Buying "As Is"?

Here is a great piece from HGTV's My First Place. It is a wonderful illustration of how everything really is negotiable in real estate transactions. It is very common for corporate or bank-owned homes to be sold "as is - where is". These corporations and banks do not live in these home of course, and do not make any representations as to the condition of the home. The buyer is expected to rely on their own due diligence. Since the buyer will be putting their own resources into repairing the home, the seller sets the list price accordingly.

Here, the seller was motivated to work with the buyer they had in-hand. If they killed the deal over the inspection issue, they will still have to confront the very same problem with the next buyer. And who knows when that buyer will come along! In the meantime, they will still have to fix the leak to avoid further damage to the house. Going back to the negotiation table in this transaction was a win-win for everyone.


Tip: Before you enter into a purchase agreement to buy a home in "as is" condition, be sure to include a cost-of-repair contingency. Don't ever lock yourself into buying a money pit!

A+ for Ron Clark Academy

Have you seen this video? If not, you must! These are the students of Ron Clark Academy in Atlanta, GA. Their teachers are obviously doing a fantastic job in nurturing a strong love of learning. Ron Clark's mission to prepare his students to hold the highest office in the land is sure to be realized one day. In the meantime, what a way to participate this historic election year. Wow!

Check out this amazing school on PBS and be sure to click on the "watch the video link" at the bottom of the profile. Guaranteed to bring an enormous smile to your face!

Ask about Buyer Agency

When a homeowner wishes to sell their home, they may opt to hire a real estate agent to market their home to attract a qualified buyer as quickly as possible. When a person is in the market to buy a home, they too may opt to hire a real estate agent to help them to find a good house and help them with the negotiations and the final purchase. In the first scenario, the real estate agent serves as the listing agent. In the second scenario, the real estate agent serves as the selling agent or in layman's terms the buyer's agent.

For any business relationship to be successful, there must be clearly defined roles and expectations. When working with real estate agents, the same holds true. When you hire a real estate agent to act on your behalf and represent your interests in a real estate transaction, agency is created. Most real estate agents represent both buyers and sellers. They may represent only the seller on one transaction and on another transaction they may represent only the buyer. Sometimes they may represent both the seller AND the buyer in the same transaction. When an agent represents both sides of a transaction (the seller side and the buyer side) this is called dual agency. There are also real estate agents who choose to represent only buyers. They are called Exclusive Buyer's Agents and they do not list homes at all. Since they cater only to homebuyers, the possibility for dual agency never arises.

Different states may have different rules about agency and how a real estate agent may work with the public. Some states may prohibit dual agency while others allow for it. Others may provide for designated agency (a type of dual agency) where the agent of a firm represents the seller and another agent in the same firm represents the buyer, and both agents maintain strict confidentiality of both buyer and seller from one another just as if they were working in competing real estate firms.

In the role of buyer's agent, a real estate agent will work hard to locate homes for sale - any home - that matches your tastes and requirements. They will arrange personal tours and incorporate your feedback into the selection process for future showing appointments. You will be encouraged to ask lots of questions and share your thoughts about your needs, wants, likes, and dislikes. Your buyer's agent will also ask questions of you so as to ensure that house hunting efforts are as productive as possible. A home's positive features as well as its drawbacks will be pointed out so that you can weigh your options in an informed manner. You should be able to rely on your agent to help you process and sift through all of your choices so that you are considering the homes that have the most appeal. Once you've found THE house, your buyer's agent will continue to exploit all available resources to help you compose a good offer and negotiate a good deal. Since price is just one of several things a buyer can negotiate, your buyer's agent will help you determine the negotiating options that could work best for you. Throughout the process, a good buyer's agent will help you avoid frustration or disappointment by helping you establish realistic goals and expectations.

If you are like most buyers, you will begin your home search online. This is a great way to get a feel of the market and it also allows you to assess the responsiveness and attentiveness of different agents as you make requests for additional information about a home that interests you. I recommend signing a buyer agency agreement as soon as you have found an agent that works well for you and most importantly, as soon as you are ready to get out there and buy a home. The buyer agency agreement spells out the nature of your agency relationship in plain black and white. The duration of the agency agreement, confidentiality, duties, agent compensation, bonuses & incentives, permission or refusal to engage in dual agency, and expectations regarding other real estate service providers are all negotiated and outlined in the agreement. You should have confidence in your home purchase and a satisfying buying experience overall. As with any successful business relationship, a satisfied client is the primary goal.

Whenever you are ready to begin working with a real estate agent, be sure to first inquire about how that agent works with homebuyers. Describe the type of home and general price range you are in the market for. Does this agent have any listings that you may be interested in? Learn about what happens in the event you are interested in a home listed by that agent and that agent's real estate firm in general. Remember - the personal information you share now just might compromise your negotiating position later. So before you go spilling your guts to the agent on the phone or to the agent on the receiving end of your email inquiry, take a moment to talk about buyer agency. You'll be happy you did.

The Foreclosure Angel

Every now and then, someone engages in an act of kindness that surprises and amazes the rest of us. CNN reported on the story of a foreclosure angel who opened up her heart and provided a woman with a second chance. I am looking forward to CNN's follow-up story. I want to learn a little bit more about these two women and the paths that led them to meet at this crossroad. I especially want to know how things worked out. After all, everyone loves a happy ending. And who knows. Maybe we'll see them Oprah sometime soon!

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UPDATE: Additional story details at ABC News.

Today's Homebuyer

Yesterday afternoon, I headed out to the Board of Elections to cast my vote early. Considering the fact that we are in the midst of an historic election, I did not want to be faced with long lines and overworked computer systems on Election Day. I brought a magazine with me to keep my mind occupied and help me pass the time while waiting for my turn to vote.

As I found the back of the line, I took a moment to look around and take in my surroundings. The line wasn't too long - maybe a 1/2 hr wait. Voters were soothing their little ones, conducting business on cell phones, filling out change-of-address forms, reading through candidate literature shoved in their hands on the way in. All felt calm and as I opened up my magazine, I started to wonder about the personal stories of the people surrounding me. Was anyone drowning in medical bills? Losing sleep worrying about the well-being of an enlisted loved one? Wondering how they would be able to afford to send their kid to college or begin retirement on schedule? Struggling to make ends meet? Was anyone in fear of losing their home to foreclosure?

Like this election, this last real estate boom is one for the history books. The rise in home appreciation far surpassed all other booms thanks in part to low interest rates, high confidence in the market, and a host of creative financing terms. It didn't take long for greed, corruption, and irrational exuberance to find its way into the mix. Many buyers relied on the "advice" of questionable industry experts and now have found themselves in terrible circumstances. Interestingly enough, a few big-named players in the real estate industry have found themselves in terrible circumstances as well!

Approximately 40 mins after I first arrived at the Board of Elections office, I was finally standing in front of my ballot box reviewing the selections I had made. Finding no mistakes, I held my breath and pressed the green button. I smiled to myself as I wondered about where this country will be in two weeks...in two years. Will my candidate win? Will campaign promises be kept? Will we be better off then than we are today? Will the housing market and economy be in recovery? I believe today's homebuyer should be inspired, empowered, and knowledgeable regarding their homebuying experience, not overwhelmed, stressed or intimidated by it. This would go a long way to avoiding the kind of economic disaster we currently find ourselves in! As I made my way to the exit, I took one last look around at the others in line waiting for their turn to cast a vote in this historic election. And then, I smiled again.