today’s buyer’s rep - home | rebacrebac.net/sites/default/files/tbr-newsletter-march-2017... ·...

TODAY’S

A p u b l i c a t i o n o f t h e R e a l E s t a t e B u y e r ’ s A g e n t C o u n c i l , I n c .

A w h o l l y - o w n e d s u b s i d i a r y o f t h e N a t i o n a l A s s o c i a t i o n o f R E A LT O R S ®

BUYER’S REP

LOOK INSIDE...

March 2017 · Volume XXVI · Number 3

Mistakes are an unavoidable consequence of being human. In spite of our best efforts, there are bound to be moments when our attention drifts, our patience lags, or our memory fails us and suddenly…before you know it…we’ve said or done something we wish we could take back.

Sure, mistakes are embarrassing. Nobody enjoys messing up.

Mistakes, however, also deliver several benefits. First, they are among our best teachers. Plus, depending on our mood and the severity of the situation, our mistakes can be the source of some of our funniest lessons.

It is in this spirit that we’re sharing humorous mistakes that buyer’s reps have experienced while working with buyers. Whether a slip of the tongue, a distracted decision, or an accidental set of circumstances, you’ll find a little bit of everything inside this issue of Today’s Buyer’s Rep.

We also extend a special thank you to the numerous REBAC instructors who generously shared their personal experiences and classroom stories. Hopefully you’ll find them both amusing and educational.

If these stories remind you of one of your own, we encourage you to continue the conversation by sharing them with other REBAC members on the “ABR® Referrals & Networking Community” on Facebook.

page 7

New Consumer One-Sheet: Avoid These Common Mistakes When Buying a Home

page 3Member Stories

We ALL Make Mistakes

MEMBERSHIP

UPDATE

REBAC.net

Connect online with fellow ABR® designees for news, tips, and referrals!

@abrebac

Have You Checked Out REBAC’s Consumer One-Sheets Lately?

WORTH QUOTING...“Freedom is not worth having if it does not include the freedom to make mistakes.”

- Mahatma Gandhi

2 TBR • March 2017

One of the most essential tools for a successful buyer’s rep is a solid package of materials to give to buyer-clients. To simplify your efforts, REBAC has been developing Consumer One-Sheets—currently 40 different topics, with more waiting in the wings.

The collection of One-Sheets has grown so large, that REBAC decided to reorganize this section of the Member Center into six categories:

• So You Want to Buy a Home?

• Shopping for Homes

• The Negotiating Process

• Checklists

• Choosing the Right Representation

• Feedback Forms

The REALTORS® Legislative Meetings & Trade Expo in Washington, D.C. offers an excellent opportunity to attend two of our newest and most popular courses:

• Real Estate Investing: Build Wealth Representing Investors and Becoming One Yourself

• Military Relocation Professional (MRP) Certification Course

Both courses will be held Tuesday, May 16, from 8:30am–5:00pm at the Washington Hilton. For additional details, or to register, please visit REBAC.net/courses/conference-expo.

In addition to easily finding the best material for your needs, you’ll also find several printing options, including low-ink versions and the ability to create full-color customized versions through the REBAC Print Shop. Plus, Canadian members will be pleased to see many One-Sheet topics adapted to your market needs.

TBR • November 2016 7 TBR • April 2016 7 TBR • January 2016 7 TBR • September 2015 7 TBR • January 2016 7 TBR • December 2015 7 TBR • September 2015 7 TBR • May 2015 7 TBR • September 2014 7

7 Reasons to Hire an ABR®

The Accredited Buyer’s Representative (ABR®) designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a subsidiary of the National Association of REALTORS® (NAR).

To learn more about REBAC and access various home buyer resources, please visit REBAC.net.

Buying a home is unlike any other purchase. Before attempting to do this on your own, consider why it’s smarter to work with an Accredited Buyer’s Representative (ABR®).

