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Author Archives: Lane Bailey

Listing Options… Just so you know.

Friday, 26 June 2009 10:47
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DSCN3105
Image by lane.bailey via Flickr

Yesterday I posted about how some companies are adding junk fees to the traditional sales fees for both buyers and sellers.  I think this practice is just plain wrong… especially the way it is usually presented.

In order to give my clients options and help them save some money, I offer three different fee structures and two different levels of service for home sellers.  Here is the quick rundown:

  • Flat Fee – $999 listing plan. This is the plan from our discount arm, WhatIf? Realty.  This puts your property on the local MLSs, and gets you a standard sign, as well as a lockbox and flyers.  I have a couple of extras, as well as some available upgrades that aren’t shown on the company page, for my clients through this plan, so if you are interested, please contact me directly.
  • Traditional Listing. This includes all of the traditional services, like full marketing, website, video, virtual tour, interactive floor plan, interactive design tools, custom sign, blog support and more.  I don’t believe that tossing it in the MLS and then shooting a couple of pictures with my cell phone is a “complete marketing package”…
  • The Hybrid Option. This is new and experimental, but really exciting.  Many sellers want more than they get from a Flat Fee plan, but they want to save a few bucks.  In effect, they are looking for a full-service marketing package with a lower overall cost…  So, after looking at how we could offer something to meet this need, this is what we came up with.  This includes ALL of the services of our traditional listing and adds a staging consultation. In exchange for an upfront fee, covering much of the cost of marketing, we discount the total cost.

For more information, feel free to call.

One other thing to keep in mind is that most real estate agents are actually independent contractors.  While we “work for” a brokerage, we aren’t employees.  In some cases, we have the ability to set our own rates, services and other aspects of our businesses.  So, even agents working for the same office may offer different services or fees.

In the case of Diamond Dwellings Realty, we are a small niche brokerage… we have agents that specialize in different areas or market segments.  And as a smaller brokerage, we have a LOT of lattitude to deliver the best fit for a client’s needs.

My goal is to get YOU the best total deal.

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Broker Fees?

Thursday, 25 June 2009 10:13
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I’ve seen an annoying new trend.  Buyer and Seller “Broker Fees”.  It may go by various names, but amounts to the same thing…  what Clark Howard would call a Junk Fee.

Entrance to Baltimore

Entrance to Baltimore

These are quite different from the other fees that may be involved in a real estate transaction, and there are a LOT of fees.  The lenders have fees, the closing attorney has fees, there are state fees, county fees, insurance fees, delivery fees…  Simply put, buyers and sellers are paying plenty of fees.  Adding some BS junk fee like a paperwork fee, transaction fee, administrative fee or broker fee is just adding insult to injury.

There is already a commission or sales fee that the real estate broker and agent are sharing.  There is no reason to add another official sounding fee on top of this that is after the negotiated amounts.

And, that is how it usually works… the seller negotiates the fee for selling their home, and everyone shakes hands… and then the agent mentions that there is a $495 paperwork fee or something along those lines.  They say it is required… maybe not saying that they are the ones requiring it…

In the case of buyers, after going through the buyer’s agency agreement and telling the buyer that the commission is generally paid by the seller, they hit the buyer up for a transaction fee… again, saying it is a requirement.

There are various reasons for this…  What it mostly comes down to is that people and companies in the real estate industry are hurting for income.  But, many of our clients aren’t exactly rolling in money… and even if they were, it isn’t right to tack on junk just because we think we can… Some agents are working for companies that charge US a closing fee for closing a transaction instead of charging a split and the agents are passing it along.  It should be part of their cost of doing business.

I just say NO!

No additional fees.  You will know EXACTLY what you are paying for my services prior to delivery and prior to completing the negotiations.  I try to deliver more for EVERY client than other agents… but that doesn’t mean I need to add junk fees on top of fair fee structure.

And there are some different options available for sellers… but that is another post.

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Deals…

Tuesday, 23 June 2009 23:46
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Dealing money
Image by Phil Dragash via Flickr

There are some great deals out there…  I’m working on a couple of them with buyer clients right now.  And many of them are not hanging around for long.

Financing isn’t going to get cheaper, and in many cases, waiting for the price to drop further could be counter-productive if the cost of financing increases…

Just food for thought.

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How much earnest money is enough?

