blog Archives - Investors Trust Realty FL

Negotiation Insights – You Can Take It With You

November 12, 2017 by bzawaski

Laying a solid foundation via effective social media and maximizing use & creativity in preparing the multiple listing can easily be neutralized via poorly handling the negotiation of an offer or multiple offers. Investors Trust Realty provides Seller with the most comprehensive planning from our very first meeting thru closing. No two sales are exactly alike however, with hundreds of sold properties over 23 years we’ve probably been there, and done that. Ultimately the final decision is always yours as a Seller however, having all the resources and knowledge behind you makes that a much easier task.

Just as we listen to your concerns & needs as a Seller, we do likewise when negotiating on your behalf in order to maximize the ‘net’ sales price of your Home. Listening is a skill that has served us well, whether it’s negotiating single or multiple offers. One of the many reasons you hire a Broker to either Buy or Sell is to take the emotion out of a large transaction. At Investors Trust Realty we understand there is a human element to every transaction & Brokers are not exempt from such emotions. The vast majority of Brokers want to do the very best for their clients and as a result, may be willing to share helpful information about their buyer clients in order to put their best foot forward. Listening & creating a comfortable environment from which they can sound off is crucial in helping Sellers get the most useful information. With Buyers experiencing multiple offers & rejections at every turn, it’s not uncommon for their Broker to counsel them in a variety of ways that will ‘sweeten’ their offer to a Seller. Conveying this information to the Seller based upon similar scenarios we’ve dealt with previously gives you the opportunity to make the most informed decision possible. Again, as a Seller the final decisions are always yours to make but, one would hope you have all the information required.

It’s certainly okay in a multiple-offer scenario to set a deadline for offers and ask everyone to provide their highest & best. In fact, we have that form in our files for just those occasions. In many situations, it appears that the playing field has been leveled by doing so but, at whose expense? It may be that the buyer who has been previously rejected many times is so beaten down that they simply don’t feel comfortable offering in what seems to be another failed attempt. It could also be that the prevailing offer was made by someone who simply wanted to ‘win’ out of desperation and either has buyer’s remorse shortly thereafter or attempts to gain it back during inspection negotiations. In either case, it could leave a Seller back at square one with their Broker explaining away a recent sale failure. Of course, this may not be the outcome in a majority of those types of offer situations however, at least knowing about options can be helpful to your bottom line.

On more occasions than I can recall, I’ve encountered Listing Broker who are overwhelmed in a multiple offer scenario and are doing little to covey any counsel to their Seller, other than sending them offers and pointing out where to locate the sales price on page 1. When inquiring about what needs their Sellers may have it’s not uncommon to hear “You know I can’t tell you anything, it wouldn’t be fair”. In reality, it’s the Listing Broker’s Fiduciary responsibility to the Seller to get as much for your property as possible thus, you may choose to deal with a particular offer that may have some terms & conditions to your liking. Whether or not a Seller decides to rely on an experienced Broker’s insight or simply let the chips fall where they may, having that choice is only possible with the guidance of an experienced Broker such as Investors Trust Realty.

Cooperation between Brokers should always be sought after as it benefits a Buyer in purchasing and the Seller in selling. This can certainly be accomplished in a way that benefits both parties in meeting their goals thus, cooperation with verification of facts is the preference. The number of multiple & single offer scenarios wherein buyers has walked away or been outright rejected, only to find they would have paid at least that much or more, is much higher than one might think. Marketing your Home to ensure it not only stands out but, has a desirability factor that creates buyer excitement is key. It’s our goal at Investors Trust Realty to make certain you never wonder whether or not you’ve left anything ‘on the table’.

Bob Zawaski

Principal Broker / Owner

Investors Trust Realty

Selling Your Home and Buying Another

November 10, 2017 by bzawaski

Selling your Home and buying another can be a challenge, especially in a market with an inventory of just 2.3 months (the amount of time it would take to deplete all listings if no new listings were added) as is the case here in the Portland, OR metro area. Inventory below 6 months is indicative of an appreciating market thus, 2.3 would suggest it’s a Seller’s market. Despite very little change in inventory from the last time I blogged on this issue (September of 2015 when it was 1.9 months) in Transitioning Between Houses we’ve come a long way in bringing back the simultaneous closing of one house to another that was commonplace a decade ago.

