Andrew Wetzel's Musings

December 14, 2019

51 Things a Buyer’s Agent Should NOT Do, Even If Their Client Accepts Them

Real Estate agents are licensed by the state.  I am in Pennsylvania.  Once approved to represent or “work for” clients, they are bound by RELRA, our Real Estate Licensing and Registration Act, which is enforced by the state Real Estate Commission.  If an agent becomes a REALTOR, which means they belong to national, state and local REALTOR Associations, they are bound by a Code of Ethics which is very similar to RELRA although enforcement is handled through a local Association in most cases.

Once a REALTOR is “hired” to represent a buyer-client they owe them certain “fiduciary duties” which are spelled out in the rules and regulations.  They should review and discuss them with their buyer-client to ensure that they are committed to working together.  Here is a list of things NOT to do even if the buyer-client asks you to do them or if they accept your doing them.  Most of this list comes from real-life examples, fortunately not my own.  I have been mediating buyer-seller and client-agent disputes since 2002.  In addition, I have served on all levels of our Association’s Professional Standards Committee which means I have heard, reviewed, evaluated and resolved many ethics complaints.  As I like to say when I teach ethics to my fellow agents, you can’t make this stuff up.

Here are some examples of what NOT to do when representing a client buying Real Estate:

  • Do not ask how they found you or if they have spoken to or worked with any other agents;
  • Do not ask if they have seen or know of any specific properties that interest them;
  • Do not ask how they may have learned about any specific properties that interest them;
  • Do not spend a lot of time preparing for the initial conversation. Personality wins every time;
  • Do not explain the buying process, your respective “roles” and how you earn your fee;
  • Do not tell them what you are going to do for them and why they should hire you;
  • Do not discuss the overall market and how it is performing, specifically in areas they like;
  • Do not discuss how using the Internet for “shopping” may distract them;
  • Do not ask if they are financially pre-qualified to buy or discuss what a seller may expect or require before responding to an offer;
  • Do not recommend a proven, local lender. Let them use any lender they want without question;
  • Do not explain different financing alternatives or what a “seller assist” is;
  • Do not clarify what the buyer is looking for in terms of their “wants” and “needs”;
  • Do not ask if they own any Real Estate or if they have a property to sell;
  • Do not ask about their current living situation, their sense of urgency or their timeframe;
  • Do not ask if they know anyone else interested in buying or selling Real Estate;
  • Do not discuss how pricing correlates with location, features, condition and their competition;
  • Do not review the Consumer Notice with them or ask them to sign it. In fact, do not discuss or document your “business relationship” with them or explain your “fiduciary duties” to them.  If “dual agency” becomes a possibility, you can always discuss it later;
  • Assume you know what is best for them and let them assume you know what you are doing;
  • Do not sign a representation contract, explain your fee, how you are paid or that a seller typically pays your fee. If something comes up, you will figure it out later;
  • If you have no exclusive contract or if you have a “non-exclusive” contract, hope they want to see properties where the listing broker will pay you what you think you are “worth”;
  • Do not tell them that the length or term of the contract and your fee are negotiable by law;
  • Do not explain how the “protection period” works if you use one;
  • Do not tell them to call you about any property that may interest them or that they find on their own such as any with a “For Sale” or “Coming Soon” sign or any properties they find online;
  • Do not explain how “cooperation” with other Real Estate agents works or that you can show them any property in the MLS;
  • Do not discuss what may cause them to owe you money;
  • Do not trust the buyer to be able to determine the best areas for them to consider. Assume you know what is best and tell them what to do.  What could possibly go wrong?;
  • Do not suggest having them drive by properties first to evaluate the neighborhood and whatever else may impact their buying decision before taking the time to see inside;
  • Do not review MLS printouts or call listing agents to make sure that properties meet their needs and expectations;
  • Do not discuss scheduling showings or tell them that getting a confirmation may take time;
  • Do not explain the Agreement of Sale to them. In fact, make sure all paperwork is done electronically so you can save them time by not having to meet with you in person;
  • Do not discuss what may happen between the time an offer is presented to a listing agent and when it is signed or what typically happens before settlement;
  • Do not ask a listing agent if a property is still available before showing it;
  • Do not ask a listing agent if they have any other offers or interest or have turned anything down;
  • Do not ask a listing agent if the seller has any requirements such as a preferred settlement date;
  • Do not discuss a potential “range of values” for an offering price or discuss negotiating;
  • Do not discuss a strategy for making a competitive offer or for competing with other buyers;
  • Do not discuss what personal property is or could be included, excluded or negotiable;
  • Do not review the disclosure statements before asking them to initial and sign them,
  • Do not explain the contingencies in the Agreement of Sale, especially the inspections, or what could possibly go wrong;
  • Do not stay on top of the timeframes in the Agreement of Sale or provide ongoing updates;
  • Do not discuss any concerns that a seller, an inspector or an appraiser might have which could affect the buying process and possibly end it unsuccessfully;
  • Do not offer to attend inspections. Let the inspectors manage the buyer’s concerns;
  • Do not explain the mediation clause or what it means should a problem arise;
  • Do not discuss a home warranty or offer them an opportunity to include one with a sale;
  • Do not document changes to any contracts or provide them with copies of everything they sign;
  • Do not explain how deposit money is handled if a sale falls through;
  • Do not discuss what may happen if they fail to do what is required to complete a sale;
  • Do not promote or protect their interests above yours. Assume that “confidentiality” is not important if it gets in your way.  The acronym, OLD CAR, which describes our “fiduciary duties”, only makes you remember the first car you owned;
  • Do not let them make all of the decisions. Why bother them when you know what is best?;
  • Do not suggest they contact a professional, such as a lawyer, when they have a question;
  • Do not stay in touch after a sale! They will remember the spectacular service you provided!

