When familiarity is a good thing— making the case for working close to home.

REALTOR® Outlook

By Kay Wilson-Bolton

October 3, 2006

There is a move in the State of California towards the mega-MLS. In one area to the north, REALTORS® and agents in 11 counties have joined together with 40,000 plus members. The major benefit is that agents are given access to a wider area of inventory and opportunity to expand their sphere of working influence. The jury is still out on the long-term effects.

With the expanded number of agents “in the business”, it has been common for a family friend of relative to represent a homebuyer in an area of unfamiliar territory—and the challenges begin.

Although it’s perfectly legal for your friend or relative to represent you, is it a good idea?

A major consideration is the amount of information the agent has about local customs. What the agent doesn’t know might adversely effect the transaction.

Buyers have a competitive edge by having their agent present their offer in person to the listing agent and/or the sellers. An out-of-area agent usually faxes the offer to the listing office.

While it seems contrary to best business practices for real estate agents to invest in the mega-MLS, there are some good business reasons. At some point, MLS boundaries cross over each other. I could live in one jurisdiction and work in another. I may have moved 100 miles away and still want to work in the area where I was trained.

Brokers and owners are having to join many MLS’s around the state, which requires numerous orientation meetings, joining fees, different keysafes, rules and regulations to abide. Therefore, creating an MLS with a wide circle of influence diminishes the need for duplicative efforts.

However, the downside is that agents will be tempted to work in areas with unknown “landmines” such as Redevelopment Agency activities, environmental issues, long-range planning such as airports, landfills or freeways. Many of these issues are not readily apparent and require research.

If your agent isn’t local, you must hope that the seller and the seller’s agent are especially diligent when it comes to providing necessary disclosures.

Good agents have a wealth of information about local conditions and property values. They also know the best inspectors, title and escrow officers, loan brokers, insurance agents, and contractors who can give estimates.

Additionally, if you found your home using the time and talent of a local agent, the right thing to do is to let that agent write the offer.

Kay Wilson-Bolton is the owner of CENTURY 21 Ojai Valley and CENTURY 21 Buena Vista. She is celebrating 31 years in real estate and can be reached at 805.340.5025. Her website is www.readysetkay.com

 

 

 

Don’t let your agent make your decisions

REALTORS® OUTLOOK

By Kay Wilson-Bolton

May 28, 2006

There are new disclosure standards in the industry that reflect industry needs and trends. They have to do with disclosing repairs you’ve made to your home – not just yesterday but for a very long time.

There are good reasons for that and it has to do with what a buyer can expect in the future from repairs made on a consistent basis—like repairing cracks, painting over stains, pumping a septic tank, neighborhood conditions, new cabinets made to fit the changing shape of walls and levels of floors.

Everyone acknowledges that a home has its own personality with its squeaks, groanings, and the special twist of the knob that makes the door open easily.  Unless disclosed up front, such traits are not usually discovered until after the close of escrow.

Whether or not they are considered defects is often a debatable issue and these examples are likely not defects. However, it is not up to the agents to decide that.

The lines blur when the new owners discover that the gutters don’t drain and water runs into the patio and under the sliding door; the sprinklers don’t work, the water heater begins to fail or the roof miraculously begins to leak after the first rain when it never had before.

Owners have a duty to disclose material defects and red flags to potential buyers and buyers have the right to rely on those disclosures. It is commonly known that what a seller perceives as unimportant may be important to a buyer.  What a buyer perceives as material may not be to a seller.

Further, agents have a duty, not a suggestion, that they disclose items of concerns after a diligent visual inspection of the property.

It is so tempting to say, “Hmmmm, seems normal to me,” and let it slide. REALTORS® and agents needs to let buyers make that decision after careful investigation. It is our job to make information available and point out opportunities for investigation.

The “as is” clause is a common method of sale.  It means, what you see is what you get, with the caveat that the seller has told you about things you don’t see and you agree to purchase the home anyway.

It is not uncommon for sellers to view some items as normal and not troublesome. This becomes problematic after the closing when the buyers decide it is more than a casual oversight.

When such situations occur, you are urged to contact the seller directly or continue to work through your agent or REALTOR®.  Sellers should be given the first chance to correct a problem and satisfy their buyers’ concerns.

Most sellers would prefer to resolve the issue without legal proceedings and most purchase contracts provide the means for settling disputes through mediation and arbitration.