1. A skilled professional will be covering your back. In real estate transactions, having representation (either as a buyer or seller) means that an industry professional is obligated to protect and promote your interests, including keeping certain information confidential and sharing information with you that might benefit your position. Accredited Buyer’s Representatives have gone a step further, completing specialized training in the best practices for buyer representation. An ABR® designee stands out in the crowd!

2. You’ll simplify many complex aspects of your transaction. Let’s face it. If you aren’t already familiar with complex real estate contracts, disclosure forms and mortgage applications, these documents can be confusing and daunting. Most buyers genuinely appreciate having a knowledgeable resource to answer their questions.

3. You’ll be working with an up-to-date expert. An ABR® designee has a keen understanding of buyers’ concerns. Further, they are committed to maintaining their professional edge by staying current on the latest issues and trends in buyer representation.

4. You’ll know your buyer representative has proven experience. One qualification of earning the ABR® designation is proof of completed transactions with other homebuyers. It’s impossible for an inexperienced real estate agent to obtain the ABR®.

5. You can improve your negotiating results. Deciding on an offer price for a house is tricky business, requiring careful analysis of other comparable homes for sale, recently sold homes, and other market factors. Plus, your offer price is just one facet of your negotiating strategy. An ABR® designee can advise you on every negotiating detail, including counseling you on the pluses and minuses of including various contingencies.

6. You can get a higher level of service without paying more. In the vast majority of circumstances, listing agreements are structured so that a buyer’s agent’s commission is paid out of the seller’s proceeds. In the rare instance where this is not the case, you still have options. ABR® designees can explain those options before you begin your home search, helping you make informed decisions if you encounter such a scenario.

7. They’re easy to find! Every ABR® designee is included in an online directory, where you can search by location and review profiles for agents in your area. Go to REBAC.net/buyers-rep today!

TBR • January 2016 7 TBR • September 2015 7 TBR • January 2016 7 TBR • December 2015 7 TBR • September 2015 7 TBR • May 2015 7 TBR • September 2014 7

How Much Should I Pay? Pricing Considerations



Real estate agents frequently use a Comparative Market Analysis (CMA) to estimate a property’s probable selling price. CMAs help sellers decide on a listing price, whereas buyers use them to determine how much they want to offer for a property.

While sellers and buyers have naturally opposing price preferences, a CMA is designed to be a completely objective evaluation, based on recent and actual selling prices for comparable properties. Since real estate markets can change quickly, it’s essential to recognize that a CMA only provides a “snapshot” for a particular point in time.

The comparable properties included in a CMA should be similar, recently-sold homes. When selecting “comps,” the date of sale, location, and size of a home are the most important factors, but amenities, floor plan/style, age, number of bedrooms/bathrooms, garage size, improvements, and potential negatives may also be considered.

When reviewing a CMA to structure an offer on a particular property, it’s also helpful to examine the following:

Competing properties are substantially similar homes that are currently listed for sale. Since they haven’t sold yet, they’re usually distinguished from other “comps” in a CMA. Sellers know they are competing against these properties, so it’s important for buyers to factor them into their negotiating strategy.

Absorption rates are used to analyze the strength of a market, in terms of the supply and demand for current competing properties (the number of homes on the market relative to the number of homes sold). A low absorption rate indicates that sellers are in a stronger position whereas a high absorption rate is favorable for buyers.

Days on market may indicate how appropriately a property has been priced for sale, especially when compared to absorption rates. If, for example, the absorption rate is two months, but a competing property has been listed for over three months, a potential buyer of that property might have a stronger negotiating position.

Sales price/list price ratios for specific categories of homes may help buyers understand how much less than the listing price they can realistically expect to achieve.

Each of these factors, and others, are important considerations in your negotiating strategy, particularly concerning price. Your buyer’s agent is your best resource for professional insights on current market conditions. With their assistance, you’ll be in a better position to make an informed, realistic, and winning offer on your next home.

Register Now for Courses Prior to the REALTORS® Legislative Meetings & Trade Expo

REGISTER NOW!

To download or order copies, visit the Member Center at REBAC.net. You’ll find all the Consumer One-Sheets under “Tools for Working with Buyers.”