Of course, this list is really intended to show you most of what we are expected to do, even if actual performance may vary from one agent to another.  Our “fiduciary duties” require that we obey your lawful instructions, be loyal to you, disclose what we know, keep your business confidential, account for any monies we handle and that we provide reasonable care and due diligence to you.  There is so much more to working for buyer and sellers than simply doing the paperwork.  Even if you have bought or sold Real Estate before, we have knowledge and insight gained through experience, training and education.  We are expected to protect and promote your interests throughout the process and to be knowledgeable and competent in what we do.  Our clients have the right to expect nothing less.

When it comes to buying what is typically a person’s largest asset:

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

November 15, 2019

49 Things a Listing Agent Should NOT Do, Even If Their Client Accepts Them

Real Estate agents are licensed by the state.  I am in Pennsylvania.  Once approved to represent or “work for” clients, they are bound by RELRA, our Real Estate Licensing and Registration Act, which is enforced by the state Real Estate Commission.  If an agent becomes a REALTOR, which means they belong to national, state and local REALTOR Associations, they are bound by a Code of Ethics which is very similar to RELRA although enforcement is handled through a local Association in most cases.

Once a REALTOR is “hired” to represent a seller-client they owe them certain “fiduciary duties” which are spelled out in the rules and regulations.  They should review and discuss them with their seller-client to ensure that they are committed to working together.  Here is a list of things NOT to do even if the seller-client asks you to do them or if they accept your doing them.  Most of this list comes from real-life examples, fortunately not my own.  I have been mediating seller-buyer and client-agent disputes since 2002.  In addition, I have served on all levels of our Association’s Professional Standards Committee which means I have heard, reviewed, evaluated and resolved many ethics complaints.  As I like to say when I teach ethics to my fellow agents, you can’t make this stuff up.

Here are some examples of what NOT to do when representing an owner selling Real Estate:

  • Do not ask if they are working with another agent or if they have spoken to any other agents;
  • Do not look in the MLS to see their property history or if they own other properties you think you might help them sell. Trust that they own any properties you are discussing;
  • Do not spend a lot of time preparing for the listing conversation. Personality wins every time;
  • Do not clarify what the seller is looking for in terms of their “wants” and “needs”;
  • Do not ask their reason for selling or ask if you can help them identify their next home;
  • If they are planning to buy another property, do not discuss getting them pre-qualified;
  • Do not ask if they know of anyone who has expressed interest in buying their property;
  • Do not ask if they know anyone else looking to sell or buy;
  • Do not ask if the seller can pay off any liens so that they can transfer ownership;
  • Do not explain the selling process, your respective “roles”, your fee and how you earn it;
  • Do not discuss how pricing correlates with location, features, condition and their competition;
  • Do not tell them what you are going to do for them or why they should hire you;
  • Do not review the Consumer Notice with them or ask them to sign it. In fact, do not discuss or document your “business relationship” with them or explain your “fiduciary duties” to them.  If “dual agency” becomes a possibility, you can always discuss it later;
  • Assume you know what is best for them and let them assume you know what you are doing;
  • Do not discuss their local market or a potential “range of values” for an asking or selling price;
  • Do not discuss their potential proceeds or their cost of selling. You can always do that later;
  • Do not ask them to repair or update anything even if you think a buyer, an inspector, an appraiser or a local codes enforcement officer might require repairs later. Everyone likes surprises, don’t they?;
  • Do not discuss how you will market their property;
  • Do not discuss what their options are if the market does not respond favorably to their property;
  • Do not discuss any personal property they may want to include, exclude or make negotiable;
  • Do not explain different financing alternatives, the appraisal process or what a “seller assist” is;
  • Do not sign a listing contract, if at all, until they are ready for showings. If something comes up, you can always figure it out later;
  • Do not tell them that the length or term of the contract and your fee are negotiable by law;
  • Do not explain how “cooperation” with other Real Estate agents works or how your fee can be used to help attract showings and offers. In fact, do not offer a market-driven coop fee or spend too much time preparing the MLS entry as you may really want to sell the property yourself;
  • Do not discuss how your fee is earned or what may happen if they fail to do what is required to complete a sale;
  • Do not explain how the “protection period” works;
  • Do not discuss scheduling showings and how important they are or tell them that some agents arrive late without rescheduling or fail to show up at all;
  • Do not tell them that “feedback” is old-fashioned and that most agents will not respond when asked;
  • Do not use an appointment center: make buyer agents call you for showings and then do not return their calls promptly.  Perhaps make sure their buyers are “qualified” to save time;
  • Do not explain how deposit money is handled if a sale falls through;
  • Do not discuss how you will handle inquiries about “other interest”, the existence of other offers or how you will handle inquiries and offers after a purchase agreement has been signed;
  • Do not discuss the law regarding the property and lead disclosures and do not review them before you upload them to the MLS. Perhaps you will not upload them until agents call you to request them;
  • Do not discuss home warranties or offer sellers an opportunity to include one with a sale;
  • Do not tell them that they cannot refuse to sell to people who aren’t like them;
  • Do not offer advice for preparing their home for sale and for showings;
  • Do not show them a copy of their MLS printout. Do you really need good pictures or a “remarks” section for buyers to evaluate the property?  Do you really need to show all of the features?;
  • Do not explain the Agreement of Sale to them. If fact, make sure all of the paperwork is done electronically so that you can save them time by not having to meet with you in person;
  • Do not discuss a negotiating strategy, especially if you have “multiple offers”, or ask what is important for them when comparing offers;
  • Do not discuss what may happen from the time an offer is signed through settlement;
  • Do not explain the contingencies in the Agreement of Sale, especially the inspections and municipal requirements, if any, or what could possibly go wrong;
  • Do not ask the buyer’s agent to attend inspections and be accountable for providing access;
  • Do not stay on top of the timeframes in the Agreement of Sale or provide ongoing updates;
  • Do not explain the mediation clause or what it means should a problem arise;
  • Do not tell them to maintain property insurance until a sale is completed;
  • Do not discuss any concerns that a buyer, an inspector or an appraiser might have which could affect the selling price or the seller’s proceeds and possibly end the sale unsuccessfully;
  • Do not document changes to any contracts or provide them with copies of everything they sign;
  • Do not promote or protect their interests above yours. Assume that “confidentiality” is not important if it gets in your way.  The acronym, OLD CAR, which describes our “fiduciary duties”, only makes you remember the first car you ever owned;
  • Do not suggest they contact a professional, such as a lawyer, when they have any questions;
  • Do not stay in touch after a sale! After all, they will remember your spectacular performance, won’t they?

