Andrew Wetzel's Musings

March 25, 2019

Data Integrity: How Accurate is/ was your Property Listing?

Filed under: Buying,Ethics,Hiring an agent,Marketing,Price,Selling,Technology — awetzel @ 5:42 PM

What is “data integrity”?  It means that the data we collect, store and report is accurate.  What do I mean by data?  It could be the status of a property listing (is it available to see and buy? Has it been put under contract?  Has it settled?), the price, the type of property and its features.  I want to relate the importance of accurate data to three different groups of people, all part of a sale.

Let’s start with buyers.  A seller needs a “ready, willing and able” buyer to complete a sale.  Whether a buyer hires an agent to search the MLS or they search online, the expectation is that properties matching what the buyer is looking for will appear in their search results so they can evaluate whether to take the next step or they will not know a house is even available to consider.  If they cannot find it in their search results, they will not see it and they will not buy it.  Even worse, a listing agent may not know there is a fixable error and ask the seller for what may be an unnecessary price reduction which reduces their proceeds and still not make it any easier to find the property in search results.  I have many examples and will share two.

  • Early in my career a buyer identified two possible elementary schools for her daughters to attend. She drove the neighborhood and found a “For Sale” sign on a house, called me for information about the house and asked me to search the area for homes like the one she was fortunate to find.  I found several other houses for the family to consider but the one she saw was not in my search results.  The listing agent had entered the wrong zip code.  Imagine if she had not seen the yard sign and the house had remained on the market unsold.  She would have missed seeing the house they bought and the sellers may have been asked to lower their price.  By the way, the family is in the same house many years later;
  • A frustrated seller called me. His property had been on the market recently and his listing contract expired without a sale.  He called me to see what I could suggest.  I looked up the property, discussed it with him and quickly found a major error:  the MLS showed the house as having a single bathroom.  He said it had two full baths.  People searching for two full baths did not know his house was available even after he reduced his asking price.  This is sad and avoidable.

In addition to limiting the number of available houses for buyers to consider, which could lead to a buyer not seeing their best options, errors will affect a market analysis.  Buyers usually want to know what comparable houses have been selling for before they make an offer.  Houses that are not accurately listed as well as those whose statuses are not correct could impact a buyer’s perception of what to offer, perhaps causing them to lose a sale.

Similarly, a seller looking to price their house according to its location, features and condition may be relying on incorrect or incomplete information.  Their house could sit on the market unsold or they could accept less than they should have.  Over the years I have seen a number of houses not properly reported as being sold.  Instead, the listing contract expired or the agent withdrew it from the market making it look like the property did not sell which is often interpreted as meaning that the price was too high.

The last person this misinformation can impact is the appraiser.  They evaluate selling prices based on reported comparable sales.  They can only rely on what is reported even if it is inaccurate (how would they know?).  In addition to the status, appraisers rely on pictures, features and the public remarks to try to identify the prior sales most like the house they are appraising.  What is the cost of inaccurate information?  If it falsely appears that a buyer paid too much, the process may stop unless the seller lowers their asking price OR the buyer comes up with more money OR they somehow work it out.  Mortgages are based on a percentage of the appraised value so errors matter.

To conclude, data integrity is a BIG deal.  Many of my seller clients were unsuccessful with one or more agents before we met.  Many of their property listings contained at least one error and there were often errors serious enough to prevent a sale.  In many cases I was able to improve their chances simply by adjusting the marketing to enable potential buyers and their agents to actually find their property in their search results.  It is like a “Google search”:  how many inaccurate entries do you see before getting the result you were looking for?  You may give up or never find the best answer for your search.

Today many buyers start their searches on the Internet before contacting an agent which only magnifies the potential damage as they may not be as proficient identifying listings as a professional is.  People rely on our training and our experience which is why a higher percentage of consumers use our services than ever before.  I do not mean this to sound like a commercial but this is what we do.

Of course there are times when price may still be an issue especially if the length of time on the market needlessly scares buyers into thinking there is something wrong with a house.  Either way, a seller should not have to suffer a financial loss because their agent failed to do their job.  In  addition, many of my clients say that they never saw their MLS sheet with a prior agent or searched online to see how their property information looked, if it was even there.  Some said that their agent never gave them a copy of their printout and that may be true as I suspect that many know they have not generated a good listing printout.  Many listing printouts, in addition to being incomplete as far as features, lack pictures or offer only a few bad ones, some taken with cell phones, and have no public remarks section or have a poorly written remarks section that is boring, incomplete or loaded with bad spelling and poor grammar making them hard to read.

The MLS syndicates the information on your listing printout to the major search engines we all know as well as thousands of others.  If the MLS is not done well this only magnifies the problem:  “garbage in; garbage out”.  Your printout is literally like a resume.  So, unless your house is on a well-traveled street exposing your “For Sale” sign to lots of traffic, the MLS and Internet may be the only ways anyone will know you want to sell.  Does that make you feel comfortable?  What is the cost of delaying your plans or being asked to accept less money than you should?  What does your printout look like?

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

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

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How Sellers Sell Real Estate: Who is the Typical Seller?

Today I want to discuss the 2018 NAR or National Association of REALTORS Profile of Buyers and Sellers.  The report comes from a survey using 129 questions mailed to over 155,000 home buyers who purchased a primary residence between July 2017 and June 2018.  7191 were returned.  The focus of this podcast will be buyers who sold one home to buy another.  This was a national survey so your market may be quite different.  Real Estate is local:  there is no national Real Estate market so please contact me for information about your local market.

