Sometimes I feel like I mark the passages of my life by the homes I sell. As a drive neighborhoods, I pass old listings or see homes that I’ve helped buyers purchase and I think “oh, that was when my daughter was in grade school” or “that’s when my son got his first guitar”, etc! After 25+ years in the biz, I’ve seen a lot of homes!!! I fell into my profession totally by accident (if you believe in accidents). It’s an industry cliche’, but true nonetheless, that I was sadly facing the demise of my marriage and with two little mouths to feed (and not a lot of help) when I started my real estate business. I was teaching dance, performing with a local dance ensemble, being a mother and quickly saw the reality of my situation. My income was not going to “carry the load”!

Somehow I knew my skill set included consultation, sales and service. But, after multiple interviews and realizing lack of experience was in my way, someone said “have you ever considered selling real estate”. Of course, my answer was “no”. I don’t think youngsters dream of selling real estate….fireman, Princess, movie star, Doctor, Astronaut…yes, but not “Real Estate Broker”!

After taking the required courses and passing the state exam, I was encouraged by the number of Broker/Owner/Managers willing to hire me. I guess I didn’t realize that giving me a desk, a phone and a slap on the back was fairly low-risk for them! And, so began my real estate career in Eugene, OR. I worked diligently to fill in the “gaps” in my classroom training (i.e: learn everything you actually really need to know) and began the challenge of building a business (while carting children here & there and waiting tables at night initially to cushion being totally self-employed)!!

Again, when I decided that I was Portland-bound in ’91 (more opportunity in a larger market), I secured the position of representing a line of tile to pay/pave the way, as I re-started my trade in a new market. Real estate is not a “what you know” but a “who you know” business (and I knew no one)! Some of my first (and still cherished clients) were and are the architects and designers that I called on to peddle my tile!!

The real estate profession is exciting/exhausting, buoyant/brutal, relevant/relentless, inspiring/intimidating and most of all challenging…definitely not for “wussies”! I wake up everyday “looking for my next job”! The last couple of years have been hard; sharing a lot of pain, heartache and frustration with clients is never a good time. But, when people ask, “is this the worst market you’ve ever experienced?”, I think back to starting as a “newbie” with two small children, two jobs and interest rates at 13% and say “absolutely not!!!”

PS: thank you to my dedicated, focused and always interesting client base that has supported me all these years!

It’s 2011 and in almost every state in the United States, buyers have the option of being represented by their real estate agent.  This relationship creates responsibilities that require the agent put their client’s interests above their own.  This could lead to a discussion regarding whether that is possible for humans, but we’ll leave that for “Philosophy 101″!  Prior to 1996, the fiduciary responsibility of a real estate agent, whether they were listing and marketing a home for a seller OR driving buyers around to identify their next home or investment, was to the seller.  YES, even if you were working with the buyers, you actually “represented” the sellers!  Like a lot of antiquated ideas, it sounds ludicrous now!

In 1996, thankfully everything changed to reflect the reality of real estate relationships!  Now when a seller hires an agent to help with pricing, staging, marketing, negotiation, implementing repairs and more,  they have an agent working for them!  When a buyer enlists the services of a real estate agent to help them get pre-approved, determine their housing needs, brainstorm values, negotiate and more, they have an agent working for them!  And, there is the occasional example of the agent who is truly “win-win” and can handle both sides of the transaction, but you see it less and less because of the increased liability.

The duties a buyer or seller can expect to received (among others) are honesty, accountability, full disclosure, representation and reasonable skill and care.  In a nutshell, the agent who represents you is working in your best interest!  It’s a special relationship that doesn’t exist with most of the other professionals involved in a real estate transaction.  Mortgage and title officers are limited to their duties of honesty, accountability and specific requirements under the Real Estate Settlement and Procedures Act.

This special relationship with your real estate agent makes it advantageous to have them help coordinate your efforts with the other professionals in the home buying process.  Since most buyers’ and sellers’ transactions are infrequent, a trusted agent can bring valuable experiences to the transaction!

