I Say, Shall We Borrow Some British Real Estate Ad Language?

country lifeThe busy-ness of the holiday season, not to mention the emphasis on shopping, must be taking a toll on me: I’ve been indulging in the guilty pastime of perusing old issues of Country Life magazine, in search of my dream manor house.

(You too can play this game! Just allot yourself an imaginary budget — I’ve recently raised mine to £1.5 million, trying to ignore the exchange rate completely — and then see what it buys you. The next step is to ignore the likely upkeep costs.)

Anyway, as I’m shopping, I can’t help but notice that advertisements for properties in England tend to use much different language than we use here in the U.S. of A. Below are some examples. Feel free integrate them into your marketing efforts as you see fit:

  • “ideal for family occupation”
  • “elegant and commodious”
  • “Located in an area of Outstanding Natural Beauty with abundant footpaths and bridleways”
  • “undulating farmland”
  • “excellent pheasant and partridge shoot”
  • “in the same Family ownership for nearly 200 years.”

A little adaptation may be in order, of course. For example, I don’t have any farmland, but my driveway exhibits a respectable degree of undulation. And we saw some wild turkeys walking down our street just last week! Too bad there’s just no way to make “in the same Family ownership for nearly four years!” sound as impressive.

Cheerio, then.

“House for Spouse” Does Not Belong on Your Holiday Surprise Gift List

valentines houseWhen I sold my first home, one of the offers came from a couple who, according to their Realtor, had been house-hunting for years without agreeing on a place they both liked.

At last, they found our house! Alas, they didn’t bid high enough. I sometimes wonder whether they’re still out there, searching . . . and arguing.

Ask any real estate agent: It can be hard, if not downright breakup-provoking, for couples to agree on their priorities regarding the various features that make up a house — its location, layout, design, number of bedrooms (at which questions like, “Should we have children?” and “Must we make room for your parents?!” tend to move to the forefront of the discussion), the amount of garden area, and so on.

Is that why some people simply go out and buy a house for their fiance, partner, or spouse without asking first? Yes, it really happens, according to Candace Taylor’s article in the Wall Street Journal, “What Happens When Your Husband Buys a House Without Telling You.”

Dumb idea, if you ask me. Well, okay, some of the wives in question were happy at being handed the keys to an actual house — or at least they say they were happy — but others broke down in tears. The bad kind of tears.

Buying a house is one of the most personal decisions one can make. It defines how you’re going to live for the next several years, and becomes as much a part of your identity as the clothes you wear. Besides, shopping for a house can be fun! Why leave one partner out of the process in the name of a surprise?

The WSJ article does have one excellent suggestion (in addition to “stick with jewelry”) for anyone  who still thinks buying a home as a surprise gift is a good idea: Don’t actually close on the deal before announcing the gift.

Legally speaking, how can that be arranged? It depends on the procedures in your state. In New York, for instance, there’s a gap between the time when the seller expresses acceptance of  the buyer’s offer and when the two actually sign the purchase contract binding both to close the deal.

In other states (such as California), the seller’s “acceptance” may actually create a binding contract. But there are ways to get out a a home purchase contract before the closing. In fact, a savvy buyer could write a contingency into the contract conditioning the closing on the spouse’s approval. I’ve never seen it done, but that doesn’t mean it hasn’t been, or can’t be done.

More traditionally, the contingencies that virtually every home purchase contract contains create escape hatches. (See Nolo’s article, “Contingencies to Include in Your House Purchase Contract.”)

The inspection contingency, in particular, which conditions the closing on the buyer’s satisfaction with the results of a home inspector’s report, offers an especially easy way to back out of a deal (unless the house is physically perfect). Most every house has some defects. You might simply announce in a huff, “Look at all those defects! I’m dissatisfied!” and walk away.

Walk directly to the jewelry store. If you made this big a purchase and your partner or spouse was unhappy with it, a several-carat apology may be in order. Unless, of course, your spouse takes the same approach as the one described in one of the comments to the article, who subsequently went out  and bought not one, but four homes. Surprise!

Finding Solid Reviews of Real Estate Agents Still a Challenge

smart homeGoing online to find a home to buy has become so user-friendly, full of pretty pictures and fun bells and whistles, that some buyers have been known to proceed all the way to a purchase without once actually visiting the house. The Internet has become the “go-to” place for starting a home search. But it’s not yet the “go-to” place for finding a real estate agent.

