Realtor Story 1 – Lessons To Be Learned

by Maria Hass –

Real Estate is a very interesting career and many colorful stories come out from it. Here is one of my memorable real estate stories:

A lady – let’s call her “Lady X,”  had been following my real estate career through the years and from time to time called me asking for real estate advice. I did show her a rental property once but she ended up renting a friend’s house  on her own.

I counseled her regarding landlord issues, prequalifying for a loan and more. One day she called me asking for money from me to help her buy a property two houses down from her house. She also said she was pre-approved for a loan. Why would she asks for money if she was pre-approved? That certainly did not add up. So, I asked her to send me the pre-qualification letter from her lender Chase Bank. She never sent me the pre-qual letter.

A few days later she called and said “I purchased a property!” “Where?” I asked. “Down the street,” she replied. She had signed a contract with the listing agent holding an Open House, but then called me to say she was worried about who was representing her.

My first question was, “Why didn’t you call me?” Her reply was that she was just dying to get THAT house and couldn’t wait to sign a contract. Also, she said I didn’t believe her when she said she was pre-approved and that I needed to see the pre-qualification letter. On the other hand, the listing agent didn’t require that. But now she called asking that I represent her if the seller was willing to accommodate a buyer’s Realtor, despite the fact the contract was already signed.

Well, in this case – where a buyer signs a contract with the seller’s Realtor – there is obviously one agent taking care of both the buyer and the seller. The agent becomes a “dual agent,” and will take care of seeing the transaction come to a close. But as a stranger walking in to buy the house, you have limited representation when the listing agent is also representing the seller.

In reality, you, the stranger, will have to watch out for your own best interests and know your rights and resources at this point. This listing agent also gets both sides of the commission. This can be a good or bad thing. Good because a listing agent is heavily motivated to close the transaction. Bad because legal battles often arise from dual representation situations.

A week later after this woman called me, I called her back to find out why the house she signed a contract on was back on the market. She replied, “I canceled it and did a contract on the house that is next door to me for a lower price.” When I asked regarding who represented her on this new purchase, she replied that she was represented by her daughter’s friend, who is a part-time Realtor.

My jaw dropped in awe. Lady X, who I’d counseled multiple times over the years, ran away with my ideas and found someone one else to represent her in the deal within a few days from having the “representation” conversation.

What’s my take on this? It comes to three major factors:

Choices and morals

Counseling a customer doesn’t mean they have an obligation to hire you.  Customers can consult one or more Realtors and use this information against one another. In some cases, a Realtor charges a consultation fee for advice – however, I did not do that with Lady X, or with any of my clients.

Treating People Right

If you treat people right, they will typically treat you well in return. It’s called the Golden Rule. When a person calls a Realtor and says she wants that Realtor to represent her, then turns around a few days later and makes a deal with another Realtor, it’s a classic case of deception and bad faith. In my book, these are people you stay away from because they are either suffering from extreme memory loss or just plainly care only about themselves. People who show respect to the Realtor who takes care of them will be rewarded in kind. Realtors like me will walk an extra mile to reward loyalty.

 

Every Realtor and Client is Different – Find One That is Fit for You

Realtors vary in many aspects of the business – personality, methods of communicating, knowledge, professionalism, experience, etc. Find a Realtor that best fits your needs and personality. Every client is also different. There are those who value service and those that emphasize cost over service. As a Realtor, I qualify my clients the same way as customers qualify their Realtors. It’s a two-way street. I agree to work with clients who understand and value great customer service and my expertise, knowledge and experience. I am repelled by potential customers who want a piece of the commission in order to hire you. Discount Realtors provide discount rates – and usually cut-rate service. Part-time or below-average Realtors may take on this type of client, but Realtors who want to share their service and knowledge and the integrity of the profession do not succumb to – nor do they need – this type of arrangement. That’s why such Realtors become GREAT at what they do.

I Have Multiple Offers on My House – What Should I do?

by: Maria Hass

 

I recently received multiple offers on a couple of properties I listed. One of the homes received multiple offers after only one day of showing.

It is flattering to receive multiple offers back-to-back. It is similar to receiving more than one proposal for your heart at one time.

The problem is — who will you pick?