Friday, 19 June 2009 23:14
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337/365: The Big Money
Image by DavidDMuir via Flickr

This is a common question from both buyers and sellers…

For Sellers…

The object is to get enough that it would be painful for the buyers to walk away without cause after the contingencies are settled.  For instance, $100 is obviously too low.  Just about anyone would be willing to walk away from that without too many worries.

But, what about $2,000? Well, if it is a $200,000 property, that might be a substantial amount, but for a $2,000,000 property, maybe not so much.

The bottom line is that you can ask for more if the amount offered isn’t realistic.  With VERY few exceptions, the buyer will need to put up a minimum of 3.5% as a down payment on the property in order to get financed.  The earnest money WILL be credited to them at closing, so 1% doesn’t seem that onerous… but some buyers may balk.

For Buyers…

Actually, I recommend the same amount in most cases.  There are some exceptions, but not many.  Keep this in mind, the idea is to make the seller comfortable with the transaction.  It IS part of the negotiating strategy.  And since the object of the buyer is to get the best price for the property, making the seller comfortable is a big part of that… and assuring the seller that the buyer will actually close WILL make the seller more comfortable.

I have had sellers ask for amounts that I thought were onerous for the buyers, but not that often.  Most agents don’t think about it until there is a problem.  But, the sellers generally DO think about it when they are looking at multiple offers, or they have EVER had a buyer fail to close.

In both cases we aren’t talking about failures because of inspection issues or other cause.

This specifically relates to contracts with contingencies released.  When there are hidden issues uncovered during the inspection, the buyer has a right to drop the contract (assuming it is written that way).  But if any financing and inspection contingencies are cleared, and the buyer backs out without a valid reason, the seller HAS been damaged.  The property has been removed from the market, and in many cases it is stigmatized… other buyers may assume that the reason for the failure was related to the property’s condition.

In that case, the seller should be compensated for their damage…

Also, remember that often the seller HAS the right to sue the (former) buyer for damages.  While we often assume that the the buyer is only on the hook for the earnest money, that isn’t actually the case… the buyer could be on the hook for more.

from LilburnDwellings

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Failure to Launch

Tuesday, 16 June 2009 15:23
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Our view to the launch that didn't happenAs many of my FaceBook friends and Twitter followers have been well aware, my family and I went down to Florida for Saturday’s failed Space Shuttle launch.

It was a long and somewhat frustrating trip… driving down with two small kids and a dog presented some challenges… as did getting the camper packed up for the trip. The result was that we didn’t leave Atlanta until Friday afternoon. We arrived at the campground in Titusville, FL at almost 1:00am… with tired kids, annoyed parrents and a dog that was ready to run… Our 8 hour trip took about 12 hours.

And then we had to set up the camper, get the kids down and tire out the dog… And get some sleep before the 7:17am Saturday launch. About 2:30am, Gail and I were finally able to turn off the lights and try to sleep. Unbeknownst to us, NASA had already cancelled the launch due to a hydrogen leak.

At 7:00 we got up and piled out of the camper, excited to see the Space Shuttle begin its journey. Jackson, cool in the pool

Around 7:01 we were told by another camper that the launch was scrubbed… and again around 7:02. We pulled out the phones and confirmed with the NASA website. And then we started talking with others and letting some of the dozen of folks assembled along Indian River at the Manatee Hammock campground know that there wasn’t going to be a launch.

Garrett was disappointed. I was disappointed. Gail was disappointed. We all had looked forward to seeing this marvelous event. At that time the next attempt hadn’t been scheduled.

So, on to Plan B… actually, we needed to figure out a Plan B. So, we went to the pool… Florida was HOT. Setting up camp was HOT. The air conditioning in the camper ROCKED… but we needed something better… The pool ROCKED more.

On Sunday we spent some more time in the pool, and then drove to Port Canaveral to watch the Disney Wonder pull out of port (It plays “When You Wish Upon A Star” on the ships horn for 7 notes). We also did a little bit of local sight-seeing.

Monday morning we got up bright and early to watch the sunrise, break camp and hit the road. We were on the road by 9:00am… home by 7:00pm. But, sunrise was a bust. It was cloudy to the east and so it just got light… no spectacle.

But, in the end… Time with the family was wonderful. There were no complaints on the way home about the shuttle launch failure. There were no complaints of the heat, bugs of cramped space. We were all glad that we were able to have fun and spend time together. And isn’t that what a vacation is about?

More pics will be posted on Flickr soon.

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