  • NAR has been collecting seller data since 1985 when the typical owner remained in their home for a median time of 5 years. In 2018 that number was 9 years which suggests that buyers may want to think long-term about their investment.  What appears to be a solid investment today may look different later.  Unfortunately, I still see sellers who paid more for their house than it is worth today and that can delay being able to sell it;
  • Sellers between the ages of 18-34 typically sold within 4 years while those over 75 sold after 17 years;
  • The median selling price was 99% of the final asking price. If you are an owner whose house is not attracting serious interest, meaning offers, this is important to know.  Many buyers think they are better at negotiating than they really are and are hesitant to start with their “best offer”.  In a very competitive situation they may not get a second chance.  On the other hand, a buyer may prefer to make an offer on a house closer to its market value to avoid having an appraisal issue or risk losing their second choice to another buyer when their offer on a house expires.  Whether a listing agent should disclose the existence of other offers is debatable but this should only be done when a seller allows it.  In some markets and with some buyers, competition may be welcome.  In others, not so much.  Sellers may also think themselves better at negotiation than they really are so they need good advice from a trusted and respected representative.  Ego can be a terrible thing to overcome.  Last point, showings are nice but they do not guarantee a sale;
  • 13% of houses purchased sold for more than asking price with 26% achieving the asking price and 24% selling for 95% or less than asking price;
  • The typical seller was 55 years old;
  • 68% were repeat sellers while 32% were selling for the first time;
  • 70% who purchased another home stayed in the same state; 16% moved to another region; 14% stayed in the same region but a different state;
  • 44% bought larger homes; 29% bought a similar size; 27% down-sized. The age of the seller strongly correlates with these statistics;
  • 50% bought a newer home than they sold; 28% bought one the same age; 22% bought an older home;
  • 47% spent more than their selling price; 27% spent less;
  • The most common reason for selling was that the house was too small (15%), followed by moving closer to friends and family (14%) and job relocation (13%);
  • 29% of first-time sellers cited size as being too small whereas repeat sellers cited moving closer to friends and family (17%). Selling is an expensive proposition so having to move in the short term because you outgrew a house or simply needed more space can be costly;
  • 91% of all sellers used a Real Estate agent with only 7% being a FSBO. 91% is the highest result recorded despite the presence of the Internet.  The % of FSBOs has steadily declined since 2000 even though the Internet was thought to have helped with exposure;
  • The median selling time for all sellers was 3 weeks. There is a correlation between the % of the final asking price achieved and the length of time it takes to sell.  While it can be a distracting obsession, many buyers look at the “days on the market” as an indicator of a home’s desirability and may avoid homes that are simply over-priced although they have no issues.  Houses that sold within 2 weeks or less achieved 100% of the final asking price whereas houses on the market for 17 weeks or more achieved only 94%.  Keep in mind that many houses are reduced in price to attract attention so looking at the final asking price as compared to the selling price is only one part of the story.  Sellers determine the asking price but buyers determine the value.  If nothing else, easy access to the Internet has allowed buyers to competitively shop meaning they at least know what is on the market although relying on valuation algorithms is risky.  Houses tend to get the most activity within a week or two of hitting the market.  Once the current supply of buyers knows a house is for sale and no one buys it, something has to energize and existing buyer or other buyers have to start their search;
  • 44% of sellers used buyer incentives to attract interest. The top two were home warranties and closing cost assistance.  These are not guaranteed to get the job done and should be discussed at the outset;
  • 64% of sellers were “very satisfied” with the process; 25% were “somewhat satisfied” and 12% were dissatisfied;
  • The overall median selling price was $259,900. Remember that this is a national number.  The median selling price for FSBOs was $200,000; for agent-assisted sales it was $264,900 and for FSBOs who eventually used an agent the median selling price was $227,900.  This clearly shows the advantage of hiring and paying a professional.

The bottom line is that this can be a very confusing process.  This NOT a retail transaction!  It is typically costly enough without making expensive mistakes.  Unless you do this regularly, I respectfully suggest that you trust a trained, experienced professional.  Whether you want to trust your most valuable asset to someone with little experience or someone who has a long track record is up to you but any professional is likely to know more than an average seller looking to save a few dollars.  I understand that signing a formal contract with someone, even if recommended to you, is quite a leap of faith.  Most of us can offer options to increase your comfort level.  After all, we want to make sure that you “fit” with us as well.

Selling Real Estate is unique compared to most typical purchases:  not only is it much less frequent than other purchases, it typically involves multiple steps, each offering its own challenges.  If you would like to discuss selling or buying or if you have any thoughts about this, please contact me.

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

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

Living Up to Being a REALTOR®

Filed under: Ethics,Hiring an agent — awetzel @ 5:17 PM

While becoming a Real Estate agent is relatively easy compared to many other professions having less impact on the public, becoming and remaining a REALTOR requires an added commitment to a formal Code of Ethics.  Living up to its ideals takes effort; failing to do so has consequences for the agent and the public.

Many in the profession believe that it is far too easy to get a Real Estate license.  Until recent changes were made in Pennsylvania, you needed to take two 30-hour classes, pass a test in each and then pass a state test.  That requirement has been increased which is good as neither of the classes really prepare agents to help sellers and buyers with their largest purchase.  Much of the “real-life” training, including how to run your own business and understanding the law, the rules and regulations, the paperwork and the process of completing a Real Estate sale continues to fall on the agent and their office.  Most agents who change offices seem to feel that their office did not support their professional development.  While perhaps true, an agent must be motivated and take the initiative to learn more.

Becoming a REALTOR requires attending an ethics class and joining a local REALTOR association.  Why wouldn’t someone take that extra step as the benefits far outweigh the additional effort and cost?  Perhaps if the public understood and embraced the difference between agents and REALTORS that would change.

To maintain a Real Estate license, you needed to complete 14 hours of state-required mandatory continuing education every two years and a nationally required ethics course every four.  Our local association requires that we complete an additional course every two years which covers the content of national course.  While recent changes in Pennsylvania changed the requirements for entering Real Estate and maintaining your license, which is a good step, it is still harder to become a hair dresser than to get a Real Estate license.

In addition to the ongoing education requirement, we have to pay dues for renewing our license and continuing to be members of our REALTOR association as well as paying other ongoing assorted fees.  Compared to many people who start and run their own businesses, we have it easy.

There are well over a million REALTORS in the United States, about half of all Real Estate licensees.  As I have explained, a typical licensee really has to do little to earn the right to advertise him or herself as a REALTOR.  However, I strongly believe that we need to do a great deal to live up to the high expectations we place on each other and ourselves even if many in the public think we are all the same.  The most obvious difference is that REALTORS have a Code of Ethics.

I would like to draw a distinction between being a REALTOR and earning designations or certifications.  I am an Associate Broker and hold several professional designations and certifications offered by the REALTOR community as well as performing several roles for my REALTOR association.  Earning these credentials and meeting the challenges associated with each of them took a great deal of time and effort.  They have ongoing obligations and I have to live up to their standards!  You can learn more about them and their requirements and see my professional qualifications on my web site.

It will be interesting to see how the profession evolves over time.  All agents have minimum standards as established by the PA Real Estate Commission while REALTORS have a higher set of expectations as exemplified by our Code of Ethics.  I would like to see all agents comply with our Code of Ethics regardless of whether they are members of our association or not.  I think the public deserves the accountability that goes along with such a set of established standards.  That probably will never happen so, at best, I hope that the public comes to realize the difference between agents and REALTORS.

