Yes, Virginia, you can sell your home “as is.”

REALTOR® Outlook

By Kay Wilson-Bolton

July 2, 2003

It happened again this week. Two good people are unhappy with the general real estate community and are asking hard questions about the “as is” clause in real estate purchase contracts.

It is true that you can sell your home “as is”. The caveat is that the buyer is entitled to know what “as is” really is.

It’s all in the contract. Don’t sign your contract unless you understand it. Buyers and sellers alike must not rely on what we said, what you thought you heard, or what you claim we meant.  What does the contract say?

The California Residential Purchase Agreement (RPA-CA Page 3 of 9, paragraph 7A) states “property is sold (a) in its PRESENT physical condition as of the date of acceptance and (b) subject to Buyer’s Investigation rights”.

In real life, this means that buyers begin the process of purchasing a home in an “as is” condition.  It also means that the buyer has a right to know the full condition of the property within a 17-day period and agree to either purchase it in the “as is” condition, ask the seller to fix certain items, or walk away. Buyers view this item as an invitation to further negotiate.

Items of concern include open electric wires, broken windows, torn window screens, an inoperative dishwasher, spa or microwave, leaking roof, excessive debris in the yard, singed rafters, broken sewer line, etc. etc.

If a property is on a well, the buyer may want to see a bacteria test.  If the lot is in the country, a legal lot determination may be requested. It costs $200 and takes four weeks to obtain.

It is common for sellers to be irritated with buyers who ask for repairs.  Please don’t be irritated.  Unless a buyer received a fabulous price on a home, they likely will not overlook issues such as those related to health and safety. Even though the repairs seem to be minor, if the buyers are not handy, they will likely ask that the seller complete them.

The irritation can begin when the home inspection takes place and the sellers are not told what to expect, such as how many people will be present, who will be present and how long it will take? The worst scenario is when the home inspector goes over his report in the living room and the sellers are within earshot.

If the seller made concessions on their sales price at the outset, adding a list of repairs to the equation is usually a setup for contention.

Sellers have the right to say “no” to repair requests and begin the selling process again but most sellers agree to repair health and safety items. My litmus test is “if you stay in the house, and now that you know, will you fix these things?”

From today on, I promise to spend more time on explaining the dynamics of  “as is”. There are some nice people who are not happy with me because we didn’t spend enough time on this single item. I am deeply sorry.

This goes to the heart of who REALTORS® are and what we do.  For a company like ours, we’re not called to be best. We are called to be different.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Ojai Valley and CENTURY 21 Buena Vista. She brings a regional perspective to local issues. She can be reached at 340.5025.

 

 

PITY THE POOR APPRAISER

REALTORS OUTLOOK

By Kay Wilson-Bolton

May 30, 2003

There is a group of professionals in the real estate business who labor under the very heavy burden of time frames, anxious clients and REALTORS®, ever-changing guidelines, forms and schedules.  They are the mysterious, seldom seen people with a clipboard, measuring tape and worried look.

They are called appraisers. They try to please everyone and lately have the ability to please no one. They are pushed by the market and the individuals affected by it to bring the value of the latest sale into conformance with it’s sold price. Some appraisers have an easier time than others matching the persuasion of an increasing market. Some appraisers are not jumping as high as the new sales price.

The REALTOR’S® skill in marketing the property, finding the buyer and opening the escrow is unraveled with the poor appraiser can’t squeeze any more value out of that number.

A recent situation will describe this well.  An LA-based family inherits a property in a local town.  The REALTOR® advises a market value of $475,000 but they are convinced that the buyer will come from Los Angeles and they wanted to list the house at $549,000.

They were 50% right.  The buyer did come from Los Angeles–so did the lender and the appraiser who just don’t see the value in the same way.  The third buyer is also from Los Angeles, so is the lender and the appraiser.  No way, they say. So here we are, since August 24, 2002 dealing again with an appraisal that is below the asking price.

The sellers are now exhausted and want the proceeds from the sale of their vacant house.

The best strategy now is to price the property at the new market value and be prepared to look at a different price if necessary so that the sale can go forward–unless of course time is on your side and you have no place to go anyway.

Four things can happen with a low appraisal. The buyer can cancel the transaction, not wanting to pay more than the appraisal. The seller can reduce their price to match the appraisal. The buyer can pay the difference in the sales price and the appraised price if they don’t mind paying more than the appraisal indicates the value to be; or buyer and seller can split the difference with the buying bring in additional cash.

We all need to have more compassion for the appraiser trying to please us while staying true the high calling of their procession.

Now that I think about it, that goes for just about anyone trying to earn an honest living.

Kay Wilson-Bolton is the owner and broker of CENTURY 21 Buena Vista and CENTURY 21 Ojai Valley. She brings a regional perspective to local issues. She can be reached at 340.5025. 

