perspective, perhaps the most attractive thing about the team concept is the ability to have someone there to cover your business when you want time off. After all, as a one person company in a 7 day a week business it can be tough to manage those times you need a vacation.

But let's take a minute and talk about what the advantages and disadvantages are for you as the buyer or seller. Typically, when someone who is part of a team is asking for your business they argument is that they can better serve you because they're not spread as thin. There's certainly some truth in that.

But it also depends on the caliber of the individuals on a given team. While the agent at the top of the team is almost certainly a seasoned professional, that's often not true of everyone on the team. In many of the teams operating locally there seems to be a fair amount of turnover. And while the top agent may be the person who initially makes contact with you, after that initial appointment you're unlikely to deal directly with them most of the time.

The other potential down side of a team is that shared responsibilities always has the potential for creating gaps. Hand offs can mean things fall through the cracks.

I'd argue that one great agent may actually serve your interests better than a team if that team is inexperienced and doesn't have good systems in place.

If you're talking to someone about their team, make sure you find out more than just about the the team leader. Who will be working with you on a day to day basis? How much experience do they have? How much access will you have to the team leader?

The truth is either a team or an individual agent can give you spectacular service. It's up to you to ask the right questions and make sure you understand what you're getting when you hire anyone, agent or team.

As always, you need to do your homework!

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Ethical Obligations to Sellers

I got a call this weekend from an agent representing potential buyers on one of my listings. He gave me some information on what his clients were thinking and then asked that I not share that information with my client.

This is information that is clearly pertinent to the deal at hand. Given that, it's my ethical obligation to disclose that information to my client. I can not know things that are relevant to the sale of her property and not disclose that information to her. I do have a duty of confidentiality, but not to another real estate agent!

The odd thing is that this guy has been in the business a very, very long time. He's enormously successful and well-loved by his clients. And, I'm going to assume knows perfectly well that I can't keep the information he disclosed from my client.

So...maybe he was just hoping I wouldn't realize it?

Hopefully he had the OK from his clients to disclose that information to me!

I've mentioned it here before and I'll say it again. Real estate agents talk too much! It's good to remind myself of this problem from time to time!

If you're a consumer you should know that a real estate agent with whom you have an agency relationship owes you the duty of confidentiality. Given human nature, if you tell them something you want kept in confidence, it doesn't hurt to remind them!

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Incompetent Agents?

John Tuccillo is a former NAR Chief Economist and one I respect for consistently telling it like it is. I check out his website frequently to find out what he's thinking. It's always thought provoking.

Recently, John was quoted as saying that the competence of real estate professionals "has fallen to its lowest point ever." Real estate consultant Jim Sherry says "Consumers have no guarantee that anyone calling themselves a REALTOR actually knows what they are doing."

It would be hard to disagree with either of these statements. I run into colleagues with alarming frequency who clearly don't have a clue what they're doing! We all bear some responsibility for this.

Consumers bear some responsibility for their willingness to tolerate ridiculously low standards for their real estate professionals.

The industry bears responsibility on several fronts. We don't demand higher standards for ourselves. We also don't do a good enough job of self-policing.

The regulators and legislators have clearly fallen down on their responsibility to consumers.

But enough about blame. What's a consumer to do? How do you know if the real estate agent you pick is any good?

I've had a series of blog posts on how to choose your agent. But I'd also like to recommend a site where the public has the ability to rate agents they've done business with.  That latter part is important. There are a lot of sites springing up where people can rate real estate agents. But they don't have to have had any contact at all with that agent to rate them! That can lead to all kinds of mischief and certainly isn't likely to be very reliable information.

QSC, on the other hand, is an independent organization. I ask them to send feedback requests to each of my clients after our transaction is complete. Sometimes clients send them back. Sometimes they don't. But over time you begin to get a sense of whether or not I'm any good at what I do.

QSC is not the complete answer. But it's a start until the rest of us start working on doing our part!

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Guarantees

This is the next installment in our series on how to choose a real estate agent.

One of the questions I believe you should ask any potential agent is "Do you guarantee satisfaction with your services in writing and if I'm not satisifed, will you release me from our agreement?"

All of my listings have an Easy Exit Guarantee. It says simply that if you're not satisfied with the work I'm doing in trying to sell your home, you can cancel the listing agreement at any time.

And, if you're a buyer working with me, the Exclusive Buyer Agency agreement can also be cancelled with written notice.

No agent with an ounce of sense should ever try to hold a buyer or a seller to an agreement when they're not happy. (For what it's worth, I've also terminated agreements with clients when I believed we were not a good fit!)

And while common sense will tell you that any agent should let a client go when they get such a request, it doesn't always happen. This is definitely a conversation that should happen up front. You don't want to ask the question for the first time when you're unhappy.

