What’s Your IBuyer Experience?

WHERE DOES IT HURT?

Let me start off by saying, yes, IBuyers satisfy a need in the home selling market. That’s kind of obvious since their success and expansion in many markets throughout the country is testimony for their business model.

So what is that need? There are home sellers that just don’t want to deal with what goes into selling a home. They don’t want to deal with getting their home market ready by fixing this and repairing that. They don’t want to have to keep their home neat and tidy as it’s being shown to prospective buyers. They just want to snap their fingers and have their home sold. IBuyers can do that.

Just like any convenience in this “have to have it now” society, it comes with a price. If it hurts too much to bring your home up to market selling standard and to keep it clean for showings, than just pay the price, and that pain goes away. But…what is the price?

Now we’re getting somewhere. Where does it hurt more: in getting your home market ready and keeping it that way until it’s sold OR potentially, paying tens of thousands of dollars for that convenience? You get to choose and apparently, many home sellers are willing to pay that hefty price tag for the convenience of washing their hands free of their home in order to quickly move into another. And I’m good with that. To each his own.

WHAT THE SELLER DOESN’T KNOW

Do you really believe the IBuyer is willing to give you market value for your home? Of course they’re not willing to give you market value because they have to turn around and sell your home!
IBuyers are in business to make money. Yes, I understand there are always exceptions to the rule as there are times when an IBuyer actually comes relatively close to market value.

On the other hand, I have seen sellers get burned big time. I spoke to a seller who sold their home to an IBuyer and when I spoke to him on the phone he said, “I had no idea my house would sell for what IBuyer sold it for!”. What does that tell you? When IBuyer presented the seller with an offer for his home, the seller didn’t know what the market value was for his home at that time. IBuyer sold the home for $17,000 more than what IBuyer paid the seller for the home PLUS the seller had to pay more than the 5-6% commission a traditional agent would have charged.

Granted, I mentioned earlier that IBuyers are filling a market need. However, sellers need to be aware of the total fees they will have to pay the IBuyer in order to go through with the deal. Some IBuyers will advertise fees that they claim amount to less than what a seller would have to pay a traditional agent but when all is said and done, the seller ends up paying way more than what was advertised.

WHAT THE BUYER DOESN’T KNOW

IBuyers will do their own inspections on a home and quite often, they bring in a group of inspectors as a team: inside inspector, outside inspector, general home inspector, etc. Sometimes the current homeowner is present during those inspections and may offer insight into what works and what doesn’t around the home.

The IBuyer is represented by a licensed real estate agent who acts as the listing agent for the property when the IBuyer now turns around to sell the property. This listing agent has a duty per the NC General Statutes to “discover and disclose material facts” about the property. Should the listing agent be present at these inspections in order to satisfy his / her legal duty? Or, maybe it’s not feasible for the listing agent to be present at the inspections but should the agent at a minimum, be given a copy of all inspection reports and understand what his / her seller is going to repair or replace? These are important questions because listing agents and buyer’s agents work cooperatively during a real estate transaction and any information provided by the listing agent helps the buyer to determine whether they want to proceed with the transaction.

It’s been my experience that listing agents representing IBuyers never even visit the property prior to listing the home for sale and consequently, don’t have any information to relay to interested buyer’s agents and their respective client buyers.

Photo credit: satguru on Visualhunt.com / CC BY

Why Married Couples Make A Great Real Estate Agent!

MARRIED COUPLE = ONE

Did you catch that? I called a married couple a single agent. That’s because they are a union – a permanent bond with the strength and determination to succeed as a single entity.

A married couple offers many advantages over a single agent and even large real estate teams when it comes to real estate transaction efficiency and effectiveness.

Unlike a single agent, a married couple can be in two places at the same time. One spouse can be meeting the photographer at your current home while the other spouse is meeting the inspector at your new home.

Similarly, one spouse can be holding an open house at your current home while the other spouse is working hard prospecting for buyers for your home.

A married couple can get more done in less time.

THERE WHEN YOU NEED THEM

As a seller or buyer, situations arise when you inevitably need to talk to your realtor asap. With a married couple, you have two numbers to call. If you receive a busy signal for one spouse, just dial the other.

Even large real estate teams will have a designated individual (typically called a transaction coordinator) assigned to a buyer or seller to call. But again, it’s a single phone number. A married couple offers higher availability than a single agent.

WHO DID WE MEET WITH?

There are many real estate agents that have formed large teams that can consist of dozens of agents. A single agent’s name may be on their business card but behind that name are scores of agents working under that agent. The team may consist of specialized listing agents, buyers agents, transaction coordinators, administrators, and inside sales reps.

The listing agent’s job on the team is primarily to meet with sellers in an attempt to earn the seller’s business by listing their home. Once the listing agent gets the listing agreement signed, they’re on to the next seller. In fact, sellers may never speak with that listing agent again. Instead, the seller may be passed on to a transaction coordinator whom they have never and will never meet in person.

When married couples meet with sellers, the relationship that’s formed persists through the transaction and beyond. Married couples have “skin in the game” whereas members of large teams may earn a salary even if the transaction never closes.

HANDLE MULTIPLE PERSONALITIES

Are you familiar with the four personality types?

1. Analytical
2. Driver
3. Amiable
4. Expressive

I won’t take up the space here to describe them as I prefer not to steer too far off topic. However, if you’re interested, there’s plenty of info on the web.

Spouses with dissimilar personality styles are well-positioned to handle the multitude of personality types they’ll likely encounter during real estate transactions: buyers, sellers, and other agents.

The benefit comes in handy especially during negotiations, whether the negotiation is about price or when negotiating repair requests. Have you ever dealt with a driver personality type?

They tend to be demanding, have little patience, and get right to the point. A driver against an amiable in a negotiation can most definitely turn into a WIN / LOSE scenario. Please refer to my other post: Real Estate Negotiations: A Zero Sum Game?

On the other hand, if one spouse is also a driver, than a driver vs. a driver could more easily turn into a WIN / WIN scenario.

When looking to hire a real estate agent, you should seriously consider a married couple.
If you’d like more information or you’re interested in a no-obligation consultation, please don’t hesitate to call or email.

Photo by Sandy Millar on Unsplash

Real Estate Negotiations: A Zero Sum Game?

Real estate negotiations don’t need to be zero sum games – where one side’s gains equal the other side’s losses. In other words, negotiations don’t need to be win / lose or lose / win or lose / lose scenarios. The outcome should truly be win /win. ( Stephen R Covey’s fourth habit of highly effective people).

Add Value If It’s There

I’ve been involved in way too many negotiations in Durham County, Orange County, and Alamance County where I’ve had to stop and ask myself, “does the other realtor really want this deal to go through?”. In one such negotiation where I was representing the seller, the buyer’s agent flat-out told me their client had no interest in the detached studio in the back of the property. In fact, she said, her client will probably just use it as a spare room. As a result, the agent significantly downplayed the value of the building and consequently, offered a much lower price than the market value for the property.

Little did the buyer’s agent know, her client became a little too friendly with the neighbors during a second visit to the property and told them she and her husband were so excited to find this home as the detached studio in the backyard would allow the husband to continue his passionate pursuit of an old hobby that was placed on hold for a few years.

Many agents out there will give kudos to the buyer’s agent for not disclosing personal information about their client. I wholeheartedly agree. However, whether the buyer will make use of the detached building immediately or in the long term, or potentially never, there’s value in the building so let’s assign a dollar amount to it.

Agents Can Be Unreasonable

I’ve also come across negotiations where the seller on the other side was just so unreasonable. On one such occasion, I was representing an out-of-state buyer. After I formulated a detailed comparative market analysis, my numbers told us the seller was at least $30,000 overpriced. I freely shared my complete analysis with the agent in support of the accompanying offer and guess what? She refused to budge one dollar! I asked her if this all made sense to her and she was adamant in her belief she was going to fetch the asking price. Eventually, the home left the market unsold (aka expired).

Buyers, of course, can be unreasonable too. I’ve had buyers fishing for the deal of the century! They’d make lowball offers on multiple properties, including one of ours, in an attempt to pit the sellers against each other. There are measures a seller can take to counteract such behavior and if you’re interested, please feel free to reach out to me.