Your REALTOR® will want to help correct problems and soften this potential for dispute.  The best approach is to let your REALTOR® guide you and it is always possible that you will need legal advice from an attorney who understands real estate matters.

 

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.

 

 

 

REALTORS® want to resolve consumer problems — Here is how.

REALTORS® OUTLOOK

By Kay Wilson-Bolton

March 7, 2006 –

This column is for homeowners and homebuyers who may be unhappy with the behaviors or business practices real estate agents or REALTORS®.

We want the public know that REALTORS® want to help make things right for our members and our clients.

The members of the Ventura County Coastal Association of REALTORS® take seriously our duties to safeguard the Ethics we have agreed to uphold. Sometimes we need reminders and sometime the public needs to understand their role in a misunderstanding or a problem.

We all agree that most problems are resolved with better communication. A heart-to-heart with your agent should take place first. If that doesn’t work, then a similar meeting should be held with the broker or the manager. Most problems are solved at that level.

If a resolution is not reached, call the Association office and you will be given some options.

The Ombudsman Committee is available to talk through the problem. Chaired by Faith Cosby, this experienced group of REALTORS® knows how to get at the heart of the problem quickly.

If you choose to not take advantage of focused dialogue, you have the right to file an official complaint.

The complaint will be reviewed by the Grievance Committee, chaired by Judy Ohaco. She leads a group of seasoned REALTORS® who determine whether or not the problem should be referred to the Professional Standards Committee.

That committee is chaired by Jim Keith, and the members conduct hearings where both sides have a chance to tell their story. Attorneys and witnesses are welcome. It’s a serious time for everyone involved.

REALTORS® want you to know your remedies if one of us acts in an unprofessional manner.  If we don’t assist in resolving problems, we know they will be a topic of discussion in an unwanted forum such as the doctor’s office, the grocery store, the neighborhood fence, at church or in the courts.

Simply call our Association Office and ask for Executive Director, Randy McCaslin, or Pamela Ward.  The phone number is 981.2100.

If you need Spanish speaking assistance, it will be provided.

We are not the police of good manners, but we are the guardians of our industry. If we fail to remember the privilege we have to serve you, we need to be held accountable. We are willing. Peers helping peers is a good way to grow a community of pros.

Before you hire an agent, be sure to ask if they have REALTOR® status. Otherwise, our forum for Ombudsman, Grievance and Professional Standards is not available to you. Your only option is to contact the Department of Real Estate. Their website is http://www.dre.ca.gov.

 

Kay Wilson-Bolton is a member of the Ombudsman Committee for the Ventura County Coastal Association of REALTORS®. The Association phone number is 805.981.2100.

 

 

 

 

 

 

 

What House Should I Buy?

REALTORS® OUTLOOK

By Kay Wilson-Bolton

May 5, 2006

Buyers and sellers face similar challenges in the housing market. “Choosing the right home to buy” can be as challenging as “choosing the right home for comparisons” when establishing a price.

Some would disagree that a two-bedroom home with a family room and 1500 sf, is not comparable to a three-bedroom home with 1450 sf.

In today’s culture with generally smaller families and the wide appeal of home offices, I would consider them to be at least competitive—if not comparable.

Finding a home to buy is rarely easy. I know a buyer who has seen 48 homes and has yet to make an offer on one.

It could well be that the home this buyer really wants does not exist for in today’s real estate market, smaller lots require smaller houses.

Recently, one buyer who’d been looking for months decided that she was ready to buy. She was intent on making one of several new listings work for her and her family. When she previewed a new listing in her favorite neighborhood, she was sure she’d found the home she was going to buy.

The listing showed beautifully. It had been nicely renovated. It has the right number of bedrooms and baths. There was a family room and a lovely yard.

Then she visited another new listing that she also liked. In fact, she liked the living space better. While this house didn’t have a remodeled kitchen and nice family room like the other house, it was bigger. The yard wasn’t as nice as the one at the first house and the school district wasn’t as good. But, the house worked better for her lifestyle.

To complicate matters, her husband preferred a listing that was larger than either of the other two and it was located in the better neighborhood. However, it was on a busy street and it needed a lot of work.

Compromise is a necessary part of the home buying process. The perfect house doesn’t exist, no matter what your price range. But before you give up on finding a home that has absolutely everything you want, re-examine your wish list carefully and then prioritize it.

The first section is for those “must have” features, or the non-negotiables, such as the number of bedrooms and baths.

The second section is for those features that you’d like to have, but that you can live without if necessary.

