Audrey's Adventures in Real Estate

In our industry you must as they say, "Roll with the Punches".   Dutifully you have marketed, staged and priced your listing.  Your seller listens to everything you say.

You are getting good traffic, good feedback and viola a contract.  Oh that nice sweet contract . .  OR is it?

You, as the listing agent - in my area, do your due diligence by qualifying the buyer, calling the lender, reading over the lender letter.  Sometimes you get one that is really  a pre-approval and other times, well, let's just say it is not.

I talk to the lender and sometimes it just feels like lip service and from some it is.  I am happy to have a contract but I have to tell you that I am going to blow up from stress because some lenders don't have their acts together.

This is a time to speak with your preferred LO and make sure you have a deal and not a nightmare.

We have been spoiled by the desktop underwriting and many types of loans are going back to manual underwriting.  In our current financial environment, that is understandable but we need to be prepared for the extra work and details that will now be involved in getting to settlement.

It is like the old days of manual underwriting.  I hate feeling like I have to check up on some of the lenders, but you do.  This calling two days before settlement to tell me that the loan has been switched unbeknownst to anyone is not a good thing.

When you get an offer on your listings I think you will do yourself and your clients a favor by checking in with your trusted lender to get an update on lending guidelines.  What was true last week is not so this week.  The underwriting guidelines are changing almost daily. 

Now, more than ever it is important to have a strong lender as part of your team to keep things running smoothly.  Even if they are not doing the loan on the property, their expertise can be invaluable. 

My Maria, she is the best.  She is leaving me at the end of July and I am sad.  I have written a post about it I don't Bad News very well. 

She is so cute.  Tonight I was at home, getting ready to write a post about who knows what and my phone rings.  Maria said I know you are home alone and I want to take you out to dinner.  So, we went out and had dinner.  I, of course, treated and we had a great time.  

You see, I am supposed to be on summer vacation with my family but I had a couple of settlements that got postponed to Monday.  I sent my husband down to our home in NC and am waiting to settle tomorrow.

Maria is my assistant and my friend who is going to move to Florida with her boyfriend.  I understand even though it is not a great scenario for me.  It is life. 

I always love that Maria has such good energy and a positive attitude that I will miss her dearly.

That's all, gonna miss her help and support.

Here at AR we all work in the same industry.  Real Estate.  Whether we are the agents, lender, title folks or inspectors, we are all part of the same, mostly happy, family.

I have read several articles recently about events that happen to us on a daily basis, but what sort of interested me was how different some of the customs are in different areas?

I thought it would be fun to just tell some of the customs and protocal in my area and would like for you all to tell me how it is done in your area to compare just how similar or different we do the "same" business.

In a typical first buyer appointment I will disclose agency ( mandatory in my state) and go over the Buyer Broker Agreement ( BBA).  I will only work with a buyer if they sign an agreement with me, it is the only way I can truly represent them in my area.  I have read that some areas do not use this - I can't imagine not using it in my business.

The agents are fiduciary agents in the transaction in MD.  I know some of you are transaction brokers.

As a listing agent, working in my seller's best interest - remember, fiduciary- I want a financial information sheet on the purchaser, showing me where they work, what their annual income is and there are enough assests to close the transaction.  In addition to this I want a lender letter with all of my offers so that I may verify the information.  This is not the law, it is not mandatory but customary in our area for the purchaser to provide the information.  I guess my thinking is how do I protect my seller from taking an offer and wasting time with someone "who is a renter in buyer's clothing"- Jesse Clinton.  Who do the think the seller is going to be upset with if you can't try to at least do your due dilligence?  The listing agent.

Next would be a home inspection.  When I represent the buyer, I go with the inspector and the buyers to the inspection and stay the entire time.  Sometimes I will have a listing agent stop by to see how things are going.  They are typically not there at the inspection though.  The agents negotiate the inspection items.  I know some areas have attorneys negotiate this.  In my mind, no offense, that makes me have visions of waiting for weeks on end for the inspection to be resolved.  The good part for the agents is that scenario it takes your butt out of the legal sling.