Of course, this list is really intended to show you most of what we are expected to do, even if actual performance may vary from one agent to another.  Our “fiduciary duties” require that we obey your lawful instructions, be loyal to you, disclose what we know, keep your business confidential, account for any monies we handle and that we provide reasonable care and due diligence to you.  There is so much more to working for sellers and buyers than simply doing the paperwork.  Even if you have sold or bought Real Estate before, we have knowledge and insight gained through experience, training and education.  We are expected to protect and promote your interests throughout the process and to be knowledgeable and competent in what we do.  Our clients have the right to expect nothing less.

When it comes to selling what is typically a person’s largest asset:

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

Bright MLS October 2019 Housing Report

Bright MLS has released their Residential Market Statistics for single family homes through October  2019.  In today’s podcast I will discuss YTD results for Delaware County Pennsylvania.  If you would like information about this or any other County in the Delaware Valley, please contact me.

The report compares the current results to one-year ago, same time period.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market so, whether you may be looking to buy or sell, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market.  Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables.  I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data is stale.  While a sale may be settled or closed today, the real question is when was the offer negotiated?  Typically sales take 45 to 60 days to close so the market today may be different.  Up-to-date information is important!

As far as the statistics, there were 8084 units listed through October compared to 7996 last year with end-of -month inventory levels of 1356 compared to 2323 with a monthly supply of inventory or MSI of 2.3 compared to 4.3.  So far 5890 properties have been settled with an average “selling price” of $290,903 and a “median” selling price, meaning that half of the sales were higher and half were lower, of $225,700 compared to 5997 settled last year, same time period, at an average price of $273,081 and a median selling price of $210,000.  The year-to-year change in settled properties is down 1.8% while the average selling price is up 6.5%.  The DOM or “days on the market” for settled properties was 41 days compared to 51 one year ago.  The MSI suggests a seller’s market overall with 3-month supply of available inventory generally considered a “balanced market”.  The underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County.

We can debate whether averages or medians are more important but what really matters is how your property or one that interests you compares to those appraised and settled with similar location, features and condition.  Appraisers rely on nearby settled properties so average or median pricing loses some validity but may provide insight for both the short term and the long term.

What about the properties that did not sell?  Many came off the market and remain unavailable.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a house was available to purchase.  Of course this may well depend on the ratio of buyer and sellers so there is more to this than raw statistics.  If a market has a lot of inventory, some buyers may not be willing to look at houses priced high compared to the rest of the market.  While sellers may be open to negotiating their price, many never get the chance.  I will happy to discuss specifics with you.

The overall economy is doing well with some adjustments here and there.  Statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move within a short period of time.  There are opportunities out there.  As with the stock market, it is very difficult to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  I am a phone call or email away and getting started is easy once you take action.

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

November 2, 2019

Bright MLS Listing Statuses and What They Mean

There are two primary tools used for conveying property information for buying and selling Real Estate.  While there are literally hundreds of possible ways to communicate this information, except for specific market segments which may use or need a different approach, all but the top two pale in comparison as far as efficiency and effectiveness.  Real Estate agents are the “match makers” bringing sellers and buyers together:  we participate in over 91% of Real Estate transactions.