TBR • March 2017 3

Member Stories

Continued on page 4

To Each His Own

Early in my career, I used to give my opinion about a house’s appearance, but I soon learned my lesson. Here’s the story:

I was working with a couple who’d already looked at several houses and this was our second showing. We planned to view three houses, with the goal of making an offer that day. House #1 was older and dated—a “no.” House #2 had weird carpeting—another “no.” Nervously, we drove to their third option.

The exterior of this house looked great, but when I opened the door, I was immediately struck by walls covered in a hideous bluish-gray turquoise paint. I was about to say, “Look at that ugly color!” when the wife rushed into the living room and declared, “This is the best house we’ve seen! I want it!”

I immediately realized that I don’t have to live here; they do. And in my mom’s immortal words, “If they like it, I LOVE IT!”

Socar Chatmon-ThomasElegant Estates by AuctionAustin, TX

Innocent Thief

About halfway through touring several homes with a family, the buyers noticed their child was eating an apple—and realized he had grabbed it from the last house they’d toured. Afterwards, the agent went to a store, bought an apple, and brought it back to the house, along with a note of apology.

The lesson: while we, as buyer’s reps, tend to be focused on the adults, we also have to pay attention to everyone in the home.

Jack StapletonRealty Texas, LLCAustin, TX

False Assumptions

I had a client who wanted to see one-stories. After viewing about five single-story homes, I asked her what she thought. She said the homes were very nice but now she would like to see some one-stories.

I asked her to clarify what a one-story looks like, and she replied, “One story above the main floor.” She further explained that in Africa, the main living space was one story above the ground because of lions and other dangerous animals.

I assured her we had no lions in Austin, Texas, and that we call that a two-story home. After we both had a good laugh, we found her the perfect location—which also had no trees, where lions might be lurking!

Sherri TeepenThe Ultimate Home RealtyAustin, TX

Test Kitchen

As an instructor, I hear some funny classroom stories, including this: Once, when a home inspection was scheduled for a vacant home, the buyer appeared with a lawn chair and baking sheets. Apparently, when she was told the inspector would be testing the oven, she decided to bake cookies. She reclined on her lawn chair and enjoyed her book while the cookies were baking.

Chris ReadCR Strategies LLCWoodridge, IL

Continued from page 3


Blurred Lines

We have a gated community in our market that includes many lakes, beaches, playgrounds, a camping area and other great amenities. The community was started several decades ago, and has about 500 home sites. The improved lots are primarily vacation homes, but over half of the lots are still vacant.

This community can be quite confusing regarding lot lines and parcel boundaries. One of our agents was working with a family that was purchasing a vacant lot to build their own summer home. They found a lot they liked and placed an offer.

The day before closing, the agent traveled with the family to their recently-surveyed lot, only to discover he had written the contract for the adjoining lot. Obviously, this could have been a nightmare. As luck would have it, however, both lots were owned by the same person— and they gladly sold the intended lot to the family at the same price.

Everyone was good-natured about the mistake and laughed it off, but the serious lesson learned was the importance of KNOWING the community you are showing to your clients. If in doubt, make sure an agent with experience in the area can assist you.

Todd BurghardtTeam Advantage Plus RealtyRochelle, IL

Member Stories

Crazy Cats, Chapter 1

When touring a home, a cat ran past me upon opening the front door. My client and I tried to herd it back in, but after chasing the cat halfway down the block, in sweltering temps, we lost it.

I quickly called the listing agent and explained what happened. She replied, “They don’t have a cat.”

Apparently, someone showing the property before me had left the door open and a neighborhood cat had wandered in, gotten trapped, then took advantage of our arrival to escape.

Reba SaxonTeacher RealtyRound Rock, TX

Breaking and Entering

My favorite “wrong house” story relates to a foreclosure listing. The clean-out team went to a property and broke in through the back patio door to perform their work. What they found, however, were two little kids eating breakfast, who instantly began screaming “Mom!!”

