It has only been four long years but it seems like the light rail construction has been going on forever. Here is a picture from early march 2012 . . it was actually warm enough to go outside that day too. I can’t wait to ride the new green line this June.
E. 4th street, downtown St. Paul at the union depot
It is Friday and Fridays are for fun. So much in life is about being in the right place at the right time and having a camera or camera phone handy.
Fish out of water
I don’t know where the fish was going or why it was at last weekends crashed ice downhill racing event but I was there to take a picture. It didn’t really happen if no one took a picture of it and posted that picture on the internet.
I wonder what they were using for bait?
Local Market Conditions & home prices
There were about the same number of homes on the market in January of 2013 as there were in January of 2014 but as you can see this year the number of homes for sale translates into a 3.4 month supply where as last year it was a 4.3% supply. Demand for homes is up this year.
We still have home owners who want to sell, but who do not have enough equity. Some sellers who did not have enough equity last year will have enough this year because they will have made mortgage payments and because home values have gone up some.
People who plan to buy a home this year will need to be ready to compete for that perfect home. Bargians will be harder to find as demand remains strong and supply remains weak.
Remember that real estate is local, and these numbers are for St. Paul, Minnesota. Numbers across the Twin Cities metro area are similar, but the numbers in outstate Minnesota and in other states may be different.
First Time Home Buyers
I write some version of this every year in the late winter because this is when people start getting serious about buying a home. Sometimes home buyers end up in open houses or in a model home talking with an agent who represents the seller and who has a duty to the seller and a contractual obligation and is the sellers agent.
There are five kinds of agency relationships in real estate recognized by the state of Minnesota:
- Seller’s Agent: representing and acting for the seller only. May be a listing agent, or any REALTOR® licensed to the listing broker, or a selling subagent.
- Subagent: a broker or salesperson who is working with a buyer, but represents the seller.
- Buyer’s Agent: representing and acting for the buyer only. As with a listing contract with sellers, an agreement for buyer representation must be in writing.
- Dual Agent: one licensee representing both the seller and the buyer as clients in one transaction, or two agents licensed to the same broker, one of whom represents the seller and one of whom represents the buyer in one transaction. This requires full disclosure and informed consent of both parties. Dual agents have a limited role, must not advocate or negotiate for either party, and must not act to the detriment of either party.
- Facilitator: a real estate licensee who works for a buyer, a seller or both in a transaction but does not represent either in a fiduciary capacity as a Buyer’s Broker, Seller’s Broker or Dual Agent. Facilitators may perform services for consumers, but do not represent them. Facilitators are bound by license law and common law, but owe only the fiduciary duty of confidentiality unless other fiduciary duties are agreed to between licensee and consumer.
Buyers and sellers both like to ask me if I am a buyers agent, or a sellers agent. Some of these conversations have revealed some mis-information about dual agency. Dual agency happens only when an agent, or the agents broker, or more than one of the brokers agents are working on behalf of that broker and representing both parties in the same transaction.
I am both a buyers agent and a sellers agent. I encounter situations where I am asked to play both roles in a single transaction. I have represented both parties in a transaction, but I prefer not to. Dual agency is a bit different in than buyers agency or sellers agency in that the agent can not advocate or negotiate for either party. Takes the fun out of it for me, and I still believe that both parties are better off if they each have their own agent.
What most buyers and sellers do not understand is that if there are two agents and one is working with the seller and the other the buyer but those agents have the same broker it is still dual agency. For example lets say Sally’s house is listed with Sam from XYZ realty and John is working with Jean as his buyers agent and Jean is also with XYZ Realty. If these agents have the same broker even if they are in different offices they are dual agents in this transaction and can not advocate for either party.
If I were choosing an agent I would not consider it an advantage to work with an agent that is not representing both parties in the transaction. I would consider it an advantage to have my own agent representing my best interests instead of an agent who is operating in the dual agency role and representing both parties. Like it says above:
“Dual agents have a limited role, must not advocate or negotiate for either party, and must not act to the detriment of either party.”
Buyers who go from open house to open house or the agent listed on each sign, to see each home, run the risk of working with an agent in a dual role. Get your own agent. There is still a myth out there that agents can only show their own listings. We can show any home listed in the MLS, this is called “broker reciprocity“. It helps sellers because all agents are working to sell their home and it helps buyers because they can work with any agent from any company to buy any piece of real estate.
Agency and the open house
First Time Home Buyers
Most real estate agents are independent contractors. That means we are self employed. Most of us work on a 100% commission basis, and we only get paid if we sell a house and then only if the sale closes. Sometimes we work with a buyer or seller and never get paid a dime.
Working for a commission is not the same as working on a time and materials basis. There are no billable hours. Most people with traditional jobs get paid for the time they put in instead of just being paid for a certain outcome. There risk involved in working on a 100% commission.
There are some who believe real estate agents are overpaid. Real estate commissions are negotiable. Contrary to popular belief there is no “standard” commission. We get paid for our experience, and a good agent can save a home buyer or seller thousands of dollars.
Here is some factual information about how much Realtors and real estate agents actually make:
According to the 2013 NAR membership profile Median gross income of Realtors® 43,000 in 2012 up from 34,900 in 2011
Realtors with 16 or more years experience had a median gross of 57,300. Realtors with 2 or less years had a median gross of 9,700 and according to Salary.com the median expected income for a US real estate agent is $38,027.
For Home buyers
I am amazed at how often people who are under contract with a real estate agent ask me for advice or for a second opinion. I won’t second guess how another agent handles a situation because I don’t have the whole story and even if I did it would be just wrong. I find the questions I get interesting, and I learn from them but I generally can not give free advice on how to handle a specific situation.
Sometimes people who are buying or selling homes believe they can save money if they are not represented by a real estate agent. When they have a question they ask me. I think they understand that I am an agent, but they ask me questions even though they don’t need an agent which confuses me. Why don’t they ask someone who isn’t a real estate agent?
There is often more than one way to handle a situation and there are other situations and problems that have only one solution because of all of the laws and regulations there are about how real property is bought and sold in Minnesota.
Some of the questions I get have to do with common business practices and etiquette. Most people only buy a couple of homes during their life time and so they can not be expected to know how to get into see a house or even how to make an offer on one.
There is a web site where people can get free advice from real estate agents just like me, but not from me because I won’t give free advice to people that I do not know who ask for advice publicly on web sites. [Trulia.com] There are however a lot of agents who will give free advice in writing for specific situations.
I write and give some free advice on this blog, but that isn’t the same as giving advice on handle a specific situation directly to people who don’t want to work with a real estate agent or who are looking for a second opinion because they are working with the wrong agent or because they want a second opinion because they are working with the right agent, but do not trust his or her judgement.