By efficiency I mean having the ability to mass market information as quickly as possible.  Marketing means exposure and exposure should ensure that a seller achieve the highest possible selling price in a reasonable amount of time.  Whether the value the market attaches to a property meets the seller’s expectations or not is another story.  The fact is that Real Estate needs to be exposed to the mass market, properties have to be available to be shown to prospective buyers and sellers need to believe that the value they are offered has not been negatively impacted by poor or limited exposure.  Sellers are either motivated by time or money so some may be willing to settle for less if they sell quickly.

By effective I mean that prospective buyers and their agents must be able to readily identify all of the options which meet the buyer’s wants and needs.  Buyers need to be able to believe that they are getting the best value for their dollar by being able to compare what is available for purchase and to compare what is available with what has been sold as far as location, features, condition and price.  The concept of “data integrity” means that information is uploaded accurately so that it can be identified by people searching for it.  Of course, listing agents and mortgage appraisers need to rely on the information as well.  No one benefits from inefficient or ineffective means of conveying Real Estate information.

So, what are the two tools?  They are the multiple listing service and the Internet.  Agents use the MLS to research the market, to offer their listings to the masses and to attach a “range of values” to what they are hired to sell as listing or buying agents.  While often not a direct link, generally what is uploaded to the MLS is “syndicated” to the third-party public-facing websites on the Internet.  While information can be placed on the Internet beyond what the MLS offers or without any placement in the MLS, the Internet has its own limitations.  For example, while it provides lots of data and information, it is a static medium which cannot provide the knowledge and insight an agent can.  It also cannot provide up-to-the-minute access to property listings or information about recently settled properties.  As an example, most people understand that the “valuation” models provided by Internet sites are unreliable even if they do not know that the lack of real-time information is a major reason for that.

My point is not to compare the two media although there are significant differences.  The public should not assume that they can “shop online” for property and Real Estate information, delay contacting an experienced, trained, educated and knowledgeable professional and still expect the best possible outcome.  Buying and selling Real Estate are too important and too many are ill-equipped for the process and the decisions that typically will follow.  Both media, while different, need to rely on “data integrity”, meaning that anyone who finds “information” on either platform should be able to trust that it is valid and that is the problem.

One major point of focus is the “listing status” of the property so I will discuss the different MLS statuses and give a brief description.  It has been my experience that some agents and many consumers do not clearly understand what these terms mean.  Misinformation can be costly given that the sale or purchase of Real Estate is typically the most expensive financial transaction a consumer will make.  The cost of mistakes can be high with little chance to recover lost opportunity.  Now, the statuses.

Active:  means that a property is available for showings and for purchase.  This seems simple enough but Bright has a 3-business day rule meaning that status changes, including price changes, must be reported within 3 business days with the date of the “change” counting as day #1.  Good agents will verify the listing status before showing a property or writing an offer.  Failure to comply with the rule may violate rules and regulations;

Active Under Contract:  means that there is an executed purchase agreement but the property is still available for showings.  The real question is why?  Does the seller have the right to terminate the existing contract or are they just looking for “back-up” offers in case something happens?  Whichever is the case should be obvious.  Good agents will ask questions.  The key point here is that showings must be allowed;

Canceled:  means that the listing contract has been canceled;

Closed:  also called “settled”, means that the sale or lease has been finalized;

Coming Soon:  means that the property is not available for showings but listing agents must respond to inquiries whether the property is the MLS or not.  This is a current “hot topic” which is still evolving;

Expired:  means that the listing contract term has run out without a sale;

Temporarily Off Market:  means that showings have been stopped and will resume at some point.  There are no showings but offers can be submitted;

Pending:  means that the property is “under contract” or sold but not settled.  No further showings will be scheduled;

Withdrawn:  means that the marketing has stopped but the listing contract still binds the seller to the listing broker.  The seller may still be interested in receiving offers but there are now showings.

Agents and the public must understand what the different statuses mean and agents must use them properly.  Few things frustrate a prospective buyer more than feeling that they are being excluded from a property especially if they think that the listing agent is the cause.  Our REALTOR Code of Ethics requires that we protect and promote the interests of our client and be honest with the public.  Failure to do either can and has hurt how we are perceived.  Sellers and buyers should feel comfortable asking questions about the process and deserve to be given honest and complete answers.

There is no time for inexperience, empty promises or false expectations!

 HIRE WISELY:  We are not all the same!

October 22, 2019

Bright MLS Quarter 3, 2019 Housing Report

Bright MLS has released their Residential Market Statistics for single family homes for the third quarter of 2019.  In today’s podcast I will discuss YTD results through September for Delaware County Pennsylvania.  If you would like information about this or any other County in the Delaware Valley, please contact me.

The report compares the current results to one-year ago, same time period.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market so, whether you may be looking to buy or sell, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market.  Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables.  I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data is stale.  While a sale may be settled or closed today, the real question is when was the offer negotiated?  Typically sales take 45 to 60 days to close so the market today may be different.  Up-to-date information is important!

As far as the statistics, 5312 properties were settled through September with an average “selling price” of $293,033 and a “median” selling price, meaning that half of the sales were higher and half were lower, of $230,000 compared to 5468 settled last year at an average price of $272,624 and a median price of $210,000.  The year-to-year change in average selling price is up 7.5% while the number settled is down 2.9%.  The DOM or “days on the market” for settled properties was 42 days compared to 51 one year ago.  The “inventory accumulation” ended at 1.8 which suggests a seller’s market overall with 3 months being generally considered a “balanced market”.  The underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County.