Transitioning Between Houses

As is the case with the Stock market where sentiment towards the events of the day shapes its ups & downs, Real Estate is not solely reliant upon Buyers & sellers simply taking statistical market data at face value. The slight gain in inventory we’ve seen in September of 2017 versus that of 2015 would suggest we should be going at roughly the same level of appreciation yet, we’re clearly not. The typical slowing down of the market that we see mid-summer seemingly came as no secret to buyers this past year thus, their sentiment was heard loud & clear. Price reductions, discounts, and repair negotiations became more commonplace than in the last two years. That’s not to say that we’re headed in a rapid decline but, perhaps a correction of sorts after a couple of years that saw Portland as one of the leading major metropolitan areas in appreciation. Does this mean the Seller will be more receptive to Contingent offers? Perhaps in some cases, they will but, there have been some changes on the lending side of the equation that may give hope to those who have little or no reservations about selling their home but, wonder if they can find a replacement home when they become buyers themselves.

The stumbling blocks to bridging the gap have typically included expensive Bridge loans or a refinance with all the costs & fees in order to rid the borrower of the ‘temporary’ financing utilized in order to circumvent buying in a Seller’s market. Whether we are still in a Seller’s market or witnessing a correction remains to be seen but, certain lenders have created products in response to the needs of today’s borrowers. According to the National Association of REALTORS, 68% of buyers are buying a home at least for the second time thus, one would assume many of them have a home to sell. Although much more than a stop-gap measure, Guild Mortgage lender John Bruce has successfully linked several of my clients with the Guild 1% Down program as an alternative to those who might be cash-strapped yet, want to purchase their next home in advance of selling their own. With market rates and competitive Mortgage Insurance the borrower truly has an option that includes keeping this loan in place as opposed to viewing it as an expensive temporary measure such as a bridge loan or traditional refinance. In addition, a recast or virtually cost-free version of a traditional refinance after purchase allows those whose qualifying numbers might be too tight, and/or whose cash for a down payment is problematic, without selling first. Of course, flexibility in underwriting has also created opportunities for borrowers where none may have existed just a couple of years prior.

Having the resources available from the lending side, as well as a thumb on the pulse of the market from the Broker’s side are what we bring to our clients at Investors Trust Realty.

When is Cash no longer King ?

February 8, 2017 by bzawaski

When is cash no longer King for Oregon home buyers & sellers? It’s not likely sellers will ever lose an affinity for accepting an all-cash offer on their property. It’s equally true that buyer’s with the financial resources to make an all-cash offer will continue to do so with the knowledge that their offers will be accepted more readily. That eagerness by a seller to accept cash in lieu of a financed offer is due in part to the elimination of concerns over the buyer’s qualifications becoming an issue as underwriting examines their file in greater depth. In addition, an appraisal value shortfall can result in going back on the market with all the most interested buyers long since gone.

Potentially compounding an appraisal issue based on value and/or conditions is the wait…Oregon is ranked 50th in regard to appraisal turn time. In a market with as little inventory as we currently have, waiting 30 + days for an appraisal turn can make a once highly sought-after listing old news. There certainly are enough considerations from the buyer’s qualifications coming into question during a transaction to issues related to appraisals that would make any rational seller seek out the easiest path to the closing table. What about those sellers who don’t necessarily consider being separated from those issues to be ‘priceless’? Would sellers entertain the possibility of accepting a financed offer over cash, if the price were right? It all depends on a seller’s comfort level with their knowledge of how financed offers work. In most cases that knowledge is going to come in a crash course from their Broker as it may be the first transaction the seller has dealt with recently, or ever. Most likely, the difference between cash & financed offers isn’t something a seller will have considered until the very moment it’s presented to them.

