Winning Offers Reflect Strategic Thinking – How to Make a Strong Offer

REALTOR® Outlook

By Kay Wilson-Bolton

December 20, 2005

There is an art to negotiation. The primary ingredient is that you give something to get something. There is a fair amount of tension in today’s real estate realm by trying to “low ball” a price on a home where it is apparent that the owners are not ready for a traumatic adjustment.

While most REALTORS® advise their seller to counteroffer back to almost every offer, that decision often comes with a great deal of stress passed along to the seller’s REALTOR®, which in turn affects the REALTOR® representing the buyer and his or her client.

The jury is out on whether discussion should take place between the REALTORS® prior to writing an offer. Smooth conversations can be an indicator of a probable starting point, instead of one that promotes shock and awe.

There are a few tips to keep in mind when making your offer that will have minimum impact on your finances in both the long and short term

Consider having your pre-qualification letter demonstrate that the only remaining items to closing your escrow are an appraisal and a preliminary title report. This level of commitment takes the guesswork out of the transaction.

As a negotiation strategy, the buyers’ REALTOR® should call the listing agent and ask if the seller has a preference for title and escrow services. If the seller does, include it in the offer. Be sure the selection of services is not “agent driven” so that counter offers are not used to change service providers.

Consider picking up the cost of a fee that is normally paid for by the seller, such as home protection plan, title insurance, or transfer tax. This will increase the seller’s proceeds.

Knowing a seller’s situation can be helpful in tailoring the offer. Sellers who haven’t lined up a new home might like the opportunity to rent their home back from the buyer for a while after closing. If you, as the buyer, are renting, you can gain favor with the seller by offering a rent back to accommodate the seller’s needs.

Some competitors are making offers that don’t include an inspection contingency even though it is not a good practice. Most sellers find a contingency-free offer hard to resist, but there is also a risk attached to selling a home to a buyer who has waived this right. Or, buyers could shorten the inspection period to reduce length of time the house is off the market.

If the home has been previously on the market, ask to see any previous reports, which have been completed. Call the home inspector to discuss any questions you might have. While the information in that report was for the person who paid for it, the home inspection company may substitute the new buyer in for a fee less than the cost of an inspection.

Let your REALTOR® guide you. Not only are we licensed by the Department of Real Estate, we have also agreed to abide by the Code of Ethics established by the National Association of REALTORS®. All others are not REALTORS®.

 

Kay Wilson-Bolton is the owner and broker of CENTURY 21 Buena Vista and CENTURY 21 Ability serving west Ventura County since 1976. She can be reached at 805.340.5025. Her personal website is http://www.readysetkay.com

45-Year Mortgages are Here.

REALTORS® OUTLOOK

By Kay Wilson-Bolton

November 28, 2005

Where there is a will to buy a home, someone will find a way to make it happen.

Pro-line Mortgage has introduced the new 45-year mortgage, a wonderful option for buyers to have lower monthly payments and to help qualify for a larger home.

As interest rates creep up, the 45-year loan compensates for the increased payment so that buying power is sustained.

The most impressive feature of all is we can close these loans in as little as 5 days.

We will be holding a public seminar over the holidays to help consumers understand credit issues, how to repair “cracked credit” and provide updates on unique loan programs. Call 805.340.5025 to find a seminar near you.

Agents new to the business are expressing alarm over the shift in market activity. History shows that the shift is seasonable, expected and normal. Predictions are still for a strong market in 2006.

While the holidays are usually a time for taking stock of the year past and looking to the year ahead, it can be a wise time to enter the real estate market and take advantage of softer prices.

We have discovered new ways to deal with “cracked credit” and our mortgage experts know how to evaluate the issues, triage them and within a few weeks, improve your credit score and your interest rate!

Mortgage interest rates have risen over the past few weeks but help is here! Most analysts believe this trend will continue throughout the near future.  It certainly is a good time to get educated on these factors so that the housing market does not leave you further behind.

Call our mortgage experts Kenny Minkel at 320.7898, Scott Gilman at 818 438-7719 or Michael O’Connor 805.371.2647

Kay Wilson-Bolton is the owner and Broker of CENTURY 21 Buena Vista and brings a regional perspective to local issues. She can be reached at 805.340.5025.

Haste in Contract Preparation is Risky Business

REALTOR® Outlook

By Kay Wilson-Bolton

December 15, 2005

In our present techo-savvy market, complimented by a real estate market marked by a touch of frenzy, buyers are expected to act quickly to complete their purchase out of fear that the home will be lost to another buyer, or interest rates are about to take a jump.

Or, maybe there’s just a one-hour time frame between soccer games to get the offer written and signed.