If you are a Seller, it should seem fairly clear-cut how your Realtor gets paid, you sign a listing contract with an agreed upon amount of compensation (based on the ultimate sales price), which is then split between the Brokerages (not the agents) of  both the listing agent and the selling agent (they will each have their own deal with said Brokerage on how that commission is split).  But, how does your agent get paid if you are the Buyer?

There are exceptions to what I’m about to share with you, such as developers who offer their agents base salary and benefits or builders who pay a wage for agents to represent them.  But, for the most part you should be aware of how your agent gets paid and for what you are paying!

Real Estate Brokers/Agents (the state of Oregon keeps trying to confuse us by changing status…but, now all “Agents” are ”Brokers” unless they oversee other agents which makes them “Principal Brokers”) are basically autonomous agents under the umbrella of a “Principal Broker”.  They are building there own independent businesses and their income is based on their own individual success.  There are no salaries, no benefits, no paid vacations, no “in-house” business (other than very occasional paid referral business) and no retirement fund!  Some of the “big” companies offer Principal Broker support, classes and the camaraderie of other agents but really all you get is a big “howdy-do” slap on the back, a phone and desk!  If you’re a self-starter and a fan of roller-coasters, it’s a dream-job-come-true.  Otherwise, it’s a wild ride!  And, I wouldn’t change a thing!!

Now, back to the “punch line”.  How does your Real Estate Broker get paid if you are the Buyer?  Believe it or not, historically ALL real estate agents worked for the sellers, and it was generally understood that the listing agent worked for the seller of the property. It was not generally understood that agents who worked with buyers were sub-agents of the listing agents, and consequently, also worked for the seller. The seller of a property paid the listing agent for successfully marketing the property, and the listing agent paid the sub-agent who worked with the buyer. In 1996 the law changed and buyers could hire agents to work for them. Now we sign what is known as “Disclosed Limited Agency Agreement” for either the buyer or the seller (or, occasionally there is the need to reconcile both) or Buyers can procure their own representation through a “Buyer Broker Agreement”.  Still the money for both the buyer’s agent and the seller’s agent is paid by the proceeds from the sale of the house by the seller, unless otherwise agreed upon in a “Buyer Broker Agreement”. However, the fiduciary responsibilities have changed…for the better!!!

All the time and energy your Real Estate Broker spends helping you decipher what you want in a home, determining neighborhoods of interest, brainstorming, helping evaluating cost vs value, setting up home searches, making appointments, showing property, referring contractors, inspectors or mortgage brokers is all time spent with the ultimate goal of getting you into a good investment and a home you will love (if they are a good agent).  However, if they do that work without getting paid too often….they simply will NOT be there for you in the future!  They will either have found “gainful employment” or they’ll be pushing a shopping cart around downtown. 

Whether you’re a buyer or a seller, you can’t expect miracles from your Real Estate Broker, you can expect honesty, dedication, resilience, perserverance, experience and integrity.  But, you have to give them the benefit of the doubt.  If you are a seller, and your agent has told you that you’re overpriced or need staging or other changes and you don’t respond and re-list with another agent because you think “you need a change”, you are actually disrespecting a professional relationship.  Whether you are a buyer or a seller, if you have “issues”, address them right away.  If your Realtor doesn’t respond, it may be time to look elsewhere! Whether a buyer or a seller you need a “Full-Service-Realtor“!!

Two important steps in the home buying process is finding trusted advisors:  a Realtor and a Mortgage Broker. The process is a partnership and it’s important to take it step-by-step.  One of the steps is getting a pre-approval from a lender.  First, let’s define a “mortgage pre-approval”.  A mortgage pre-approval is a letter from a lender that says the borrower’s credit, bank references and employment have been verified. The letter is not binding on the lender because it is subject to other conditions such as an appraisal of the property.  And, how is that different from a “mortgage pre-qualification”?  Pre-qualified means a loan officer has determined a borrower is credit worthy and financially able to qualify for a certain loan if all the other verification come through.  A pre-approval holds more weight than a pre-qual and most professional Realtors today will request an approval letter upon receipt of an offer.