What due diligence should a listing Broker employ when analyzing a buyer’s offer with a seller? Regardless of whether it’s to make a determination about weighing the merits of financed versus cash, it should be standard practice to contact the lender directly to get as much insight about the buyer & lender as both. Unfortunately, the percentage of listing Brokers who contacts the buyer’s lender directly in order to verify information already stated on a Pre-approval letter, or gather additional insight about the buyer, is a mere fraction of what it should be. I would venture to say that when I’m representing a buyer whose offer is being seriously considered that our lender is contacted by the listing Broker less than 10% of the time. That may in part be due to my making a good case for my buyer clients & the listing Broker feeling all the issues have been satisfactorily addressed but, there are always pieces to the puzzle that can only be solved with the lender’s input.

Having a pre-approval in hand gives us a head start in dissecting the appraisal process and possibly putting to rest some of the concerns that might cause a seller to dismiss a financed offer in lieu of cash. Knowing the difference between Mortgage Brokers, Mortgage Bankers & Commercial lenders will be the very first consideration for the seller to take into account when presented with a financed offer. This not only gives the listing Broker the opportunity to educate the seller on differences that can truly separate one from the other but, it also should be the first subject to the table with the lender. Commercial lenders, or the big Banks that You and I may have our checking and savings accounts with, are required to use an appraiser from the Statewide pool on a first come first serve basis. In Oregon, we’re just shy of 1,500 appraisers Statewide thus, the first challenge is hopefully getting someone who is somewhat familiar with the neighborhood in which they are being asked to make a value judgment. Secondarily, the sheer volume of appraisals being ordered by large commercial banks creates a backlog that is compounded by an antiquated compensation system that many times hinders the capabilities of those appraisers in making adjustments when the value has come into question. Appraisers are exceedingly well-educated in their field thus, the vast majority of challenges they face are due to regulatory & industry demands that simply haven’t kept pace with the times. On the flip side of the coin are Mortgage brokers & bankers who may work under local Company names you’re familiar with, some being rooted here in Oregon while others have a National presence. This would be the opportunity for a listing Broker to inquire as to the working relationship the lender has with its much smaller pool of appraisers. Better yet, would be to leave open the opportunity for that lender to boast about the excellent relationship they have with their appraisers and the quick turns they are accustomed to. Obviously, the lender feeling a sense of pride in their working relationship with their appraisal pool and offering evidence of results without being prompted to do so may go a long way toward a more favorable view of a financed offer. Of course, this requires the listing Broker to exercise due diligence on behalf of their seller clients above & beyond the listing and marketing of their property that resulted in a multiple offer scenario. Utilizing Social Media to gain optimal exposure, as well as marketing to cooperating Brokers via Maximizing Multiple Listings are critical components to getting a seller to a position where multiple offers are a factor. The value derived from those first two steps is unfortunately the final ‘resting place’ for some listing Brokers who may feel their duties to the seller have been satisfied by having multiple offers on the table. It’s at this point that a Broker truly can determine his or her own value to the seller by providing Negotiation insights that outline options and considerations far above & beyond simply being presented with an offer(s) and directed to the location on the first page that states the offered sales price.

In order to provide a seller with as much pertinent information to make an informed decision, be it which offer to accept or whether a financed offer should be given more weight in comparison to cash, it’s important to know something about the makeup of that particular buyer. In addition, creating a scenario of some common traits that cash buyers sometimes exhibit can be helpful to a seller. As was mentioned earlier, buyers with cash resources do have certain expectations that go along with their offers. In addition to the knowledge that their offer has a greater likelihood of being accepted there is also a realization that their capability to close sooner & avoid financing issues is looked upon favorably by most sellers. Each & every cash buyer places a different value on his/her ability to put to rest some of the seller’s concerns. Exercising due diligence above & beyond simply reviewing the buyer’s proof of funds statement can be a crucial part of the decision as to whether or not cash is truly king in all cases. On numerous occasions, I’ve had Buyer’s Broker’s casually stated that their cash buyers had just terminated a transaction prior to this one and it was ‘easy to do because it was cash’. In reality, it really isn’t any easier to do but, that mindset is the key component here for the seller to consider, once it’s conveyed by the listing Broker. Of course, all this wouldn’t take place if it were simply left to telling all the buyer’s Brokers to bring their ‘Highest & Best Offers’ and have no conversations above & beyond that. Unfortunately, that is all too often what takes place.