When a contract is written the earnest money deposit is typically held by the selling broker.

In MD, you do not have to have a brokers license to sell real estate, you can be a sales agent for a Broker of Record. 

In MD you cannot represent the buyer and the seller in the same transaction.  That is another post entirely.  You can represent one or the other, never both no matter how much you disclose it.

Buyer chooses their own lender and will probably ask for advice in this department from the agent.  Buyer selects the settlement entity.  This typically a title company/ attorneys.  There are not two attorneys at the settlement representing each party.  The settlement attorney/officer, in our area, represents the bank and the contract.  They usually conduct the settlement.

Also, it is customary for all parties to be at settlement together at the same time.  This is the case unless someone has a schedule conflict or has already moved, but normally we are all their together.  I remember buying properties in NC and thought maybe I offended the folks because the seller was never at my settlement?  I have now figuered out that in that area both parties don't usually have settlement together.

When settlement occurs, funds are dispursed at the table, I know some areas have to wait for the deed to be recorded?

Those are just some of the ways we do it here. There are things I have left out, but I must run to an appointment -  I am sure there are agents that do it a bit differently than I do even in this area.

I thought it would be fun to hear how different it is in your area from some of these customs and maybe why?

Today is the longest day of the year.  The Summer Solstice.  There are many folks at Stonehenge for whatever it is they do there on the Summer Solstice.  I guess anything and everything is worth celebrating?

For me, I live in the DC area, it will stay light until about 9:00 pm today.  I love that.  I know depending on your location and time zone, you may have daylight longer than 9:00. 

This got me thinking about Jesse Clinton, way up there in God's country.  It stays light almost 24 hours during the summer?  Wonder how big the party is in Alaska?  Jesse . . .?  I am sure I will be corrected here soon as to the exact hours - Sorry, I have gone to look up the exact time.

As much as I like the longer days, I wonder if we could sleep through it all?  Maybe there is a big market for those eye cover thingyies that Thurston Howell III used to wear?  I bet the sunsets, when they happen are breathtaking.  If you haven't, check out Jesse's blog- I suggest you go there now.  Not only will you learn with great humor, Jesse has some really great photos of the breathtaking sunsets in Alaska.

Where ever you are celebrate your Summer Solstice in style!!

                                                    I am rethinking how I have done my business for the last two decades.  I think the Post Settlment Occupancy agreement (PSOA)will now come into play for me and what is best for my clients on almost all contracts.

This will be important for the "domino effect" transactions.  These are the transactions where the consumer will have to sell one house in order to purchase the next home.

Typically the sellers move out and have the house vacant on the day of settlement date so the buyers, new owners can move right in.  In past markets we have written PSOA into contracts when sellers have had to have the proceeds from their current home to move to the next home.  I NEVER schedule back to back settlements anymore, unless it is one of my lenders that I know will have the loans done on time.  When a lender letter is presented on my listing and I speak with the LO, I still have my doubts and I structure the settlements with a PSOA.  Sometimes that is not the perfect answer, but it gives everyone a time buffer.

The reason for this is with the tight underwriting guidelines these days you never know what the underwriters are going to ask for at the 11th hour and 59th minute?  Then the purchaser has to get "one more document" and it will typically hold up the settlement.  This will make everyone in the transaction have to scramble to stay in the time schedule and that can't always be done.  I don't really care what the reason is, if this happens it is frustrating and expensive for all parties involved.  We are seeing it happen more and more in our current market.  With the PSOA, there is more time to firm up the financing in case there are last minute problems.

This can be a stressful time for all parties involved.  It is especially stressful for the seller and buyers, who's entire life is sitting on a moving truck.  They have taken off work, took the kids out of school, got a baby sitter.  If they don't make full settlement, everyone is staying right where they are are looking for increased costs of money and time to both sets of clients.