It requires a knowledgeable and experienced Realtor with strong negotiation skills to achieve the best results for the seller. In a multiple offer scenario, the seller has several options:

1. Counter one offer at a time.
2. Counter all the offers at the same time.
3. Accept one of the offers.

Finding the best option will depend on the type of buyers you have. By answering the following questions, the listing agent will have a better understanding about which buyer has most to gain or lose in purchasing the property:

 

1. Why are the buyers buying the house (determine motivation)?
2. Which buyer is most qualified?
3. Who needs the house sooner?
4. Which buyer’s Realtor is easier to work with?
5. Which buyer has the lender that is reliable and can close on time?

 

Finding more information about the loan officer and lender is a critical choice. In many cases, a lender can make or break the deal. The listing agent should know if the lender can close on time; the lender’s requirements; the structure of the loan officer’s business; the ability of the loan officer and his or her team to communicate with you; level of experience; track record, and so on.

 

Big banks like Wells Fargo, Chase Bank and Bank of America, based on my experience, do not provide good training and supervision for their newer loan officers. This can result in many failed transactions. Big banks have a multiple layers of bureaucracy and restrictions that can prevent the Realtors and all parties involved from knowing what is really going on with the buyer’s loan application.

I had a file handled by a Wells Fargo loan officer which did not close because the loan officer could not get the buyer’s salary disclosed in the loan documentation to match up with the buyer’s salary as reported by their employer’s a few days before closing. The buyer did not get the house and I earned zero commission on a transaction that was near its conclusion.

The listing Realtor’s art of disclosing or not disclosing information on other bids is dependent on seller instruction and is crucial in influencing the final price for the house.

 

On the other hand, it is possible for some buyers to lose interest in a property if placed in a multiple-offer situation. These type of buyers are not interested in competing and raising their price; they would rather go look for other properties than watch the prices go up. It is important for the listing agent to keep the buyers updated about the process and to keep the buyer’s Realtors engaged in these exchanges. Otherwise, you can lose ALL your buyers.

If you are fortunate enough to get multiple offers when selling your house, if you aren’t working with me, be hopeful your Realtor follows the rules I do: Think smart, know your buyers, and engage with them to compete with each other’s bids.

Good luck!

 

How Much House Can You Get for Your Money in Arizona?

by: Maria Hass-

Compared to other U.S. cities, Metro Phoenix is one of the most affordable places to live.

In fact, website Realtor.com recently named Phoenix as one of the top 10 fastest-growing real estate markets in the nation for 2015.

Cost of living, quality of life, employment opportunities, infrastructure, disaster-free climate, ethnic diversity, and opportunities for myriad types of outdoor recreation are among the reasons people from diverse backgrounds and income levels choose Arizona for their primary or second home.

The same size and quality of home you might purchase in Los Angeles for $3 million will typically be priced at an average of $1 million in the Phoenix area. The added benefit is that homes in Arizona are likely to be newer.

Different types of homes can be built in Arizona. You can find high-end homes built in the hills surrounding Mesa, Scottsdale and the Tucson area. Horse property homes are available on the east and west sides of town. Custom homes, semi-custom homes, winter homes, active adult communities for 55 years and older and young family communities are also good choices for home buyers looking in Arizona.

Is it cheaper to own a house or rent?

In many parts of Arizona, the money needed to pay the mortgage is often much less than renting. The low mortgage interest rates and still-affordable home prices make mortgage payments a better deal. The rental market has also remained strong. The demand for rental homes by people who are not qualified to buy a home — or are simply not ready —  has continued to push rental prices upward.

 

What’s the future of home prices in Arizona?
We are seeing much stronger upward movement in pending listing counts and under contract counts than existed last month or last year. We therefore expect good demand during the spring selling season and no significant downward pressure on pricing unless a substantial amount of new supply is introduced.

At the moment, supply numbers remain weaker than last year, so we could see prices increase over the next three months. Almost every year, we see a little price weakness during the summer followed by renewed strength during the last four months of the year.

“I Hope I find a Great House” (Not a Great Realtor)

by: Maria Hass

One recent Sunday afternoon, a married couple came to an open house I was hosting in Chandler. They were looking for a new house because they were not happy with their current home in Gilbert – which they had only purchased three months earlier.

Apparently, they decided that their current house was too small, among other issues. I asked them if they were working with another Realtor to find them a new house and they answered, “Yes, we’re using our old Realtor.”