It is common in this world of technology for REALTORS® and clients to email and fax documents back and forth without the opportunity for a face-to-face discussion of the details.

It’s not surprising that most buyers don’t have a clear understanding of their offer to purchase. Many buyers will sign documents before reading them and not realize that, upon signature of the seller, the document becomes a legally binding contract.

The purchase offer, or contract, is generally clear about what price is being offered, but it also includes other terms and conditions like contingencies, termite reports and clearances along with possession dates and interest rates.

A major consideration and one that deserves a fair amount of discussion is that the contract provides the mechanism for  resolving disputes should they arise. A failed step in this category could be disastrous in the event of a major dispute down the road.

The document requires more than casual reading and begs the attention of a REALTOR® who can explain the paragraphs and the details.

Changes require agreement by both parties, and if a buyer fails to address an important item in the initial contract, the opportunity to have it included may be lost.
Buying a home is an emotional experience. It’s difficult for most buyers to focus on the contract details when they are distracted by the next appointment and the problems of the day.

Many REALTORS® will provide a copy of the purchase contract to their buyers and sellers in advance of receiving or writing an offer, and highlight the 10 or 12 key points.

Reading through the document will help buyers be prepared for signing the real one when the time comes. If the contract is written in time sensitive situations buyers can react better to signing a document they have read and understood.

There is an irony in our industry in that REALTORS® are not supposed to practice law.  However, we are required to know the law and explain it. If you feel your REALTOR® is not explaining the clauses, contingencies and conditions to your satisfaction, you should seek independent legal advice from an attorney who understands real estate practices as well as the law.

 

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

Bad Real Estate Practices In Ventura County

By Kay Wilson-Bolton

October 15, 2005

Every community in Ventura County is subject to the tragic conditions of predatory and bad real estate and lending business practices.

Every culture and every business has its share of predators, and they come in various forms. In cooperation with the Ventura County District Attorney and the Ventura County Coastal Association of REALTORS®, the Board of Supervisors has authorized a program that will raise an estimated $250,000 to combat such business practices.

A $2 fee will be attached to every deed recorded in Ventura County for the next year. An investigator will be assigned to this division and the DA’s office will move towards a no-tolerance position with regard to predatory practices.

One could argue that the real estate industry should monitor its own bad eggs, but the Department of Real Estate is testing between 20,000 and 30,000 candidates each month. While only half of them pass the exam, only half of them will join the National Association of REALTORS® in order to give us oversight over their practices.

The rest are left to the Department of Real Estate which has been known to take one year or longer to investigate.

The definition of a predator is one that eats its prey while its still alive.  It is not a pretty picture, but it does characterize the moves and the results of a predator who victimizes a borrower, a buyer or a seller. Many of us believe this is a multi-million dollar problem in Ventura County and is taking a terrible toll on innocent people, many of which are non-English speaking.

Just for the record, if an agent you speak to is not a REALTOR®, they cannot be held accountable by us as their peers.

There are stories of lenders refinancing homeowners out of fixed rate loans into variable loans at high loan fees, leaving them very vulnerable in a market of rising interest rates.

Buyers are vulnerable when they purchase homes without the benefit of home inspections and later discover  defects that are expensive to repair and mitigate.

Sellers are often victimized when agents insist on taking office exclusives without the benefit of multiple listing service and do not provide proper assistance in completing their paperwork leaving them open for lawsuits later on for improper disclosures.

The test is always to understand everything you sign. If you don’t, seek legal advice or consult with another professional.

The gray area comes when one tries to defend a bad practice as a sharp practice. Good business strategies can usually pass the smell test.

REALTORS® care about good service and oppose any real estate agent or lender who uses predatory practices. They need to be put out of business.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista CENTURY 21 Ojai Valley. She can be reached at 805.340.5025.

Participate in the Home Inspection

REALTOR® Outlook

By Kay Wilson-Bolton

August 20, 2005

There is never an occasion when a buyer should waive his or her rights to inspect a home prior to completing a purchase.    Recently a broker from San Francisco represented a buyer of a condo he had never seen, and because of the market area he works in, he told the buyer to offer $5000 over the asking price. He also told them to waive their rights to a home inspection and termite report in order to insure that their offer would be accepted.

Accepting this offer was difficult for the seller because they felt the buyer was getting poor advice—and they were.

The purchase contract prepared by the California Association of REALTORS® provides for home inspections and time frames to protect buyers and provide ample opportunity for the study of disclosures and conduct additional research.

Recently, a buyer bought a home without a home inspection and without receiving a disclosure from the seller, only to learn after the close of escrow that the home had a bath and a bedroom that was unpermitted and had to be demolished.