Lastly, list the items that you absolutely don’t want, like a home that’s up a lot of stairs or too close to a freeway.

It’s easy to get sidetracked when you’re looking at listings, particularly if they have been staged for sale. While it can be a good selling technique, staging can disguise defects. When a listing looks good, it tends to make buyers feel at home. This is an emotional feeling that can interfere somewhat with a rational home buying decision.
Lastly, it is sometimes it is good to limit the input from those who are not invested in the purchase.

 

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 340.5025.

What does “Contingent” Mean?

REALTOR® Outlook

Guest Column

May 26, 2006

As the more “normal” real estate market returns to reality, and interest rates makes it more challenging for buyers to purchase homes with 100% financing, the handling contingent sales becomes more important to sellers.

Multiple Listing Service rules vary from region to region.  In most local areas, once a seller accepts an offer, your home for all practical purposes “goes off the market”, and is no longer found on the public search engines.

REALTORS® know that there is a generally a 17-day period for buyers to complete their home inspections and obtain loan approval.  Once the buyer signs for the removal of those contingencies, we consider the house generally “sold”.

Until then, he home is subject to cancellation if the appraisal fails to meet the sales price, the buyer does not qualify for the loan, of there is no agreement between buyer and seller as to the handling of any repair issues.

There is lack of agreement among the real estate community as to whether or not homes with accepted offers should remain on the “contingent list” for buyers to find on public search engines, or if in reality, the home is sold for at least the 17-day period and should not be left on the active list.

In order to not lose a buyer, ask your REALTOR® to indicate in the comments section that back-up offers are welcome so that agents will continue to show a home with an accepted offer.

Buyers should also ask agents to search homes that are “sale pending” to see if something they like is still in the inspection mode.

Finding the home of your dreams on the “pending sale” list, can be disappointing, but making a back-up offer in case the escrow fails, will put the buyer in first position in the event it does fail.

We are seeing more failed escrows and longer days on the market.

There are ways to structure a contingent sale offer to make it more appealing to the sellers.

Some agents will use a release clause provision which allows a seller to accept another offer and provide for an arbitrary and generally short period of time for the buyer to remove the contingencies and move to the close of escrow as soon as the 17-day period passes.

In the event a more favorable offer is presented, buyers are given first chance to stay in the transaction by removing all contingencies and providing assurance of closing.  If they are unable to remove all contingencies, the new buyer can take first position, and the seller starts over again.

It doesn’t make a lot of sense for the offer to contain a release clause until after the 17-day period because the buyer is expected to pay for the appraisal and the home inspection, and it almost “isn’t fair” to cut that period of time short.  The schedule of the appraiser and inspector cannot be controlled by the buyer.

The REALTOR® community is not in agreement on how best to report sales, but sellers can be aware of these strategies.  Ask your real estate professional for guidance. Also be sure that your agent is a REALTOR®–sworn to uphold the ethics and standards of practice of the National Association of REALTORS®.

 

 

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

 

What Are Agents Required to Know?

REALTOR® Outlook

By Kay Wilson-Bolton

April 23, 2006

While REALTORS® are not experts, we are required to complete diligent visual inspections of properties to assist our buyers and sellers in providing good information and make good decisions.

There is a trend these days for REALTORS® to work outside their locales. This can complicate the life of everyone in a transaction when important information may not be readily apparent to the buyer and the buyer’s agent.

REALTORS® working in their areas of familiarity are required to know about traditions, trends and some history, particularly when it comes to potential for flooding, settling and slippage, property uses and zone changes.

When a real estate licensee joins a local Board or Association of REALTORS®, he or she agrees to conform his or her conduct to the National Association of REALTORS® Code of Ethics.

The Code of Ethics is comprised of a Preamble and 17 Articles, with corresponding Standards of Practice that support and interpret each Article.  Case Interpretations provided by NAR demonstrate the application of the Articles to particular fact situations.

There are often questions asked about how detailed REALTORS® are to be when completing their inspections. Practices vary from office to office, but the Civil Code is clear. The method of obtaining it and delivering it is not.

Article 2 – Discovery and Disclosure; Standard of Practice 2-1 states as follows:

“REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority.  Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines.”

A REALTOR® is only required to make reasonable inquiry and is not obligated to discover those things that require professional expertise outside the field of real estate.

However, in the exercise of their fiduciary duty to their clients, agents are required to assist their clients in discovery and to share important data, known as  “common knowledge”, particularly to clients from outside the area.  We are also held accountable for what we should know.