It sounds funny, but why would you do business with the same Realtor who just found you a house you didn’t like? Obviously, the couple that visited my open house didn’t want to deal with a Realtor. They just came to look at the house.
This brings me to a page I was reading in a book titled “Super Agent” by Joanne and Joseph Calloway. The book mentions that seasoned Realtor Russell Shaw once commented, “Buyers wake up in the morning thinking, ‘I hope I find a great house (not a great Realtor)’.”

This sentiment is accurate. I know many buyers think that way. This statement is however, FALSE, because you find a great house the majority of the time through the efforts of a great Realtor who understands your needs.

Unfortunately, Realtors in general have been a target of negative public opinion, owing to part-time Realtors who are not properly trained or who are unprofessional “discount” Realtors providing below-average service.

Every Realtor is different depending on level of expertise, knowledge, communication style, professionalism, work ethics, etc. Yes, there are lazy and unmotivated Realtors too, and also those who overpromise to get your business but never deliver.

In reality, there are many Realtors who are well-trained, knowledgeable and educated, committed to looking after the best interests of their clients.

These Realtors exist and are dedicated to finding you a home that you like – if you stay committed to them. After all, having more than one Realtor is the same as having none. Professional Realtors don’t like working with buyers who don’t value their time and are not loyal.

Great Realtors can get you the house you want just by listening to you. In some cases, you only need to look at a few houses to find the one house you like. Great Realtors can find you the one house you like regardless of the market and create an action plan to get you into your dream home.

The market changes and as a buyer you should know how to adapt to these changes if you want to buy a house soon. Without a great Realtor, you will be looking longer and end up wasting more time and money. Great Realtors simplify the buying process and move the transaction to closing.

So, if you are a buyer looking for your next house, wake up one morning and say, “I hope I find a great Realtor today!”

Had the couple at my recent open house decided to take some time to talk with me, they may have learned some important things about the market and homes for sale that would help them in their new home buying journey.

Arizona Real Estate is Heating Up!

by: Maria Hass

The Arizona real estate market is really heating up. Real estate publication The Cromford Report shows an increase 30.5 percent in pending or under contract homes in February 2015, compared to January 2015.

The increase is due to the strong demand from buyers waiting to get in on the market following the holidays. New listings remained slow to come by. If the increased demand continues and supply of homes remains low, prices will continue to rise.

Monthly Average Sales Price Per Square Foot was up 4.2 percent this year compared to last year, at $130.87 versus $125.54.

The largest increase in sales over the last year is found in the $100,000 to $224,999. This is clearly prime first-time home buyer territory. There is also improvement up to the $799,999 price range. In the case of high-end market homes above $1,000,000, there is far more supply than demand.

Arizona continues to attract local, out-of-state and international buyers from Canada and China due to its robust infrastructure, diversity and business and employment opportunities. Metro Phoenix was also named by Realtor Magazine as among the top 10 growing real estate markets for 2015 – a prediction that is fast becoming a reality.

Thinking of Becoming a Realtor? Find Out the Real Deal From an Expert

by: Maria Hass-

I met a nice lady the other day who told me she is taking classes to become a Realtor. Her mom has a realty business.

She asked me how I liked being a Realtor and how difficult the business is. I told her I love being a Realtor and that I’m actually thinking of hiring an assistant to increase my production.

However, there are facts unknown to many new Realtors that are worth knowing now, rather than later. These facts may save you money and time in classes, training, membership fees, exams and more because they will help you know now whether this profession is right for you.