Understandably, the mother was quite upset. After lots of calls and apologies, which included the police, things eventually settled down. While this situation didn’t directly involve any licensed real estate professionals, it’s another example of how important it is to make sure you’re at the right location.

Michael StraleyGo Straley Group of eXp RealtyStafford, VA


Continued on page 6

That Bites!

It was quite exciting to work with new buyers from California who were interested in the rural suburbs outside of Washington D.C. After years in corporate America, they were “right-sizing” and planning to do some farming, including fresh eggs.

We found the perfect home and the buyers were eagerly anticipating their new lifestyle, while also feeling a few butterflies about the significant changes they were making. It seemed like nothing could go wrong at the final walk through…until we stepped into the bedroom and noticed something black in the corner.

I walked over thinking someone left a belt or a scarf and it almost bit me! I screamed, she screamed, and we both screamed over and over!

The snake was six feet long! Luckily, my husband is also my business partner and he and the other husband came running into the bedroom. As they approached, the snake slipped away behind the bathtub plumbing cover and into the crawl space.

My husband worked on encouraging the snake to come out. By then the wife was nearly hysterical and certain she would never sleep in this room. They left while we discussed options. My husband was certain this could be fixed, so we began making calls to the co-op agent, home inspectors, and pest control.

No one is fond of snakes, but did you know there are snake wranglers? Luckily, we found one just a few miles away, and for $300 he rid the home of snakes and provided a guarantee! He even revisited from time to time to make sure all was safe.

Everything was settled and the buyers were happy. We were even able to get a couple videos of the snake wrangler, the snake, and the buyers at the settlement table!

Rebecca StraleyGo Straley Group of eXp RealtyStafford, VA

Double Whammy

There are many “wrong house” stories. In my case, I was showing homes, in the rain, to a family with four small children. I got turned around and saw a house with the right street number and the right brokerage sign, so we parked and entered…and proceeded to scare the heck out of the homeowner, who was in the shower.

Fortunately, with profuse apologies and pleas for forgiveness—to both the owner and the listing agent—we were able to remedy the situation. But entering a home without an appointment is a serious matter that can generate a grievance or a trespassing charge. Always make sure you are at the right house!

Cindie StewartTexas Sold Team Realty, LLCKeller, TX

Crazy Cats, Chapter 2

While showing a townhouse to a young couple, we opened the front door and a cat ran out—or at least we thought it ran out. We spent about 30 minutes hunting it down (plus it was raining!). The buyer finally caught it, brought him back to the house and, after touring the home, we left the cat inside.

A few hours later, I was called into my manager’s office. It seems that a rather irate homeowner called and asked why I let a cat into their home when showing it. Apparently, the cat did not run out of the house when we opened the door—he ran out of the BUSHES—then we trapped him in the house for hours.

I had no idea how badly a cat can act when unwillingly placed in a strange house. It cost me about $400 to have the home cleaned and repaired!

Lynn MadisonLynn Madison SeminarsGreater Chicago Area, IL

Continued from page 5

For Your BuyersEverybody makes mistakes, including your buyers! Use the new Consumer One-Sheet on page 7 to help them avoid several of the most common pitfalls.


Never Say Never

Years ago, I had a student who swore she would never represent a buyer under any circumstances. She said she fully understood buyer representation, but simply didn’t believe in it.

Some time later she listed a property, agreeing to drop her commission if she also found a buyer, which she did. But she forgot about the agreement when she wrote up the final paperwork. The seller reminded her, and she immediately agreed to adjust her commission, but the seller said they didn’t want her to do that. In fact, they hadn’t reminded her earlier because they actually wanted her to get her full commission AND represent them in the purchase of their replacement home.

With some humility and embarrassment, she agreed to be a buyer’s agent! Unfortunately, the home she found for them was listed with another agent in her company, a situation she’d never considered because she’d never envisioned herself as a buyer’s agent. Due to company policy, she had no choice but to declare dual agency and tell the buyer that she wouldn’t be able to advocate for them because of the conflict.