We can debate whether averages or medians are more important but what really matters is how your property or one that interests you compares to those appraised and settled with similar location, features and condition.  Appraisers rely on nearby settled properties so average or median pricing loses some validity but may provide insight for both the short term and the long term.

What about the properties that did not sell?  Many came off the market and remain unavailable.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their market and/ or they were poorly marketed, meaning that some buyers may not have even known that a house was available to purchase.  Of course this may well depend on the ratio of buyer and sellers so there is more to this than raw statistics.  If a market has a lot of inventory, some buyers may not be willing to look at houses priced high compared to the rest of the market.  While sellers may be open to negotiating their price, many never get the chance.  I will happy to discuss specifics with you.

The overall economy is doing well with some adjustments here and there.  Statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move within a short period of time.  There are opportunities out there.  As with the stock market, it is very difficult to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  I am a phone call or email away and getting started is easy once you take action.

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

New Bright MLS Listing Policy (October 2019)

This week Bright MLS announced a new policy regarding property listings that are “advertised”.  The policy begins with the following language:

“The MLS system encourages competition in the marketplace while also ensuring cooperation and compensation among real estate professionals.  Full participation in the MLS ensures the seller has the largest possible marketplace, and the buyer has the widest possible selection.  This policy will help provide transparency and access to information in the real estate marketplace”. 

The reaction on Facebook was as swift and voluminous as I have ever seen in my years of engaging in social media.  I called the response “nuclear”.  While many, including myself, agree with the thought behind the policy change, a majority found it objectionable, questioning the ability of the MLS to interfere with how they conduct their business.  Let me add some history and context to the situation.

Bright was formed in 2018 by the merger of multiple MLS systems.  It covers several mid-Atlantic states and serves almost 100,000 Real Estate licensees.  Before Bright, our local MLS was called Trend and it served about 30,000 agents.  Until this new policy, there was a “3-day rule” that stated that any change in the status of any property had to be reported to MLS membership within 3 business days.  It excluded weekends and national holidays and the date the change was made counted as the first day.  The changes included new listings taken, price reductions and status changes.  The rationale was transparency.  The rule still applies with the one exception covered by the new policy.

For sellers, it encouraged full-market exposure for their properties which should result in more competition and the sellers attaining the highest value.  For buyers, it meant they could access all property listings that matched what they were looking for so that they could make an offer knowing they had considered of all their options.  For agents and their clients it meant having the ability to evaluate the market for comparing and attaching values to properties offered for sale.  All that being said, allowing 3 business days created problems even when agents complied with the rule.  What could happen in 3 business days?

New listings could be shared with segments of the market before receiving full exposure.  Sellers might not get the benefit of full competition.  Buyers might put a house under contract without seeing all of the possibilities.  Agents might show houses that were already “under contract”.  Will any rule change any of these?  Probably not but trying to minimize the problems we have dealt with might add to market efficiency and effectiveness and enhance our image as professionals.  One can only hope!

In my various roles in addition to listing and selling houses, I have heard many complaints over the years from agents unable to get information about houses not yet uploaded to the MLS.  Their buyers saw “For Sale” signs and some information online and wondered why their agent was unable to provide additional information they needed to make an informed decision about property.  Even if the information is in the MLS, some listing agents are the point of contact for scheduling showing appointments and some do not respond to inquiries in a timely manner but that is a separate issue.  What good can come from keeping property information secret?  The general presumption is often that these listing agents do not want competition and that they are trying to sell their own listings.  That may or may not be fair but their actions create those feelings and those perceptions taint all agents.

Here is the new policy:   Within one business day of marketing a property to the public, the Participant must submit the listing to Bright MLS for cooperation with other Bright MLS Participants.”

Let’s break this down.  “One business day” apparently means 24 business hours.  I would prefer that it really meant a “business day” as that is easier to monitor.  “Marketing” should be easy to define but it apparently isn’t.  For example, putting up a “For Sale” sign or uploading property information to the Internet is considered marketing but, as was explained in a Bright MLS video intended to clarify the new policy, “marketing” in emails seems to be correlated with how many people are included in the communication which makes this awkward to say the least.  I like definitive rules and regulations.  Regardless, I believe the intent is good and, if followed, will allow agents to answer questions about price and features and should help the overall Real Estate experience.

I have followed the developing reactions online and have read a number of reasons why some agents seem to feel this new policy is wrong.  One specific concern that makes sense is that agents who use a third-party to install their “For Sale” signs may not know exactly when the sign has been installed.  The easy answer is to upload the listing to the MLS before placing the sign order.  Frankly, while I am certain that some agents have valid concerns that needed to be discussed and addressed, most of what I have read seems to be complaints that some listing agents will not be able to control activity which makes me wonder whose interest they are serving.  A number have mentioned wanting to restrict needless showings to minimize their clients’ inconvenience.  I wonder how they do that while complying with the various laws affecting Real Estate.  Frankly, I empathize with the thought but, as I have opined before, this is not a retail transaction:  showings are generally required to allow buyers and agents to assess Real Estate and they will be inconvenient but that  inconvenience will end once an agreement is signed.  Trying to manage showings and control the marketing might make people wonder who is being restricted from viewing a property and what the real intent might be.