1. Realtors are salespeople. It says this on your license. Unless you are a broker, your license begins with an SA – meaning Sales Agent. If you don’t like to sell, this is NOT the job for you. Many successful Realtors are not necessarily the most knowledgeable and experienced Realtors but are “great” at marketing themselves.
2. It isn’t enough to like houses. Houses are just a part of the job hunting process. What is even more important is liking “people” no matter how they look and behave. You have to convince people to trust you and like you back for them to give you the business. Some Realtors are naturally good at this while introverted people need to work on it.
3. This business is highly competitive. I was knocking on doors the other day and found out four Realtors lived on one street of that neighborhood. Let’s face it: Realtors are everywhere and the sad part is, the public thinks we are in the same class as car sales people. Of course, I beg to disagree.
   To be successful, you have to stand out in this highly-competitive industry and beware that unfortunately, there are other Realtors that will cut underneath you with unorthodox, sometimes unethical tactics to get a sale. In the same vein, beware of clients or prospects who only care about themselves. They are likely to dump you at their convenience after you have worked many hours to find them a house. It hurts, but you have to try hard to pick up and move on. Not all buyers are a pain, there are still many who value loyalty and service if you treat them well.
4. This business is costly. Set aside a budget for marketing (mailings, printing, postage, flyers, advertising, networking and more), membership fees, classes, lock box fees, gifts, entertainment, office supplies and up to 40 percent or more in taxes. After all these are tallied, the real estate business may not be as lucrative as you initially thought.

If you’re thinking of becoming a Realtor, it helps to know if you have the personality, aggressiveness, patience and perseverance to compete in a highly-demanding industry. Take inventory of your abilities and traits before making a decision to move ahead – and if you go for it, best of luck!

Customer Lost Home by Using Wells Fargo Mortgage

This story is a telling one about why you should think twice before considering Wells Fargo to handle your next mortgage loan.

A recent client of mine was excited to close escrow on her first home on December 5, 2014.  Contrary to my recommendation, her choice to handle her home loan was a loan consultant with Wells Fargo dubbed as “MN”, whom she met at a Mesa or Gilbert branch of the bank while processing another  transaction.

I was told by MN that my client was well qualified to purchase a home and there were NO red flags to worry about in getting her the loan.

During the loan process, my client frequented the branch office to deliver documents and sign paperwork to help speed the transaction to what all thought would be a successful closing. The loan officer assured me that we were on track to close escrow on time for my client.

Issues arose when the due date for delivering loan documents to the title company came and the Wells Fargo’s loan documents were not complete. The loan officer was not easy to track down to explain why. He later returned my emails and phone calls by saying, “We are waiting for the employer of the borrower to change their verification of income because it doesn’t match the W2.”

Apparently, the loan consultant accounted for bonuses and overtime pay when qualifying my client for the loan, but her actual work salary showed a lower amount. If the verification of employment salary remained the same, my client would no longer be qualified for a conventional loan and she would have to change her loan application to an FHA loan, which would take another two to three weeks to process.

It was later ruled that the document Wells Fargo was asking for was not obtainable. Wells Fargo denied my client the loan. She didn’t get the house. As a result, she was out nearly $1,000 for the cost of inspection and appraisal and I was left to fight to get her earnest money returned while the loan consultatn MN was out looking for his next customer.

There are many questions to be answered and lessons to be learned in this story. Wells Fargo, with the help of MN’s.  supervisor, didn’t detail how they got into this situation – nor will they admit to any error.

Questions:

1. Why was Wells Fargo asking for verification of employment (VOE) on the very day that loan documents were due to Title? Someone wasn’t paying attention to the deadlines and didn’t address these issues earlier, in a timely fashion.
2. Why did Wells Fargo miscalculate my client’s income? Did they miss asking her specific questions that should have been asked? Income verification is a basic requirement to start the loan process – any experienced loan officer and their supervisor would have figured this out.
3. Does Wells Fargo provide adequate training to their loan officers? They have plenty of mortgage consultants and each one is different. You can get one who is a seasoned loan officer, to one who is incompetent as my client seems to have located.
4. How closely does Wells Fargo manage and help their numerous loan officers in closing on loans? Apparently, in this case, help came too late. The bank loan officer’s error resulted in my client not getting a house, wasted time and money for both my client and myself, including my client losing nearly $1,000 on inspection and appraisal costs. I also got zero consideration for work done to bring a home’s closing to near-completion.
5. Why was my client denied the same loan for which she was originally approved?

Big banks like Wells Fargo, though household names, don’t necessarily employ the best people in the mortgage business. In my many years in real estate, I have more bad experiences with big banks than with small mortgage companies.

Big banks have layers of authorization and policies that delay the process of your loan. In most cases, your loan application sits at the end of what must look like a factory conveyor belt, waiting for its turn. If things go wrong, there is no one to expedite your loan and close it on time. You risk losing your earnest money and not getting the house wanted so badly to purchase.

