If You Can Search The MLS, Why Do You Need An Agent?

July 24, 2009

homesalepriceFrom agent Greg Swann in the Arizona Republic:

Here’s an intriguing question: Given that it’s so easy to search for homes on the internet, why do you need a buyer’s agent?

Face it, if you use the MLS search tool on my web site, you’re seeing exactly the same listings I see. And you know better than I ever could what you like and what you don’t like.

By now, the home search process is at best a partnership between the agent and the buyer. In some cases the buyer and I will work together to perfect our search criteria. But many buyers simply search the available inventory on their own, emailing me the MLS numbers of the homes they want to see.

So why do those buyers need a buyer’s agent?

Realtors hoarded the MLS data for so long that even they came to believe it was the source of their value to buyers. But this is very far from the truth.

You don’t need me to search for listings, although I’m happy to do that. And you don’t need me to open lock-boxes. You need a buyer’s agent to guide you through what is in fact an arcane and perilous process — potentially a financial disaster. You might not need me to find your next home, but you need me to make sure that you get it — or that you pass on it, if that is what is truly in your best interests.

A skilled buyer’s agent will write the kind of purchase contract that will prove surprising to you at every turn, with every term and condition tailored to achieve your best advantage. Your agent will supervise the inspection process and negotiate the optimal solution to the repair issues. Your agent will be prepared for every pitfall in the escrow process.

If you bought and sold houses every day, you could do all these things yourself. It’s because you don’t — and because the seller and the listing agent are looking to take advantage of your naivete at every turn — that you need a skilled buyer’s agent as your steadfast champion in the home-buying process.

Greg’s post is right on the money. Personally, I like to help my clients search for homes, but that’s largely because as an agent I have access to information that can tell me, for instance, whether or not the property is already under contract even though it’s still listed as “Active” in the search they are using. I’m also looking for certain things that clients – no matter how savvy they may be – will not notice or understand. Still, it’s what comes after finding the property that is going to make a bigger difference to my clients, and makes my involvement crucial for them.

Kim Hannemann,  Samson PropertiesSamsonPropTag
Real Estate Consultant/Realtor
Cell: 703-861-9234 • Fax: 703-896-5055
Email: KimTheAgent@gmail.com
It’s Good To Have A Friend In The Business®

If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

4.5% Listings with First-Class Service — Cash Back to My Buyers!


March 2009 Northern Virginia Sales Info

April 15, 2009

chartMarch 2009 home sales activity for Fairfax and Arlington counties and the cities of Alexandria, Fairfax and Falls Church and the towns of Clifton, Herndon and Vienna (this sounds like a weather alert, doesn’t it?):

A total of 1,384 homes sold in March 2009, an increase of 11% over March 2008. That’s great, but look at this – pending home sales, based on signed contracts, are 2,306, up a fantastic 33% from last year!

Active listings – homes on the market – decreased by 20% from last year, with 8,069 active listings in March, compared with 10,123 homes available in March 2008. Fewer homes on the market usually means prices are poised to start rising. The supply of homes has again fallen into the under-six-months “seller’s market” range.

Another sign of strong activity – the average days on market (DOM) for homes in March 2009 decreased by 18% to 89 days, compared with 109 days in March 2008.

Sales prices continue to remain lower than those realized last year. The average sales price in March fell 17% percent from March 2008 to $395,512, while the median price was $335,000, also a decline of 17%. Interestingly, though, the average and median sale prices are both about 5% higher than last month.

Agents are reporting a considerable number of multiple-offer situations on foreclosures, and on attractive well-priced homes in good condition, particularly in price ranges under $425,000. If you are looking for such a home, be prepared to act decisively – and, if the home is right for you, don’t let yourself be outbid.
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Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com

It’s Good To Have A Friend In The Business®
samson-realty-and-bird

If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

4 – 4.5% Listings with First-Class Service — Cash Back to My Buyers!


Tips for First-Time Northern Virginia Buyers

March 20, 2009

pricedownReductions in Northern Virginia home prices, and unprecedented low interest rates for mortgages, have combined to offer tremendous opportunities for renters to become homeowners. The prospect of making the change may be exciting, but also overwhelming.

Here are a few common mistakes to avoid:

hud-logoNot understanding the home buying process. Educate yourself. Find a homebuyer seminar that you can attend, or research online. The U.S. Department of Housing and Urban Development has an entire section devoted to first-time homebuyers, information on mortgage programs, downloadable tools such as a “wish list” and home-shopping checklist, tips on selecting a real estate professional, and so on. Another good source is a solid lender such as Wells Fargo or  Prosperity Mortgage whose websites offer consumers a variety of tools and resources on purchasing a home.

housequestionNot asking questions. There are many intricacies to the home buying process, and even though you can gain a basic knowledge on your own, you will still have questions. Be sure to tell your real estate professional that you are new to the process. Choose an agent (like me!) who is willing to spend time with you and walk you through the entire process. A good agent will expect you to have questions at each step – from house-hunting, to making an offer, to the closing (such as, “What the heck is a closing?”). This is one of the largest financial transactions of your life, so you want to have a clear understanding of what’s going on at all times.

