While we’ve found that public open houses no longer attract many visitors in the New Orleans area, agent open houses are still alive and well attended.  Preparing for the agent open house is no different than preparing for a public one.  As a matter of fact, agents tend to be even more critical of condition than buyers do, so the proper preparation can mean the difference between them bringing a client for a showing or not.  If you can get an agent excited about a home, they will show it again and again.

Recently, I attended an agent open at a house in Algiers.  The floor plan was pretty good and the location is great, but it was obvious that the seller either isn’t really interested in selling or didn’t heed their agent’s advice about pricing, cleaning and de-cluttering the house.

We scope out open houses to know the competition for our listings and to see if a particular home might work for one of our buyers.  Finding a home that is overpriced and dirty and cluttered shouldn’t happen on these tours and we were in and out pretty quickly, making mental notes of what information we would pass on to our own clients.

Here are a few recommendations to prepare for your open house:

Clean, clean and clean some more.  Everything should be sparkling, from the floors and baseboards to the ceiling fans and everything in between.

Remove all indicators of pets.  Food and water bowls, doggie beds, litter boxes – all of these should be stored out of sight.  Do a sniff test as well.  Nothing will turn off buyers and agents alike as much as a smelly house.

Tidy up.  Make the beds, hang fresh towels in the bathrooms, put away all of your personal toiletries and be sure that any children’s bedrooms don’t look like Toys R Us exploded in them.

Think curb appeal.  Cut the grass, weed the flower beds and make sure that the porch is swept clean.  If it’s a rainy day, provide a good door mat to keep visitors from tracking wet and mud into your home.

What’s behind closed doors matters.  Don’t make an area of your home off limits during the open house.  If there are family members that sleep during the day, then an open house may not be for you.  Also, visitors will open closet doors, pantries and cabinets to check out the amount of storage you have.  Clearing out and pre-packing some items will make all of these spaces appear even larger.

More home selling tips

There are several roles that REALTORS can play in who they represent and they vary from state to state.  In some states, agents always represent the seller (as a sub agent) unless they have entered into a specific Buyer Representation Agreement with the buyer.  In other states, agents are transaction brokers, not representing either buyer or seller.  In yet another twist, there are some states that allow for buyer agents, seller agents, dual agents AND transaction agents.

Confused yet? If you are relocating to New Orleans, there are only a couple of things you need to know about agency.  In Louisiana, agents are assumed to represent the person they are working with, whether they have a buyer brokerage agreement signed with them or not.

Now, most agents work with both home buyers and home sellers.  Occasionally, an agent will represent both the buyer and seller sides in the same sale, but I’ve written before that we don’t recommend dual agency.  Instead, we recommend that you work with a buyer’s agent.

What Is A Buyer’s Agent?

A true buyer’s agent works only with home buyers. They are well versed in the local real estate market (as every agent should be) and have a slew of behind the scenes professionals just waiting to help you with the purchase of your home.  Lenders, home inspectors, termite inspectors, roofers, plumbers, HVAC technicians…you name it and they usually have someone at their fingertips that can assist you with any issues that arise during your home purchase.

A buyer’s agent spends a lot of time viewing homes, so they are the most knowledgeable about what upgrades and improvements that you can expect in the neighborhood of your choice and in your budget.

A buyer’s agent works tirelessly to ensure that you are getting the home you want at the best price possible and on the terms that work for you.  It’s difficult (actually, it’s almost impossible) to expect that same level of service from an agent who is also representing a home seller.

Finally, the services of a buyer’s agent are included in the commission already being offered by the listing agent.  There is no cost to you, but the benefits of having your own representation are priceless.

When you work with an experienced and professional buyer’s agent, you get more than just someone who opens doors to homes for you. You gain an advocate, who can educate you on the buying process, the local real estate market and how to get the most bang for your buck when choosing a home.  You get someone who is vigilantly protecting your best interests through the entire transaction.

This past week, we lost two listings because the owners were foreclosed on by the lender holding the mortgage.  It makes me sad when someone can no longer afford to keep up with the payments on their property and has no other solution than to allow the bank to take over.  But, what really disheartens me is that they kept mum during the entire listing period about the fact that they were behind in payments and were running the risk of foreclosure.