Having an understanding of how an appraiser views a home & subsequently makes a value determination is vitally important information to convey to a seller. Deciding between taking the seemingly easier road with cash versus a financed offer that may ‘net’ tens of thousands more to a seller requires serious discussion based upon revisiting comparable sales. In addition to the due diligence required to make this call, it may also bring into question the listing Broker’s original comparable sales. Unfortunately, as is all too often the practice of some Brokers to ‘shut it down once offers have been received, there may also be a reluctance to revisit comparable sales for a variety of reasons, none of which benefits the seller.

Cash certainly has its advantages however, its uses are determined by the holder of those funds, Determining what other motivations they may have for purchasing this property, whether have they purchased others with cash, whether have they been successful, etc. Creating a profile of a cash buyer can be vitally important information in helping the seller predict how they might act in a transaction.

Ultimately the choice as to whether a seller should accept a financed offer when a cash offer is also on the table has much more to do with merely a difference in price. An understanding of the market, appraisal of common practices, and an ability to ask questions to gain helpful insight about parties to the transaction are vitally important factors. With over two decades in the industry, I pride myself on having developed a knowledge base of issues and an ability to act in a beneficial way on behalf of my clients. If your looking for superior representation in your next purchase or sale I would be glad to meet with you to see how we might work together.

Bob Zawaski G.R.I.

Oregon Licensed Principal Broker

Investors Trust Realty

Repair it all Home Inspections

January 23, 2017 by bzawaski

Repair it all Home Inspections are typically the product of a buyer seeking to get a fresh start in life in their new home. In some instances, that long wish list of repairs may be a part of a strategy employed by a buyer in order to regain some of what they may feel they lost when their offer was accepted. Whatever that reason may be, it’s crucial in negotiating repairs that any emotions a Seller may have as a result of being presented with an endless laundry list of repairs be dealt with tactfully.

Unfortunately, communicating in person isn’t always an option in this age of technology thus, we’ll employ a real life example via email. Effectively conveying that you’ve heard what the buyer has said and demonstrating it by responding in a thorough & thoughtful manner is critical to keeping everyone’s hopes alive when it seems your miles apart.

In many instances a Listing Broker representing a Seller will send back a reply reminding the Buyer and their Broker that this is not a new house but, one of a certain age with all the issues that go along with it. Of course, this may well be correct but, the effort a Listing Broker makes to first address the buyer’s efforts and appreciation for making their offer can go a long way towards allowing them to understand how things are viewed from the Seller’s perspective. The following narrative is from an email response I recently made in regards to a buyer’s repair request. That request included virtually every item noted by the Home Inspector, be it those requiring immediate attention to points for future reference and everything in between, here’s that reply:

“Sorry for the delay in getting back to you. Both the Seller’s and I appreciate the effort & due diligence put forth by the buyer in highlighting his concerns thus, wanted to spend as much time as necessary to provide a response commensurate with that effort.

Please note that although I’m just going to address a few of those issues herein that each & everyone has been considered. Before I address a sampling of those issues I wanted to say that we felt the Home Inspector did a good job of pointing out areas of concerns, as well as typical home owner deferred maintenance issues, all while doing so in a professional & non-alarmist manner. In addition, we certainly appreciate his identifying the frozen water supply line issue before it thawed. I’ll be meeting a plumber tomorrow to have that replaced and have him check for any additional leaks as well.