REALTORS® want their clients to know as much as possible and most will do what they can to be good providers of information. However, there is no substitute for your own research as well.

If you have any questions as to ethics guidelines, you can visit the www.realtor.org website and learn about them.

 

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.

The Early Stages of Denial

REALTOR® OUTLOOK

By Kay Wilson-Bolton

August 15, 2006 –

We all know what trouble looks and feels like. Money goes out faster than it comes in. The day the house payment comes due arrives faster each month. The payment dates seem to come closer together each month and the payment is expected to rise again soon.

When these factors conjoin, you must admit that trouble is on the horizon. Ventura County homeowners are beginning to see the impact of high prices, low start rates for mortgage loans and no down payment financing.

Last week, a customer called to report that she was a few days away from foreclosure on a $45,000 loan and needed help. We found a lender who would make her a short term loan, and put her in touch with an attorney to help evaluate her situation complicated by her husband’s recent death.

It was too late. The sale took place, even while help was on the way. The foreclosing private lender, for A $45,000 loan, ended up with a home worth $650,000 with a first trust deed of only $160,000 with a major lender.

Homeowners who sense that trouble may be imminent can get help from their lenders if they act responsibly and quickly.

Homes can be sold if there is equity available. If not, homes can still be sold if everyone works with the lender to help prevent a foreclosure.

Without sufficient equity to pay off closing costs and the mortgage, lenders will work with borrowers on what is called a “short pay off” in cases of hardship, as long as the borrower cooperates with the lender and starts early to do their part.

If you see trouble ahead, contact a REALTOR® who has experience in dealing with banks and who understands today’s real estate market. They can guide you through the process of avoiding a foreclosure.  It is a process, and there are dos and don’ts. Interview your next REALTOR® and ask lots of questions.

Don’t wait till the last minute to take action. Head it off by making the right moves. Home ownership in the long haul is always best. While contrasting market conditions can complicate that statement, banks and lenders don’t want your home. They want you to stay in it and make the payments on time.

 

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

DON’T OVERSTATE THE SIZE OR UNDERSTATE THE AGE

REALTOR® Outlook

By Kay Wilson-Bolton

January 15, 2006

 

With an aging housing stock in Ventura County, and in previous days when record keeping was not as precise as it is today, it is not unusual to discover that ages and sizes of homes vary from the common understanding of owners.

It is difficult to know for sure if a 1350 sq home with four bedrooms was built that way unless a good paper trail exists in government agencies.

Appraisers cannot add value to a finished attic room and treat it as a third bedroom unless it has a closet and the work was permitted.

Most multiple listing services have an “auto fill” feature that reflects the year built and the square footage of the home as of the date of construction. Rooms built with permits might be included in the stated square footage, but not always.

Home inspectors estimate the approximate time a home was built and are often able to determine within a year or two the precise date of construction.

However, the accuracy of such assessments depends largely upon the evidence. Manufacture dates on plumbing and mechanical fixtures often provide reliable clues, but these indicators may or may not be present in a given dwelling.

For example, if a home still has an original toilet, the date of its manufacture is likely to be found on the inner wall of the tank or on the underside of the tank lid. If these older toilets have been replaced with newer models, for the sake of water conservation, then the evidence is lost.

In older homes, dates can also be found on the under-surfaces of some bathroom sinks. And in later model homes, usually those built after World War II, there are also manufacture dates on the fuel connectors to gas-burning appliances.

Local building departments are good sources for records. In some jurisdictions, one should call for an appointment to review a file. Their records may indicate the date of construction as well as the local tax assessor’s office.

Sometimes their documents indicate when a property began to be taxed as improved real estate. If these avenues lead to dead ends, see the reference librarian at the local library. There may be some useful public records, such as old aerial photos of the neighborhood. If you can find photos taken just before and just after the house was constructed, you can piece together additional clues.

As time goes on, hearsay from owner to owner can alter the true representation of size and age. REALTORS® must be very careful about changing the auto-fill information from the tax records as it could be considered negligent representation. It is common for owners to insist that the information be changed in order to put the home in a more favorable light. Educate the client and consider the consequences.

Changes should be made only if the new information has been verified, and that is generally through an appraisal or construction drawings of additions reflecting the old and the new square footages.

 

Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista with four offices serving West Ventura County. She can be reached at 805.340.5025.

