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Reptition, Red River Valley and the Residential Purchase Agreement
Reading the residential purchase agreement can solve many potential problems.
A client whose home in Fair Oaks I sold last year called a few days ago to reiterate how happy she was with my services and her utter amazement that a real estate agent in this day and age would advise a client NOT to take an offer. She is an agent herself. She said: Who does that? Well, I dunno, but I obviously had said it to her, and I would have said it for only one reason — because that was in her best interest. Then I asked why was she trying to butter me up. What was going on?
Much laughter, then she launched into the fact she has a real estate license but hasn’t been using it, and inquired whether it would be worth it to her to join the Board of Realtors, MLS, all the organizations that charge an arm and a leg to belong. We talked for a long time, and I told her the single thing that has immensely helped me and what I suggested she do to get started in real estate after all these years of absence:
Read the California Residential Purchase Agreement and Joint Escrow Instructions in its entirety, all 10 pages, and read it at least 6 times, maybe more. Commit every paragraph to memory.
The agents who seem to struggle the most are those who have never read the RPA. Many just fill in the empty blanks and instruct their buyers to initial here and sign there. Just about all of the answers to anyone’s potential problems in a real estate transaction are contained in the RPA. A Realtor should know that contract inside out and backwards. Of course, we have to be careful not to give legal advice, but it is our duty to embed the terms of the RPA into our brains.
On a related note, let me compare this to learning how to play the guitar. Just about anybody can learn how to play the guitar, although not everybody can play it well. My guitar teacher in 1962 insisted that I could not become proficient unless I could play a song at least 6 times in a row without a mistake. With swollen and callused fingers, I invested more than 1,000 attempts to achieve that goal. As a result, I can play Red River Valley without any mistakes, LOL. But I can’t play Stairway to Heaven. I know my limitations.
If you want to become a top-notch Sacramento Realtor, then study the Residential Purchase Agreement. Agents don’t need to memorize every possible real estate form because there is ample opportunity to peruse ZipForms, but one does absolutely need to know the RPA. There is no proper representation without that knowledge.
If Sacramento Agents Abandon Old Supra Lockboxes at Your Home
Old Supra lockboxes become inoperable when they expire in December 2015
We will soon have a crisis in Sacramento regarding Supra lockboxes. Mark my words. Saturdays are always “lockbox Saturdays” for me in my Sacramento real estate business. This means I drive around to my closings from that week and retrieve my lockboxes. I generally do it myself because picking up Supra lockboxes brings closure to me; satisfaction that the home has sold, my sellers are thrilled, and I will get another fabulous review added to my client reviews because those are my two goals for every closed sale: 1) make my sellers ecstatic and 2) get a good review.
The reason the crisis is about to happen was fairly clear to me yesterday. One of the lockboxes I picked up was from a home in Elk Grove that I’ve sold 5 times or more. It was a long listing with its share of complexities and challenges. The box I retrieved was an old Supra lockbox, prior to the two-for-one iBox exchange at MetroList. In another 3 months, though, those old lockboxes will no longer work. That Supra lockbox will expire. It means it won’t open and can’t be removed from the gas meter or wherever the agent stuck it by utilizing a key fob or a display key. It is of no value to me or to anyone.
I brought it home and stuck it on the shelf with my other 26 lockboxes that will no longer work by the end of the year. As I shoved it into the lineup of my sad and pathetic display of expired lockboxes, I realized that MetroList has screwed me out of $1,300. MetroList promised me that I could keep my lockboxes as long as they still had juice in them, and many of those lockboxes are at 70% of power. They could last another 5 years.
As a result, I did not turn all of my lockboxes during the two-for-one exchange at MetroList, only about half of them. The other half I kept. Soon as the exchange was over, MetroList then announced all of our old lockboxes will expire at the end of December. Don’t you love those guys? If I had known they were about to reverse that decision, I would have turned in those lockboxes at the exchange and received $1,300 worth of brand new lockboxes. I trusted them to be truthful. In real estate this is known as a material fact.
Wait, you must be saying, while you may feel empathetic toward me, seriously, what does it mean to you, the consumer, to homeowners in Sacramento? How do these old Supra lockboxes affect you? I’ll tell you. Although I am a real estate agent with a conscience, even I wondered why I was removing an old lockbox that is of no use to me. Sure, I admit it crossed my mind. Why did I drive 30 minutes there and 30 minutes back to my home to pick up a worthless item? Well, like, I said, I have a conscience. I have an ethical responsibility to the buyers who purchase the homes I list.
I’m betting there will be many agents who will say to themselves, screw it. I’m not removing the lockbox. And they’ll abandon the lockbox, leave it there. You know they will. If an old lockbox is not removed by the end of December, MetroList says it will no longer work. If you find an old Supra lockbox attached to your home, there is recourse. First, write down the serial number and call MetroList to report it. MetroList has the ability to look up the agent from the serial number on the lockbox. Then, you can call the agent and / or the agent’s broker. It is that agent’s responsibility to remove the lockbox, even if he has to haul over a reciprocating saw. MetroList is 916.922.7584.
Don’t Shoot Yourself in the Foot When You Make an Offer on a Sacramento Home
Buyers who make an offer on a new listing should discuss the price with a Realtor.
The trouble with making an offer on a home is many buyers judge the value of the home by the sales prices of surrounding homes and not the comparable sales. They do not seem to understand that the gray house with the remodeled kitchen and additional 500 square feet is worth many thousands more than the home they can really afford to buy, which is the brown house, two blocks over, without the remodeled kitchen and 500 square feet less.
