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.

You Don’t Need a “Certified Deed” When You Buy a House.

Bob bought a nice little condo in Cary.

He contacted me a couple of weeks later and told me he was getting a sales pitch from someone who was peddling a “Certified Deed.”
He wanted to know if this is something he needed.

No.  He doesn’t need a “Certified” Deed.
This is just a low-level scam that comes around now and then. The scammer follows closings at the courthouse and contacts  new homeowners with an official looking letter, offering to help them protect themselves with a “Certified Deed,” usually for a fee in the $70–$150 range.
And it is totally unnecessary and useless.
Bob’s deed was recorded at the Wake County Courthouse Register of Deeds Office, and is on the public record.  When he emailed me asking about the “Certified Deed” scam, I emailed him a link to the recorded deed.  That recordation carries more weight than any scammer’s fake deed.

And, I told him if he ever had a question about his deed and ownership, he should contact his closing attorney.

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.”

 

Buyers’ Market? Sellers Market? Maybe it’s a Ninja’s Market!

Home buyers are noticing that desirable properties, depleted inventory, and great demand are creating multiple offers daily in the Triangle.
Welcome to the Cary NC real estate market, 2013 Version.

We are seeing homes sold with 0, Zero, Days On Market. The Pocket Listing is back. Sell them before they hit the MLS.
We are seeing showings declined on Active listings, and no response from the listing agent. Et Voila! A contract!
We are seeing homes go under contract before photos are posted to MLS.

Buyers’ agents must sniff out opportunity and be ready to turn on a dime.
Like the ninja of old, it can take legendary skills to complete the task. I haven’t developed the skills of invisibility, time travel, or shape-shifting, but they may come in handy.

More seriously, the market was strengthening for sellers and getting more competitive for buyers through last year, 2012. Then the news broke that Wake County Public Schools would resume school assignment by address. And some areas went into hyper-drive. Davis Drive Elementary School and Davis Drive Middle School are two very desirable schools. Historically, homes with school assignments for those two schools have traded at a premium. Confusion over school assignments for a couple of years defused that demand. Now? Buyers flock to homes in neighborhoods that have assignments for both schools.

2012 and Wake County Property Taxes

2012 is the mid-point of the Wake County property tax assessment cycle. We reassess all properties every eight years. Last full property tax reassessment was performed in 2008, and the next full reassessment is scheduled for 2016.
Volatility in the Triangle housing market has raised the question of whether such a cycle is adequate. When some real estate values dip or increase more relative to other properties, should assessed values be corrected to be accurate? What costs would taxpayers have to be willing to absorb for more frequent reassessments?

The N&O had an article today, regarding the quandry, and the issue in Orange and Chatham Counties where property tax reassessments may possibly be delayed to avoid increasing the tax rates to maintain revenue.

It is more politically feasible to delay assessment than to be the one who voted for a tax rate increase, even if the bill stays the same…

Photos in MLS Listings Carry a LOT of Weight

Poor photos diminish property values

The Price of Poor Real Estate Photography


I was looking at visitor statistics on my No Hassle Home Search
this morning, and one detail jumped out at me.

With over 20,000 page views so far this month, 25%, over 5,000 of those views were in Photo Galleries. I.e., consumers routinely look at the property photos when surfing the internet to search for homes. And I am sure that other agents generate more traffic than I do.
It is not unusual for potential buyers to email me and inquire if more photos are available for someone else’s listing they have found on my IDX. Then I have to explain the nature of IDX services. And, sometimes I find that the Listing agent has used the tax rolls photo, which is NEVER complimentary to the property. Ouch! for that Home Seller.


501 Midenhall Way by Mike Jaquish

501 Midenhall Way from Wake County Revenue Department

Which do you think presents that home better to Buyers and Buyer Agents? I’m picking the top one, the one I shot. And when you multiply those page views I see by the number of agent IDX sites and scraper sites, the impact of poor real estate photos is exponentially increased. Like having a bad product and going international to purposefully gain more bad press on it. Why? Poor photography going viral to diminish property interest? How is that good for home sellers?
Lack of photos, poor photos, etc, actually can be one of the worst marketing investments home sellers can make.