What we did in our evaluation of the buyers concerns was prioritize what was noted into repairs needing immediate attention, items that could be categorized as deferred maintenance or as we noted in several cases, just those requiring further explanation. Examples of some, but not all, of the noted issues that require further explanation are: Water heater over flow pan does in fact have a drain tube that runs from it out thru the garage. The furnace was recently serviced just a few months ago (no sticker left on it which leaves the inspector no choice but to suggest that) & a circuit board was replaced a few years back. All the parts for the T.V. cabinet are there but, need to be adjusted…the old parts are the ones laying in the back of the cabinet. Secondarily, there are a number of issues that any buyer would be well advised to take care of once inside their new home such as vegetation, moss growth, caulking & sealing etc. In regards to a tree mentioned, if it’s the one the Seller is thinking of, it may border in part onto another property thus, that might fall into question but, can very likely be dealt with.

None the less, we took it to mean that by spending the amount of time he did in compiling this list these items held some importance to the buyer thus we wanted to afford him the opportunity to continue to prioritize just how important each one was. After much reflection the Seller’s have agreed they would credit the buyer up to $3,000 to use as he see’s fit for the essential repairs or, would be O.K. with increasing the sales price as much as an additional $5,000 to $422,000 with an $8,000 credit.

Just as I’m sure all concerned are well aware this is a 16 year old house and no longer brand new as it was when the Seller purchased it, we are also sensitive to the fact that the buyer would like every opportunity to remedy any & everything possible in order to get a ‘fresh’ start. We feel we’ve adequately covered essential issues while giving the buyer the option to take on as much or little of the typical home owner issues your likely to encounter with any 16 year old Home.

Thank You again for your thoughtful insights and we look forward to your addendum.”

I typically try to put myself in the shoes of both the Buyer and Broker when responding thus, words mean things whether your on the Buyer or Seller side of the equation. Here’s a breakdown of my email response and what wording was employed in the context of a Real Estate transaction to convey a clear & concise response. First, I would note that the response was only a few hours after it was promised however, starting off by suggesting that any delay in getting back to them shows that their requests are ever-present in our minds thus, they should expect a thoughtful response as they continue reading. Secondarily, I wanted to convey that any perceived delay was due only to our wanting to dignify their efforts on an equal footing.

In the second paragraph I’m touching on two primary points, one being that a later attempt to categorize and condense a list of 20 something items into 3 categories is being done with everything taken into consideration and not a skimming exercise & second paying respect to their Home Inspector. All too often Broker’s use the opportunity to dismantle an inspection addendum by laying blame on an over zealous Home Inspector. It’s important, as long as the Listing Broker truly feels it to be the case, that how you viewed their inspection report was also considered, assuming of course you’ve been provided with one. Note that just as I was laying a foundation for condensing their list of issues into smaller groupings, I’ve also taken the opportunity to highlight that the Inspector not only did a good job of pointing out areas of concern but, also noted in a subtle way that we recognize there was a place for items that might be considered home owner deferred issues. Ideally I want to convey here and elsewhere that their own Inspectors report has a varying degree of comments & notations…sounds much better than actually pointing out that something like suggested might have a different meaning then recommended. It’s sounds like a very minor difference but, it’s important that we first agree that the Inspector they choose did a good job and second, we noted his varying degree of comments & notations without any cloud over us from having just implied the Inspector was over zealous in preparing the inspection report. In this particular case, I also took the opportunity to once again thank them for the thoroughness of the inspector in catching a potentially damaging issue and hopefully drove that home by letting them know a professional would be not only repairing that issue but, would look for other issues as well.

The third paragraph recognizes the effort put forth by the Buyer in compiling his issues and related ancillary information. We also ‘suggest’ that we are in essence affording the buyer additional time to continue to prioritize those issues. After all, we initially got a list of 20 plus issues with no degree of separation as to their importance. We’ve already implied that there is in fact a difference in how things should be viewed and that all started with their Inspector, someone we already agreed upon as being competent & reasonable. The second part of that paragraph is where we finally condense the subject matter so as to avoid discussion of 20 something different issues thus, we’ve suggested a credit that covers essential repairs. In addition, and again treating all the buyers concerns as important, we’ve extended an opportunity for the buyer to potentially do all those items with a majority of the overall credit being offset by a price increase. Many times we’ll find the buyer no longer see’s these items as necessary if they are being asked to contribute. Of course, offering an increase in sales price is subject the ability of the property to appraise…something we were comfortable with in this case.