Any one running a small business is very dependent on personal referrals for their business. One very unhappy individual can do a huge amount of harm to your business. I simply don't understand why every agent wouldn't make it their policy to release a client when they ask. But I know from experience that not everyone has this policy!

So make sure it's one of the questions you ask when you interview an agent!

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DPOR

The Virginia Department of Professional and Occupational Regulation exists to protect you, the consumer. If you haven't checked out their web site, it's definitely worth a look.

This web site has news about changing real estate laws. It has a place for you to check out real estate agents and find out whether there have been any disciplinary actions against them. And while I'm talking about real estate agents here, DPOR actually regulates 30 occupations and professions.

There are two upcoming changes to real estate laws that will effect you in the next 12 months. And, as each one gets closer I'll have a blog that provides more information on what you need to know. But the DPOR site is a good place to get started with what's coming up.

And, if you're getting work done on your house, you might want to check out your contractor here before you hire him or her! First you want to know if they're actually licensed! Then you want to know if there have been serious problems with them in the past.

It always pays to do your homework! And DPOR provides a good web site for starting that process.

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Experience and Volume

This is the next piece in our series on how to find the right real estate agent. Today we're going to talk about asking the right questions regarding experience and the amount of business they do.

Ask any potential agent "Is real estate your full time profession?" The average number of transactions for a real estate agent in the US is 4 per year. Obviously, at four transactions no one is paying the bills with just real estate. And realize that 4 is the average! That means there are a lot of agents out there who do substantially fewer transactions!

Now, I'm not saying that a part time agent can't be a good agent. (Or that a full time agent can't be really bad!)However, at just a few transactions a year it's going to take the average REALTOR about 5 years to get the amount of experience that a full time, busy agent gets in one year. That matters because when something goes wrong, it helps to have someone who's seen it before!

And after asking the first question, if you feel the need for further clarification, ask how many transactions the agent did in the previous calendar year.

If you decide to hire an agent with not much experience I would recommend that you meet their broker. The likelihood is that they're going to be dependent on their broker for advice and counsel during the process. And you want to feel that the broker is someone you can trust.

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Protecting Your Interests

This is the next segment in our continuing segment of how to interview a real estate agent. Today's segment applies whether you're interviewing an agent to buy a home or sell a home.

Today we're talking about agency. Ask your agent "Will you commit to representing only my interests in the transaction?" With this question you're asking them to forego the possibility of doing what is known as "dual agency".

But let's back up and talk a little bit about definitions. Agency in a real estate transaction has to do with whose interests the agent represents. Single agency would mean that the agent represents the interests of only one principal, either the buyer or the seller, never both. Virginia, and some other states, have also created something called "designated agency" this is where although the agent represents only your interests, their broker represents both sides. For example, a ReMax Regency agent is the listing agent and another ReMax Regency agent is representing the buyer. In this instance, Chuck Cornwell, the managing broker would be a dual agent representing both parties. My opinion on designated agency is that in larger firms you usually don't have much of an issue with conflict of interest, but there is always that possibility.

Dual agency is when the agent who is listing the property is also, supposedly, representing the buyer. In effect, I would say that they truly represent no one's interests other than their own! One of the principle skills you pay an agent for is their negotiating expertise. But in a dual agency situation they can not advise either buyer or seller on negotiating tactics, proper pricing, etc. I don't know how you can possibly justify your commission if you've just taken out a major component of your value to your clients!

By the way, disclosed dual agency is not illegal in the state of Virginia. Notice the disclosed, however! The possibility of dual agency must be disclosed before the agent ever takes you to see the property in question.

I don't practice dual agency. But, like most agents I frequently get calls from someone who has seen a sign on my listing and calls me to see it. Before we go in I tell them that I represent the sellers interest only and that they should be careful not to share any information with me that would hurt their negotiating position. And, even after this discussion, many people still will tell me how much they love a place or exactly how much they can afford to pay for a property. My obligation to the seller means that I MUST SHARE THAT INFORMATION WITH THE SELLER!

That's with me telling buyers what they're up against. There are too many agents who simply say they represent the seller without any discussion at all of what that might mean for the potential buyer. And, there are some who never discuss agency at all until they sit down to write the contract!

I've said it before here and I'll say it again, the only one who benefits from dual agency is the real estate agent who collects double the commission!

So, ask any potential agent if they will represent your interests and only your interests! It's an important question!

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Asking About Average Sales Price

In our continuing, occasional series on interviewing a realtor, I'm going to talk this time about average sales price as a percentage of list price.

First of all, let's work on some definitions. Let's say you list your home for $400,000. If it sells for $400,000 you've sold it for 100% of the list price. If you sell it for $390,000 you've sold it for 97.5% of it's list price.

If an agent averages those numbers over all the transactions they do, you get average sales price as a percentage of list. It's a number I would ask an agent for when I was interviewing them.

