Real estate agents who want to be successful in this business can’t hide in their shell or be a “wilting lily” - at least not in Silicon Valley.  Being able to get out there and find new clients with whom to work, encourage offers on listings, and negotiate well for buyers and sellers all require a level of assertiveness.  We may need to work outside of our comfort zone if the situation requires it.

But sometimes real estate sales people can go too far and venture into aggression instead of assertiveness.  The words “pushy” and “salesperson” almost seem to go together at times, don’t they?  (Personally, I hate buying cars because I loathe being on the other end of what feels like pushy sales tactics.)

A few years back, someone I met at an open house said that he didn’t need to like his agent because the agent wasn’t someone he’d want for a friend – it was someone who would push through what needed to be pushed and he didn’t need to be likable.  I found that a really interesting idea, but fundamentally, I disagree with the guy’s premise that successful Realtors basically have to be jerks.  It just isn’t true; in fact, the opposite is the case.

The most successful real estate agents share a few recognizable traits, at least most of the time.  I will list them off as I see them – not every top Realtor will possess all of these habits, skills or traits, but as a group, they emerge as a commonality found among most of them.

Top Silicon Valley real estate agents share these traits (at least most of the time):

1. Prospect or market themselves continuously to attract new business (they cannot simply work on today’s business or tomorrow they will be unemployed).
2. Have systems in place for how to work with buyers, sellers, sales in contract, prospects who are long term, follow up etc. Good systems are crucial.
3. Work well with other agents and consumers – they play fair, communicate well, respond in a timely manner.  They are usually well liked by their colleagues. (This helps you to sell or buy a home – agents want to work with others they can trust to work well and fairly.)
4. Know the contracts and forms and use them appropriately. They explain the contract to their clients so that expectations are in line.  Surprises are bad most of the time and can be avoided if everyone understands exactly what they are agreeing to.  And the contracts we use are clear: if it’s not in writing and agreed to by all parties, it is not a part of the transaction. (more…)

Yesterday I held an open house at my condo listing in Santa Clara.  Three different buyers told me that they wanted to write an offer but didn’t have their own agent. (What a big mistake!  Would you go into court without a lawyer?) Some of them thought that perhaps the listing agent could write up their offer – hopefully causing the price to fall.  One home buyer, though, wanted to write the offer without the help of any real estate agent at all.  Her thought was that the price would sell for less since only one agent was involved.  Wrong again.

The idea that these buyers have in common is that the buyer’s agent’s commission is somehow up for grabs.  But that’s not how it works.  We have 2 sets of contracts in our area, the CAR and the PRDS, but have a look at what the CAR offer says about broker compensation (found on page 8). Please pay attention to paragraph D below:

Who will get compensated at close of escrow?  Not just anyone, and not just any real estate sales person or licensee. The broker must be a participant of either the local MLS or a reciprocal MLS, or there must be a separate contract signed that provides that the buyer’s agent will get the commission.

So a real estate licensee who’s not a member of the MLS is probably out of luck.

Why is that?

The multiple listing looks to consumers to be just a big database of homes for sale.  That’s what is on the surface, however it misses the point. The reason the multiple listing service  exists is found in paragraph D above: fundamentally, the MLS is a broker-to-broker offer of compensation if the cooperating agent or broker brings a buyer to the table and it results in a successful sale.

Not a member of the MLS? This offer is not for you.

The workaround, of course, is that there is a form that smart agents can use if they are dabbling in sales outside of their own MLS area, or if they are not members of the local or cooperating MLS.  But the listing agent does not have to agree to it – does not have to agree to pay non-members of the MLS.

What if there is no other agent involved in the Silicon Valley real estate transaction?

The commission amount is set between seller and broker (agent) when the listing papers are signed.  The commission agreement sets for the possibility that another agent will be involved from another brokerage, and if that happens, there will be compensation shared.  If not, the listing agent gets the full commission.

The commission is not up for grabs.

If you’ve ever had the experience of selling your car, perhaps you’ve also had someone phone you who’s never even looked at your vehicle and ask you “what’s the lowest price you’ll take?”  Most of the time, auto sellers aren’t too happy with that question: the caller is low balling without even looking at what’s for sale.

That happens in real estate sometimes, too.

Today I got a phone call from a Silicon Valley condo buyer who asked me, without having seen my listing, “will the seller take less?”

Not a great question, for a whole lot of reasons.

First of all, part of a real estate agent’s duty is to protect the seller – and that means not telling consumers the lowest amount that a seller would take, or even if a seller would take less at all (unless, of course, the seller gave express directions to do so, which is very rare indeed).

Secondly, it is a little insulting to call on a property you’ve never viewed and start to verbally bargain down the price, or fish for the lowest possible price. What that does is make the listing agent feel “on guard” from the very beginning. Guess how that impacts your position if there are multiple offers?  You will have made an impression – but not a good one!

Most of the time, a home buyer is better served to not call the listing agent directly at all, but instead to have his or her buyer’s agent place the call to get some information.  There are better ways to figure out if the seller is motivated,  how the pricing looks, whether there will be multiple offers etc. – and Realtors and other real estate licensees are usually pretty practiced at getting the information without damaging the buyer’s position for offers or even potential multiple offers later.