Last paragraph states the obvious in regards to the homes age but, includes the Seller and I in that statement as well. This is a much better time to state what is often bluntly stated in one simple sentence during such negotiations, it’s creating a foundation for what we hope to convey. We further address the fact that the buyer’s request is really only what virtually everyone else wants in their purchase, a fresh start in a Home that is ‘new’ to them. By that statement we are again giving just due to the importance of what the buyer is requesting. We finish off by revisiting the idea that there are different types of issues with varying degrees of importance and place our Home on equal footing with other Homes of its age, no better & no worse. Finally, we commend their thoughtful insights and move to our intended goal of getting the buyer’s Broker to put there list to writing.

Will the efforts put forth have a ‘net’ positive effect for the Seller ? Stay tuned to my Blog to see how this works out.

Bob Zawaski P.C.

Oregon Licensed Principal Broker

Investors Trust Realty

itrustrealty.com/blog

Does Lifetime Really Mean Lifetime For Your Roof ?

January 15, 2017 by bzawaski

I think you can get into semantics over a wide variety of definitions as to what a lifetime roof really means. Here are some things to think about and perhaps it creates more questions than it answers but, here goes. First, everything seemingly has to wear out at some point in time, even a metal roof loses its protective coating after a while. Increasingly popular Presidential style material comes in single (30-year life), double (40-year life), and triple (50-year life span). I have no doubt that even the triple-thickness material will wear out eventually depending on the conditions around it. These high-quality roofs come with algae blockers built in but, that’s really only a guarantee for maybe the first 5-7 years. If someone doesn’t start treating every other year after that I’m sure the moss will take over and create adverse conditions thus, shortening the lifespan.

The manufacturer’s lifetime warranty is going to be subject to certain conditions, you can almost bet. For example but not limited to, it may or may not be transferable. Looking a bit deeper into possibilities, in order to protect themselves from ever having to replace a 50-year-old roof there are certain maintenance items that must have been adhered to & documented along the way. Examples might be you could have some responsibility for not allowing it to grow a coat of moss or maybe they say it must be installed under workmanship standards that exist currently. In regards to the latter, requirements for venting and installation are almost constantly changing for the better. It wasn’t that long ago that you started seeing typical metal roof vents that allowed a roof to ‘breath’ being replaced with a single long ridge vent that looks almost like they forgot to fasten down those shingles along the ridge. Of course, every manufacturer’s lifetime’ warranty may be structured to suit their own needs so the possibilities could be endless.

The reason I mention all those things is very few people ever get to the point where they recall they have such material on their roofs, see it on packaging left over from a previous owner, or perhaps more importantly have read all the fine print and can document the ‘life’ of the roof. Another factor is whether that manufacturer is still in business. It also may be that if they are in business, a roofer can get some reimbursement from the manufacturer. It’s also possible that replacing with the same material no longer makes sense or the improvements are so vast that seeking out ‘old’ styles may not be practical. Roofing material is constantly changing therefore it could be that manufacturers know full well that having to ever replace material they sold 20 + years ago is very slight.

Part of the equation in getting reimbursement for so-called ‘lifetime’ roofing will hinge on whether it was installed to their specifications originally. Having the very best Roofing Contractor install your roof is critical to preserving any claim you may have in the future. Of course, in addition to a warranty on materials from the manufacturer, there is a warranty for the much larger part of the job, the labor to install your roof. In some cases you’re looking at just several months to perhaps a lifetime so, that becomes more important with that cost being maybe 2/3 of the overall expense of replacing your roof. We can’t predict who & who won’t be around a long time from now but, certainly selecting a Roofing Contractor who has the best track record for installations and will hopefully be in business decades from now are a consideration.