I saw one interesting comment from a buyer’s agent:  they said they had a client who wanted to buy a house that had not been in the MLS or on the Internet to avoid any privacy issues after settlement.  Again I empathize:  listed properties stay online after the sale closes or after the house is taken off the market and anyone can see interior photos even if they reflect prior ownership.  The Internet has affected privacy and I am not sure how to change that.  In my opinion, only active and available properties should be online and properties that sell or come off the market should be removed.

Time will tell if this new policy works.  Will it be modified?  Will deviation be allowed?  What will happen to those who violate it?  There is a heavy fine proposed for non-compliance.

As an experienced, educated and knowledgeable professional, I embrace the efficiency of the MLS.  Prior to our having an MLS, trying to get property information out to the broad a market was tedious, time-consuming and expensive because it was so inefficient.  As someone who bought a personal residence prior to there being an MLS, I remember all too well the hardship we faced identifying every possibility to consider.

Buying and selling Real Estate are infrequent acts that typically involve our biggest asset so the processes deserve all the attention and respect we can give them.  Article 1 of our Code of Ethics requires us to promote and protect the best interest of our client above all else.  While some may think that that means keeping information off the MLS, my best guess is that an overwhelming majority benefit by getting information published as quickly as possible.  We need to make sure our clients fully understand the benefits of using the MLS and our services even if that means we lose a little control.  I certainly hope that it isn’t all about the commission!

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

October 4, 2019

Selling Real Estate Without Representation: Reward vs Risk

The Philadelphia Inquirer recently ran a Real Estate story that made many people angry.  REALTORS were not involved.  What has happened and will undoubtedly continue to happen is sad and, perhaps, entirely preventable.

The article talked about people buying Real Estate, such as vacant land, from people with a high level of urgency or people with limited information.  The article described many as being poor which adds to the emotion.  The buyers either searched for people they thought would want or need to sell property or responded to owners looking to sell quickly.  In many cases the buyers “flipped” the properties for huge profits, often without making any repairs or little added cost to themselves.  Now the sellers and others are blaming the buyers, saying the buyers took advantage of the sellers.  But did they?

Would I like to have this done to me or someone I know?  Absolutely NOT!  So, what is the answer? Assuming these transactions were not coerced, who is responsible for this?  Whether the sellers were misled about the “market value” or worth of the Real Estate is a separate issue.  What is the seller’s responsibility as far as learning the “market value” of what they want or need to sell?  What should the buyers have done differently?  What is society’s role:  do we want to require a third-party to review and evaluate sales to protect whomever we think “vulnerable”?  That would seem excessive.

Please do NOT misunderstand me:  the article did not accuse the buyers of fraud and I would certainly NOT condone that.  In fact, the buyers say they do a lot of work to put these deals together and provide a benefit to sellers.  Frankly, what we have are two parties with their own interests and motivation as well as two different ideas of property value.  The same thought applies to a sale where both parties are represented by professionals although they would have an added layer of “protection” if their agents performed as we are supposed to.

In Real Estate there have always been a number of “private sales”, meaning there are no agents involved.  About 8% of national transactions do not involve agents although many of these involve parties who know each other.  Sadly, many who buy or sell Real Estate without professional representation come to realize there was a problem AFTER the sale closed and those sales tend to result in lower proceeds even when you consider that the Real Estate fee was not charged.

While the article has several very sad stories, absent fraud, many of these sellers need to look at what they did and what they expected to happen.  They took a risk by not hiring a professional.  Could they really have gotten “top dollar” on their own or did they have the resources to maximize the “highest and best use” of the Real Estate?  Again I ask:  whose job was it to protect and promote their interests?  They had choices, even if somewhat limited, and now they have the consequences of what they did.

While anyone can make the decision to buy or sell Real Estate without an agent, what is the TRUE co$t of trying to save the fee?  If the issue was a matter of time, trying to sell fast usually comes at the expense of profits since the market was not allowed to function properly.  Absent hiring a professional, please, at least pay an attorney to review any documents involved and/ or hire an appraiser to determine the true “market value” of your property.  While doing either may not get you what you think you are due, at least you will know your options.  Certainly do NOT trust random online property valuations and, respectfully, do not rely on friends and family.  Business is business!

In the event there was any fraud or misrepresentation, pursue that through legal channels.

When Real Estate (or anything of value) is involved:  there is no time for inexperience, empty promises or false expectations! 

HIRE WISELY:  We are not all the same!

August 30, 2019

Have You Really Decided Not to Sell Your House?

I have been helping frustrated owners sell properties that other agents could not sell since 1996.  What does this mean?  I use the multiple listing service to monitor daily residential and multi-family properties.  I look for property listings that might appeal to my buyer-clients, that compete with properties owned by my seller-clients and those which come off the active market without selling.

During the course of any year a number of property listings are canceled or their contracts expire before there is a sale.  Some of these properties will come back on the market with the same agent, perhaps at a lower price, some owners will hire a new agent thinking that will solve any problems they had and a significant number of properties will remain off the market for months or longer!  I always wonder what happened with whatever plans those owners and families had.