Real Estate Sales Settlement and Closing in Cary NC, 60 Seconds in Real Estate, Cary NC

Buyers need to know when they will receive keys to the house. Typically, that is after Closing.





Settlement vs. Closing in Cary NC Real Estate

Folks buying or selling a home in Cary need to plan well for activities around Settlement and Closing. And they should be able to expect some guidance from their Listing Agent and Buyers Agent.

And, many home buyers in Cary do not know the difference between Settlement and Closing in a North Carolina Real Estate transaction.  When using the NC Association of REALTORS® Standard Offer to Purchase and Contract, the two terms have significantly different meanings.  "Settlement" is the signing of documents related to conveyance of the property.  "Closing" is when the Closing Attorney actually records the Deed at the Wake County Courthouse.  Buyers are still Buyers until the Deed is recorded.  After Recording, i.e., "Closing," Buyers become "Owners."

 


How to Pro-Rate Wake County Property Taxes at Closing: 60 Seconds in Real Estate Cary NC

Wake County Property Tax Pro-Ration with video blog



Real Estate Closing and Wake County NC Property Tax Details

Wake County Property Tax Proration at Closing

It really isn't all that complicated.

Seller pays property tax through Closing, the date of deed recordation.

Buyer pays the balance for the year starting from the day after closing.

Wake County Property Tax year is the Calendar year, January 1 through December 31.  Your Closing Attorney will divide the tax bill by 365 days, and multiply the result, the property tax per day by the number of days for which each party is responsible.
And the total is the party's share.

If the tax bill has been paid already, Buyer will credit Seller at settlement for their share. 
If the tax bill has not been paid, Seller will credit Buyer for their share.

It seemed to be worthy of a quick breathless 60 Seconds in Real Estate Cary NC video blog:

 


Tax Value does NOT Equal Market Value! 60 Seconds in Real Estate Cary NC

Wake County Property Taxes do not always reflect true current market value.

We see it routinely in the Cary area. Listing Agents shout, “Priced $Thousands below Tax Value!!”
It doesn’t mean much. If the difference is in the tens of thousands, then a Buyer might wonder if the Seller should have appealed the assessment and tried to have it lowered to a reasonable affordable number.

Wake County Property Tax reassessments are performed every 8 years. The last time was in 2008, with the next reassessment scheduled for 2016. Until then, Wake County will not adjust tax values because of market conditions or soft sales prices.

I have spoken to many homeowners who are afraid to appeal taxes, as they believe that a lower assessment may hurt their home value. That is an error, I believe. If one is contemplating selling their home, a Wake County Property Tax bill that is excessive can discourage a Buyer.

And I got into it in a 60 Seconds in Real Estate episode:

Comps, Competition, and Compelling Pricing

Cary Home Sales set comps. Competitive pricing compels buyers to buy.



Comps, Competition, and Compelling Pricing

Comps, Competition, and Compelling Pricing

Everyone wants to see "Comps," comparable closed sales when fixing a price for a new listing.

I agree.  We have to begin with the end in mind, and the "End in Mind" is a closed sale.  A contract price MUST be supported by market activity, specifically recent, comparable sales that have closed.

However, a smart seller and smart listing agent will also consider "Competition."  And that will include properties outside the specific neighborhood where the home to be listed for sale is located.
See, while the neighborhood activity must support the sales price for appraisal purposes, Buyers have myriad choices outside the neighborhood. 
A home worth $400,000 must compete with and draw attention away from other $400,000 choices.  We just cannot tell Buyers that they can only shop one neighborhood.

So, Sellers have to be competitive across a broader area, perhaps a school district, or a local geographic area in a county or town.
In Cary, and Wake County, NC, the Wake County Public School System manages all public schools at the County level.  Town boundaries do not indicate school assignments, and it is not uncommon to see a neighborhood, all or part, reassigned to another school
So, parents will shop various school assignments, attempt to grasp stability in assignment, and affordable neighborhood options. To do so, they may look in a ten mile radius, or farther.  That search may take them out of Cary, and into Morrisville, Apex, Raleigh or any other local municipality. 
That is why it is smart to consider a wide area of competitive Active listings when pricing a home.

Comps, Competition, and Compelling Pricing, via 60 Seconds in Real Estate, Cary NC: