Social media do’s and don’ts for home buyers

Victorian homes
turrets – Dayton’s Bluff

Social media has been around awhile and there are people who use it to ask their friends for advice on every subject including how to buy a house.

This is going to come as a shock to many out there but your friends don’t have the answers. Maybe they bought one house once. They have an experience which isn’t the same as experience and their advice isn’t going to help.

There are a lot of real estate agents on social media and they will also offer advice. So will people who have opinions on how to buy a house but no experience or experience from 20 years ago.

Sometimes home buyers post about the process step by step on Facebook. They want to keep their Facebook friends in the loop.

One of the first things I do when I get an offer on one of my listings is I look for the buyer on Facebook, Linked-in, Twitter, and Instagram.

First I am looking to verify their identity and I am looking for insight into how important the purchase is to them. Are they struggling to afford it? Do they love it so much that they will pay full price or more? I gather any and all information I think may help me advise my clients and negotiate the very best terms for them.

The only “do” I can think of is to limit who sees your posts on social media. If you must share with “friends” make sure they are people that you actually know and are friends.

I once walked away from the opportunity to work with a home buyer because she shared every little detail on Facebook and I didn’t want my name or reputation dragged into the drama. Everything in her life has been a huge struggle. The drama continued after the home purchase as there were numerous problems with the house.

There are no secrets on social media or on the internet for that matter.

Also, see:

Use social media with care

Contingent offer, what could go wrong?

There are all sorts of contingencies that can be put on an offer to buy real estate. The two most common are inspection contingencies and contingent on financing.

Buyers can also make an offer contingent on the sale of their home. It happens all the time but those contingencies get complicated.  Usually offers that are contingent on the sale of real estate can be bumped by non-contingent offers from other buyers.

Here are a few things that can and do go wrong:

  1. A non-contingent offer comes along and the seller accepts it and the contingent buyer’s offer gets canceled because they do not get an offer on their home fast enough.
  2. The contingent offer isn’t accepted because there are several other offers that are non-contingent.
  3. The seller asks that the contingency is removed within 48 hours because they can and they got cold feet and you all agreed to the 48 hours.
  4. The buyer gets an offer on their property but it is a contingent offer, which means it can not be used to remove the sale contingency.
  5. The buyer gets an offer but the financing on that offer falls through and offerer is unable to perform.

Sometimes there is a chain of 3 or more home sales that depend upon that first home sale in the chain closing.

When selling your home is contingent on the sale of someone else’s home it will cause a lot of extra stress if your purchase is also contingent on a sale.

I have been through chains of sales with multiple contingencies and they often work out. I have learned to go into these situations believing that everything will work out and I encourage my clients to do the same.

In a strong seller’s market is especially important for home sellers to have a plan and know where they are going to live after their home is sold.

All offers have to be presented

One of the issues we are running into in this seller’s market is that offers from buyers are not always being presented to the sellers . . or sometimes we are not sure they were presented or sometimes they are not presented right away.

If a buyer makes an offer, even after the seller has accepted an offer that offer must be presented to the seller unless the seller had waived this obligation in writing.

When I represent buyers I sometimes ask that the seller initial the offer as an indication that he or she has seen it. The initials also give me proof to offer the buyers.

As a rule, offers should be presented quickly but there is no hard and fast rule about how quickly. We use terms like “timely manner”. In some situations that “timely manner” can be several days or even a week.

“Timely manner” can also mean right now.  Some of our clients give the seller a 24 or 48-hour deadline. Giving a deadline can backfire too.

REALTORS are bound by a code of ethics which is an extra set of rules that dictate how we handle offers.

From the code of ethics:

  • Standard of Practice 1-7

When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. Upon the written request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide a written affirmation to the cooperating broker stating that the offer has been submitted to the seller/landlord, or a written notification that the seller/ landlord has waived the obligation to have the offer presented. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. (Amended 1/19)”

The code of ethics only applies to REALTORS® and there is a complaint process.   Anyone can file a complaint.

looking for a real estate bargain?

Almost everyone wants a bargain when they buy real estate. Most home buyers look for bargains in the wrong places. They choose that one house that is priced just right that everyone wants to buy. After the house gets multiple offers it won’t be a bargain.

The bargain is the overpriced house that has been on the market for a long time. Homeowners often believe that if they price their real estate high that they may not get the asking price but they will get more for their home.

Instead of making offers buyers avoid even looking at the overpriced house. Eventually, that house will sell and in most cases, the seller ends up accepting an offer that is less than the asking price. Sometimes that offer is significantly less than the asking price.

The bargains are the houses that have been on the market for 4 to 12 months. Buyers looking for opportunities should look for overpriced vacant houses that have been on the market for several months. There is little competition because most buyers won’t make an offer.

Right now there are about 80 homes on the market in St. Paul that have been on the market for 90 days or more that do not have an offer on them. These houses can be found in all St. Paul neighborhoods and the listed prices are between 75K and 560K.

If you would like to learn more about these opportunities you know how to contact me.

Cold weather tips for home sellers and buyers

icicles

Winter is upon us with no end in sight. As soon as it stops snowing or we get a little warm-up the home buyers will be out looking again.

Here are some winter tips for home sellers:

1.  Leave some lights on so we can open the lockbox and unlock the door.

2.  Remove the snow and ice from the walkway.  Clearing the sidewalk makes it less likely that someone seeing your home will fall on their a$$ and sue yours off.

3.  Place a walk-off mat near the front door that is big enough for four pair of shoes.  This small act of kindness will keep my feet dry because I won’t end up standing in a puddle made by my clients and it will keep your floor dry and your home cleaner.

4.  If your home is vacant please have it winterized, that means that you have the water turned off.

5.  Light in a home is a good thing, especially in the winter.  You want to make it look warm and inviting.   If you normally live like cave people with every blind drawn and every shade pulled consider making some changes so that your home will sell quicker and so you will get more money for it.

6.  If your home is occupied and you have a bunch of burglar alarms and maybe some barbed wire and a guard dog consider easing up on the red alert status.  (this has nothing to do with the weather . . I was on a roll)

Here are some tips for home buyers:

1.  Wear shoes or boots that are easy to slip on and off.

2.  Go to the restroom before you begin house hunting.  Homes that are winterized have no running water.

3.  If you are interested in a home that you saw in the dark please schedule an appointment to see it when it is light out before you make an offer.

4.  Most agents carry a flashlight but it is a great idea to bring your own.

How much did the current owner pay?

There is no relationship between the value of a house today and what the current owners paid for it. Home buyers like to find out how much the sellers paid for the home. Some want to use that information as the basis for an offer.

craftsman style dining room
Dining room with built-ins

It is interesting information but there is no relationship between what the current owner paid for a house and the current value of that house. Sometimes it is good to know that the seller paid more than you want to offer. Some sellers can not afford to accept an offer that won’t pay off their mortgage.

When someone purchases a home and uses financing the lender who is providing the financing has the property appraised. The appraiser looks at how much similar properties in the area have sold for in the last year or so. The subject property is compared with comparable properties and adjustments are made.

If the home buyer offers more money than the appraised value the buyer may have to bring more cash to the closing. Sometimes the buyer and seller renegotiate the sale price. Sometimes the buyer decides not to proceed. What happens when a property does not appraise for the amount offered depends upon how the purchase agreement is written and on what kind of financing is being used.

Minnesota appraisers have training and licenses.

Low appraisals happen. Pricing a property correctly is important. Even in today’s market, we are seeing houses that do not appraise for as much as they are listed for or as much as the buyer offers. It is possible to get multiple offers for more than the appraised value of a home for sale.