Looking outside your price range. Before beginning your home search, get pre-approved by a mortgage professional – preferably one you know or one recommended by your agent – to get an idea of how much you may be able to borrow. Use this information as a starting point in determining your price range. Then take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, homeowners insurance, utilities, and maintenance. Don’t go out looking at homes before you have a firm idea of your range.

Buying on impulse. Don’t feel pressured into making an offer on the first home you see. Buyers, especially first-timers, may be impressed by the first two or three homes they view. Look at a good selection, then narrow the prospects to a select few and return for a closer look. When you decide to make an offer, work with your agent to get all of your questions answered first. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

storkNot planning ahead. Think about personal changes you are planning in the next five years. For instance, are you starting a family, and if so, is the home large enough and will it continue to be? If you think you’ll be relocating in a few years, you’ll probably want to pay closer attention to potential appreciation and resale value. If two incomes are needed to qualify for financing or to make your payments, do your plans include the ability to sustain those incomes?

Failure to consider location. Don’t just focus on the house. Examine the community. Does it suit your lifestyle? Is the area safe, well-maintained, close to work, stores and schools? Find out about zoning and whether new construction is planned on vacant land in the immediate area. Also consider the potential market for resale in the future. Your agent can also help with that.

    Above all, remember knowledge is key. No question is silly. Your agent and your mortgage professional are invaluable assets throughout the process, and they want you to succeed. Making smart home buying decisions will make the home-buying process less scary and your first home purchase a rewarding experience.


    Why Is The Buyer’s Agent Paid By The Seller?

    March 5, 2009

    housequestionIt’s a strange arrangement. Here I am, the agent for the buyer, receiving my compensation from a party who not only is not my client, but whose interests are (one would think) directly opposed to those of my client – the seller. They want the highest possible price, my client wants the lowest. They don’t want to spend money on repairs, my client wants the repairs made. The list goes on. The two sides are in agreement on one thing only – they want the transaction to happen. Yet it it almost universal for the seller to pay the buyer’s agent. Huh?

    This seemingly oddball arrangement exists for a couple of reasons. First, the historical background: until the mid-1990s, real estate brokers and agents operated under subagency agreements, whereby brokers listed property, and offered cooperative commissions to other brokers bringing in buyers for the listed property. Under subagency, these cooperating brokers and agents were legally bound to represent the seller.

    conmanDespite this fact, most buyers thought “their” agent represented them, and acted accordingly, often to their detriment. By sharing how much they were willing to pay, when they had to buy, or how much they loved the home, they unwittingly provided the seller with useful negotiating information. Eventually the Federal Trade Commission put pressure on the states to have real estate agents disclose to consumers exactly whom they represent. Most states eventually adopted disclosure laws, and the industry adapted by creating buyer agency arrangements (similar to sellers’ listing agreements). But the existing commission arrangement remains in place – the seller still pays. Why?

    no_moneytranspThe reason that sellers still pay the commission is because the main obstacle to buyers being able to buy is a lack of cash – cash for the down payment, cash for closing costs, cash for the move, cash for furnishings, and the list goes on. It takes a long time to save that money. Some people find it difficult; others find it impossible. Add the buyer’s agent commission, and the seller will have fewer buyers available.

    The seller is receiving cash from the sale. If they pay the commission, more potential buyers are able to afford this property. The more potential buyers, the higher the likely sales price. The higher sales price provides the incentive for the sellers to pay the buyer’s agent in addition to paying their own.

    There are “exclusive buyer agents” who accept their payment only from their buyer client and refuse the seller’s offer. They argue that the only way for a buyer to be certain to avoid any conflict of interest is to avoid firms that both list and sell homes, and to compensate their own agent. In practice, I have never been tempted to change my buyer representation perspective regardless of the offered compensation. I disclose to my buyer clients the compensation offered on every property, and have on occasion used higher compensation levels to assist my clients in the purchase.

    Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
    Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com

    It’s Good To Have A Friend In The Business®
    samson-realty-and-bird

    If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

    4 – 4.5% Listings with First-Class Service — Cash Back to My Buyers!


    What’s My Home Worth?

    January 27, 2009

    The first question a potential home seller has is undoubtedly, “What’s my home worth?”homesaleprice

    A real estate professional will establish the likely selling price by doing a comparative market analysis (CMA) – comparing your home to others like it that have sold recently. We would include market conditions, such as the inventory of homes for sale and the ease of purchase (interest rates, mortgage availability).