The Voices Behind You

October 16, 2014 by bzawaski

Be it the Seller who lingers just long enough for a ‘meet & greet’ with your clients or the disgruntled tenant who needs to air a laundry list of perceived code violations you’re going to run into someone willing to voice an opinion just when you thought you were alone i.e., the voices behind you. Being aware of your surroundings should always be a priority for safety’s sake thus, being prepared to respond to a friendly “excuse me” or an empty beer can coming your way should come naturally…I’ve dealt with both. How you deal with an impromptu situation may be your client’s first opportunity to see firsthand how you treat a total stranger or whether your ability to ‘think on your feet might translate well into negotiating a good deal. It’s an opportunity to practice both good citizenships & let your clients know who you are.

Today’s encounter was not unexpected thus, I knew the well-meaning property manager on my multifamily listing was going to open more than just a few doors for the commercial appraisers and me. Again, unlike the disgruntled tenant, she had no real intention of sabotaging a listing that now spans over 15 months and is just a few weeks from closing…if only these two seasoned appraisers don’t take issue with something said today. Of course, once the interior inspections were completed and a Q & A was about to commence they suggested that the property manager stick around as well, just in case she had some ‘additional insight’. Of course, in order to get me in the right frame of mind the voice in my head said “That’s a great idea”.

It didn’t take long for a few questions regarding some deferred maintenance issues to go off the rails a bit with that ‘additional insight’ they were originally looking for when they asked the manager to stay. I’m pretty certain that both appraisers knew exactly what they were getting themselves in for by inviting the property manager in for the Q & answer session. What better opportunity to quickly decipher what conditions might exist than to have the property manager serve up an outlandish tale to explain a hole in the wall and gauge my response to it? I will admit that the prolonged laughter the property manager exhibited when she described squirrels running circles inside one of the units almost reached an ‘uncomfortable moment’ however, it also allowed me the opportunity to answer a few questions that were waiting for answers, as well as posing one to the manager about landlord/squirrel law.

Having worked for years in the Health Care industry prior to my 28 + years in Real Estate I found that recognizing & allowing someone an opportunity to take center stage, however brief that moment may be, may be more important to them than you’ll ever know. As I answered the appraiser’s questions about financials & condition issues, I made a point to address everyone in the room equally. I could sense by her silence that some of this ‘financial stuff’ was either getting by her a bit or perhaps she was just taking it all in, either way, it seemed to have slowed the additional voices in the room.

As the appraisers and I parted ways one of them couldn’t help mentioning that “It appeared you had some help today ?”. I knew from their eye contact with one another that they not only planned for such a scenario but, were entertained as well so, hopefully, we’ll come in at value with no conditions being required. I got a follow-up e-mail from the appraisers later that day simply stating they enjoyed their visit, not something that happens very often. I may not know ‘Jack’ but, those voices do come up with some great ideas from time to time.

Broker Referrals

August 17, 2014 by bzawaski

What Buyer’s should know about Broker referrals…

Ask any Broker about referring Lenders, Home Inspectors or Contractors to their buyer clients and you’ll get a wide range of answers from referring several for each trade, referring just their most trusted individual to not referring anyone at all. The one common thread among those three points of view is the Broker’s concern for his/her liability. Of course, the buyer simply wants to hire someone with expertise to help them obtain a loan, inspect a house or make repairs so, should the Broker’s issues with liability be a concern for the buyer ? Unfortunately, the answer is yes but, how your Broker deals with walking the fine line between being a resource for all your needs and protecting his/her liability will determine whether you’ll have a good working relationship and be able to accomplish your goals. This is certainly a question you can pose to any Broker you may be considering to work as your Buyer’s Agent before hiring them.

Why should a Buyer be concerned with the Broker’s potential liability…the short answer is because in an Agency relationship your Broker’s liability could become your liability. You’ve hired someone to represent you thus, what they say and do in that capacity may have unintended consequences for you. Regardless of which point of view a Broker takes in regards to providing referrals or not, if they’ve made that decision with the intent to protect all involved from the harm of potential liability then they have served their clients well. Of course, there still is that fine line between potential liability and providing a buyer with high quality service.