Why would a buyer want to get a pre-approval prior to looking at homes?  From one who “looks at homes for a living” (that part is time consuming, but not the difficult part of my job), let me assure you that there are differences at different price points.  So, ask me how hard it is (after all I’ve seen) to go house shopping for myself?  Why torment yourself with what you can’t afford.  From a buyer’s perspective, it makes perfect sense to:

1)  Get comfortable with what you are qualified to purchase!  Spend more time examining homes that fit your budget!

2)  Find out if a government loan or conventional financing will be the best choice for you!  Some government loans have limitations on the use of the property. 

3)  Gain power in the presentation of your offer to the seller!  Most sellers and their Realtors will not consider an offer that doesn’t come with a letter of pre-approval.

4)  Lessen the stress of the home-buying process!  By knowing, as closely as possible, all the costs involved and,ultimately, your “monthly nut”, you will experience less middle of the night “panic attacks”. 

Mostly, you want to end your experience Happy…not just done with the transaction!

CHOOSING A REALTOR!

Finding a home or selling a home, like every other successful venture, takes focus and discipline.  An experienced and successful real estate agent can facilitate the process.  How to choose which agent to represent and understand your housing goals, can be confusing and daunting.  My advice is to choose an agent with whom you are comfortable.  You will spend a lot of time conversing and/or discovering properties together and you might as well make it as painless as possible.

For the home buyer, a second factor should be an appropriate sense of urgency.  Newly listed properties come on the market daily.  Our RMLS system is totally computerized and can be checked daily.  From the Home Page  of this site, you can set up an account and be e-mailed daily for fastest service, with full color pictures (if provided by the listing Realtor) and detailed descriptions.  We can then choose the ones deemed most appropriate and make appointments to view.

For the home seller, that sense of urgency is reflected in a strong marketing plan & a commitment to open lines of communication.  I provide daily or weekly updates with feedback from other Realtors and website statistics, so that we can best gage our response from the marketplace.

HOW IT WORKS FOR THE REALTOR

Real estate agents are commissioned agents and do not get paid until they sell or find your property of choice, negotiate the specifics of the contract, help you locate lenders, contractors, property inspectors, etc and finalize the details for the closing of escrow.  We are independent agents building autonomous businesses.

A majority of my business is based on satisfied clients re-enlisting my services as their real estate professional or referring my name to others.

We may, in our search, discover a home “For Sale By Owner”.  Most of these sellers offer a “Courtesy to Brokers”.  This means they will gladly accept an offer with me representing you as the buyer and they will be responsible for representing themselves as sellers.

 HOW IT WORKS FOR YOU

Since I don’t get paid until your property closes in escrow, I have a compelling and undeniable desire to make it work for you!!!

What exactly is a full-service Realtor?  When buyers or sellers start the process of choosing a Real Estate Broker in Portland Oregon or elsewhere, what are the steps?  What are the expectations?  What does “Full-Service” mean to you? 

FULL SERVICE REALTOR

As a “Full Service Realtor” (FSR) I have invested years of experience managing & closing real estate contracts. I am an advocate protecting your interests in the wording of the contract which will dictate the terms of the agreement. I am knowledgeable about the abundance of required paperwork involved in any real estate contract deal and understand the terms as well as the timelines.

Timelines. A FSR understands how to accomplish YOUR goals by vigilantly adhering to established timelines within the real estate contract. We must work together with the cooperating Broker and other team professionals to meet contract obligations and move to a successful closing. A FSR assures that these important timelines do not expire!

Escrow. A FSR understands the process and fees associated with escrow and title insurance. A title and escrow company will handle the title search, the pay-offs to existing lien holders, disbursements of funds and recording of the deed. (I can arrange, at no cost to you, a courtesy closing at your office or an office closer to your work or home). A FSR can help you read and interpret the preliminary title report. This title and escrow company is in charge of handling all the documents for this sale, a FSR will help facilitate these documents being timely and will assist the escrow officer in guiding you through the paperwork.