While some owners may resort to renting their houses so they can move, many seem to either give up or delay their plans, perhaps waiting for what they think is a better time to sell.  Those looking to buy another home need to know how waiting will affect a purchase.  Either way, the fact is that buyers look at houses all year long and they can only see and buy properties that are on the active market so waiting to try again may be counter-productive, especially in areas that tend to move more slowly.

I understand and empathize with people who feel frustrated by the harsh reality of the Real Estate market.  Any optimism they felt can lead to frustration:  why aren’t people coming to see their house?  Perhaps they had many showings but no one made a good offer.  Many probably wish that family, friends and neighbors would stop asking them questions.  I do have one serious question:  what happens if you do not sell?  If anyone really wants or needs to sell, why not restart the process now or start planning for next year?

I am a full-time agent, a REALTOR®, an Associate Broker, an Ethics Instructor and a Mediator.  I have listed and sold Real Estate in Delaware, Montgomery and Chester Counties and in Philadelphia.  Many properties that sell were “previously listed” and most of them sold only after something was changed with the way they were being marketedPrice is not always the issue.  In fact, many sellers take unnecessary reductions.  For anypreviously listed” property to sell, something must change.

The most effective choices are marketing (meaning “exposure” or awareness of your property: your MLS sheet is your property resume.  How accurately did it represent what you were selling?), pricing strategically and/ or hiring a different agent.  Changing agents can bring a new perspective and a different philosophy that might provide the advantage you need in a competitive market.  What would your last agent do differently this time (other than a price reduction)?  Will doing the same thing over again even with a new agent produce a different result?  Change for the sake of change can be a mistake.  You may be adding days on the market without increasing your odds for success.

Why should you call me?  My background in Client Service Management combined with my Real Estate experience, training, education and knowledge will help me to assist you.  Real Estate is not “rocket science” but it requires a thorough knowledge of the “process” and a proven strategy.  I have a common sense, client-centered approach.  You can learn more about me by listening to my podcasts, reading my blog and by visiting my website.  I have a lot of material available.

Effective marketing allows buyers and agents to find properties like yours in their search results (think “Google search”).  If they could not find your property in their searches, the odds were against you perhaps causing your property to sit on the market!  Many sellers are asked to reduce their price (and their proceeds!) when marketing was THE real problem.  Reducing the price will NOT always solve a marketing problem.  I NEVER ask for a price reduction without justifying it.  Every house has a price at which it will sell; my job is to get my clients the highest price possible.

If I earn the opportunity to work for you, you will receive the highest quality service, attention to detail and effort.  Communication is critical:  my job is to keep you informed so that you can make the best decisions.  Most of my clients never had any ongoing contact with their agent!  I work for my clients.  In addition, I offer the following guarantee that I will do what I promise:  if I don’t, call me to discuss your concerns.  If I cannot satisfy you, you may cancel our listing contract unless your property is under contract with a buyer!

Thank you as always for taking the time to read my blog and/ or listen to this podcast.  Please contact me if you would like to discuss this further.

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

August 5, 2019

The PAR Listing Contract, Paragraph 13: ADDITIONAL OFFERS

Filed under: Buying,Ethics,Hiring an agent,Marketing,Multiple Offers,Price,Selling — awetzel @ 3:09 PM

I created and am teaching a class on representing sellers from the Consumer Notice through settlement.  As part of my preparation for the class I reviewed the PAR Listing Contract in detail.  I have always questioned two specific statements in paragraph 13 which is titled ADDITIONAL OFFERS.  I have worked around these two statements in my own business and used the classroom as a way to see if other agents agreed with me.  Most did.  Here are the statements and my thoughts.

Line 118 basically says:  “Unless prohibited by Seller, if Broker is asked …, Broker will reveal the existence of other offers”.  While I understand and appreciate that we have to be honest, our primary duty as stated in Article 1 of our Code of Ethics is to protect and promote our client’s interest.  Generally speaking, I am not sure that telling an agent or a buyer that you have an offer on a property really helps the seller especially if the offer is not something they are likely to sign and/ or the buyer wants to avoid what may not really be any viable competition for the property.  The question demands a yes or no answer, not a maybe.  Suppose you have an unopened email or a package that you know contains an offer for a property you have listed.  You may have no idea about the details:  it could be full price or above asking or well below.  There could be contingencies that are unacceptable to your seller client.  Are you supposed to tell others that you have an offer?  Again, you cannot say “maybe”.

I offer two alternatives for rewording the sentence to be more proactive.  One would be a statement that the agent will not reveal the existence of other offers unless authorized by the seller.  Or it could state that the agent is authorized.  Either way, the statement is plain and simple.  This may be semantics but I like these phrasings better.  The other alternative would be a check box offering the seller the choice to accept or waive disclosing the existence of other offers at the time of signing the listing contract.  When the disclosure is waived the agent would respond by saying they are not authorized to answer the question.  Again, if authorized the answer is an honest yes or no.  In addition, suppose you say yes or no and the circumstance changes, perhaps an offer dies or one comes in.  Does the seller or the buyer’s agent or the buyer expect a real-time update?

