Real estate teams are not always what you think they are

There are teams in sports. On a baseball team, everyone has a position and each player is responsible for playing his position to help the team win.

In business, the word “team” is used to refer to a group of people who work for the same company, department or office. We like to use sports analogies in business because they are easier for men to understand.

A team is a group of people who work together to achieve a common goal.

In real estate the point of a team is so that team members can get “leads” and so that the team leader can make more money. The leader gets some of the agent’s commissions. For new agents, teams can be a great way to get some hands-on experience and training but to be honest that is what a broker is supposed to provide.

Sometimes the clients of real estate teams get this mental picture of several people working on selling their home or finding them a new one but it almost never works that way. One agent works on selling the house while the others work with other clients or on lead capture.

If I call a team and ask about a home for sale usually no one but the actual listing agent knows anything about the home. In fact, it seems like they don’t even talk to each other. They don’t actually help each other when problems arise and they do not tap into each others expertise. Homes do not sell faster because they are listed by a real estate team.

Some teams do work together. There are a couple of smaller teams where each person on the team knows what is going on. I can call one team member and ask another team members listing or offer. Often these teams are families or couples who work together.

Teams are popular among agents because they are a great way for experienced agents to make more money and a way for inexperienced agents to get some experience.

Large teams operate like a company within a company. Some team leaders end up starting their own real estate company, other teams act and operate like a separate company, within a company.

It gets complicated. In the end, working with a team may not help you achieve your goals.  Sometimes working with a team means that after the team lists your house the only person you will talk to is an assistant because the lead agent who sells the real estate spends his/her time getting new business.

Go, team!

Looking for homes to buy

Right now I have at least a half dozen home buyers who are pre-approved for a loan and well qualified to buy a home. There are so few houses on the market it is hard to find that perfect home for that wonderful home buyers.

Yesterday I started looking through some of the homes that were on the market last year but did not sell and were taken off the market. There are one or two homes that could work for my clients and I’ll be contacting those homeowners today to see if they still want to sell.

If you had your home on the market last year and it did not sell and if you still want to sell it now might be a good time to try it again. I found a couple of homes that were priced too high last fall but prices continue to go up.

A few of the homes that did not sell looked dark and dingy due to poor interior photographs. That is an easy problem to solve.

There are also several homes that had offers on them but it looks like buyer and seller were unable to agree on terms after the inspection. Getting through the inspection phase can be challenging but most of the time we can come to an agreement that works for both parties.

If you would like a free no obligation consultation about what it would take to sell your home please contact me.

Restored homes – Little Bohemia neighborhood

Make a great offer

My mother’s Antique Teapot

These days multiple offers on houses that are for sale are fairly common. When choosing an offer it isn’t just about the amount of money being offered. Here are a few things that matter to sellers when they evaluate offers:

  1. The total dollar amount of offer.
  2. Down payment percentage. The greater the down payment the better but that doesn’t mean buyers need a huge down payment to buy a house. It just means that if all things are equal an offer with a 10% down payment is better than an offer with a 5% down payment.
  3. Closing date. Usually, closing dates can be negotiated but buyers should ask their agent to find out what the sellers have in mind for a closing date.
  4. Length of the inspection period. A shorter inspection period is better than a longer one.
  5. Earnest money matters, it shows that the buyer has money and it also shows the strength of the buyer’s commitment to buy the home.
  6. An offer written by a real estate agent with a good reputation. An agent’s reputation is based on how she works with her clients and with other agents. The agent with the most sales isn’t necessarily the agent with the best reputation.
  7. Offers that are not contingent upon the sale of another property are better than contingent offers.
  8. Asking the seller to pay the buyers closing costs weakens the offer.

These days speed is important. When the right house comes on the market buyers need to drop what they are doing, see the property and make an offer. Unfortunately, those who wait for the weekend or for an open house end up missing out.

Pro buyer tip: If you are at an open house and you think you want to make an offer on the house act as disinterested as possible around other open house attendees and be very careful about what you say in front of the real estate agent who is hosting the open house because he/she is representing the seller and anything you say can be held against you and it can weaken your negotiating power.