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

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

March 23, 2019

The Courtesies of Showing Properties to Clients

Filed under: Buying,Ethics — awetzel @ 4:57 PM

The preamble of the REALTOR Code of Ethics states that REALTORS “are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS a common responsibility for its integrity and honor….  They identify and take steps, through enforcement of this Code of Ethics…, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession”.

Our most basic purpose is to bring sellers and buyers together.  We are matchmakers.  Typically the formal process starts with showing a prospective buyer properties that interest them.  Most showings require scheduling and confirming a specific appointment before entering a property.  Whether occupied or not, regardless of the type of property or its usage, someone owns it and our profession requires that we respect the private ownership of Real Estate.

The concept of showing properties should be simple:  a listing agent shares the instructions for accessing the property, a buyer learns about a property and expresses interest in seeing inside to see if it matches their wants and needs, they meet an agent for the tour and evaluate what they saw compared to other possibilities.

While a listing agent and seller have no idea whether a buyer is serious about buying or can even qualify to offer the seller what they want or need to complete a sale, the minimum expectation should be that the agent and buyer show up within the scheduled time frame, that the property be entered in accordance with the seller and listing agent’s instructions, that the people respect the ownership of the property as well as any personal property inside it and that, when they leave, they leave the house as they found it which typically means that they turn off the lights and lock the doors.  Unfortunately, some of this seems difficult for some agents and buyers.

For whatever reason, one of the constants in listing Real Estate for sale is that some agents either fail to show up within their scheduled time frame or they do not come at all.  There are going to be times when showings run longer than planned which may affect arriving on time for the remainder of the scheduled tour or when there are problems with traffic.  The remedy is to call to see if it is possible to change the scheduled time so that the seller knows what is going on.  It is not acceptable to just assume that you can enter someone’s property whenever you get there.  The owner may have thought you were not coming and was not prepared to welcome you at your convenience.

The larger issue is when an agent and buyer do not show up at all.  It should be assumed that a courtesy call will be placed to advise the seller that the showing has been canceled.  The showing may or may not be rescheduled but, at the very least, the seller should be told if you are not coming as scheduled that day.

Common sense dictates that selling Real Estate is going to be quite different from simply living in it.  Showings are not always convenient no matter how much a seller wants or needs to sell, even if the property is vacant.  Sellers do not know whether they are having their time wasted but they generally endure even if it means delaying a meal, changing their plans or doing something that accommodates someone they do not know.  Inconvenience is one thing, it is expected, but failing to show up for an appointment without canceling is rude, unprofessional and shows a lack of courtesy and respect for others and their property.  Again, there may be a perfectly valid reason but this happens too often and most agents will never call to apologize or explain what happened.  This reflects badly on our profession and causes some members of the public to think poorly of us.  We are collectively responsible for upholding the image of our profession and any individual can damage it.

I take the time to explain to my clients what can happen with showings.  It is part of my role but I find it embarrassing to need to do that and too many of my clients know all too well why I have to do this.

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

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

Buyer Regrets: Hopefully Too Few to Mention

Filed under: Buying,Ethics,Hiring an agent — awetzel @ 4:42 PM

Many buyers express regrets after moving into their next home.  Some feel the need to resell it which can cost thousands of dollars in closing costs not to mention the possibility of their selling it for less than they paid.  Others will remain in the house and deal with whatever regrets they have.  Over the years many sellers have told me that they should not have bought their house.

This is worse than “buyer remorse” which may cause a buyer to terminate an agreement before taking possession.  That still may have a serious cost attached to it especially if the buyer defaults on a purchase agreement.  Either way, I respectfully suggest that many if not most buyer regrets are the direct result of buyers choosing to conduct a search “their way” instead of following a tried and true plan.  Many buyers wait to hire an agent so they are left to fend for themselves.  Competition may also lead to a hasty purchase decision.  The 24/7 availability of information gives many buyers a comfortable feeling about the process.  However, they are, at best, receiving a lot of conflicting, incomplete or false information rather than using REAL knowledge.

When I meet a buyer I ask that they do two things:  get financially pre-qualified so that they know their situation and comfort level AND determine their “wants” and “needs” so that we can begin to focus on identifying locations, prices and features for them to consider.  Once they start to embrace those two foundations, we can really begin to put together a list of properties for them to consider.  Unfortunately, many buyers get distracted by the lure of seeing houses which may lead to their finding one they think they like without their being prepared to pursue it or knowing if it is really THE BEST ONE available for them.

So, what is my plan?  I use their information to do an initial MLS search.  The criteria I use will likely evolve but we have to start somewhere.  Of course I fully expect my clients to search online as they consider different options as well as to attend open houses and do anything else that they think they need to do as long as I know the best criteria to search.  We are a team and need to have the same goal.

If my search yields dozens of houses, I suggest they narrow their focus.  If I only identify a handful they should likely expand their options.  My typical buyer makes a purchase decision after actually viewing 10-12 houses.  Trust me, after awhile they start to blend together!  Many buyers forget what they saw by the time a house tour ends so I try to limit a tour to 5 or 6 houses but that depends on what they want and their circumstances.  Buyer agents who do relocation probably wish it were that easy.  I have shown 17 or 18 houses during a tour and that generally makes no sense for most of us even if they are tightly clustered.

After identifying the initial “list” of properties, I email them to my clients and ask them to look at them and then drive by all of them so that they can prioritize them.  This not a perfect situation as the MLS may be incomplete as far as pictures and descriptions so a buyer may not really be sure they will like the house.  If they wait for the agent to complete the MLS information it may be too late to get in let alone to make an offer.  Even though a specific listing may not appeal to them, driving into and through neighborhoods may help a buyer evaluate whether they like those areas or not especially if they are not familiar with an area they have chosen to consider.  They may think they know an area really well but probably have not traveled on every street.  Buyers may also find areas they had not considered.

The goal is twofold:  finalize the list of wants and needs to help me continue to identify new possibilities as they come on the market and to start the process of looking inside.  For example, if a buyer narrows a list to 10 properties and we see the best 5, they are more likely to feel comfortable making an offer if a specific house really stands out.  If a buyer starts to haphazardly look at random houses with different agents they may find one they like but fear making an offer because something better may be available.  The buyer is the boss and gets to decide what to do; my role is to advise.  The process of getting to settlement may have its ups and downs and the stronger a buyer is committed to owning a specific house, the more likely they are to work through any issues that arise such as with any inspections rather than wishing they had spent more time looking at houses.