Other Agents. A FSR cooperates with the other agent for the mutual goal of closing the transaction. Remember the other agent is representing another party to your purchase or sale. A FSR is fully invested in assuring your escrow move smoothly and protecting your interest in the transaction. We don’t get paid until we succeed in procuring your new home or achieving the sale of your present residence or investment property! We handle paperwork, escrow, lenders, appraisers, property inspectors, the negotiation process, details of the earnest money agreement, home inspection repairs, closing and possession dates, lockboxes, signs and keys. A FSR will be there to answer your questions about details of the transaction and assure timelines are met. A FSR will assist you in making realistic decisions about your timelines and the moving process; plus will provide excellent resources to make your move less stressful.

Home Inspections:  A FSR understands how to assist you in hiring a reliable home inspector, reading the report, getting bids from reputable repair sources and negotiating the problem repairs. In a Sellers market, the Seller often does not want or think they need to make repairs.  A FSR can make all the difference for the Buyer in being a fair negotiator, and in knowing how to approach the seller and the seller’s agent to keep the sale moving forward instead of failing at this point. A FSR can assist the Seller through this process by understanding the bottom line, the impact of putting the property back on the market, and cost effective repairs so that the Seller also gets a fair, fast close on the sale of their property. The FSR is the professional intermediary between buyer and seller!

 Qualifying the Buyer:  A FSR understands and has the contacts to facilitate a buyer’s pre-approval. This positions that buyer more competitively in the marketplace or reassures the seller. The FSR will speak with the lender to request information in writing that determines qualification of the buyer to close the sale. The FSR also keeps track of the Buyer’s progress through the lender, the other agent and/or the escrow officer.

Professional Courtesy:  A FSR is in possession of this valuable tool for both Buyers and Sellers. Professional courtesy is a key component for successful transactions. It assures buyers and sellers their concerns in the transaction will be addressed legally, ethically and with integrity. Professional courtesy is practiced between agents, escrow companies, lenders and service professionals. It allows agents to show homes, attain property information and help investigate potential obstacles.  This professional courtesy can help manage the obvious stress of moving. This professional courtesy can also get Buyers into homes not currently listed in RMLS; it can sometimes get Sellers a Buyer w/o the nuisance of showing their home. In multiple offer situations, it can bring the highest price to the Seller, and it can get a Buyer into a competitive first position or solid back up position. This is because the FSR has a reputation in the market based on her ability to work easily with other agents and close those transactions.

Market Knowledge: As a FSR, I am in tune, in touch and actively touring, investigating online and exploring various areas of the city and surrounding areas daily. A FSR is keenly aware of market appreciation, neighborhood trends and property values.  I can assist in determining “transitioning” sections of our tri-county area for buyers or verify market conditions in established neighborhoods. I can help determine appropriate pricing and positioning in the marketplace for sellers.

After the Close of Escrow:  A true FSR will be there after the close of escrow if there are any unresolved issues. You can rely on that professional experience to counsel you through any delayed concerns.

Market Changes:  A FSR is a member of your financial team, respects your time and your money and is ready to counsel and brainstorm to meet your housing and real estate investment needs. Whether the market is vibrant or reluctant, a true Full Service Realtor is there for you!

Buying real estate can be a little bit stressful at times, whether its in Portland Oregon or Kalamazoo.  After all, you are not buying socks at Bi-Mart (by the way) and for most of us it will be the largest financial transaction we make (as most of us are not Donald Trump)!  So, how can I be a better conduit for the process.  How can I be more than a “Broker”.  Webster defines “Broker” as “a person hired as an agent for negotiating contracts”.  Buying real estate is SO much more than negotiating a contract!!

There are so many moments in a real estate transaction that give you pause.  There’s digging through all your financials to get approved for the mortgage, there’s choosing the style of real estate, the location and the amenities.  Then, there’s all the choices of available homes for sale (and, today’s buyers do have choice), the decisions, the offer and, ultimately, the process of escrow.  There’s the waking up the middle of the night screaming “what have I done?”.  Okay, maybe that’s just me. 