The client was VERY disappointed in the change of events. Even though the transaction closed, no one was satisfied. Now this agent is also an instructor and one of my biggest advocates. She tells this story to all her pre-license classes, stressing the importance of buyer representation and learning how to do it right!

Tom Gillette The Tom Gillette Company, Inc.Monroe, GA

Member Stories

Awkward…

Another story I heard while teaching involved a buyer’s agent who received a call, inquiring about a property. After confirming that the buyers weren’t subject to another agency agreement, the agent began attempting to establish a rapport and gather information. While she intended to ask, “How many bedrooms do you need?” she mistakenly said, “Do you know how many children you have?”

Chris ReadCR Strategies LLCWoodridge, IL

Leap of Faith

While showing a house with an impressive, wrap-around deck, the buyers and the agent walked out to take advantage of the stunning views. The door shut behind them—and locked. There were no steps from the deck to the ground.

Wanting to demonstrate calm control, the agent said, “No problem,” and jumped off the end of the deck. However, the distance to the ground was further than they expected, and the agent ended up breaking an ankle. On the plus side, the buyers did purchase the house!

Melanie McLaneThe Melanie GroupJersey Shore, PA


Avoid These Common Mistakes When Buying a Home



1. Underestimating costs. The purchase price may be the biggest item, but buyers also need to factor in several other costs, including property taxes, homeowner’s insurance, utility bills, home maintenance expenses, mortgage insurance (if your down payment is less than 20 percent) and possibly homeowner association fees. Buyers may also need to budget for some closing costs—either paid at closing, or wrapped into their mortgage.

2. Overlooking important financing details. For most buyers, purchasing a home involves securing a mortgage. First, check your credit report and clean up any issues that might hurt your ability to get preapproved, or bump up the interest rate you’ll be charged. Then, request loan estimates from several lenders and compare them side-by-side to make sure you’re getting the best terms.

3. Not researching the neighborhood. It’s easy for buyers to imagine themselves living in a home, while overlooking what it’s like to live in a particular neighborhood. Be sure to consider schools, parks, safety, proximity to transportation, shopping, restaurants, or anything else that’s important to you. Doing so will make your home feel like home in every sense of the word.

4. Ignoring resale value. While house hunting, the idea of selling your new home may seem like a remote and distant prospect. Even if you imagine yourself living there forever, life often dishes out unexpected changes. It’s important to consider how other buyers might react to your home and avoid a purchase you may later regret due to undesirable or hard-to-modify features.

5. Not hiring an Accredited Buyer’s Representative. You may be aware of buyer representation, but did you know that only a select number of real estate professionals have earned the Accredited Buyer’s Representative (ABR®) designation? By completing special coursework, demonstrating prior experience, and keeping up on the latest issues and trends, a REALTOR® with their ABR® designation is a proven and skilled professional who can help you achieve the best results!

Buying a home is a big decision that involves thinking about many different needs and desires. Your buyer’s representative will want to know as much as possible about your preferences in order to pinpoint your best options.

In addition to determining basic parameters (such as square footage and price range) it’s helpful to have a detailed conversation about your top priorities, in terms of features, location, and lifestyle. The questions below can help get your thoughts flowing.

TODAY’S

BUYER’S REPM a r c h 2 0 1 7 · V o l u m e X X V I · N u m b e r 3

Real Estate Buyer’s Agent Council, Inc. 430 North Michigan Avenue Chicago, IL 60611

[email protected]

Plan Now to Attend the New and Exclusive RE:Up Event!

Registration is now OPEN!

• High-level programming

• Valuable networking

• Business-building opportunities

RE:Up is an intimate event limited to 300 attendees (only REALTORS® who have earned the ABR® and/or SRS designations). Don’t miss this opportunity to RE:Up your business! Learn more and register at www.re-up.realtor.

September 17-19, 2017Charleston, SC

The Real Estate Buyer’s Agent Council (REBAC) and the Real Estate Business Institute (REBI) have partnered to provide a premier setting for our members to take their businesses to the next level with:

today’s buyer’s rep - home | rebacrebac.net/sites/default/files/tbr-newsletter-march-2017... ·...

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