In 20 + years I’ve observed Broker’s not only practice one of the three above referenced points of view in regards to referrals but, some pretty unique defenses of those positions as well. It’s common place to hear Broker’s say they always refer “3” of every trade but, all too often it’s followed with some sort of disclaimer that they’ve now cleansed themselves of any liability by doing so. There is also a saying that goes “your only as good as the last name on that list” thus, the client still got the names from the Broker so, if one goes bad then who is to blame, the buyer for making a bad selection or the Broker for providing the names ? In many cases the buyer’s are glad to have three names from which to choose and things go just fine however, there are buyer’s who require more pinpoint direction and that means being guided to the sole individual expert who’ll solve their issue. To this type of buyer, 3 names may be looked upon like handing them the yellow pages and wishing them good luck & that leads us to Broker’s who proudly state their “no referrals” policy. I try to put myself in my clients shoes whenever possible and I can’t imagine how stressful it would be to be left on your own to trust a total stranger to take you thru a crucial point in a transaction. Needless to say, I’m not in the camp with either of those Broker’s who would provide multiple names or leave you on your own. I just closed a transaction wherein my buyer’s & I encountered a seller who had just went thru a sale fail that included making repairs to his roof which were improperly done…it factored in that deal terminating, as well as being an issue when our inspector called out the improper repairs a second time. This was a situation wherein the seller simply searched on his own to locate a roofer & unfortunately, it didn’t fare well. Having had the rare opportunity to meet the seller in person, I was taken back by his obvious embarrassment for what had happened previously. It’s a situation such as this that confirms my belief that I will continue to provide only the most trusted individual lenders, inspectors & contractors to my clients. Brokers are only permitted to share referral fees with other Brokers, not lenders, Home inspectors or contractors thus there are no financial incentives, other than providing a valuable resource to the client. I constantly review records & information on all trade referrals to ensure that anyone I refer to a client would be the same individual I would trust in my own home.

Although most Real Estate Broker’s are not experts on home inspections or construction we do have an obligation to our clients to have sufficient knowledge to address issues related to buying & selling property, including providing information that may require more advanced expertise from Attorneys, CPA’s or Contractors etc. It would be very difficult, if not impossible, to understand when those ‘next steps’ are required if a Broker essentially removes him/herself from a transaction by not taking part in all the issues that effect a client, such as when & who to hire in addition to the Broker.

What you should know about the Rental market…

Whether you own rental property or not it’s current State of the Union may effect your personal financial situation and if not now, perhaps down the road so, keeping abreast of the rental market is as important as watching your 401-K. If you own rental property your probably glad you do as rents have increased 6.5% so far in 2014. 78% of leases in 2013-14 were renewed and 75% of those saw increases. If your one of the 25% of renters who renewed without an increase, good for you ! There certainly isn’t anything wrong with renting or more importantly living within your means…after all, living above ones means started this mess in the first place. Home ownership is currently at it’s lowest level (64.8%) since 1995, the same year that the Community Reinvestment Act made regulatory changes that required lending institutions to make loans that might otherwise not have been made thus, by 2004 home ownership was at it’s peak.

With home ownership declining the rental market has seen record increases, in fact Portland is #5 Nationwide with a 2.2% vacancy rate thus, it’s no wonder that 60% of the Foreclosed homes State wide became rentals in 2013. Unlike just a few short years ago, it may be possible for those who are having difficulties meeting their note payments to rent out their homes and stay above water. For those of you who may be considering rental property as a part of your overall portfolio I would be glad to answer any questions you may have. The market for multifamily properties, particularly commercial (5 units +) is fierce so, it does take some patience. Regardless of whether the Real Estate market is on an upward spiral or decline there is typically something that can help you either increase your position or maintain what you have if you have the right information & guidance along the way.

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Repair it all Home Inspections

Does Lifetime Really Mean Lifetime For Your Roof ?

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