Most of my buyers remain in their homes for many years.  I look at a house as something you “grow into” rather than “out of”.  My focus is their long-term happiness rather than hoping they will buy and sell frequently!

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

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

Compensation in Real Estate

Filed under: Buying,Ethics,Hiring an agent,Marketing,Price,Selling — awetzel @ 4:31 PM

While there are many different business models as far as how sellers and buyers compensate their Real Estate representatives, the one that seems to remain the most popular is based on closing a sale meaning that the agents work on full commission.  Typically the seller pays the listing broker a fee due at settlement and that broker offers a portion of their fee to buyer agents as an incentive for them to show their listings.

Anyone working on a full commission-basis has to constantly focus on finding new clients if they want to continue to generate income.  While most agents will have opportunities to work with friends and family as well as people referred to them, we also need to identify prospects from people we do not already know.  The point I want to stress is that Real Estate agents, and perhaps anyone who works on full commission, have two commodities to trade for the opportunity to earn a commission.  One is our time, meaning that any time we devote to developing leads and working with prospects, customers and clients has to be invested wisely as the amount of time we have is finite.  Time management is one of many topics we have to master.  How much is our time worth?  Can we differentiate between important tasks and urgent ones?  How is our time best spent?  Some agents have a better handle on this than others.  One of our challenges is to evaluate which clients to accept based on the likely outcome of our working for them.  It boils down to probability:  am I likely to sell a client’s house or is a buyer likely to buy a house?  Of course nothing is guaranteed and we all will spend some time for which we know we will not be compensated.

The other commodity we have to trade is the combination of our skills, knowledge and ability.  Our actual experience is only one part of this as some of us spend a lot of time, money and effort to learn more so that we are better prepared for the unexpected.  While some clients may be more self-sufficient than others, perhaps minimizing what we do for them, others are much less so and will need more time from us as we advise and counsel them.

One of the basic facts of Real Estate is that commissions are negotiable.  In fact, when a group of agents get together we are NOT allowed to discuss commission as doing so may be perceived as collusion.  Offices and companies set their rates or fees, we try to avoid the word “commission”, and may or may not allow their agents the flexibility to charge what they can or need to in order to acquire clients.  There is more to our fees than simply comparing one company to another.

I have heard since my first day in business that our fees were under assault.  Different business models have done a variety of things to capture market share and, frankly, many focusing on low fees have not survived.  Some consumers do not value our services as highly as others, reducing our role to preparing documents and unlocking doors while others demand a lot of our time, seemingly expecting to learn everything we know regardless of whether or not their situation requires it.  I do know that when the market went crazy, some sellers thought our job easier so they wanted to pay less.  Of course, I never had a seller offer more when it took longer to find a buyer for their house.  Conversely, no buyer ever offered me more even though it took writing and negotiating several offers to get them a house.  I often joke that when I look at my commission check I either think I was overpaid or that it was not nearly enough!

The word commission is an interesting one as is the concept of only getting paid when a house is sold regardless of how much time and effort we have invested or whether or not the seller and buyer were really motivated to get it done.  Many sales fall through when a buyer cannot get a loan or when the two parties cannot agree as to how to address a home inspection list.  Even if the sale falls through during or just prior to settlement, there is no payday.  That is part of what we accept.

Our commission is a marketing expense.  I understand that buyers and sellers prefer to pay less rather than more.  From the buyer’s perspective, the seller typically pays the buyer’s agent although the fee comes from the funds offered by the buyer.  From the seller’s perspective, the less they pay, the more they walk away with.

What is the reality?  Some sellers will settle on an agent solely based on the fee they charge.  You do generally get what you pay for and if an agent is willing to accept less than their competition, perhaps they are not as capable of earning the trust of prospective clients.  Sellers might want to question the negotiating skills of an agent who accepts what the seller wants to offer:  how hard will they negotiate the selling price?

In addition, sellers need to understand their competition.  Part of the fee charged by the listing broker will be used as an incentive for buyer agents to want to show and sell the listing agent’s property.  The portion offered is determined by the agent and the seller but if it is not competitive with other listings a buyer agent might show their client, the seller could see their house sit on the market longer than it should.  Houses with a high “days on the market” can become stigmatized, meaning that buyers and their agents wonder why someone has not bought it.  Even worse, houses that go under contract and then come back on the market may be thought to have repair issues.

More to the point, assuming that a buyer has “hired” an exclusive agent to represent their best interests, the buyer and their agent likely agreed to a fee owed to the agent at settlement.  If the contract allows the agent to accept compensation from the listing agent, it may well include a provision that the buyer has to make up any difference between what they agreed to pay their agent and what the listing broker is offering.  Why would a buyer pay “fair market value” for a house and still be willing to pay a portion of their agent’s fee?  Of course, if the agent does not have a formal contract with their buyer, this may not apply.

One of the many possibilities in today’s market is for the seller to agree to pay their listing agent but to expect the buyer to compensate their own agent.  Sounds simple and fair, doesn’t it?  However, our local MLS requires listing brokers using the MLS to advertise, expose and promote their property listings to offer some compensation to buyer’s agents who successfully “procure” a buyer for their listing.  The answer for some is to keep their listings off the MLS.  These are called “office exclusives”.  When used, it is important that the listing agent respond to inquiries even though they will be offering no compensation.  I doubt that any seller, even those not willing to compensate a buyer’s agent, would expect their listing agent to prevent agents from other companies from showing their property to their buyer-clients.

When I talk to prospective seller clients I need to gather information.  Prior to our actually meeting, I need to learn what I can so that I can prepare a market analysis for the house so that I have some idea about the possible range of asking and selling prices.  At our meeting I need to walk through the house to see how it compares to others on the market, under contract or recently sold so that I can better assess its marketability and pricing.  In addition, I need to discuss the seller’s motivation, is it more based on the price achieved or the length of time it takes to sell?, their expectations as far as asking and selling prices and, whether we can work together.  There is a lot more to taking a listing than signing paperwork.  I need to make sure that my clients understand the market, the process, the paperwork and how I do what I do.  A significant part of this is explaining the commission and how it works:  is it more than a “line item expense”.  Do they understand the need to compete with other available listings, do they value what we do and do they value my time?  They may simply want to know a price so that they can try to sell it themselves without spending anything on commission.