Most agents have their own website, or at least a page on a website owned by the real estate agency for which they work. But the amount of information the agents offer up may be minimal, and is certainly not standardized. Some provide little more than their name, rank, and credentials — while others wax on about client philosophy, forgetting to so much as tell you that they’re members of, say, the National Association of Realtors (NAR).

Very few agent websites offer clients a place to post reviews and ratings. (Redfin is an exception here.)

Other consumer-rating websites have, of course, stepped in to fill the void, such as:

  • Yelp.com. Any consumer of anything online is no doubt familiar with this site and its opportunity for the world at large to rate services on a five-star system and write a lengthy essay about their experience. Potentially useful? Yes. But look at what it doesn’t provide — any independent, objective information about the agent’s credentials, work history, or success at matching buyers to homes or getting homes sold for a worthwhile amount.
  • Zillow.com. This is the site that every real estate agent is afraid will take over the world. Zillow offers a Yelp-like, five-star rating and review system — but again, minimal hard data about indicators like the agents’ transaction history.
  • Neighborcity.com. This tries to be the opposite of Yelp, by using “a sophisticated algorithm that analyzes Agent’s transaction history and active listings to provide the most objective and relevant rankings of Realtors in any area.” It’s a site worth stopping at for information about an agent’s experience and transaction history. But it feels like it’s still getting off the ground — I had a devil of a time getting it to search for agents in another state (it kept defaulting to my home area); many agents lack photos; and you can tell it’s a computer-run algorithm when you run into descriptions like, “he primarily serves sellers with Single Family properties in Seattle, Kent and Renton and the Interbay, None specified and Green Lakes neighborhoods.”
  • AgentAce. This is more than a review site, but plays matchmaker. It provides hard data about agents’ transaction history, then a live human contacts both the prospective buyer and suggested agent to set up a relationship — and the company takes a cut of the agent’s commission if it all works out. Great for handholding, but less useful if you just want to research agents online. (And it’s not available in all U.S. markets yet.)
  • HomeLight. This site also plays matchmaker, leading you through a long questionnaire before suggesting agents. It collects reviews, but as far as I can tell, doesn’t let the public see them, instead factoring them into its ratings of the agents. It’s operative in 34 U.S. markets so far.

Meanwhile, the great institutional behemoth known as the NAR has decided, at its national convention, that it “should develop a methodology to rate REALTORS ®.” That doesn’t sound like something that will happen tomorrow — especially given that one of its committee members hastened to explain that, “I know that the impression those words give are not in line with the intent of the objective. NAR, as an organization, will not rank, rate, or review Realtors.” Uh, guess we’ll have to wait and see.

Check Out Redfin’s Creepy Virtual Halloween Tour!

pumpkinHere’s as good a way as any to practice using Redfin’s 3-D “Walkthrough” technology (which it plans to start featuring on all its home listings): Tour a home filled with creepy characters and decor, as shown on the Inman site.

As someone who doesn’t virtually tour homes every day, I’m as good a guinea pig as any for the walkthrough. I found it mostly cool, if sometimes confusing.

I got it that clicking on a circle takes you right to the spot, and the arrows help navigate in all directions.

But there were a couple of doors that remained closed no matter how hard I bumped the arrows into them. Is that just because they didn’t have enough ghouls to go around, or would that be normal on a regular home tour? I hope the former.

The dollhouse and floorplan features are worth a look, and help reduce dizziness and disorientation if one goes a little too wild with all the 360-degree navigation.

Oh, and don’t miss what’s written on the bulletin board next to the refrigerator.

Competing With “Investors” Has a Whole New Meaning Now

IMG_4403For people wanting to buy homes in which to live, “investors” have long been the bogeymen — the professionals with lots of cash in their pockets who sweep in, buy up properties, and either turn them into rentals or flip them for a profit.

They’re still in the picture, making buying a home difficult for ordinary buyers, especially in hot markets.

But percentage-wise, it’s looking like fewer and fewer of these investors may be professionals. This is alluded to by Bernice Ross in her article for Inman called “Ultra high net worth individuals want to work with real estate agents of their own caliber.” She describes a recent event called Luxury Connect, in which agents representing UHNWIs came together to discuss their specialized corner of the market. (Okay, I confess, I had no idea what UHNWIs means — it’s “ultra high net worth individuals.”)

