Real Estate Investing

It’s the important time that rolls around every year - the time to remind Realtors to be safety conscious as they are out and about showing homes to clients and holding open houses.  As an agent, we always hear the horror stories … bad things that happen to both male and female ranging from robbery, rape, and sometimes murder.

As agents, we tend to be easy targets.  We get a phone call saying, “Hello.  I am [fictitious name] and I’m sitting in front of this house on Cumberland Drive. Can you come over so I can see it?”   If the agent is wise they will schedule a meeting with the potential buyer at the office first (bad people won’t come to the office).  If the buyer seems insistent, the agent should at least NEVER GO ALONE.

We are pretty good at my own office about helping each other out.   I’ve gone to showings with other agents, sometimes my colleagues come with me.  And I will continue to do that both ways … I never want to meet a client for the first time outside of a safe area (my own office). We also have a Realtor “question” we can ask our office as a code to say we’re in trouble.  I won’t - of course - reveal that question here, but I hope ALL offices have some tip-off mechanism to reveal when someone is in danger.

An agent once told me about meeting with a client she’d first met on neutral ground, but got frightened during the showings.  The buyer only wanted to see vacant homes and kept asking her to go upstairs with him to look around.  She kept her cool and remained downstairs … phone in her hand and next to the unlocked door.  Nothing bad happened, but who’s to say nothing could have had she not trusted her instincts.

I’ve only felt threatened one time - at a new construction open house.  Two men came in and wanted to see the plat of the subdivision.  I turned my back to them to get it and when I turned back around, there was one on each side of me.  In hindsight, I was probably just paranoid but I simply stepped away from them and chatted at a comfortable five feet away.

Just remember, if you’re working with an agent expect to be asked to meet at the office first.  Do not be affronted if they ask you for a copy of your drivers license.  Again, the bad people will refuse to let you see it and make a copy.  Don’t corner your agent.  Be non-threatening.  Don’t ask creepy questions or you’ll find yourself without a Realtor.

Realtors, be safe.  Be cautious.  Be careful.  And read this safety information from the National Association of Realtors.

When I bought my first and second homes, I wanted to know what the square footage was.  Is it 1400 square feet or 2400?  Do you measure the outside of the house and add, or measure rooms and add them up to get the square footage?  According to an attorney who visited our office today, none of the above.

His advice to agents?  YOU should never measure a house yourself.  While it seems straightforward, figuring out the square footage of a dwelling can be tricky business.  There is no standard methodology for measuring - in fact three different appraisers, a professional measurer (is that a word?), an appraiser, and an agent could quite possibly ALL come up with a different number.

His next bit of advice?   If you publish the square footage of a home, always attribute where you got the number.  If it’s from the tax records, say that’s where you found it.  Additionally, agents would be wise to state in the MLS listing, “Information here not warranted or guaranteed” and add, “If square footage is important to you, you need to measure it yourself.”

Interestingly, in Texas - and perhaps other states - state law prohibits real estate agents from revealing the square footage according to the attorney today.  While I was unable to find evidence of that via my friend Google, I did see that square footage has not been listed for years in California.

Here’s an interesting discussion about the subject with points of views from many states.

Photo by Aussie Gall via Flickr Creative Commons.

A colleague once told me that his favorite part of being a Realtor is the negotiation.  We couldn’t be more opposite.  I hate negotiating.  Hate it with a passion.  It is a necessary evil, though, so I still strive to give it my best, to be the voice for my client so their interests are guarded and protected.  But it still doesn’t mean I have to like negotiating.

I know both buyers and sellers want the best deal.  Buyers want a good price on a home - with repairs made and hopefully a chunk of the closing costs paid.   Sellers obviously want top dollar, but any closing costs or repairs they dole out will affect their bottom line.   I find these costs are usually the sticking point of a home sale - NOT the price of the house.

So here are my own Top Five Negotiation Strategies for buyers and sellers:

1. Put yourself in the shoes of the person facing you at the table.  While their problem is not your problem, it COULD be your problem if they say “No.”  Try to be reasonable and understand WHY they need X done.
2. Do NOT take it personally.  Just because a price comes in low doesn’t mean that your house isn’t nice (although sometimes that is the reality).  They may be wheeler-dealer investors.  Even if the price is ridiculous, you have the option of saying, “YES, NO, or MAYBE.”
3. Never let the negotiation end in your lap.  Always make a counter-offer, even if the other side says, “Final offer.”  Make them to be the one to say “NO” so you’ll be able to sleep at night knowing you gave it your best shot.
4. Never be afraid to ask your agent to talk with their broker for insight and advice.  This outside-looking-in coolness can state the obvious without heated emotions interfering.
5. It’s okay to say YES to an offer or a counter-offer.  This is where you should be sensible and reasonable.  Do you really want to lose the house you love because the seller won’t pay for a $50 heating element in the stove?  Do you really want to hang on to your mortgage payment for another two months because you wouldn’t drop the price by another $1000?  You may regret your decision that was probably made in anger or frustration.

I’d love to hear of other negotiation tips from buyers, sellers, or agents!