Once you find the house and successfully negotiate your offer, you are in “escrow”.  There are several components to the experience.  There’s your continued negotiations (inspection negotiations, changes in possession because loans papers are late, etc) through your real estate broker, there’s your continued (often seemingly endless) requirements from your mortgage broker and there’s your interaction with your escrow officer.  There will occasionally be incompetence, arrogance and sometimes just honest mistakes.  Stress can make all of these experiences amplified.

It appears that every aspect of the process has gotten more complex.  Updated regulations to avoid any semblance of fraudulent behavior has complicated the methodology.  And, once again, the actions of a few are visited upon all of us.  But, an important component for all service providers in the real estate buying and selling process is patience and empathy.  The rest of the world is not involved in real estate transactions every day of their lives.  We have to perform our jobs like we trying to make people happy, not just getting them through the transaction.

Okay, you’ve decide to sell your home in Portland Oregon, so you’ve walked through with your Realtor and you’ve:

• Made the entryway sparkle, which could include painting the front door, changing out hardware and placing color spots.
• Landscaped the lawn, cut back bushes, edged, swept and raked and suddenly you see why people live in condos.
• Cleared out as much extraneous stuff as you can possibly live without.  You’ve staged your home to the point that you often think you are in the wrong house.
• Cleaned, mopped, dusted, picked up your underwear.
• Touched up paint, power-washed and made minor and/or major repairs as needed and you’re suddenly wondering why you wanted to move in the first place.
• Looked over the comparable SOLD data plus checked out your active competition and priced accordingly.
• Agreed with your Realtor on the marketing strategy and have vowed to have no life other than keeping your house as it looks right this very moment.

Now, why hasn’t your house sold?  Well, if it’s being shown and is “always the bridesmaid, never the bride” but the feedback is positive, both on how the home shows as well as pricing, it may simply be a matter of patience.  It’s been awhile since we’ve been in such a challenged market.  There is a smaller pool of buyers and more inventory and buyers absolutely have choice.  If it’s not being shown, it may be over-priced as compared to other properties a potential buyer can choose to tour.

What’s more important?  Low rates or low price?  Well, both of course, but low rates will trump almost anything.  There’s a good reason!  For example, if you purchase a home for $300,000 and finance $270,000 and your interest rate for a 30-year fixed rate loan was 5.25% versus 4.75%, you would pay nearly $30,000 more over the term of the loan.  This is a significant amount of money.  If prospective home buyers are waiting for home prices to decline a bit more before purchasing a home, but interest rates push higher towards 6% in the meantime, waiting could well cost those home buyers more money in the long run.

So, here are a few enticements that you could consider:

• offer to pay the buyer’s mortgage closing costs as many buyers are struggling to get the cash necessary to go forward with their housing dreams.
• offer to pay upfront points for the buyer to “buy-down” the interest rate which will lessen the payment.

There is a double bonus for the buyer by having the seller pay to lower the interest rate on the mortgage.  The buyer will have lower total costs over the life of the mortgage.  But, also the IRS treats points paid up front to lower a mortgage interest rate as pre-paid interest, regardless of who pays the fees.  This means that when buyers negotiate to have the seller pay the costs to lower their interest rate, the receive the benefit of deducting them on their income taxes in the year the home is purchased!

I recently had a business associate ask me “do you think I would’ve gotten a better deal on my home purchase if my agent was more aggressive?”. I, of course, recognize that we may be discussing semantics here, but I believe aggression can be the antithesis of a successful real estate transaction. A real estate sale or purchase can be stressful on a good day. You are, after all, buying or selling the largest purchase the average citizen will make. We’re not all “Donald Trump” so the purchase of our primary residence, second home or a real estate investment property is usually one of our largest single acquisitions. We have to angst over numbers, suffer sleepless nights with our decision and ultimately make peace with our judgment.