Every buyer should take advantage of the home inspection protocol, and every seller should take time to complete the disclosure forms that make the buyer aware of the condition of the property.

This checklist could be helpful when you visit a home and talk to the listing agent.  Sellers can use the list in preparing the necessary disclosures.

  1. What is the visible condition of the property? Poor exterior condition may spell problems inside.
  2. Does the house require major repairs or replacements? Major repairs, such as a new roof, can be costly. Consider these costs if you decide to make an offer.
  3. How old are the mechanical systems? Consider the cost of replacing older systems if you decide to make an offer.
  4. Has the house been well maintained? Ask if the sellers have kept any maintenance records and review their disclosure documents.
  5. Where is the house located on the block? Corner lots can be spacious, but exposed to more traffic and noise. Interior lots can be quieter but too close to neighbors.
  6. How is the house sited on the lot? Be sure the area around the house is graded properly to provide good drainage.
  7. Are there noteworthy architectural features? Front porches, gables or other details add value to the property.
  8. Are there noteworthy landscaping features? Established trees, shrubbery and perennials add value to the property.
  9. What is the condition of the houses on either side and across the street? If neighboring properties are too run-down, they may affect your resale value.
  10. What is the surrounding neighborhood like? Look for evidence of a sense of identity and pride of ownership in the other homes. Ask if the neighbors have any annoying habits.
  11. How close is it to shopping and schools? Nearby services can also add value.
  12. Are there community amenities nearby? Parks or recreation centers can add value to the property. Is the facility a homeless shelter or a community center?
  13. How long has the house been on the market? A long time on the market may indicate problems with the house or neighborhood that you need to know.
  14. Why does the seller want to sell? If there’s a problem with the house or the neighborhood, assess the situation carefully.

If you are asked to sign forms you don’t understand, don’t sign them until you do. Don’t be pressured into accepting conditions that bother you.

The Ventura County Coastal Association of REALTORS® offers the services of an Ombudsman Committee to assist with problems or questions you might have.      You should speak with your REALTOR® first, then the broker or officer manager. The Association office number is 981.2100.

 

 

 

 

 

On Hundred Years Ago Today – 1905 – REALTORS® TAKE LEADERSHIP IN STRIDE

REALTOR® Outlook

By Kay Wilson-Bolton

June 3, 2005

Like so many REALTORS® who have served on REALTOR® board of directors for decades in the County, today’s leadership is still making the trek to Sacramento to do what we can to insure the viability and integrity of the real estate profession.

Ventura County Coastal Association of REALTORS® Board President Stuart Monteith and Ojai Valley Board of REALTORS® president, Riki Strandfelt, among other presidents in the Ventura County area, will lead their travel teams to the June meeting of the Statewide directors in Sacramento. This is the annual occasion to speak as a group to legislators about the issues facing California and our cities. The range is from predator lending practices to cultural diversity and land use.

The California Association of REALTORS®  is celebrating its Centennial year.

One hundred years ago on May 27, nearly 100 men gathered at the Lankershim Hotel in Los Angeles, envisioning an organization that would work to create a bond of trust and respect between REALTORS® and homebuyers and sellers throughout California.

That vision became a reality, and today, the California Association of REALTORS® provides educational programs and business services to more than 165,000 members, enhancing the ability of REALTORS® to conduct successful real estate transactions, and produce satisfied clients.

For 100 years, C.A.R. has worked diligently to preserve and promote a commitment to excellence, professionalism and integrity within the real estate industry.  Our Centennial marks the beginning of a second century where, together, we will work to bring the dream of homeownership within reach of all Californians.

C.A.R. provides educational programs and business services to more than 160,000 members, enhancing the ability of REALTORS® to conduct successful real estate transactions – and produce satisfied clients.  2005 marks the hundredth year that C.A.R. and its membership will work together to bring the dream of homeownership within reach of thousands of Californians.

C.A.R.’s leadership and members are proud to commemorate a century of accomplishments rooted in the desire to continuously improve California’s real estate industry.  There were some interesting early milestone achievements.

1905 –  The California State Realty Federation, later known as the California Real Estate Association and now called the California Association of REALTORS®, was established.

1906 – The San Francisco earthquake hit, causing uncontrollable fires and destroying 28,000 structures. REALTORS® were on the scene.

1907 –  Voters approved a $23 million bond issue to build a 250-mile aqueduct that would bring water to Los Angeles from the Owens Valley to help meet the needs of Southern California’s growing population.

1908 – Henry Ford introduced the Model T; by the end of the decade, California had 36,000 automobiles.

