One of the most frustrating events that can happen in a real estate transaction is a delayed closing. Frequently, there is a domino effect that is launched when a closing is delayed. Though each party is responsible for their own contingency plans in the event of a delayed or busted deal, I’ve seen delayed closings impact a chain of subsequent transactions and moving plans. I once even reimbursed a seller for a one-night hotel stay and U-haul rental in order to smooth over a bad situation, even though the delay wasn’t my fault and it wasn’t my seller.
The undeniable law of moving says that when you move, for some period of time, you will either have two places to live, or nowhere to live. Period. This cannot be avoided, though many try to limit the overlap to one day.
A common scenario is that you are a Seller in the morning and a Buyer that afternoon, taking the proceeds of the morning sale and using those funds as a down payment on the afternoon purchase. Meanwhile, your U-Haul sits loaded in the parking lot and you eat lunch technically as a homeless person.
Now, imagine if the Seller (of your new purchase) that afternoon is also a buyer the next morning, and you can see how any disruption in a chain of unrelated but dependent closings can cause one or more people up the line a problem.
Delayed closings are almost always the fault of the lender. Sylvia and I don’t tolerate lenders who can’t close on time. It’s one strike and you’re out. Sorry. No excuse is acceptable. We simply don’t tolerate it, at all, and we don’t care what the reasons are or who is to blame. If you’re a lender who can’t get your paperwork to the Title Company on time and fund the deal on time, you are 100% useless to us and our buyers. That’s the bottom line. There is no other way to hold a lender accountable other than promising never to use them again if they let us down.
This attitude is a result of having to deal with the chaos and frustration of delayed closings a number of times in the past. To say it’s a hassle is an understatement. An amendment to the contract is required, which means chasing down signatures at the last minute. Rescheduling of movers. The parties have often scheduled time off from work on the closing date, so work life is impacted. The prorated amounts have to be adjusted on the settlement statement. If the closing overlaps past the end of a month, it can trigger another full month of interest payment on the payoff for the seller (if the seller has an FHA loan).
Then there are the afformentioned domino deals that create phone calls about “what’s going on with the closing?” from the deal next in line. Plus any number of other unfortunate outcomes or new problems that can also result. In other words, all sorts of trouble and work results from a delayed closing, which is why we view it as an intolerable and unforgivable failure by the lender.
This leads me to the real topic of this blog article. On a recent deal last year, the listing agent, having recently suffered through an unfortunate string of delayed closings caused by incompetent lenders, attempted to insert “buyer guaranty” language into the deal on an addendum.
Read more …
This news article came into my email today, about the “Real Estate Agent of the Future”. Like a lot of the drivel fed to Realtors, this story is a jargon-filled write-up of nothingness, but it did get me thinking about how much things actually do stay the same, with regard to relationships, no matter the technology.
via Realtor Newsletter
The Real Estate Agent of the Future
Asked what skills future realty agents will need to compete, Saul Klein–president and CEO of InternetCrusade and CEO of Point2Technologies–cites product knowledge, sales competency, access to customers, and service with integrity.
More specifically, he says an agent working in 2015 will need the ability to communicate effectively across generational spans as the different age groups move up and out.
Uh, that sounds like the Realtor of 1908, 2009 and all years in between. But I wonder what sort of class we need to take to learn how to “communicate effectively across generational spans”. Communication skills for an agent depend more on recognizing which of the four main personality types a person possesses than how old they are.
This generational stuff sounds good, but in practice, one’s generation tells us less about what makes them tick than does their personality type. We work with slow, plodding, careful detail oriented people in the same patient and detail oriented way whether they are 28 years old or 68 years old. Those buyers really are the same, trust me. And the excitable, exuberant buyers who love everything they see and can’t decide which home is the right one for them?… they come in all generations too, including married grandmas and young single dudes with earrings.
An agent who can listen to you, understand your motivations and “get” what makes you tick will be of far greater value in helping you than one who makes trendy assumptions based on nothing more than your age.
Another key skill of the future, he says, will be the ability to negotiate successfully. To increase access to clients, the Realtor of the future will need to be technology-oriented.
Prospecting and marketing will have become automated, says Klein, and client management and online transaction management software will become more important.
Negotiation skills have always been important, and always will. No news there. Being technology oriented? I won’t argue with that, but many non-techie agents do well by simply surrounding themselves with knowledgeable help. I know one that doesn’t even check his own email but instead delegates it to his assistant. He’s a top producer and I bet he can’t burn a CD or send a text message. For some agents, knowing how to leverage the talents of others is the only technology they need. That way, they can spend their time building and maintaining relationships with past, current and future clients instead of trying to figure out how to set up a new printer.