Please don’t tell me “everything is fine”.

REALTOR® Outlook

By Kay Wilson-Bolton

June 12, 2003

I know exactly when to worry about a real estate transaction.  It is when I hear the words “everything is fine”.  That statement is common to the industry and it has proven to me to be an indication that the one I am speaking to does not really know what is going on.

It is typical to quickly discover that there is some kind of problem, hitch, dilemma, development or concern that needs my attention. Therefore,  everything is “not fine”.

If someone in your team of professionals uses those words, ask what they mean by that! Ask for a status report by asking detailed questions.

This age of the real estate transaction is very complex. Everyone must do his or her job, at just the right time, or nothing is fine.  The home inspector has to inspect the home within the specified time frame so the buyer knows what  to expect. The appraiser has to meet the lender’s time frame to coincide with the ordering of termite work, underwriting, ordering of loan documents, insurance, lender conditions and walk-throughs–to name a few.

The real estate business has lots of new agents. Some are better supervised than others and as the learning curve gets longer, tempers get shorter and expectations get higher.

We use cell phones, home phones, home offices and home faxes. We use email, voice mail, office faxes and trans boxes.  We have high-speed connections, messengers and over night mail. We say, “Call me anytime for anything” and a REALTOR® will do their best to make it all come together at the same time.

Fortunately, new agents can be good agents because they have a desire to learn a new career and dread the consequences of making a mistake because their first transaction is usually with a friend or a family member. If they work under a good broker who knows how to avoid making mistakes or at least how to resolve them, the training curve will be shorter.

However, the really good REALTOR® knows how to make the work look easy. That’s partly why so many new people want to do it. Experienced REALTORS® can identify the problem and the strategy at the same time.

I heard it again today. “I’m paying you thousands of dollars to sell my home. Why didn’t we close on time?”

The answer is that there is a huge circle of service providers that participate in a sale and a closing. Generally, we have one goal, but different jobs. We have different talents, but the same objective. We have different training, but one direction. And the truth is that some are simply better than others at their work.

In the end, there is one person who directs the orchestra and that is your REALTOR®.  While REALTORS®  have different levels of commitment, expertise, and experience, the common denominator is that we don’t get paid until you get paid.

Do our industry a favor and continue your high expectations of  REALTORS®. Remember that the phone rings two ways.  Ask questions. Demand perfection. Share your expectations.

Working together, we are all better.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Ojai Valley and brings a regional perspective to local issues. She can be reached at 340.5025.

Inclusionary Zoning

REALTOR® Outlook

By Kay Wilson-Bolton

November 12, 2003

There was a time when the real estate community would fall on it’s sword before it would support the idea of forcing a developer to provide for less than market rate housing in a new project.

Fortunately, its enlightened leadership realized that the best way to get the housing we know we need for California’s future is to first understand the concept. Here are some interesting bits of information.

Inclusionary zoning enables local governments to use zoning powers to develop affordable housing by requiring developers to build affordable housing in exchange for incentives that reduce the developer‘s project costs, i.e., reduced or deferred developer fees, density bonuses, land purchase assistance, reduced traffic/parking provisions, etc.

 Affordable units in mixed income housing developments are physically indistinguishable from market rate housing, thus avoiding the stigma often attached to affordable housing.

 Many existing subsidized housing programs have the effect of concentrating affordable housing in a certain areas of a community. Inclusionary zoning fosters mixed socieo-economic neighborhoods by integrating low/moderate income housing throughout the community.

This gives all members of society access to better schools, better commercial centers, good parks, and a higher quality of life often found in and around newer neighborhoods.

Mandating affordable housing, gives local governments another tool to meet the housing needs of specific lower income levels.

Resale controls, which often accompany inclusionary housing ordinances, ensure long-term affordability of units.

Furthermore, in-lieu fees and equity recaptures provide local governments with the revenue to purchase or build more affordable units or finance renter assistance programs.

Reasons to oppose it:  It is unfair to place the burden of providing affordable housing solely on developers. The lack of affordable housing is a societal problem, and all of society should share the responsibility of addressing it.

             Inclusionary zoning does not address the factors that contribute to the high cost of market rate housing, i.e., high land costs, lack of available sites, developer fees, cumbersome permitting process, etc. Inclusionary zoning adds costs to the market rate housing.

Inclusionary zoning places financial hardships on developers. Ultimately, they will no longer be able to provide housing in the community because the costs are too high, or they will pass the costs on to market rate buyers.

Resale price controls eliminate homeowners‘ ability to realize a reasonable profit on the resale of their home and therefore takes away the incentive for them to maintain their home. This makes it difficult to resell inclusionary units.

The cost of implementing an inclusionary zoning ordinance for a local government entity is high. Most local governments cannot afford the staff resources to administer a program.