As I hope I have explained, there is much more to selling Real Estate than deciding how much commission you want to spend.  The fee is a marketing expense and studies over the years have shown that houses offering lower commissions to buyer agents tend to take longer to sell.  While we all want to save money, there is nothing wrong with that, signing a listing contract based on a low commission may not work.  I have seen the same result time and again:  a low commission is offered to buyer agents, the houses may get shown but not sold and the listing agent asks for a price reduction which more than likely offsets any perceived commission savings.  While the new price may appear attractive, the commission has not changed so the house may continue to sit unsold.

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

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

Cooperation in Real Estate

Filed under: Buying,Ethics,Marketing,Selling — awetzel @ 3:45 PM

Real Estate, like many professions, has its own vocabulary.  In addition to using many acronyms, Real Estate uses what appears to be common words that really mean more than they imply.  One such word is “cooperation” which generally means “the process of working together to the same end”.  While largely true in Real Estate, a profession which is based on bringing sellers and buyers together, there is more to it than that simple statement.

Cooperation among competing professionals in any line of work is unique and competition is at the heart of the Real Estate community.  We compete for and on behalf of buyer and seller clients and then cooperate to match them with each other, with each party typically having their own exclusive representative.  While the “end” result may appear similar, meaning that both parties have to agree to transfer ownership of a property, there is much that happens along the way.  This is NOT a “retail transaction” where funds and goods are swapped instantaneously.  Cooperation embodies the relationships among agents and our rules define the requirements.

REALTORS have a Code of Ethics consisting of 17 Articles.  Our Code of Ethics is built on the principal of protecting the public and advancing the interests of home buyers and home sellers.  Cooperation is so important and intrinsic to what we do that it has its own Article and it is number 3.  It begins with the statement “REALTORS shall cooperate with other brokers except when cooperation is not in the client’s best interest.”  The client is the boss and gets to make or not make the critical decisions and we owe our clients 6 “fiduciary duties”.  One of them is “obedience”, meaning that we have to obey their lawful instructions.  There are times when clients will not want us to cooperate with each other but that does not relieve us of the obligation to act ethically and professionally.  For example, we need to respond to inquiries even if to advise the person inquiring that we are not “cooperating”.

Article 3 has ten “Standards of Practice” (or SOP) which interpret the Article.  Standard of Practice 3-10 defines cooperation.  It says “The duty to cooperate relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords.”   That means that listing brokers will make their property listings and information about them, such as property disclosure and lead hazard statements, available to other brokers.  The goal of course is to identify prospective purchasers or tenants.  Accordingly, the default position for REALTORS is cooperation.  Sharing listings and listing information benefits the consumer.  Sharing increases “exposure” which should theoretically result in maximizing the selling price while minimizing the marketing time.  There are many variables that can affect either of those but no one can doubt the potential benefits to consumers.

Article 3 also discusses respecting the private ownership rights of the seller.  SOP 3-9 says “REALTORS shall not provide access to listed property on terms other than those established by the owner or the listing broker.”   This means that a broker must have permission to enter or to allow others to enter a property which includes how to schedule showing appointments and inspections, arriving when scheduled, managing delays in arriving on time and canceling showings when necessary in addition to who must be present for appointments and showings.  It is safe to assume that an agent is expected to accompany all showing and appointments.

The Code of Ethics was created in 1913 and has been amended over the years.  The greatest changes to it have been those related to technology and the law.  For example, since 1913 we have seen the inventions of fax machines, email, texting, scanning, electronic signatures and the Internet, all of which changed how we do business.  Exclusive buyer agency and the multiple listing service have also dramatically changed our profession:  allowing each party to be exclusively represented and making marketing so much easier than before.  That being said, the competitive nature of the profession will always cause issues and misperceptions about our conduct.  Are we working for our client’s best interests or our own?  That question often arises when an agent is dissatisfied with something that has prevented them from getting what they or their client want.  While it is a good question, we need to ensure that we are not jumping to conclusions that are wrong and we need to make sure that we have done all we can to resolve any discord that arises.

Not surprisingly, the perceived lack of cooperation can be very frustrating.  We are expected to share information and to be honest with each other.  The primary focus of this involves making properties accessible and disclosing when a property is under contract.  Few things in Real Estate are more frustrating than having a buyer interested in a property for which we have no information and are unable to get the information that our buyers need to decide whether to request an appointment or not.

“Coming Soon” listings generate much of that frustration as many agents point to a lack of cooperation when simply trying to get the information their clients want, need and expect.  The practice itself is perfectly legal and acceptable if handled according to our rules and regulations.  Cooperation, at the very least, may simply mean that we return a call, an email or a text when a fellow agent inquires about one of our listings.  If the listing is an “exclusive” one, meaning that the seller has agreed that you will not compensate other agents for bringing a buyer to them, that must and should be communicated so that the inquiring agent can advise their client and plan accordingly.  When communication is lacking, it is too easy to assume something is wrong.

One of the great lines in literature is “no man is an island”.  As REALTORS, we are independent contractors in business for ourselves.  However, through our network of associations and our Code of Ethics, we are not in business by ourselves.  Cooperation is what makes our profession work best and, aside from the issue of ethics, failing to cooperate, even if that means telling a fellow agent something they do not want to hear, is unprofessional, short-sighted and reflects poorly on the profession.  We are judged by the company we keep.

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

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

March 22, 2019

Dual Agency: The Pros and Cons

Filed under: Buying,Ethics,Hiring an agent,Price,Selling — awetzel @ 5:52 PM

Let me start with some background and definitions.  Of course you know that this is not legal advice!

According to RELRA, the Real Estate Licensing and Registration Act of 1980, Chapter 2, the word “agency” is defined as a relationship whereby the broker or licensees in the employ of the broker act as fiduciaries for a consumer of real estate services by the express authority of the consumer of real estate services.  The legal definition of agency from merriam-webster.com is “a consensual fiduciary relationship in which one party acts on behalf of and under the control of another in dealing with third parties; the power of one in such a relationship to act on behalf of another.”  Dual of course means two.

In the NAR Code of Ethics and Standards of Practice, Article 1 requires that REALTORS “protect and promote the interests of their client” and says that this obligation is primary.  Further, we have 6 fiduciary duties owed to clients, meaning people with whom we have a formal representation contract.  Briefly, the six are obedience, which requires that we obey their lawful instructions, our giving them our undivided loyalty, our disclosing all information concerning the transaction that might affect their decisions, our not revealing their confidential information, our accounting for monies involved in a transaction and using reasonable care and due diligence to protect them from foreseeable risks or harm.  In most Real Estate transactions each party has their own exclusive agent making these responsibilities easier to understand although conflicts will still arise.