1919 – After 14 years of lobbying in Sacramento, the California Real Estate License Law was enacted, helping to rid the real estate industry of unethical practices.  The law called for the licensing of any person engaged in the business of real estate, created the state’s department of real estate and stipulated penalties for engaging in the real estate business without a license.

There have been dozens of changes in the past few years regarding the practice of real estate. We are still learning

 

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

The Value of Mortgage Interest Deduction

November 20, 2005

By Kay Wilson-Bolton

A congressman, speaking during a National Association of Home Builders conference call Thursday, pledged that any effort to eliminate or reduce the mortgage interest deduction or eliminate property and sales tax deductions “would be dead on arrival” in Congress.

While the President’s Advisory Panel on Federal Tax Reform has recommended changes to tax law, real estate industry groups are fighting to ensure those recommendations do not amount to major changes for homeowners that benefit from federal, state and local tax incentives.

“Since these recommendations have come out, I’ve certainly heard a real sense of alarm from my constituents. They are very concerned about a proposal to eliminate or greatly reduce the mortgage interest deduction, as well as the deduction for state and local taxes. They recognize that means they’re going to pay higher taxes,” said U.S. Rep. Jerry Weller, R-Ill., a member of the House Ways and Means Committee.

“Both of these proposals would be dead on arrival in the House Ways and Means Committee,” he said. Weller added that he has reached out to a group of Republican lawmakers on the committee, and they have signed a letter to encourage President Bush to reject tax panel’s recommendations.

Officials at the home builders’ trade group and the National Association of Realtors, for example, have lashed out against the tax panel’s recommendations, and vowed to fight against any proposals that would negatively impact homeowners and home ownership.

The home builders’ group paid for a survey this month that found strong support among consumers for the mortgage interest tax deduction and deductions for state and local taxes, including property taxes. The group also prepared a study of how individual homeowners in different parts of the country might be impacted by adopting the tax panel’s recommended reforms.

Jerry Howard, CEO and executive vice president for the builders’ association, said the tax panel’s recommendations appear “out of touch with the American people.” Howard also said that current homeowners planned to benefit from tax incentives when they bought their homes, and they should not be punished for their purchase. “It just seems like you’re changing the rules in the middle of the game and that’s patently unfair,” he said.

David Wilson, president of the home builders’ association, said the tax proposals, if adopted, “Would reduce housing values and send a chill throughout the housing market,” adding that homeowners in high-cost areas like California and Florida “would bear the brunt” of the tax blow. “It would cripple markets that rely on second-home (buyers).”

U.S. homeowners save about $70 billion in taxes from deducting mortgage interest on their homes, said David Pressly, president-elect for the homebuilders’ group. “Newest homeowners will probably be hit the hardest,” he also said, as about 18 million people bought homes in the last three years and “most of these have significant mortgage interest payments and virtually all of them are counting on (deductions) to keep it at low levels.”

Kay Wilson-Bolton has been in full-time real estate in Ventura County Since 1976.

New Laws for 2006

REALTOR® Outlook

By Kay Wilson-Bolton

December 19, 2005

REALTORS® and the industry we support is an annual target for new laws, many of them pointing to consumer protection. To give you an idea of how varied these laws are, continue reading.

In 2003, a law was passed requiring landlords who want to evict tenants in periodic tenancies, where the tenant has been living in the property for over a year, to give the tenant a 60-day notice to vacate.      Effective January 1, 2006 all month to month tenants may be evicted with a 30-day notice unless the property is in a rent control jurisdiction, or if the rent on the property is subsidized by the government, such as a Section 8 rental.

            Homeowner Association Rules –SB 702 provides that if a homeowners association is an unincorporated association that has governing documents that are deficient, default rules will be supplied in the Civil Code that will apply automatically.

            Risk Management Course – AB 223 provides that the first time a real estate licensee applies for license renewal, the licensee must complete a three-hour course on risk management that includes principles, practices and procedures calculated to avoid errors and omissions in the practice of real estate, as part of the overall required 45 hours of continuing education.

            Mobile Home Parks – Effective July 1, 2006, SB 237 provides that a rental agreement in a mobile home park entered into or renewed on or after that date may not include a provision that grants the management of the park the right of first refusal to purchase a mobile home owner’s mobile home if the owner wishes to sell the mobile home to a third party.  .

            Small Claims Court – Effective January 1, 2006, SB 422 increases the small claims court jurisdictional amount from the existing $5,000 to $7,500.

            Financial Elder Abuse Reporting –SB 1018, which will become effective January 1, 2007, makes all officers and employees of banks, federal and state credit unions and their affiliates who suspect financial elder or dependant adult abuse, as specified, to be “mandated reporters” .