While they may have been embarrassed about their financial troubles, it would have been in their own best interest to be honest with us, because we could have attempted to work something out with the lender to avoid a foreclosure on their credit report.  A short sale may have been in order, but since we weren’t told about any issues, we didn’t know to counsel the sellers on the possibility and their options.

When you hire a REALTOR to represent you in the sale of any property, it’s critical that you provide all of the information about your financial situation to them.  We are not being nosy and one of our primary duties to our clients is the duty of confidentiality – we don’t share your information with anyone.  If you don’t feel comfortable giving that information to your agent, then perhaps you need to keep interviewing agents until you find one that does make you comfortable.

Whether you owe back taxes, are delinquent in your HOA dues or are behind on your mortgage payments, that’s important information for your agent to know.  The more we know, the better we can help you determine the best course of action and the most appropriate pricing and marketing plan for your property.

Need a confidential assessment of your home’s value in today’s market?  Contact the West Bank Living Team to find out how we can help.

From the National Association of REALTORS:

After a close brush with the deadline, Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed.  The legislation is designed to create a seamless extension and the new closing deadline for eligible transactions is now September 30, 2010.  There is will be no gap between June 30 and the date the President signs the bill into law.

In a nutshell, if a qualifying buyer was under contract by the April 30th deadline, they now have an additional 90 days to close on their home.

This is NOT an extension of the credit, but of the required closing date.

Most of the buyers taking advantage of the credit in the New Orleans area have already closed on their homes, but there are always exceptions and delays.  Home buyers waiting on a short sale approval by a bank or those buyers that are still waiting for their own lender to finish the approval process can breathe a sigh of relief, knowing that they have an extra 90 days to get it done.

Normally, I’m a little hesitant about why someone is changing agents.  Did they not follow the professional advice they were given?  Did they ignore the market indicators and price their home too high?  Is the house not in show ready condition?

Apparently, the reason they were agent shopping has nothing to do with any of that.

When mom and dad first decided to sell the house, their daughter offered to do some research for them and find a REALTOR that is familiar with the area and has recently listed and/or sold homes there.  Mom and dad didn’t want any help and instead went to…the phone book.

It’s not how I would start my own search, but I guess there are worse things than using the phone book as a starting point.  The downside was that they hired the first agent they talked to without digging a little deeper.

What they were surprised and disappointed to find out during the course of the listing was that their agent was:

Bad tempered

Everyone has a bad day now and then, but there is absolutely no excuse for being unnecessarily rude to a customer.  Whenever the agent was asked questions or pressed on any issues, he would blow up at the sellers.

Technology impaired

Sadly, not every REALTOR is tech savvy.  But you don’t have to be a rocket scientist to master the basics.  Email was a struggle for this agent and the ability to work a scanner was way beyond his capabilities.  In this day and age if you don’t have the ability to make communication easy with a home seller then it’s time to find a line of work that doesn’t involve anything more technical than a flip phone.

Speaking negatively about the house

No house is perfect – they all have a flaw here or there – some of them are big and some of them are small.  A listing agent’s job is to market the property to the best of our ability, highlight the best features and provide recommendations to improve your chances of a sale.  Instead, during the course of the listing, Mr. Bad Temper informed the sellers that if he was a buyer, he wouldn’t buy their house.

Whoa!  Really?

Someone entrusted him with the sale of what is probably their largest asset and he actually had the nerve to say that?  If he was willing to voice this opinion to the home owner, what in the world might have been said to potential buyers?!?  I’ve sold many, many houses that I wouldn’t have bought for myself.  Whether it was location, condition, size…it doesn’t matter what the listing agent personally thinks, it only matters what the buyers think.

We, as REALTORs, have a code of ethics that includes the phrase “When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client.” While not directly in violation, if a listing agent is speaking poorly of the listing to potential buyers then, in my opinion, they are not promoting the interests of their client.  Note: this does not mean that we don’t have to disclose any known defects with a property, only that our personal opinion shouldn’t cloud our professionalism.

Are we perfect?

Absolutely not.  We’re human.  We make mistakes.  We’ve had clients that we just didn’t gel with.  We’ve lost clients because we weren’t on the same page as the buyer or seller and no amount of good humor or technology or ethics can change that.