You might read this and say to yourself: it makes sense, why doesn’t it make sense to the buyer? And it’s because they don’t look at it this way. They see 6 or 7 homes, all of which vary in size, configurations, location and condition, and in their mind those homes are all the same. They are homes for sale in Sacramento, and all they have to do is pick one and make an offer for less. I know agents are chuckling?over this scenario but it’s how buyers’ minds work. I hear it day after day from buyer’s agents who call on my listings.
I can also understand why buyer’s agents might not want to discourage them because to do so could alienate the buyer from the agent. Nobody wants to be told they don’t understand what they are doing. Agents often will urge them to make an offer, any offer, because once they get a signature on the contract, they hope the negotiations will continue.
But you can take a brand new listing in Sacramento that is attracting a lot of attention and buyers will still think it is OK to offer less. The problem is the seller is very unlikely to accept such an offer. Even if the buyer were to make an offer for FULL list price, the seller might not even take that kind of offer, and believe it or not, a seller is not required to. Nope, no law.
Often I get buyer’s agents who say their buyer wants to make an offer just prior to an open house because they are worried another buyer at the open house will want their home and swipe it. Yet, they often make an offer that the seller cannot or will not accept. Talk about shooting yourself in the foot.
Bottom line, if the buyer wants to make an offer, it helps to determine market conditions, assess the competition for the home, and best of all, to consider the comparable sales.
Are Open Houses in Sacramento a Good Idea When Selling a Home?
Open houses tend to attract buyers in Sacramento.
Is it worth it to hold an open house when you’re selling a home in Sacramento? If you watch HGTV, the answer there will be yes, because without an open house, how can they kill time between rehabbing a junk pile and shoving it down?the throat of some unsuspecting buyer? Open houses in Sacramento are something agents do generally as part of the Sacramento real estate services offered, but if a home was never held open, it would still sell.
Out of many of the studies that have been focused on open houses in Sacramento and the results, the acceptable percentage of homes that sell at an open house are less than 5%. However, it doesn’t take into consideration the number of buyers who might have viewed the home at an open house and a few days later wrote an offer. I suspect if that number was included, the percentage might jump to 10 or 15%. Which is still a decent enough number to continue holding open houses.
I have a client who does not want us to host any open houses in Sacramento. He straight out said he doesn’t believe in them, and he implied that its sole purpose is to bring the open house agent a bunch of buyers to whom the agent can sell a different home. Yet, it doesn’t hurt, either, I pointed out. Why throw away that 5% or 10% chance of finding a buyer? It just might happen. Turns out he is not diametrically opposed to open houses after all.
Buyers often buy a home on impulse. You would think they would buy a home the way you or I might do it — by agonizing over every single detail, filling out mounds of paperwork to obtain preapproval, sifting through homes online, one photo after another until our eyes bulge out of our heads, watching video after boring video of four walls and a roof, but no. Some people will be out driving to an errand on a Sunday afternoon, pass an open house and say to themselves, hey, it’s a roadside attraction, let’s stop and take a peek.
Next thing you know, they are salivating and asking if they press hard whether the third copy is theirs. This is absolutely true. They can’t whip out that checkbook fast enough to write an earnest money deposit. It can happen to anybody. It could happen to you.
Identity Theft Protection Options When Buying a Home
Identity theft protection might help when buying a home.
Anybody who is buying a home in Sacramento might want to consider signing up for a free trial run of credit monitoring and fraud detection, including identity theft protection, before applying for a loan and while your mortgage is in process. Because it seems every time you turn around, some agency is getting hacked. The I.R.S. has had to send out thousands of letters to citizens informing us that some of our data might have been exposed. The New York Times say the IRS hacking is worse than reported. If your major corporations, your banking institutions and your government are not secure, what is?
About a year ago when Home Depot was breached, part of the settlement was to provide its recent customers with a free one-year subscription to credit monitoring and identity theft protection. This is how I became registered with such a company because it would never occur to me to sign up otherwise. Yesterday the company called to say new credit information showed up on my credit report and asked if I had initiated such a thing.
Now, those of you who follow my blogs might recall the situation with a Citibank Custom Credit Line. This happened about a month ago when Citibank mailed a 12-page letter without an account number or other identifying information apart from my name and address to inform me a Custom Credit Line had been opened in my name. Without my permission nor knowledge. I spoke to a supervisor and demanded they reverse the Citibank Custom Credit Line without affecting my credit. In other words, I did not want the account merely closed, I expected it to vanish, and was assured it would happen.
The reason the credit monitoring company called was to inform me that Citibank had placed a new account on my credit report for its Custom Credit Line. Granted, the date I received the letter was August 17th, and yesterday was September 11th, so almost a month had passed. The company asked if I had opened the account. After I explained that not only did I not open the account, it was not supposed to show up on my credit report. That’s when they told me it had also been closed on my report.
Good news is the identity theft company is able to remove it all together from my report. They are also placing fraud protection on my account for free for 90 days. It can be extended for 7 years, they promise, if I file a police report against Citibank, which I will gladly do. Citibank had no legal right to do what it did. They also suggested I deal directly with TransUnion because of the 3 reporting agencies, TransUnion is the most consumer friendly. Good tips, I’d say.
I can’t recommend the best identity theft protection company to you; you’ll have to do your own online research, but it seems that Consumer Reports ranks Identity Guard as #1, followed by Identity Force as #2 and Lifelock trailing as #3.
Any consumer agency, though, will tell you that the best identity theft prevention is you. Use common sense. Don’t access your banking accounts from a public WiFi. Put credit alerts on your personal accounts. Change your passwords often, and make them complicated. And remember, during the mortgage process to buy a home, you don’t want anything to mess up your credit reports. Besides pulling your free credit report from Annualcreditreport.com., you might want to sign up for a trial basis for an identity theft protection. Just record the data so you can stop the service prior to being charged for a full year if you find you no longer want it.
All information is secure online until the day it isn’t.