At the very least, my hope would be that there is a greater likelihood that a conversation would take place than is probably happening now and that is a good thing.  Too many of my seller clients who have worked with other agents before hiring me have told me that they were negotiating an offer or heard there was interest and then nothing happened.  When I mentioned my concerns to my students I sensed that many never gave a thought to the downside of this:  some buyers run the other way when they hear about competition and line 118 does not differentiate between viable and non-viable offers.  Of course, we have many different business models and if a property is located in a market that thrives on any type of competition, disclose to your heart’s content but one size does not fit all.  We have to know our clients, their circumstances and their local market.

Within the same paragraph, line 120 states that “ONCE SELLER ENTERS INTO AN AGREEMENT OF SALE, BROKER IS NOT REQUIRED TO PRESENT OTHER OFFERS”.  My office policy has always been to present any and all offers and let the seller decide what to do.  Admittedly this may require their seeking legal advice if they like the latest offer even though under contract with another buyer with their having no apparent right to terminate the existing offer without creating a default.  Experience tells me that the grass is not always greener but it is their house!  Either way, the client is the boss and gets to make those decisions.  I advise and they decide.

My questioning this particular statement has a more basic rationale:  when a seller signs an agreement of sale, we are required by MLS rules to change the status within 3 business days.  In addition, our Code of Ethics Article 3 and RELRA require that we disclose the existence of accepted offers.  The keyword is accepted meaning that a contract has been signed.  It is the right thing to do.  Bright MLS offers two status choices:  A/C, meaning active under contract, or PENDING.

A/C technically means that the seller is still allowing showings, presumably as a way to limit the damage should the contract fall through while PENDING stops showings.  Buyers sometimes wonder why and we have to assure them that they have a viable contract although some find this unsettling and it can affect the process.

Many agents, whether it is their thinking or their client’s, use A/C and, while true or not, agents have always complained that agents who use the A/C status often do not allow showings which is a violation of our rules and makes no sense.  That is a separate matter but, given the likelihood of using A/C rather than PENDING, it makes no sense to have the seller agree that we not present any additional offers while we seem to be encouraging them.  I think we either need to change this statement or offer options depending on the MLS status chosen.  Again, let’s force another conversation.  We live in the age of scanning and email with electronic signing.  Real Estate is a people business and yet technology seems to separate us.  Sometimes I see the negative impact of that when I am asked to mediate a dispute or chair a panel hearing an ethics complaint.  The root of many problems is a failure to effectively communicate.

Of course either statement could be modified by changing the contract itself as I am doing or by using an addendum.  The question is whether either happens or is the seller put in a precarious position perhaps by an agent who does not understand the potential consequences.  Given that buying a house is typically the largest purchase someone will ever make and that the process itself is emotional enough even in the best of circumstances, I think we need to better prepare our clients for what may happen and that means making it easier for agents to explain the steps in the process and what may go wrong.  While having a sale fall through can be traumatic, it does not come close to how a buyer or seller feels when the process got in the way of itself.  The damage cannot be easily undone.

I know that no one wants longer contracts but I see these two statements as problematic.  On a related note, our state required property disclosure statement is almost the same number of pages as our state purchase agreement.  That is amazing to me!

There is no time for inexperience, empty promises or false expectations!

HIRE WISELY:  We are not all the same!

Bright MLS Quarter 2, 2019 Housing Report

Filed under: Buying,Hiring an agent,Price,Selling,Statistics — awetzel @ 3:06 PM

Bright MLS has released their Residential Market Report for single family homes for the second quarter of 2019.  In today’s podcast I will discuss YTD results through June for Delaware County Pennsylvania.  If you would like information about this or any other County in the Delaware Valley, please contact me.

The report compares the current results to one-year ago, same time period.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market so, whether you may be looking to buy or sell, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market.  Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables.  I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data is stale.  While a sale may be settled or closed today, the real question is when was the offer negotiated?  Typically sales take 45 to 60 days to close so the market today may be different.  Up-to-date information is important!

As far as the statistics, 3310 properties were settled through June with an average “selling price” of $288,887 and a “median” selling price, meaning that half of the sales were higher and half were lower, of $227,564 compared to 3429 settled last year at an average price of $266,570 and a median price of $209,900.  The DOM or “days on the market” for settled properties rose to 61 from 55.  The ratio of the “average sold price” compared to the “original asking price” was 95.7% with the percentage dropping as the days on the market rose.  The “inventory accumulation” remains under 3, which suggests a slight seller’s market overall.  The underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County.

We can debate whether averages or medians are more important but what really matters is how your property or one that interests you compares to those appraised and settled with similar location, features and condition.  Appraisers rely on nearby settled properties so average or median pricing loses some validity but may provide insight for both the short term and the long term.

What about the properties that did not sell?  Many came off the market and remain unavailable.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their market and/ or they were poorly marketed, meaning that some buyers may not have even known that a house was available to purchase.  Of course this may well depend on the ratio of buyer and sellers so there is more to this than raw statistics.  If a market has a lot of inventory, some buyers may not be willing to look at houses priced high compared to the rest of the market.  While sellers may be open to negotiating their price, many never get the chance.  I will happy to discuss specifics with you.

The overall economy is doing well with some adjustments here and there.  Pushing statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it or planning to move again.  There are opportunities out there.  As with the stock market, it is very difficult to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  I am a phone call or email away and getting started is easy once you take action.

There is no time for inexperience, empty promises or false expectations!

  Remember:  HIRE WISELY.  We are not all the same!

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