According to the PA Consumer Notice and RELRA, Chapter 2, “dual agency” is defined as occurring when an agent represents both the buyer and seller in the same transaction.  In Chapter 6, Duties of Licensees, Section 606d, it states that a licensee may only act as a “dual agent” with the full disclosure and informed consent of both parties to the transaction.  Further, it states that an agent may not take any action that is adverse or detrimental to either party’s interest.  Can you see how this concept may cause a conflict in terms of our properly carrying out our fiduciary duties to both parties in the same transaction?

The concept of “dual agency” is inherently complicated when you have two parties trying to do business with each other and perhaps at the expense of the other, meaning that a buyer and seller are not always equally happy with the outcome even though a deed may have transferred from one to the other.  A single agent is in the middle of what may well evolve into a “tug-of-war” with either or both sides trying to exert their will on the other party by manipulating the agent.  This can happen with two agents as well.  This is why many agents question how one agent can properly represent two parties with potentially opposite goals.  Some refuse to be “dual agents” even though the practice is perfectly legal in PA.

When we represent both parties, how can we make each party’s interests primary?  Can they be equal?  By definition, “dual agency” requires that we adjust our fiduciary duties.  Can we obey the lawful instructions of two parties?  I think so although there may be some conflict.  We may not be able to provide undivided loyalty to more than person unless their combined goals complement each other.  Accounting for money would seem easy to accomplish.  The two duties that are compromised are disclosure and confidentiality:  I cannot disclose to another what one party considers confidential.  Frankly, what does confidential even mean?  I take it to mean protecting something that could cause harm to another although many people simply demand more privacy than others and want information or details kept private which would not affect a sales transaction or even be of interest to anyone else.

With respect to buyers and sellers working with the same agent, the best way to explain this conflict is to say that an agent cannot reveal how high a buyer is willing to go or how low a seller is willing to go.  Absent “dual agency”, it is common for our clients to ask what to offer or what to accept although I generally respond with advice about how to negotiate based on where they want to end up rather than what to offer or accept.  In “dual agency” we should provide each client with the same market analysis and are told not to advise beyond that.  Unfortunately, many if not most people hate having to negotiate anything let alone money so they may want to rely on their agent.  What is interesting is that sellers expect and deserve to see that a buyer is financially qualified to execute their offer but do they prove they can finance their offer or do they show the maximum amount for which they are qualified?  Some buyers only want to show their ability to execute what they are offering and that could be a problem if the seller wants more and there are multiple offers.  A seller might think a buyer’s offer their “highest and best” and move on.  Frankly I like to show a buyers’ maximum qualification and try to assure them that I want the seller to feel at ease with my client’s financials while making sure that just because a buyer could go higher does not mean they have to.  What about the seller?  The contract language shows that they can transfer title but there is no information that would in any way suggest how low a buyer could go and that is just the way it is.

Both clients should have accepted “dual agency” prior to my “introducing” them and, hopefully, both will continue to accept it and my role as the process goes from showing a property to making an offer, and then negotiating it and the remainder of the terms as the process plays out.  There may well be conflicts at the outset or later on as each party assesses who is winning or losing each step of the way.  Many like to “keep score”.  I have had conflicts where I suggested that I would put everyone in a room and walk out so they could work it out.  I have generally found sales where I acted as a “dual agent” to be the best although not all were perfect.

What happens when either party or the agent starts to question the viability of remaining in a one agent-two party scenario?  The concept of “designated agency” allows someone to ask a broker to assign a different agent to a buyer or seller when a conflict arises that cannot be resolved.  That is a good thing.  However, my opinion goes further.  While I understand and embrace “dual agency”, I do not see how an agent can be separated from one client and still represent the other.  While expanding the number of agents to two seems to allow both parties the opportunity to have exclusive representation, the former “dual agent” still knows more about their “separated client” than a typical non-dual agent does and that could be a problem.  In my opinion, if you cannot represent one, regardless of it being your choice or that of a client, you should not represent either.  Removing yourself entirely seems to be the only fair thing to do.  Of course the broker will be accountable for how either or both parties feel about the agent now designated to represent them.

So, what is the benefit of “dual agency”?  If you think it is the commission you are on the wrong track!  Some buyers like to work with the listing agent although some of them may be trying to leverage that relationship to their advantage.  Same goes for some sellers.  Simply put, the biggest advantage for me is that it removes a body from the process.  While some sellers and buyers may be harder to deal with than others, most conflicts I have seen were made worse by having an extra mouth involved.  Of course, if there is only going to be one agent, they have a lot of responsibility and it is not for everyone.

As far as avoiding “dual agency”, that may be harder than it sounds.  If you have a property listed and someone contacts you to see it or a buyer you are working for likes it, what do you do?  Chances are that most buyers will want their own exclusive agent but you never know and you may be working with two parties now who are destined to meet later.  Life is unpredictable.

I often describe “dual agency” as being like a “Tale of Two Cities”:  it can be the best of times or it can be the worst!

Agency is not always pretty and it is not always easy to explain but it is expected in client relations and its misapplication can and will cause harm, which is the antithesis for our entering into such a one-to-one relationship in the first place.

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

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

Dual Agency: Does having two buyers interested in the same property qualify?

Filed under: Buying,Ethics,Hiring an agent,Multiple Offers,Price — awetzel @ 5:40 PM

In the NAR Code of Ethics and Standards of Practice, Article 1 requires that REALTORS “protect and promote the interests of their client” and says that this obligation is primary.  Further, we have 6 fiduciary duties owed to clients, meaning that we have a formal representation contract with them, which requires giving them our undivided loyalty, our disclosing all information concerning the transaction that might affect their decisions, our not revealing their confidential information and our protecting them from foreseeable risks or harm.  In most Real Estate transactions each party has their own exclusive agent making these responsibilities easier to understand although conflicts still arise.

According to RELRA, the Real Estate Licensing and Registration Act of 1980, Chapter 2 defines “dual agency” as occurring when an agent represents both the buyer and seller in the same transaction.  In Chapter 6, Duties of Licensees, Section 606d, it states that a licensee may only act as a “dual agent” with the full disclosure and written consent of both parties to the transaction.  Further, it states that the agent may not take any action that is adverse or detrimental to either party’s interest.