The benefit of the PSOA is it will make your transition as a buyer or seller less stressful. With the PSOA, you can have your settlement and then have a few days - whatever you negotiate- to take off of work, take the kids out of shool, and pay for the movers for one day, not a week.  The beauty is that everything is signed, sealed and delivered and you can now move forward with your moving plans.

In my market it is customary for the seller to pay the purchaser's daily expenses based on the new loan amount, taxes, insurance, and HOA fees.  This will probably be higher than the seller's current payment, but I guarantee you it will be cheaper than paying for the moving truck, movers, hotel rent if needed. 

If you are the buyer, you might be thinking, "how do I know the seller won't damage the house or they will get out?"  Ask your agent or settlement attorney.  There are provisions in the agreement for these details.  In our market, we will have the seller leave a deposit with the settlement company so you can then do a final walk through to make sure the house is in the same condition as when you settled.  The security deposit will protect you, the buyer, from any damages the movers may have done during the move.

Let's face it, moving day is stressful enough, using a PSOA might be able to help make it a better process.  At that point, the house is vacant, cleaned, and ready for you to move right in and get on with your life!!

Metropolitan Regional Information Systems, Inc.   ZIP Code Statistics - <$100K to >$5M Format

ZIP Code: 20841 Boyds, MD
From: 05/01/2008 to 05/31/2008                Statistics generated on: 06/06/2008

Source: Metropolitan Regional Information Systems, Inc. - MLS Resale Data
Copyright 2008 - Information deemed reliable, but is not guaranteed.

Metropolitan Regional Information Systems, Inc.   ZIP Code Statistics - <$100K to >$5M Format

ZIP Code: 20874 Germantown, MD
From: 05/01/2008 to 05/31/2008                Statistics generated on: 06/06/2008

Source: Metropolitan Regional Information Systems, Inc. - MLS Resale Data
Copyright 2008 - Information deemed reliable, but is not guaranteed.

Market statistics for Germantown Maryland, zip code 20874.  The information is provided by MRIS services.

These are the housing statitics for the Gaithersburg zip code area of 20878.  The information is provided my MRIS services.

Metropolitan Regional Information Systems, Inc.   ZIP Code Statistics - <$100K to >$5M Format

ZIP Code: 20878 Gaithersburg, MD
From: 05/01/2008 to 05/31/2008                Statistics generated on: 06/06/2008

Source: Metropolitan Regional Information Systems, Inc. - MLS Resale Data
Copyright 2008 - Information deemed reliable, but is not guaranteed.

Paying through the nose . . .

This is going to be a "Chicken or the Egg" argument, I will be interested in your opinions.

I recently wrote a post Are Sellers better Consumers than Buyers?  In that post I ask the question of why do sellers seem to do more homework and research when selecting an agent as opposed to the buyer's process of agent selection.

The consensus from most of you was that the seller pays the commission and wants to protect their equity.  The buyer does not pay commission to the agent so maybe the choice is not as important? Okay, that sort of makes sense to me, well sort of?

 I have a big but with that argument - yes, I have a big butt elsewhere, but that is another post entirely. 

My argument is the SELLER would not have the MONEY to pay both of the agents if the BUYER didn't come up with the money to buy the home.  The seller doesn't pre pay us, at least not in my market?

So, yes, as a ledger sheet goes, the money does come from the seller's side of the sheet, but the buyer has to come up with the lump sum in order for this to occur.

For me, the argument that the buyer doesn't pay the agents doesn't hold water.  I believe that the buyer should be very selective in the choice of real estate agent when they are making their selection for the best representation in a transacction.

This doesn't mean I think the seller's side of the transaction is less important. Not for one minute.  My opinion is that the buyer should stop and give more thought to the fact that they are "paying" too.

In the end, not having an agent with experience and know how could end up costing the buyer MORE money.