It’s All Wrong, But We’ll Take It!

I’ve also had a buyer’s agent, during the negotiation, tell me everything that was wrong with my listing: no garage, no bathtub in the owner’s suite, and too small of a kitchen. The only response I could think of at the time was, “I think you put an offer on the wrong home”.

Hot Market Is Not Win / Lose

Let me just clarify something here. Just because there’s a “feeding frenzy” in certain hot market neighborhoods where multiple offers come in at above list price, that does not necessarily mean the chosen buyer loses and the seller wins. It’s still a win /win since this is an example of market dynamics at work. If the buyer wants to “win” the property in this market, he’s going to have to bring the highest and best offer.

Other Agent Not Ready To Play

What happens way too many times than I care to admit, is the agent on the other side of the negotiation doesn’t actually know if the listing price is too high or too low. Truly, I’m ok with that – at least they’re honest and willing to learn. Either they ask me for my comparative market analysis or I will fully explain why the house is priced the way it is. Once we are all on the same sheet of music, the rest of the negotiation runs smoothly.

Here’s the bottom line, let the facts speak for themselves, let’s play honestly and fairly together, so we can mutually bring the buyer and seller towards the end goal of allowing them to move on to their next home: all in the spirit of a win / win outcome.

Photo by Michał Parzuchowski on Unsplash

Is That House In Orange County Or Durham County?

It’s a question I expect to hear from buyers and their agents as they tour homes we’ve listed in subdivisions that are divided: some streets are in Durham County while other sections of the neighborhood are in Orange County. All too often, when the answer is Durham County, it becomes a deal breaker for a buyer. It’s practically a knee-jerk reaction: “we don’t want Durham County Schools, we want Orange County Schools”.

Durham Public School’s reputation has been dismal at best over the years. Even as Durham continues to add scores of new residents daily, these newcomers have habitually avoided Durham Schools in favor of charter schools or private schools. In fact, over the last eight years, charter schools have experienced a 110% increase in enrollment while public school enrollment had gone up just 3%. A full 30% of Durham County school-aged children don’t even attend Durham Public Schools.

However, with last month’s release of North Carolina’s school test scores, there’s a subtle, almost silent transformation taking place within the Durham Public School System. Compared to last year’s scores, the number of F-graded schools in Durham County has dropped from six to one and the number of B-graded schools have risen from eight to 11.

One school in particular, Lakewood Elementary, jumped two letter grades from an F to a C! Kudos to Principal James Hopkins, the teachers, and of course, the students. The big question is, “how did they do it?”. At the helm of this transformation is Durham Public Schools Superintendent Pascal Mubenga. This past January, he laid out a strategic 5-year plan that fosters a strong partnership between Durham schools, parents, teachers, and an unwavering commitment from the business community.

Every school will have an official community partner. In Lakewood’s case, they have three: Duke University, YMCA, and KBI Biopharma. Every day, Duke students volunteer as tutors at Lakewood.

On a similar note, the DPS Foundation was formed a year ago specifically to foster community support and investment in Durham Public Schools. About 25 businesses have helped fund school projects and there’s about $120,000 in grants planned for next year. Additionally, the Foundation provides an online forum for parents to request meetings with city officials to discuss enrolling in Durham Public Schools.

Is the plan working? Well, a couple of weeks into the school year, Durham Public Schools has an enrollment of 32,993. That’s an increase of 555 students over last year’s number. And according to Mubenga, it’s encouraging since he hadn’t seen numbers like this going back four to five years.

There’s a slew of dedicated individuals and businesses working hard to flip Durham Public School’s reputation on its backside. As realtors serving as the front line to new home buyers contributing to the rise of Durham’s popularity, we have the responsibility and duty to defend these efforts and change the knee-jerk reaction to the all too frequent question:
“Is That House In Orange County or Durham County?”. Everyone’s response going forward should be, “Yes! It’s Durham County! And have you seen what’s been going on with the rejuvenated Durham Public School System?”.

Durham Magazine: October / November 2019 Issue pg. 122