To give you a frame of reference, during the hot sellers market a couple of years ago, it was not at all unusual to have an agent have an average that was over 100%. Obviously, that's not true these days! For February, 2007, the last month for which numbers are available, the average for Fauquier County was 92.76% and for Culpeper County 94.22%.

Ideally, of course, you want an agent whose numbers beat the averages! And you definitely want an agent who doesn't look like a deer in the headlights when you ask them about this. They may not know the exact market numbers for last month for a particular county. But they should certainly know generally where the numbers have been. And they should definitely be able to tell you what their own numbers look like.

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How to Interview a REALTOR

Over the years a number of clients have told me that while I was wonderful, they believed that it was pretty much the luck of the draw that they got a good agent! That tells me there's a problem with the system!

So, I will begin doing occasional posts here on questions you should ask a prospective agent. I will, over time, cover questions from both a buyer's and a seller's perspective.

Today, I'll start with a discussion of the question: What additional designations or certifications do you have?

I believe this is a vitally important question that almost no consumers ask!

Do you know that old joke about what you call the guy who graduates at the bottom of his medical school class? (Doctor!) Well, it's true in real estate as well. You have no idea whether your agent passed their real estate test with 100% of the answers correct the first time or if it took them 20 tries and then they passed by one point! Either way, their a real estate agent!

And, to be perfectly honest, the training you get in order to get a real estate license has very little to do with your ability to be successful in this profession day in and day out. As my instructor told me on the first day I sat down in the real estate class, "This is not to train you to be a real estate agent. It's to train you to pass the state exam." And they did a great job of that. But as a consumer, that's not much help to you! Much of the material is made up of arcane legal matters that will never come up in the average residential transaction in the commonwealth of Virginia!

So, to do this job well, I believe it's imperative to get additional training and to get it as soon as possible. GRI, Graduate Realtor Institute, should be one of the first things a new agent works on. It's all the stuff you need to know in order to really do your job as an agent!

Another reason I believe additional training is so important is that it increases your knowledge at a much faster rate than you could ever manage on your own. If the only lessons I learn are the ones from the transactions I myself am involved in, it's a pretty slow learning curve. If I get the chance to learn from the wisdom of the instructors, the course materials and the shared experiences of everyone in the course, I become a much more experienced agent in a much shorter period of time.

And, lastly, the continuing education requirements for real estate agents are pretty pathetic. While there's work ongoing to increase the requirements, currently an agent only needs 16 hours every two years. And a surprising number of agents manage to fulfill those requirements without learning anything new!

Here's a link to a list of the designations and certifications recognized by NAR (National Association of REALTORS). I urge you to take a look for yourself and decide which are important to you. If you're curious about which ones are important to me, you can check out my own designations or ask me about what I'm working on next!

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Choosing an Agent

Date: Oct. 15, 2006
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I was at a training session this last week and an agent in the area stood up and told how she gets lots of business by showing up for appointments in a new Mercedes Benz and a $3,000 custom suit.  It's an interesting marketing plan, if not one that provides a whole lot of benefits to the customer/client!

If you're wondering, I'm never showing up at your house in a $3,000 suit, even if I'm the richest woman on earth! My frugal ancestors would roll over in their graves! I was definitely not raised for conspicuous consumption!

But I did think that this might be an opportune time to talk about how you should go about choosing a real estate agent. I would argue for substance over style in this choice, although who you feel comfortable with is also a large consideration. After all, you may be spending a lot of time with this person and you'll certainly be trusting them for advice with one of your largest financial transactions.

So, here are some other criteria you might think about when choosing a realtor.

1. Is this your full time business?

2. Do you have references available?

3. How long have you been in the business?

4. Are you a REALTOR, bound by the NAR code of ethics?

5. What additional designations, certifications do you have and what do those mean for me?

6. What is your communication plan for working with me?

7. What benefits does your firm offer to buyers/sellers?

These are questions that will apply whether you are buying or selling a home. There are also questions that will be specific to if you're buying or selling. In this blog, we'll talk about some of the sellers questions. I'll leave the buyers questions for another day.

1. What is your list price to sales price ratio?

2. What is your average DOM for your listings?

3. What is your marketing plan for my home?

4. What will you do to market my home on the internet where most buyers now start their home search?

5. What else do you do for me besides market my home?

6. Will you represent only our interests or do you do dual agency?

7. What happens if I am unhappy with your services?

And, here's one question you should not base your decision on:

How much will you list my home for?

Anyone can give you a number that will make you happy! But if your home won't actually sell for that amount, you're just buying trouble for yourself.  And you will ultimately net much less by overpricing your home at the beginning.

As always, comments regarding these suggestions are welcomed! Do you have questions you've used with agents that have gotten you vital information that helped you make a wise decision? Share them with us!

And, if you'd like to ask me these questions, get in touch! Julie@JulieEmery.com is my e-mail address and you can find out more about me at http://www.JulieEmery.com

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