The PA Consumer Notice states that as a “dual agent”, the licensee works for both the buyer and seller.

The concept of “dual agency” can be complicated enough when you have two parties trying to do business with each other and perhaps at the expense of the other, meaning that a buyer and seller are not always equally happy with the outcome even though a deed may have transferred from one to the other.  Many agents question how an agent can properly represent two parties with potentially opposite goals.  Some refuse to be “dual agents” which is perfectly legal in PA.

However, while not considered “dual agency” in PA, what happens when one agent represents two or more buyers each interested in purchasing the same property?  I respectfully suggest that this is more like “dual agency” than not in terms of its practical application.  Most of us will never have an opportunity to confront this and when I discuss it in my classes many agents admit that they never really thought about.  Let me explore this.

Let’s start with my having one buyer interested in a house and assume they have made an offer and heard a “counter-offer” from the seller.  It is reasonable to assume that our fiduciary duties preclude us from disclosing their interest, including the amount of their offer, to anyone else (think of the fiduciary duties of loyalty, confidentiality and reasonable care) as well as letting anyone else know how a seller countered their offer as doing that could harm my buyer’s position.  So, what happens when I either have two buyers interested in the same or similar properties?  Let’s keep it simple:  whether 2 or 200 makes no difference although it gets geometrically more complicated as the number rises.  While RELRA may not see this as “dual agency”, I think it in the best interests of all involved to treat it as if it were.  Let’s look at two general examples.

First example.  I am working with two buyers, each looking at different price ranges.  One is looking up to $200k; the other up to $190k.  The $200k buyer makes a $180k offer on a $200k listing which the $190k buyer considered out of their price range.  What would happen if I informed the $190k buyer that the $200k seller countered at $195k?  From the seller’s standpoint, since I have no fiduciary duty to them, I would think they have no recourse for my disclosing their counter-offer although how a seller counters an individual buyer does not establish what they might accept from another and, presumably, it is in the seller’s best interests to have more than one interested party.  The real question is how would my $200k buyer feel if they knew that I shared something about their negotiating that might generate competition for them which could end up causing them to have to pay more to get a house or, perhaps even worse, cause them to lose the bidding?  This sounds like a problem even if we do not call it “dual agency”.  How would you feel if this happened to you?

Second example.  Two of my buyers-clients express interest in seeing the same property.  Aside from the planning it might take to manage the process of showing and perhaps writing offers and negotiating them for two different buyers, what is their expectation for how I keep the two processes separate?  As clients, they both signed the Consumer Notice and either accepted or declined “dual agency” and, since they signed a representation contract with me, they accepted the fact that I may be working with other buyers who share the same goals in terms of what they are looking to buy.  If either declined “dual agency”, how would that influence my performance with the second buyer, if at all?  Does the agency selection of either have any impact on whether I can add clients with a similar goal to my list of clients?  We all know that people change their plans from time to time and a buyer may decide to look at houses that I am already showing to someone else.  Of course if I failed to properly manage the process I have no one to blame but myself.

Again I mention the potential conflict and add to that.  In discussing this concept with other agents, I have heard some startling opinions.  Some feel it only “fair” to let both buyers know that they have competition.  One agent even stated that they would stop representing both, allowing their broker to designate a new agent for each, and that they would let both know exactly why.  Perhaps I look at this differently from others but, were I working with a buyer’s agent, I would be appalled to learn that they advised another of their clients about MY interest in a specific property.  Even if we take for granted that the details of my offer are confidential regardless of whether or not the relationship constitutes “dual agency”, advising another of my interest could harm me either in terms of my cost to acquire the property or, even worse, result in my losing the chance to own it.  In this scenario one of us will lose and that person may well have wished to know they had competition but the very act of raising the stakes most certainly seems to only benefit the seller unless neither buyer acted differently.

The last analogy I will use relates to how a listing agent is allowed/ expected to answer an inquiry about the existence of other offers or interest.  It is expressly understood that their ability to answer is dictated by their seller client.  While I would not suggest that a buyer agent’s informing a pair of buyer-clients about the existence of the other’s interest is a violation of the seller’s interest since there is no fiduciary duty, I think that the buyers should dictate whether their buyer agent is in fact allowed to share the buyer’s interest in a specific property with another buyer client.

Agency is not always pretty and is not always easy to explain but it is expected in client relations and its misapplication can and will cause harm, which is the antithesis for our entering into such a one-to-one relationship in the first place.

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

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

“Coming Soon” Property Listings

Filed under: Buying,Ethics,Marketing,Selling — awetzel @ 5:29 PM

Sharing property listing information and making our listings available for other agents to show to their prospective buyer-clients is at the heart of the Real Estate profession.  Listing agents control the inventory and how they handle their inventory greatly affects their seller clients and how buyers and their agents perceive them.  We call how we do this “cooperation”.  There are two related issues:  compensation and procuring cause that I will avoid at this time.

One of the hottest topics today is “Coming Soon” property listings.  These are properties not yet on the active market or available for showings where the agent has put up a “For Sale” sign with signage that says “Coming Soon”.  Whatever the thinking behind it, these signs generate interest which could help a house sell fast or it could frustrate some agents and buyers if not handled ethically.  Many buyer agents seem to feel that the practice is deceptive and designed to allow listing agents to find buyers for their own listings thereby earning them more commission dollars.  Like most things in life where there are opposing points of view, this issue can quickly develop into a hot debate involving feelings and emotions regardless of the actual facts.  The practice is perfectly legal and can be very effective for sellers if handled properly.  My concern is that it may cause some buyers to have a less than favorable impression of us and our industry.

As I like to say, we are not all the same.  Some agents may do things that do not conform to our rules and regulations and I like to think that these instances are unintentional, perhaps resulting from a lack of understanding the rules or not thinking about how an agent’s actions may be perceived by others.  However, when a listing agent’s actions cause a buyer to miss out on a house they like and/ or a seller is deprived of additional competition that could have earned them a higher selling price, that is unacceptable.  A competitive market for scarce listings only adds to the situation.

Let me start with two disclaimers.  First, this NOT intended as legal advice.  Second, while the practice is legal if done properly, the devil is in the details and that is where “Coming Soon” property listings intersect with rules, regulations and emotion.  The fact that someone feels slighted may not necessarily mean that something wrong happened.