So, how can we make sure our Real Estate Broker, Realtor, Real Estate Consultant, et al…. is helping us make the best decision? How can we make sure that person is representing our wants and needs with tenacity and with the full arsenal of their experience?

My 25+ years of experience in Eugene Oregon and Portland Oregon has brought a myriad of Realtor-to-Realtor interactions: “The good, the bad and the ugly” would be the title of that novel. I do have to say it has been “mostly good”. Considering that it doesn’t take a license to perform brain surgery in order to begin a real estate career, the number of very professional and honorable Real Estate Agents never ceases to amaze me. My most trying experiences have been with very “aggressive” Realtors. They play games, they attempt a “win-lose” strategy and they “don’t play well with others”. They mislead, they attempt to back you and your clients into a corner and they “don’t play well with others”. So, NO I don’t believe my associate would’ve gotten a “better deal” with a more aggressive Realtor. I believe a better deal can only be with an absolute commitment to the buyer or seller’s best interest coupled with an absolute belief that cooperation is a must. And, those two ideals are not opposing sentiments!

Anyway, I digress.  To survive in the real estate business you must constantly reflect your buyer’s and seller’s needs and the requirements of the marketplace in present tense.  Real estate information is no longer proprietary and we are not the “gate-keepers” of listing inventory or property details.  Home buyers and sellers have access to multiple sources of information and with 90% of buyers starting their real estate search on the web and xx% of sellers researching their position online, the public does not need real estate agents as their first point of contact.  There are a myriad of ways to access much of that data.  Our industry must keep re-structuring and re-inventing itself to reflect the times.  We need to “kick it up a notch” and be a partner in an important set of decisions that revolve around a real estate purchase.  We must be a source for other referrals such as mortgage brokers, title and escrow companies and property inspectors.  We must be an educated and experienced resource.  We have to be a strategist, a fellow brain-stormer, an advocate and a sponge (take it all in, wring out what we don’t need).  We have to not chase the immediate sale, but rather embracethe long-term relationship.  We have to negotiate with a win-win attitude while solidly championing our clients’ position.  We absolutely have to maintain a certain level of technical proficiency and constantly be willing to upgrade our technology….it is a “people-first business”, but you must have access to fast information and an even faster response time!  We have to read, take classes, attend seminars/webinars and scour real estate, financial and economic “rags” to keep abreast of the “latest and greatest”.  We have to respect ourselves and our clients by first investing in ourselves, personally and professionally.  You cannot be an advocate if you’re not mentally, physically and spiritually at least trying to be at the “top of your own game”!

The emergence of this new breed of real estate agent will, of course, begin with the on-going edification of existing professionals.  The rest of the evolution of the industry will have to launch with hiring practices.  Instead of pressure on managing Brokers in real estate offices to “fill seats” or simply produce “warm bodies”; instead of a “numbers game” the industry will have to embrace the age-old “quality over quantity” ideology!  The public will have to insist on “full-time” vs “part-time” agents to represent them.  Why does this matter?  It matters because experience matters!  Everyone has to start somewhere, so why not institute “mentoring programs” within real estate offices, where new agents can actually shadow experienced agents and learn the basics.  Instead of fueling a state of paranoia, the agents develop a sense of community and camaraderie.  Of course, a little old fashioned competition mixed in doesn’t hurt, but sharing the wealth of knowledge is essential.  Lack of training is rampant and handing someone an RMLS-web code, a desk and a phone is not enough to secure the success of that agent or the clients they represent!

I am one of the lucky ones.  Not only do I love my job (despite the fact that 2008/2009 tested my stamina), but I started my career in another down market with interest rates at 13% and a stampede of real estate agents had left the business.  There were only 12 agents in my office and we were given individual attention and weekly required classes.  I know that many newer agents have never seen a downturn…till now.  This temporary down market could give managing Brokers the opportunity and time to really participate in their agents’ development.  Instead of setting the bar so low, we can now demand from ourselves our very “highest and best”.  Just some thoughts……………