Home Buyers: Test Drive The Driveway!

When home buyers in the Triangle drive to properties in a separate vehicle from me, I always tell them to park in the driveway.
“Test drive the driveway.  It is part of what you are buying.”

We don’t have mountains here in the Piedmont, but the topography certainly rolls. It is easy to find steep driveways in both Raleigh and Cary.  And that steep driveway can be a deal breaker.
A Buyer needs to know they are comfortable in the driveway, if their car scrapes bottom entering or leaving, if they have good sight lines when backing out, if that side entry garage requires a three-point turn to enter and exit or if it has adequate space for a pad that allows easy access.
The time to know is prior to going to contract on an otherwise appealing house.
As their buyers agent, I want my clients to notice before we write, before we give up a large Due Diligence Fee to get a contract.

Inducements to Buyers Agents on the Rise?

It is only fair that consumers know about incentives offered to their agents.
This applies particularly to commissions, bonuses, and spiffs offered to buyers agents by builders, or resellers, who offer fat checks to agents to drive traffic to their subdivisions or resale homes.
Nearly 90% of resale listings in Wake County offer me 2.4% of gross contract price as my commission for bringing a successful buyer
Many builders offer 2.5%.
My Buyers Agency agreements all stipulate either a 2.4% or 2.5% Expected Compensation.  I always inform the Buyer client if I am offered a higher pay from “across the table.”
And, I am seeing an increase in higher offers dangled in front of me, if I will bring my client to contract with a builder.
For example, I just received this email from a builder’s representative:

Hi Mike,

“XYZ” is offering 4% commission on all 5 quick move-in homes at “XYZ Development” in “Lovelytown” if they can close by the end of November. That’s BIG money.

As an incentive to attend our luncheon this Thursday 9/14 from 11-2pm we’re offering a $25 gift card for the first 10 agents to arrive. In addition we’re having a drawing for 3-$50 gift cards for touring our quick move-in homes.”

I have a file of many offers like this, from many builders, collected over the last few months.
Transparency in ethics, and current Buyer Agency regulation, require that I disclose these incentives to my buyer clients ASAP, and definitely prior to writing an offer for them.
A buyer should rightfully know, early and clearly, that I stand to reap an increased financial benefit for guiding them, or pressuring them, to purchase any property.

I remember well in 2009, when the market was completely reverse of that we have experienced over the last couple of years, when we bragged about getting contracts in less than 3 months on the market.
And, sellers were desperate.
I saw buyers agent commissions as high as 8%.
You read that right.  “8% of contract price.”
Now, THAT is really BIG money.

I showed a new house in a subdivision where the builder was offering me 4.5%.
And, in follow up, the on-site agent whispered conspiratorially to me, “And, Mike, we want to take care of YOU, too.  I’m sure I can get you more money, if we can get your buyer under contract.”
All I could think was, “EEEwwwww!  So glad my buyer has no interest in these homes.”

I am seeing an uptick in these bonuses and increased commissions, usually in outlying areas outside the Hot Hot Hot Cary, Raleigh real estate market.
Builders want contracts and closings before the end of the fiscal year.  Help those top and bottom lines, and get more houses coming out of the ground.
This happens every year.
I don’t see anything unethical in their actions.  Ethics?  That is my responsibility, and I can choose to be transparent or conceal my motivations from a client.
Transparency, ethics, integrity, clarity.  It’s a package deal.

The current market in the Raleigh-Cary area is moving FAST!

Sellers’ Market Alert!  Real Estate Factoid!
Since yesterday morning, as of now, 55 Wake County homes have been put on “Contingent” status in the Triangle MLS.

For those 55 listings, the median average Days On Market, “DOM,” is 30.

And that is happening with multiple offers, difficulty getting showing appointments, and barely ready listings.

And, this is mid-April.  We are just ramping up!

Thus defines a “Sellers’ Market,” and a “Frustrated Buyers’ Market.”

 

Get Pre-approved to have a chance in the Cary Real Estate Market.

Craziness reigns in Cary real estate.
But, buyers, if you think you are going to score a new home in a great Cary neighborhood this spring, you are going to have to have a plan.

MLS home listing inventory has shrunk, while demand has boomed. Desirable homes, and even homes of questionable value, are popping off the market.

“He who hesitates is lost,” is the fact of life for Cary home buyers right now.
But, “Haste makes Waste” also comes to mind.

So, buyers need to be methodical, and deliberate. And efficient.
Get funding lined up. Proof of funds for a cash buyer. Solid pre-approval letter from a respected lender for borrowers.
Listen to your Realtor. Get those out of the way.
They are necessary groundwork. Once they are procured, you are in a position to make a quick offer when a home clicks.
And, quickness in deliberation is required!