If a private citizen posted a “For Sale” sign on their own lawn with a sign that said “Coming Soon” we would have nothing to complain about.  Of course we would expect them to allow anybody interested in their home to see inside so that they could try to sell it for either the highest price or in the shortest period of time, wouldn’t we?  That changes when another agent posts the sign.  The difference is “competition”.

Our PA Real Estate Licensing and Registration Act, RELRA, and our Code of Ethics both require that an agent have a seller’s permission to post a sign on their property and to advertise a property as being “For Sale”.  Whether an agent is a REALTOR or not makes no difference.  The ideal documentation for this permission or authorization is a formal listing contract such as the one PAR created and updates from time to time.  I say that because it is a legally-approved form that also includes details relevant to forming a business relationship including the term or length of the arrangement, the duties of the listing agent, the amount of compensation earned and how it is earned among other important protections.  I suppose that a seller could send you an email asking you to put a sign on their lawn and authorizing you to advertise their property but would you?  If you only want the opportunity to generate buyer leads and are not concerned about selling the specific house or getting paid when it sells, this could work but I would not advise doing that for a number of reasons.

What happens when an agent, either on their own or through a buyer-client, becomes aware of a “Coming Soon” sign on a property that may interest their buyer?  If the agent knows of no one who may be interested, chances are nothing will happen.  Otherwise, the agent may soon find that the house is not listed in the MLS or it could be listed as “Coming Soon” for up to 21 calendar days without running up the days-on-the-market statistic.  In that case they will most likely call the listing agent to ask the price, features and anything else relevant to their buyer.  If the listing agent answers the phone or returns the call, this may go no further.  The problem comes to a boiling point when the listing agent, for whatever reason, does not respond and the agent placing the call feels that others are gaining access to show the property.  When there is a buyer chomping at the bit to learn about a house or a buyer who wants to see inside and their agent cannot get answers, the situation gets worse.  What to do???

In addition to rules governing signage and advertising which I mentioned earlier, agents who belong to the multiple listing service must abide by their rules.  The relevant one here is that once a listing contract is signed, the property must be uploaded into the MLS for other agents to be able to search within 3-business days.  That process leads to “syndication” which means that, if authorized by the seller, the information is disseminated to the Internet for the public to find in their searches.  I am aware that some sites allow agents to upload listings even though they are not on the MLS and that may or may not be a problem depending on what the seller has authorized and whether there is a listing contract.  While probably viewed as a benefit to the listing agent and seller, buyer agents can get frustrated when their clients learn about listings before they do especially if a property is not in our MLS.

If you see a “Coming Soon” sign on a property, regardless of when you think it went in the lawn, by the end of the third “business day” the property information should either be in the MLS for all agents to access OR the listing agent should have filed a waiver with the MLS which states that the seller has authorized the listing agent to withhold the listing from the MLS.  Many buyer agents question why a seller would do that and seem inclined to speculate that the listing agent did not properly advise their client about how this could harm them by preventing competition but the fact is they do not know what was discussed and the Code of Ethics and the general concept of professionalism should prevent them from speculating and judging another agent’s conduct just because they feel it unfair or because it does not meet their needs.  The seller is the boss and has the right to make decisions even if they may not make everyone else happy.

If the listing is uploaded to the MLS, all seems right unless the house quickly goes to “pending” or “under contract” since the buyer agent may feel that they were blocked from showing the house and that their buyer was treated unfairly.  True or not depends on the details and it may take filing a complaint to find out but, in my experience, things are not always unethical just because we did not get what we wanted.  Perhaps you or your buyer saw the sign and hesitated taking action.  Real Estate works at the speed of life and competition can be fierce!

If there is a waiver, the listing agent should still respond to another agent’s inquiry even if to tell them that they can show the house but that it is an exclusive listing where the listing broker will not be offering compensation to the buyer’s agent.  That is another subject I will ignore.  In addition, if there are no showings until a specified date, that should apply to everyone.  Of course, that does not stop a buyer from making an offer “sight unseen”.  All offers, even verbal ones, must be presented to the seller.

If the listing is not uploaded to the MLS and there is no waiver, the situation gets real cloudy because you do not know whether there is a listing contract or not.  I cannot tell you how to handle this but if you alert the MLS they will most likely contact the agent or company named on the sign although that may not happen quickly or make you feel any better.  If an agent does not call to ask if there is a waiver, they need to accept some responsibility for the tension that may arise with their buyer, perhaps to the point where the buyer no longer feels that their agent is working in their best interests.  These situations have ripple effects.

I will conclude by stating two of my truisms about Real Estate.  First, buying and selling is like playing poker:  you have two or more people who would like to know what the other people are thinking.  This includes agents.  Second, in most cases, even if everything is done ethically and professionally, the listing agent is in the preferred position.  They are working with the seller and may know them on a personal level.  All routes to a sale go through them and that is just the way it is.  While protecting and promoting the best interests of our client may not make everyone else happy, we should conduct ourselves as ethically and professionally as possible in terms of how we handle what is going on.  Buying and selling Real Estate often involves emotions because you cannot always get what you want when you want it.  While we cannot control other agents, we can keep those who wander ethically or professionally on track if we take the initiative.  While we cannot control our clients, we can do what we are expected to do and document what we have done so that we can at least rest assured that we did our best.  Again, the devil is always in the details.  This will not make everyone happy.  My goal is to clarify what I believe to be the proper way to handle “Coming Soon” listings so that we can at least minimize the controllable problems.

In the ideal world, every buyer would know their financial qualifications and limitations and know their wants and needs.  Every property listing would be made available to every possible buyer and all would be given a specified time to evaluate a house, schedule a showing and make an offer.  This should maximize the seller’s price and would give all buyers an equal chance to make an offer.  This is not an ideal world.

Here is the reality:  many buyers will delay getting pre-qualified or determining exactly what they are looking for which may prevent them from getting a house they think they want; buyer agents will continue to work with unqualified or not-yet-qualified buyers which may waste everyone’s time.  Some buyers and some buyer agents will always be more diligent than others when it comes to managing the buying process and identifying houses to consider, some will take action more quickly than others and be more realistic in terms of what they offer and how they construct an offer.  Human beings are funny creatures, aren’t we?

One of the best management aphorisms I ever heard is this:  “some people will make things happen; some people will watch things happen; some people will wonder what happened”.  On a related note, “Lead, follow or get out of the way”.  I mean no disrespect but too often people blame others when things do not go their way.  Buying and selling Real Estate often lacks etiquette and it is not for the faint of heart!  Be prepared!

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

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

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