    Ideally, your agent will be looking for homes

    • of similar size;
    • in similar condition;
    • in the same or a nearby neighborhood; and
    • sold in the past three months.

    In a large subdivision or condo complex with many recent sales, this can be fairly easy. If your home is very similar to several recently closed sales, except for the level of improvements, adjustments can be made for the various differences.

    It is more difficult to establish market value when there are few or no comparable sales (“comps”). Sometimes your home is unique compared with nearby homes sold recently. In this situation establishing a reasonable market value will also be a matter of adjustments, but the adjustments will be trickier.

    The most important factor is location, so up to a point we would tend to favor closer homes over more recent sales from a distance. On the other hand, if we can locate several recent sales of similar model homes by the same builder in a distant neighborhood, we can adjust for location.

    mcmansionAdjustments may be made for the home’s “fit” in the neighborhood. A home that “sticks out like a sore thumb” – either too fancy or too big compared to nearby homes, or relatively small or unimproved relative to the neighborhood – will require more up or down adjustment. If the comps are in a more highly sought after school district than your home – or vice versa – it will be necessary to adjust for the schools.

    Occasionally we might try multiple approaches. For instance, in addition to pricing recent sales of similar homes from other neighborhoods,  we can also research sales in your neighborhood from previous years and then adjust for what has occurred in the local market since then. By establishing the value from several perspectives, a more accurate price range for your home will become clear.

    Finally, when a property sells, it’s not just about the price. There are other factors that influence what a buyer will pay and how much a seller will accept:

    For example, terms such as these might induce a seller to take less money:

    • an all-cash offer (no mortgage contingency to worry about);
    • an as-is offer (no concern about repairs);
    • a fast closing or a longer closing, depending on what the seller prefers; or
    • a free rent back, to allow the seller time to complete his move at a more leisurely pace.

    And these terms might make the seller demand more money:

    • seller financing all or part of the purchase price;
    • seller paying for closing costs; or
    • offer contingent on sale of buyer’s home.

    If you would like to know the likely market value of your home, please contact me. I’ll be happy to help you evaluate your property’s value.

    Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
    Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com
    It’s Good To Have A Friend In The Business®

    samson-realty-and-bird

    If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

    4 – 4.5% Listings with First-Class Service


    It Depends . . .

    January 27, 2009

    askingpriceWorking with prospective home buyers, I often find that early in the process they are inclined to suggest an offer price based on the listed price – as though they should always offer X% or $XXX less than the list price.

    I can understand why they would make that assumption, if they’ve been looking at market averages or listening to people who do.

    But basing your offer on the list price is a big mistake. Some are ridiculously high. Some are tantalizingly low. And until I do a Comparable Market Analysis (CMA) – investigating the sales price and terms of recently sold similar homes in the area – I can’t know if the asking price is anywhere near market value.

    Some agents might toss out a number when you ask them while touring the home. They would not be the best agents.

    Here’s an example:  A home is listed for $399,000. You love it, but you firmly believe that you should offer 10% under list, and your offer of $360,000 is accepted! Wow, you’re a great negotiator . . . until you find out that similar homes sell for about $345,000.

    Example 2:  A home is listed for $399,000. You love it, but you you firmly believe that you should offer 10% under list, and your offer of $360,000 is rejected without a counteroffer. Someone else got your dream home! THEN you do your homework, and learn that similar homes sell for $425,000 and the asking price was intended to attract multiple offers, or even ignite a bidding frenzy.

    I will not give my opinion on price until I do my research. In the first example, if you know the likely sales price of a home is $345,000, and it is listed for $399,000, your agent might suggest an offer of say $325,000 with other terms that might pique the interest the seller – and you’d be pleased to get the home for $335,000.

    In the second scenario, if the house you love is listed at $399,000, but research reveals that similar homes typically sell for $425,000, your agent can help you construct a winning bid. If yours is the accepted offer at $415,000, you did great!

    It’s all about doing your homework. When negotiating, you can’t really know where to begin until you know the market value of the home.

     

    Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
    Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com
    It’s Good To Have A Friend In The Business®

    samson-realty-and-bird

    If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

    4 – 4.5% Listings with First-Class Service


    Family Update

    January 15, 2009

    Just a quickie to update interested parties:family

    • Brendan’s 28th birthday is (was) yesterday – we are celebrating at Fogo De Chao (I think it’s Portuguese for “Festival of Meat”) next week;
    • Chris is planning a trip to Budapest next month;
    • Vicky is home for the next 8 weeks or so student-nursing at INOVA Alexandria Hospital; and,
    • Janet and Kim are visiting Charleston, South Carolina this weekend to escape the cold and traffic!