            Megan’s Law –AB 1323 mandates a change in the statutory notice language regarding registered sex offenders (Megan’s Law) that appears on residential purchase contracts and residential lease forms in California. The new language refers the buyer or tenant to a website that contains the database (http://www.meganslaw.ca.gov).

.           Bankruptcy Law Changes – Effective October 17, 2005 the federal Bankruptcy Abuse Prevention and Consumer Protection act of 2005 permits Bankruptcy Courts to convert a Chapter 7 bankruptcy to a Chapter 11 or a Chapter 13 without the debtor’s consent. It will be easier for landlords to evict tenants who have declared bankruptcy.

Energy Efficiency Standards – Effective January 23, 2006, all new central air conditioning equipment will be required to have a Seasonal Energy Efficiency Rating (SEER) (the measurement of the efficiency of cooling devices such as air conditioners) of at least 13. The previous requirement was 10 SEER.  Consumers have no duty to update or replace air conditioning units and it is not a retrofit requirement,

Notice of Supplementary Tax – Effective January 1, 2006, sellers or agents must disclose in writing to a buyer that they may have to pay a supplementary tax bill.

 

Kay Wilson-Bolton is the owner and broker of CENTURY 21 Buena Vista and can be reached at 805.340.5025.

To Meet Or Not to Meet the Buyer

By Kay Wilson-Bolton

REALTORS® OUTLOOK

August 18, 2005

 

Real estate agents almost always advise sellers to be scarce when their home is shown to prospective buyers.

Buyers are also advised to conceal their excitement about the listing if they do happen to run into the sellers. The reasons are obvious.

Some agents worry that chance meetings between sellers and buyers could jeopardize their negotiating positions for a variety of reasons.

In some cases this might be so, but such an encounter could just as easily have the opposite effect.

One couple returned to see a listing they were considering at night so they could appreciate the city lights view. The seller was home. The buyers and sellers engaged in a friendly conversation, which left the seller with a positive impression of the buyers.

The seller subsequently received three offers. The couple he met at the property actually offered the lowest price of the three. The seller wanted these buyers to have the house if they were willing and able to pay the highest price he was offered. So rather than accept the highest offer, he issued a counteroffer to the buyers who’d made the lowest offer. They accepted. If he hadn’t had the personal connection to these buyers, they wouldn’t have received preferential treatment.

This could also be true of an investor’s offer versus an offer from someone who plans to live in the home and raise a family.

Sellers who list their homes for sale with a real estate agent often do so because they don’t want to interact directly with the buyers, at least until negotiations have been completed.

This includes any negotiations that might be required to resolve inspection-related issues. If the seller has lived in the property for some time, he has had time to decipher idiosyncrasies that could take you months or longer to figure out.

If you do meet with the sellers, it’s usually best to keep your redecorating and remodeling plans to yourself. The sellers may have a strong attachment to their own taste in such matters.

In the end, good judgment and common sense prevail as well as trusting the process of established practices. Your REALTOR® should know best. Be sure your agent is a member of the National Association of REALTORS®. It makes a difference.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ojai Valley and is celebrating her 30th year in real estate. She can be reached at 805.340.5025.

Holiday Sales Can Include Your Home

REALTOR® Outlook

By Kay Wilson-Bolton

October 15, 2005

A common reaction of homeowners who are thinking of making a move is to wait until “after the holidays”.

For those who would like to sell sooner than later, I encourage you to take advantage of this festive season and let your home be viewed at is decorative best.

Nearly everyone agrees that when a home looks its best, it sells faster and brings a premium price.

Assuming the carpets are clean and leaky faucets are fixed, there is hardly a more appealing, customer-friendly home than one that has been dressed for the holidays with lights, candles, ribbons and pleasant aromas coming from the kitchen.

Short of a national crisis, the real estate market will continue to flourish through the year 2010, although some think this bubble is about to spring a leak.

While my preference has always been for a “steady as she goes”

real estate market,  the market is continuing to escalate. Waiting until January will find homeowners in good company, but in large numbers. The more homes for sale, the keener the competition.

If a job transfer or right-sizing is in your near future, consider engaging the services of a REALTOR® who believes in the Multiple Listing Service and start getting your home into holiday shape.

Your REALTOR® will want to highlight your home for the weekly REALTOR® tour and for weekend open houses, if you are up to it.

The public will appreciate a pleasant, holiday-decorated home. Most of us have warm memories of our own homes as children when life was simpler and, of course, so were we.

When selecting a real estate professional, be sure and ask if he or she is a REALTOR® who subscribes to the Code of Ethics for the National Association of REALTORS®

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista and CENTURY 21 Ojai Valley. She can be reached at 340.5025.