Read more …
The rental market for single family homes in Austin continues its march upward. Rent prices increased about 6% in 2008 over 2007. Remember though that the 2008 average rent amount of $1,424 per month in Austin is still less than the year 2000 average rent of $1,497/mo. and the year 2001 peak of $1,524/mo. The graph below shows the historic average and median rent values for Austin from 1999 through 2008. The big dip you see in the chart is a result of the tech bust, 9/11 and the resulting job losses, weak economy and over-supply of rental homes that resulted in all the failed sales efforts from 2002 through 2004. You can see that our rental market bottomed out in 2005 and turned upward in 2006 and has continued that trend for three years now. But most rental homes in Austin still rent for less than they did in 2000 and 2001, so renters have had a good run.
Will the Austin rental market continue its upward climb in 2009? It’s hard to know for sure, but I think it might level off a bit for 2009. Demand for rental homes will increase due to the non-buyers who are choosing to not buy a home and instead becoming or remaining renters. But that is offset by the slower job market, and the increased rental supply provided by sales listings converted to rentals after not selling, as those sellers refuse to lower the price further and instead decide to simply hold off on selling for a year or two until the sales market rebounds. Also, although the rental stats look really good for landlords, those of us in the business of renting properties know that we are not always able to increase rents and not all homes rent as quickly as the stats suggest.
Finally, apartments are over-built again in Austin and there will be a large number of just completed new apartment units coming online in Austin in 2009, as well as new condos converted to rentals due to slow sales. The move-in deals and concessions offered by apartments tend to siphon away at least some of our home renters who ordinarily might not consider an apartment but can be swayed by economic incentives such as three month’s free rent, $99 deposits and free washer and dryer. So, while demand will increase, supply will be increasing by even more.
I just mailed lease renewal notices out for 4 rental properties I manage, and we did not raise rent on any of those particular properties. It’s much cheaper and more prudent to retain a tenant at the current rental rate than to cause them to think about moving because of a $50 or $100/mo rent increase.
December rental stats, Year to date rental stats, and a breakdown comparing 2008 to 2007 by MLS area are all posted below.
Yesterday was not a good day for the Crossland Team. In our office Sylvia and I have a whiteboard mounted on the wall where we write our listings and our pending closings. After yesterday’s closing, we have no more pending sales written on our board.
We have listings, but the showings are slow and we have no offers in the works and nobody threatening to write an offer on any of our listings.
We were discussing this morning when the last time might have been that we didn’t have at least one closing on the board, and we just don’t remember. But it must have been 2005 when we returned to the business after selling our former real estate company and then taking a hiatus/sabbatical. Since we’ve averaged 3 to 5 closings a month, there is always something up there on the board waiting to close. But not since yesterday – our “black Friday”.
What does this mean?
Read more …
A Nuwire Investor reporter interviewed me recently about the Austin real estate market. Me and Sam Chapman (another Austin KW agent and blogger) were quoted heavily in the article.
Nuwire Investor focuses mainly on alternative investments. On their website, they describe an alternative investment as “any investment that falls outside the realm of traditional stocks, bonds and mutual funds. The most common alternative investment is single family real estate. However, there are many other alternative investment options”.
All together I think it’s a pretty good write-up. You can ready the full article here.
These interviews have slowed down lately, though KXAN Channel 36 was at our local investor club meeting last night interviewing people, and I saw some friends of mine on the 10PM news last night. But I showed up when the reporter was packing up and leaving so I thus missed the opportunity to pontificate and have my ego stroked by being on TV as a purported “expert”. The investor club meeting was good and one of the members put on an economics presentation using cobbled together graphs and charts from a vast number of sources. I’m going to try to get a copy and post it up on the blog here.
The general sentiment of the meeting goers, many of whom are hardcore Austin real estate investors?:
The Austin real estate market for December 2008 ended better than I predicted. The Austin market held up well throughout 2008, all things considered, and within the context of the national economic climate and the fierce headwinds created by fear and negative consumer sentiment. Before we get into the December stats, the YTD stats and the MLS area breakdowns, let’s take a quick look at the graph below to get a perspective on how the Austin real estate market has performed since 1999.
As you can see above, even though 2008 is down a bit from 2007, it’s not anywhere near the nose dive that most of the rest of the country has experienced. In fact, viewed on the 9 year graph, the small dip is no big deal. It has to be noted that both 2006 and 2007 saw price appreciation of just below 10%, both years setting new record high prices in Austin. Each succeeding year cannot be a new record. Real Estate markets do not produce straight upward sloping lines over time, nor should that be the expectation, so it somewhat puzzles me the degree of concern we hear from buyers and sellers when the market does what it’s suppose to do, but that’s what we’re hearing a lot of lately.
Relax, 2009 may be slightly down as well. But real estate is a long term investment, not a lottery ticket or an ATM machine, as folks came to view it during the early through mid 2000’s. Moving on. Below is the December 2008 stats summary as well as the 2008 vs. 2007 sales comparison and breakdowns by MLS area. First, let’s see how December did. Read more …