That’s why every buyer and seller should take the time to do a little research, interview more than one agent and choose the one that fits you best.  Please don’t just choose a name from the phone book!

When I visited, I found several items of deferred maintenance that would keep the house from attracting the most qualified buyers, especially the FHA buyers that are making up the majority of home sales in the area.  There were lots of little things too, and it’s my practice to let sellers know about everything that could be improved, explain why they need to be improved and recommend the most critical things to be addressed before a house goes on the market.

Sometimes, this means that I don’t get a listing, but I wouldn’t be doing my job if I didn’t address condition.  Most owners are open to doing the things that are needed, but there are always those who have a “take it or leave it” approach about the condition of their home, even when just a little bit of time and money can put them into a higher price range.

In my opinion, the house needs to shine from the first day on the market. So, I gave them a list of repairs and improvements that I thought were necessary before the house would be worth what they are hoping to sell it for.

I got the following email:

Lisa -

Thank you for you honesty. I had asked my previous realtor to let me know the things that we could do to fix it up and she didn’t have anything to tell me. I appreciate your honesty and frankness….

Why would an agent not tell someone what needs to be done to make their house marketable? It is our job as professionals to promote our client’s best interests and appealing to the broadest market is definitely in their best interest.  Also, if there are issues that are going to keep a house from selling quickly or at the listed price, it’s the job of the agent to counsel the sellers in advance about how those issues may affect their ability to sell.

Don’t get me wrong.  I don’t like to be the person who tells someone that their house needs to be cleaned or decluttered or deodorized.  But I also don’t want to be that agent that isn’t honest with a seller.

When you are choosing a REALTOR, make your selection based on more than just what price they are willing to list your home at or the commission they are charging.  Find an agent who is realistic and candid about what you need to do before putting your house on the market.  That’s what they are getting paid for.

Who pays the REALTOR commission?

In a nutshell, the seller usually pays the commission of both the listing agent and the buyer’s agent.

When a home owner decides to sell, they have a couple of options.  They can choose go it alone and try to sell it themselves or they can hire a professional REALTOR.  When they hire a brokerage and choose an agent, the listing agreement outlines how much that agent will charge in commission.  Out of that commission, the listing agent offers a percentage (usually 50%, but not always – a topic for another day) to any other brokerage/agent who brings a buyer and successfully closes the transaction.

The end result is that there is no cost to the buyer to take advantage of the expertise and market knowledge of a good buyer’s agent.

What about For Sale by Owners?

Most For Sale by Owner (FSBO) home sellers are simply trying to save a few dollars by cutting out the listing agent’s commission from their expenses and are usually open to paying a buyer’s agent who brings a ready, willing and able buyer to their home.  When this happens, the seller signs an agreement with the agent/broker for a buyer’s agent commission only and no representation is provided to the seller.

But, there are always exceptions.

Some FSBO sellers are adamant about not paying a commission at all or simply can’t afford to pay a commission and pay off their mortgage as well.  In those rare cases, the cost of using a REALTOR falls on the shoulders of the buyer if they want to have representation through the process.

I had an out of town client once that absolutely needed an agent.  They could not be here for negotiations, inspections or the appraisal.  The house they wanted to purchase was a FSBO and the seller was maxed out and could not afford to pay me a commission.  Because the buyers knew that they would need assistance, they chose to move ahead with the purchase and paid my commission on their own.

This, however, is not the norm and has only happened to me once in over 8 years of practicing real estate.

Buyer Brokerage Agreements

In some other states, the use of Buyer Brokerage Agreements (also known as Buyer Representation Agreements) is the norm.  When a home buyer chooses an agent to work with, they sign a BBA agreeing that their agent will be compensated a certain amount.  If they choose a home that is offering a commission that is less than that in the agreement or if they run off and buy a FSBO without their agent or if they wander into a new home builder’s office without their agent and buy new construction…well, they are contractually liable to their agent to pay them the commission agreed to in the BBA.

If you are moving to New Orleans from a state that uses Buyer Brokerage Agreements, you might think that your agent has skipped over something when you aren’t asked to sign a BBA.  In reality, I don’t know of any agents or brokerages in our area that are using them.  While in theory they a good idea for an agent or broker, in practice we just don’t do it.