In reality, the best way for a local government to provide affordable easier for its constituents, at all income levels, is to make it easier for developers to develop such housing with incentives such as reduced land costs and land restrictions, increased availability of housing sites, and reduced fees.

The practice of in-lieu fees is a tax on homeowners and renters.

Many jurisdictions collect in-lieu fees, but do not leverage the revenues to build more affordable housing. Instead, in some cases, the money is not spent to produce new affordable housing.

This issue is only pertinent, however, in areas where new housing is needed by people of all income levels.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Ojai Valley and CENTURY 21 Buena Vista  and brings a regional perspective to local issues. She can be reached at 340.5025.

THE MOVE THAT CAUSES PAIN

REALTOR® Outlook

By Kay Wilson-Bolton

May 21, 2003

Those who are closest to a “move” are often not the ones most affected by it.  It is the unwilling participants who feel its greatest impact.

For the record, REALTORS® love to find homes for people–rich people, not-so-rich people, singles, families, with pets and without.  There is a thrill that comes from opening an escrow and from closing one.

A little different spin on REALTORS® helping people find a home comes in our desire to promote the idea of foster parents and respite partners.

Supervisors Kathy Long and Steve Bennett have launched a campaign in their regions along with our family court judges to find people who will share their homes with kids who have been taken from theirs.

This move supports the fundamental value of a home, capped by the added value of home ownership that gives safe harbor to a child taken from what they know as home.

Two years ago, there were 300 foster care homes in the County for children from 0 to 18 years of age.  That number is now at 175 and at crisis proportions.  For most of us, we can’t picture the environment from which a child is taken from their parents, their beds their friends and schools.  The best of a bad situation is made when a child can at least stay in their own city with their friends and familiar faces.

A new dimension of the foster care program is the opportunity to be a respite volunteer for the foster parent to provide relief from the full-time care.

An interesting element of foster care is that the court awards the child to the care of authorized individuals. That does not include baby sitters, neighbors or trusted relatives. So, those who come into the care of a foster child must also be qualified by training and instruction.

Isn’t it interesting that parenting requires no instruction but the parent, one-step removed, does; and so does the person who is willing to stand in thegap for the one who does the full time work.

If you have a heart for a child in need of a home in the most troubling time of a child’s life, please consider attending the beginning training session for volunteers on June 3 at 5 pm in Ventura.

Supervisor Bennett and his wife, both teachers by original training, have a  continuing passion for the child.

As a REALTOR® with a heart for home, I encourage anyone to consider this great humanitarian effort on behalf of the children of the Ojai Valley.  For more information, call Supervisor Bennett at 654.2703.

There is a need for English speaking and bi-lingual homes at all economic levels.  It’s not an easy job.  Neither is parenting. If it was, everyone would do it. It’s no surprise that REALTORS® would support someone who does.

Kay Wilson-Bolton is the owner of CENTURY 21 Ojai Valley and brings a regional perspective to local issues. You can call her at 340.5025.

 

A fair amount of chaos

REALTORS OUTLOOK

By Kay Wilson-Bolton

May 30, 2003

There is a fair amount of chaos in today’s real estate business and it is unhealthy. It is prompted by frenzied buying and selling, fueled by low interest rates and fear that the shortage of homes will created that “out of stock” condition all of us fear.

The market temperature is also causing other problems. The channels of service providers are clogged and the predictable levels of good services are being challenged. Meeting the scheduled closing dates is more difficult. Everything and everyone is thrown off schedule, down to the transfer of utilities and the reading of meters.

The lines of protocol have become blurred and some service providers have forgotten their manners. The search is on for someone to blame for a low appraisal, a missed closing date, and a missed time frame approval.

There are fewer courtesies being paid to a fellow REALTOR® who has a previous relationship with a client and intervention in that relationship is all too common.

This is an odd circumstance because it times of prosperity, it should be easier to be kind with the idea that honor still has value.

One can only wonder if the numbers of new people into the business are causing the chaos. We all know that some companies are better supervisors of new people than others. I’ve yet to meet a new real estate agent who didn’t want to do it right the first time, so don’t be discouraged about dealing with a new agent–just be sure you have someone who knows who to call with a question.

The chaos is exacerbated by the problems appraisers are having in the meeting new sale price based on the last few sales. While they are receiving a fair share of the blame for lost sales and delayed escrows, their job is likely the toughest. They are expected to go with the flow, yet they have to justify to a court of law, if necessary, the method by which they obtained the value for a property.

The state of our economy is tricky and so is our future. We have yet to see the price we will soon pay for what we think we are entitled to receive and for wanting it now.

Kay Wilson-Bolton is the owner and broker of CENTURY 21 Buena Vista and CENTURY 21 Ojai Valley. She brings a regional perspective to local issues. She can be reached at 340.5025.