Wells Fargo doesn’t disclose financial information about clients to the buyer’s Realtor that could help close the deal. If the buyer is related to the Realtor, they need to provide an exception.

A complete investigation of this transaction is deserving to avoid similar fiascos in the future by Wells Fargo.

A lender and loan officer/consultant are key in closing a loan transaction. If the buyer doesn’t close on time, the buyer risks losing his or her earnest money and also risks losing the house.

It is important to find a loan officer who has a strong track record of closing on time, and being honest and knowledgeable. Consult me or your own trusted Realtor for recommendations, as we come across loan officers and lenders all the time and have experience with ones who gets results.

 

Analysis of New Construction Homes in SE Valley

by: Maria Hass

There has been a recent surge of new construction permits in Chandler and Gilbert areas. As a result builders are finding ways to outdo each other by offering more incentives in closing costs, bonus appliances, providing front and back landscaping, free blinds, lower interest rate, giving buyers a $10,000 to $20,000 towards upgrades and more.

This is all good news to the buyers. Recently, there seems to be a slow decline in the price of new construction homes.  Supply of newly built homes is increasing while demand is weak. This price decline is typically of the last quarter of the year. As many buyers and sellers are preparing for the holidays.

However, it will be interesting to note how the market will do when the new year comes. Historically speaking, real estate activity picks up at the beginning of the year. This is good news to every homeowner.

 

Realty Executives Sold to New Firm

by: Maria Hass –

The Phoenix Business Journal recently reported that real estate firm Kinetic Cos. has bought Realty Executives Phoenix, one of the region’s largest residential brokerages.

Jeff Murtaugh — a Kinetic partner and CEO of Realty Executives offices in Tucson and Yuma — is taking over as CEO of the Phoenix operation. Rich Rector, the former CEO of Realty Executives will remain focused on the international arm of the business. Rich Rector’s parents owned Realty Executives since 1965. Gerry Russell will remain designated broker.

There is no specific reason cited for the bold move takeover, except that the new regime believes the future for Realty Executives is bright.

As a former Realty Executives Realtor, the news doesn’t come as a surprise to me. When the real estate market tanked between 2008 and 2012, many Realtors at Realty Executives found the high agent fees charged by the company to be economically unsound. Lots of those Realtors left the company to find a company that offered realistic agent fees appropriate for what were then collapsing market values.

A lot of seasoned mentors, Realtors and brokers found HomeSmart to provide the best value for their money. HomeSmart is now the No. 1 broker in Arizona with $4.8 billion in residential sales volume in 2013.

During the market collapse, Realty Executives CEO and owner Rich Rector also encountered a legal battle with former Realty Executives President John Foltz, and Foltz ended up winning a $2.2 million award in a defamation lawsuit against Realty Executives earlier this year. The legal costs, mounting debt and exodus of Realty Executives agents resulted in Realty Executives filing for bankruptcy.

In its prime, Realty Executives carried a public image of integrity and respect, which slowly eroded as new, more innovative real estate brokerages came forward. It is perhaps a good move to make a leadership change at an organization that was once at the top of the realm. Only time will tell if this move will offer the “bright future” described in Realty Executives’ purchase announcement.

Chandler Means Business, According to This List

by Maria Hass

The Phoenix Business Journal recently reported that three Arizona cities were named as being among the nation’s top 50 list business meeting destinations.

Phoenix, Scottsdale and Chandler made the cut compiled by cloud-based event management company Cvent. Phoenix ranked 11th, down from No. 10 last year; Scottsdale moved down one spot down into 16th place and Chandler made the list for the first time ever at No. 50.

I am not surprised to see big cities like Phoenix and Scottsdale make it onto the top 50 list. What I am excited about is the development efforts by the City of Chandler are now recognizable through this recognition.

Despite the absence of a large convention center in Chandler, businesses still find Chandler a good place to conduct business meetings, networking and marketing, owing to its hotels, dining, shopping, arts and entertainment.

By the way, Chicago took the top spot on the list, and several state capitols also were named.

To find out which cities made it on the list of top 50 list best meeting destinations, click here: http://www.cvent.com/RFP/DestinationGuide/DGCustomPage.aspx?dgcpstub=06945d34-a4bb-441c-8540-8f55453e46e5&cid=70100000000TRLtAAO.