Do you have questions about how to choose an agent? Contact the West Bank Living Team and we’ll be happy to help you through the process.

The first kind is the neighbor we all want to have.

Their yard is perfectly landscaped, the trash cans are never left out by the curb, the cars are tucked safely into the garage instead of parked on the street, they don’t have dogs that would even think about barking or cats that consider your garden a litter box.  They are friendly, courteous and can’t wait to tell anyone they meet what a great neighborhood they live in, including the people who are considering moving to the block.

They are the cheerleaders for the community, make everyone feel welcome and are the best advertisement for a new neighbor you could ever hope for.

The second type of neighbor is just as nice.

Although they are trying to sell their home too, they still love their neighborhood and they are going to miss their friends after they relocate.  They also take great care of their lawn and wouldn’t even think about allowing home maintenance to go undone.  Beautiful flowers by the front door, a freshly pressure washed sidewalk and driveway and a butterfly garden that would make the greenest of thumbs envious.  They are friendly, courteous and…

…their home is way over priced for the neighborhood.

Now, if I was selling my house, I would want both of these types of neighbors.  Heck, I’d love to have them anyhow.

But, if I had to choose just one, I would definitely cross my fingers and thank my lucky stars for Mr. and Mrs. Overpriced.

Why, you ask? Because no matter how lovely the landscaping, no matter how shiny the fixtures, how new the appliances, how clean the floors, how uncluttered the closets and cabinets and how nice the people…overpriced is still overpriced – and usually serves to make your neighbor’s homes look like much better deals.  Buyers are doing a lot of research before making offers on homes and you can bet that if your price is significantly higher than the others in your neighborhood, you are at a disadvantage.

So, are you priced right or are you just helping your neighbors sell their homes?

Run your free report of home values in your New Orleans West Bank neighborhood

Sometimes I feel like I’m talking to the wall, especially when I meet with home sellers who want a sign in their front yard right now, but they are no where near ready to go on the market and put their best foot forward.

Recently, one of my listings (which was perfectly prepared, by the way) had an issue with the air conditioner.  While at the house, I realized that it just wasn’t cooling correctly.  So, I let the owner know that it needed to be checked out.  Within 2 days I had an email telling me that the repairs had been completed and everything was working properly.  I responded to the owner, thanking her for taking care of the issue so quickly.

Here was her response:

Your job is to get it sold but it is my responsibility to make sure it is in the right condition to sell.

Ta da!  The heavens opened, the sun shined down on me and I did a little happy dance because I have a home seller that gets it!!  There is hope yet…

When is the Act of Sale?

In Louisiana, the closing date, like so many other things, is negotiated between the buyer and seller as part of the purchase agreement.  Typically, buyers want to close as near to the end of the month as possible, because they will be pre-paying interest between the act of sale date and the end of the month.  The closer to the end of the month, the less in pre-paid interest that they have to bring to the table.

An unfortunate reality today is that closing dates are changed more often than not.  Delays in loan approvals and appraisals can push everything back, sometimes by a day or two, sometimes by weeks.

While the agents work hard to keep things on track, there are some things that are beyond our control (lenders and appraisers being a couple of them) and that may result in you being asked to sign an extension to the closing date.  As noted in the purchase agreement, any changes to the date must be agreed to in writing by both the buyer and the seller.

Where is the Act of Sale?

The Louisiana purchase agreement requires that all real estate closings be held by either a settlement agent or a Notary Public. The settlement agent is usually a real estate attorney who works in conjunction with the title company.  Occasionally, a title company may use a Notary instead of an attorney.

Typically, the closing takes place at the title company office, but there are title companies that will close off site if needed.  I’ve been to closings that were held at real estate brokerage offices because that was more convenient for the buyer and seller.

The choice of title company is up to the buyer, because the bulk of the fees being charged by them are on the buyer’s side of the transaction.  The exception to this rule is when the seller is a bank.  Often, they have one title company that does all of their closings and they make it a condition of the sale that their closing company is used.  When buying new construction, builders will sometimes offer a discount or help with closing costs in return for using their title company or attorney to perform the closing.