It is also important to have that pre-approval letter from a lender ready before looking at houses. If there are multiple offers the seller isn’t going to wait for a pre-approval letter and an offer isn’t any good without one.

Happy house hunting and may the odds be forever in your favor.

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Cameras are everywhere

I was touring a home with some buyers when I noticed a camera on one of the bookshelves. The camera was plugged in but I am familiar with the particular model and I don’t think anyone was watching us or recording because the little green light wasn’t blinking.

These cameras are popular as baby monitors and can be set up as motion detectors that will send an email to the owners who can activate an app on their tablet or smartphone or use a computer to get the same view the camera is getting.

In other words, a homeowner could be away and watching people inside their home. The cameras can see and hear, zoom in or out and pan the room.

I originally posted this in early 2014. I have found cameras in homes several times since then. Sometimes it is best for buyers to wait until they are outside the house to talk about it.

There isn’t any rule that I know of that says a homeowner can not have a camera recording in their home.  It isn’t easy letting strangers in and for some a camera makes them feel more secure.



Yes you can say no to dual agency

Marcie – Reading all about agency in real estate

This is a kind of public service message I write at the beginning of every year when the home buyers come out of hibernation and get serious about looking at some real estate.

Here are some basics:  If you list your house with a real estate agent and that agent brings in an offer from a buyer that she is representing you now have dual agency which means that agent cannot represent the buyer or the seller but instead becomes a facilitator. The agent facilitates the sale and can not do anything to the advantage of one party and the detriment of another. No matter what the seller or the buyer have signed with that agent previously they are not in a dual agency situation until both parties agree to dual agency by checking the box on line 229 on page 6 of the purchase agreement and signing lines 234 and 244.

What most home sellers and buyers do not understand is the way the word broker is used in the disclosure. If an agent from real estate company A lists a home and another agent from real estate company A brings in the buyer there is dual agency because they have the same broker.  All agents work under a broker and most people have no idea what a broker does or who that person is.

There are a couple of large real estate companies in the area that has one broker for a few thousand agents. When they list your home they will tell you all about the networking and how they will market your home to other agents. What they don’t tell you is that if one of those agents brings in a buyer those agents go from being able to advocate for their clients to being facilitators.

The rules are broken often as agents from two offices of the same real estate company under the same broker both advocate for their clients.

Home buyers need to be aware when they go into an open house or new construction the nice agent who is showing them around is representing the seller and anything they say can be to their detriment later on. Buyers should choose an agent to work with who will work for them as an advocate and not just a facilitator.

I am just writing about Minnesota. Real estate is locally regulated and the law may be different in your state.

Related articles about dual agency Agency and dual agencyAgency in real estateAgency and the open houseAgency? What is agency?What consumers should know about agency

There are closing costs too

calculatorFirst time home buyers are often surprised when they find out about closing costs. Those pesky fees are in addition to the down payment. Lenders will provide detailed information about what those costs are but here are a few examples:

1. Loan origination fee

2. Appraisal fee

3. Pre-paid homeowners insurance.

4. Property taxes prorated from the day of closing and for the rest of the year.

5. Mortgage registration tax

6. Pre-paid interest and taxes (prorated from the day of closing)

Typical closing costs in Minnesota are about 3% of the purchase price which is usually not the same as the loan amount. In addition to closing costs, most home buyers will make a down payment. The down payment can be as little as 3%. There isn’t any truth to the rumor that home buyers need to put 10 to 20% down to buy a home. There are some down payment assistance programs too.

Home buyers often ask sellers to pay their closing costs. Typically that means that the buyer borrows 3% more and those funds are applied to closing costs. I encourage buyers to do the math and understand that the closing costs come off of the seller’s bottom line. I encourage sellers to pay attention to the bottom line and I let them know that paying the buyer’s closing costs is common and often necessary.

To estimate closing costs the lender needs to know what day the closing will be held on and will have an exact figure available to the borrower 3 days before the closing. The lender will provide a good faith estimate shortly after the loan amount is known.  Closing costs should never be a surprise.

Closing costs are generally lower in Minnesota than they are in other parts of the country.