The Reasons to Own a Home

REALTOR® Outlook

By Kay Wilson-Bolton

July 6, 2006

County-wide real estate brokers are reporting slower home sales this year. After years of record-breaking levels of home sales activity, the market is poised for a slowdown. With this in mind, it is tempting to wait until “things settle down” before buying a home.

Real estate sales activity is cyclical. When buyer demand is high, interest rates are low and the supply of homes for sale is low, home prices tend to rise. In this sort of market, buyers are eager to buy. The problem is finding a place to buy when demand outpaces supply, and it probably won’t be along the Coast of Ventura County.

When home sales slow down, the supply of homes for sale tends to rise and, this can lead to a softening in home prices.

The concern today is that home prices have risen significantly in many areas over the past five years. During the same period of time, interest rates dropped to multi-decade lows. Recently, rates began to rise. What happens to the real estate market if interest rates continue to climb?

The answer to that depends on the economic situation in ou locale.

As the national economy picks up, interest rates will rise, hiring will hopefully improve and, if so, household incomes should grow. Unless interest rates rise rapidly, increasing incomes should make up for the decrease in housing affordability.

However, if the local economy lags behind the national economic recovery, we could be faced with higher interest rates, which mean higher housing costs except for decreased prices, at the same time that the average local income is static or declining. In this situation, home prices could drop, particularly if there’s a glut of inventory on the market.

To ensure that you don’t over-pay at a precarious time in the housing cycle, take stock of the local housing market and economy, as well as your personal financial situation. Your local REALTOR® real estate can provide you with valuable information about your housing market.

Be sure and talk tomore than one lender who can help you work through a purchasing program when you can qualify for a better loan by asking the seller to pay some of your closing costs which in today’s market place, equates to a price reduction.

How long is it taking homes to sell? Is this more or less time than it took homes to sell a year ago? How long would it take to sell off the entire inventory?

Our local economy is good. The balance of jobs to housing is good. Taking stock of that along with your personal financial situation will help with that decision.

There’s no harm buying at the high point in a market cycle as long as you’re not forced to sell when the market is down. If you have any concerns about the stability of your employment, this may not be a good time to buy.

Timing markets is difficult. Some people wait to buy until all the conditions are right, which you may not know until after the fact. You could miss opportunities if you wait too long.

The right time to buy is when you have financial security; you can afford to buy; you find the right house; and you know that you won’t have to move again for 5 to 10 years.

The Local Housing Market:  Is it good or is it bad?

REALTOR® Outlook

By Kay Wilson-Bolton

September 12, 2006

Very few people have said that buying a home was a good short-term investment. In fact, it has been proven for decades that it is the best long-term investment.

That has been demonstrated by those who participated in “equity flight” in the last few years and took their huge equities to states where mansions could be purchased for comparatively small amounts of dollars.

Newspaper articles can be confusing if the writer does not have a regional perspective on the housing market and can temper it with an understanding the local market.

It’s important to read the whole article and not swallow the headline as absolute.

There are two factors to keep in mind when evaluating news reports on current market conditions. One is that you need to evaluate what’s happening now in relationship to what came before. We’ve recently experienced several of the best years for home sales on record.

If the market were to continue to escalate, we’d have a serious problem.

Even with the current adjustment, we still have affordability issues. If home prices were to continue to rise unchecked, first-time buyers would eventually be shut out of the market. With no entry-level buyers, the move-up market would grind to a halt. Rather than a curse, the slow-down in the housing market is a blessing and we have to agree to view it as such.

The other factor to keep in mind when you’re trying to make sense of changes in home prices is that, in most cases, the changes quoted in the press are changes in the median price of homes sold during a given period of time. The median is the market price for a given time period where half of the homes sold for more and half sold for less.

Changes in median price from one period to the next do not necessarily reflect changes in absolute home values. When the median price rises, it means that the number of more expensive homes sold during that period increased. Likewise, when the median price of homes sold declines, this means that the volume of lower priced homes sold increased relative to the number of more expensive properties.

Home ownership is the best way to plan for retirement. Delaying a purchase and continuing to rent helps the landlord pay off his or her mortgage and keeps the new buyer from enjoying the tax deduction for mortgage interest. Yes, the new buyer might have to curtail some entertainment activities and forego that vacation, but little beats home ownership.

Before drawing conclusions about the strength of the home sale market in your area, you need to collect data at your local level. Regional, statewide and national statistics can be misleading. A REALTOR® can help you and that’s what we do.

 

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