At the event, Zillow’s Greg Schwartz said that, based upon a Zillow survey, 72% of high net worth individuals said they prefer real estate to the stock market as a “safe haven” for their investment. This is a reported 30% increase from five years ago. They may not be buying up scads of homes, but rather a second home for vacation or retirement — but they’re still adding to your competition as a home buyer.

Oh, and if you were picturing U.S.-based investors, that image needs revising, too. Many foreign-born investors are parking their cash in U.S. real estate, particularly in New York, Los Angeles, Miami, and San Francisco.

What else can I say, except that this seems like a good time to refer back to our earlier blog, “Don’t Let an Investor Buy the Home You Wanted!“?

Court Decision Reminds Home Buyers to Read Seller Disclosures Carefully

wet floorIn most U.S. states, including California, home sellers must provide buyers with a written set of disclosures indicating what the seller knows about the property’s features, defects, history, and environment. A seller who hides a material defect can be sued later, when the buyer finds out about the problem (probably the hard way, for example when a piece of the ceiling falls on their head due to a leaky pipe).

Seller disclosures provide valuable information to buyers, and should be read carefully and followed up on with questions. Yet many buyers are so eager to close the sale and start planning for furniture and curtains rather than ongoing repair needs that they skim it, or leave it to their agent to look at. That may be what Joanna Peake did in buying a California home from the Underwoods in 2008.

The Underwoods’ agent, John Ferrell, provided Ms. Peake with, according to the court, “photographs and reports disclosing problems with the residence’s subflooring,” She went ahead and bought the house regardless.

Later, Peake says that she “became aware of the extent of the [water-intrusion] damage when her son’s foot . . . went through a bathroom floor.” Peake proceeded to sue the seller as well as the seller’s agent. In fact, she pressed forward with the lawsuit even after the agent’s attorney repeatedly sent her said reports and other evidence that Ferrell hadn’t breached any duties under California law, and asked her to withdraw the case.

The California appeals court not only dismissed Peake’s claim against the real estate agent, Ferrell, but ordered Peake to pay sanctions for having brought a frivolous lawsuit. Oops. (See Peake v. Underwood,Fourth Appellate District, June 25, 2014).

This case is, of course, drawing lots of attention from the real estate community, as agents heave a sigh of relief that they don’t have to become automatic deep pockets for disgruntled buyers.

It should also serve as a reminder to buyers that the disclosure information that they’re provided pre-sale isn’t just another form to review: It has important legal consequences. Once a home buyer is on notice regarding problems with the property, and doesn’t follow up with further questions or negotiations, it becomes a lot harder to sue over them later.

Few Young People at Your Open House? There’s a Reason

Debt_collectors (2)Real estate agents have told me personally that that they’re seeing fewer young people than usual among the herds of interested home buyers, but now it’s official: A study by John Burns Real Estate Consulting found that the burden of student debt will reduce by 8% the number of homes expected to transact in 2014. (See the L.A. Times report, “Student loan debt curbs housing market by $83 billion, study says.”)

The basic problem is that, to put it semi-mathematically, a whole lot of young people owe at least $250 each month in student loans. With every $250 of debt reducing their home borrowing and purchasing power by $44,000, you can see why this swiftly puts many of them out of the running.

If you are in the process of selling your home, this doesn’t mean that no one will be out there to buy it. The real estate market is turning into a “seller’s market” (lots of interested buyers) in many parts of the United States, and some prospective buyers may have already been waiting for years to finally pay off their loans and buy their first home.

But this may necessitate a revision in selling strategy for some sellers, especially those selling “starter” homes. When preparing advertising material and deciding how to “stage” your home, the image of the young couple about to have children may have to be scrapped. Perhaps a retired couple looking to use a spare bedroom as an office is actually your most likely buyer.

Friday’s Real Estate Fantasy: Buy a Scottish Castle!

With Scotland all over the news lately, my thoughts naturally turn to what fun it would be to own a Scottish castle. (As yours do, too, I’m sure.) A really auld one, preferably.

castleSure, we’ve got properties that pass  for castles here in the U.S. — like this $45 million one just advertised by Coldwell Banker in Woodstock Valley, Connecticut, called Chrismark Castle. But it was built in 2003. It just doesn’t have that shivery, “People walked here hundreds of years ago, and there might be ghosts” feeling to it. (Unless they’re the ghosts of whoever had to put the tiles on those turrets.)

A little hint if you are tempted to buy this Connecticut place: I’ll bet it doesn’t come with the furniture, so be prepared to bargain separately for that Egyptian sarcophagus, or anything else you might have your heart set on. The only things that sellers normally leave behind in a home are “fixtures,” described in Nolo’s FAQ, “If I buy a house, will the seller leave behind things like the curtains and the refrigerator?

Meanwhile, miraculously, people actually sell real castles in Scotland. Or at least very, very, very large houses. Savills always has some nice offerings, as does Knight Frank.

There’s just one problem. Well, okay, there’s the money issue, but there’s one more problem: Last I heard, us Yankees can’t get any residency rights in the U.K. by buying property. (And as of the recent vote, Scotland is indeed still part of the U.K.) See for yourself, on the “Visas and Immigration” page of the U.K. government website.

But wait: It says you can get a visa if you’re married to a U.K. citizen. A Scottish laird, perhaps? With his own castle?

The Strongest Purchase Offer Leaves No Questions Hanging

goldBricksI’ve talked a lot in this blog about ways to make your offer to buy a home stand out from the pack in a multiple offer situation. (See, for example, “Don’t Let an Investor Buy the Home You Wanted,” and “In a Multiple-Offer Situation, Will Your Buyer’s Agent Shine?“) Bidding wars are becoming increasingly common in parts of the U.S., so this topic is gaining in relevance day by day.

But Janna Scharf’s excellent article on “Top 10 ways to strengthen your purchase offer and beat out competing buyers” not only covers the basics, but offers an important real-world reminder: Some otherwise strong offers lose out simply because the buyer held off or procrastinated on providing bits of information that would round out the offer and reassure the seller that the deal will go through as envisioned.

For instance, Sharf describes a situation where her selling client was choosing between three very strong offers, two of them all-cash. One of the all-cash offers “was accompanied by a very impressive proof of funds to close.”  When Scharf requested proof of funds for the other cash offer, however, the response she got was that “the buyer would submit proof of funds necessary to close only after her offer had been accepted.”

One can perhaps see this from the buyer’s perspective. Anyone with enough cash to buy a house probably feels pretty comfortable about his or her ability to close the deal, and may view a proof-of-funds request as an annoying technicality at best, or an invasion of privacy at worst.

But now let’s look at it from the seller’s vantage point. Two strikingly similar offers are on the table, one from a known quantity, one from an unknown quantity — maybe even someone who’s still scrambling to raise the promised cash from family and friends. The choice is simple.

Even more disturbing was that the same buyer had failed to provide various addendums that Scharf had requested (and made available in advance by uploading them onto the MLS). Oops. 

Even if that had been the only difference between the offers, it’s possible that this oversight could have led the seller to choose another offer. Which is precisely the reason that Nolo included “How do you organize your work?” on our list of questions to ask when choosing an agent to help you buy a home. You want a perfectionist, not someone whose moments of inattention may cost you.

Now Everyone Wants to Be a Real Estate Agent Again!

Back when the real estate market could barely be scooped out of the gutter, real estate agents were leaving the profession in droves — particularly the inexperienced ones and part-timers who could no longer make a living at it. (Some of that may have amounted to a necessary housecleaning.)

5_JFK-Harvard-JV-Football-TeamNow, with the market picking up and insanely high home prices reported in some parts of the U.S., becoming a real estate agent is starting to look awfully tempting again. In fact, the National Association of Realtors reports that 42,000 agents joined up in 2013, its first membership increase in seven years. (That’s 840 new agents per state, if they spread out evenly! If all of them had beoame football players instead, there’d be enough to field 15 new teams per state, assuming a 53-person roster.)

This influx of newbies makes it critical that anyone choosing an agent to help buy or sell a home do some serious homework and make sure to get someone experienced and reputable, not someone who got tired of trying to scrape out a living as an aromatherapy consultant.

An agent isn’t just someone who drives you to houses, or stands around during your open house. The most important role an agent can play today is making sure that, in this high-priced transaction, you don’t pay more than you have to (if buying) or accept less than you have to (if selling).

The basic steps to finding a good agent are to:

  1. Get referrals from friends and colleagues.
  2. Interview at least three agents.
  3. Check references. (You wouldn’t believe how many people fail to do this.)

For details, check out Nolo’s article on, “Choosing Your Real Estate Agent” and our “Real Estate Agent Interview Questionnaire” and “Real Estate Agent Reference Questionnaire.”