Most of us wouldn’t try to represent ourselves in court, but sometimes don’t appreciate that these same principles apply with real estate; that is, the value of having a fiduciary, an agent, helping us not just when the offer is presented but every step of the way.   Let your agent represent you from earlier stages, and you will likely find that you are presented in a better light than you could do yourself.  Think before you pick up that phone and call the listing agent directly!

Some Silicon Valley home buyers do not want to have their own buyers agent, but instead expect that they can find properties in the San Jose area that they want to see and request that the listing agent show it to them in a private appointment.  These same potential buyers may be surprised that the listing agent may refuse to show them the listing outside of a regularly scheduled open house – that is, if the seller is permitting open houses.

What’s going on?

In earlier articles we’ve discussed the need for a buyer broker agreement (verbal at the least, but possibly in writing) and why you, as a buyer, ought to have your own representation at the negotiation table.  (If you missed these, see the links under “related reading” below.)   Today I want to dispel the myth that the listing agent is required to open up and show condos or houses for sale to anyone who calls and requests seeing them and explain why that’s the case.

Showings of homes for sale are determined by the listing agreement or contract between the home seller, the listing agent or Realtor and the broker

The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate.   It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. Here are some of the expected scenarios and reasons why showings are somewhat restricted most of the time: (more…)

Those of us who sell real estate for a living know that consumers want to hear back from us as soon as possible when they call or email (or text, in some cases).  What’s a realistic turnaround time for the response?

If not with clients or otherwise tied up, many Realtors (yours truly included) will pick up the phone when called during business hours. (Some won’t. Some do time blocking and return calls at set times, such as between 11am and noon and 4 and 5pm. Those who time block in this way will often put a message on their voice mail explaining when they will call back. Hopefully, that works for the caller!)    In general, Realtors and real estate sales people will not take calls or return phone calls while they are with other clients unless there is a really crucial event happening – and if that’s the case, they’ll let the folks they’re with know about it upfront.  Depending on how long the appointment is, then, the return call could be an hour or two or, in the extreme, at the very end of the day (if with relocating clients and doing a crash course in the area that goes 8 hours – it can happen, but is exhausting for all).

Once in awhile, a voice mail or text simply won’t be delivered by the wireless carrier in a timely manner. This is extremely embarassing and upsetting to everyone impacted by it.  So please keep in mind that it’s always possible that your message simply wasn’t delivered.

If something big is going on, check in ahead of time with your Realtor

If there is some momentous event or report looming, talk to your buyer’s or seller’s agent ahead of time to learn his or her schedule and availability.  This is key for reducing everyone’s stress!

Agents do sometimes take time off, too. Communicate with yours to know when he or she is off, and do your best to respect that time. Real estate licensees who get too burned out are less effective in the long run. (more…)

Frequently I’m asked if I (or another real estate licensee or agent) can help a consumer to purchase a foreclosure.  There are some nuances to this answer, but in short, it depends.

There are several stages in the foreclosure related sales in California.  Often, homes somewhere in this quagmire are listed on our Silicon Valley area MLS or multiple listing service.  If a property is listed in the MLS, then yes, we Realtors can help home buyers with a distressed sale purchase.

1. Pre-foreclosure (where payments have been missed and a Notice of Default or NOD has been filed – often, but not always, these homes are on the market and included in the MLS.  If they’re in the MLS, I can help.  Often these are short sales (but short sales are not always in pre-foreclosure – they may not have missed any payments).
2. Trustee’s sale, or actual foreclosure on the courthouse steps.  No role for a real estate agent here.  There are some big caveats and warnings! First,  often what’s owed against the home is more than it’s worth and the only way to purchase a home here is to pay off all the debts (so it may not be much of a deal!).  Second, if you buy here, you get NO inspection contingency and must pay cash for the house.  End of story – no backing out.  Worse, you cannot inspect it ahead of time!
3. Bank owned or REO.  These are usually listed on the MLS and if so, I can help you with it.  Sometimes banks hold onto them between the trustee’s sale and prior to listing them with a broker.  Often this is only for a month or two but sometimes it’s longer.  If it’s not on the MLS, it’s very very hard, or maybe impossible, to buy it.

While it’s not hard to locate homes where owners have missed some payments, it should not be assumed that these houses are either for sale or that the owners have any intention of selling them.  In my opinion, it would be harassment if consumers showed up on their doorsteps trying to purchase a house where a payment has been missed.  Most, maybe all, of the residents there would be offended.  They may be trying to get a loan modification (a friend of mine got one approved last week!) or have family & friends helping them to get back on track. If it is not listed in the MLS (which you can find at www.MLSListings.com – the public portal of our agent multiple listing service), the odds are overwhelmingly against it being available to you.

Lately I have been given a lot of incomplete FIRPTAs from listing agents in & near Silicon Valley with the request (or demand) that my buyers sign them.  They explain “we don’t have to provide the social to the buyers anymore”.  These well intentioned agents have mixed up two choices and provided something of a hybrid that cannot be used to satisfy the requirement of the form. Hence this post.

It’s not just happening to me and to my buyers. There’s an immense amount of confusion about how to properly complete and handle the FIRPTA form in California real estate sales.  Most of it would be solved if people (buyers, sellers, realty agents, transaction coordinators and brokers) would simply read it and not assume what the requirements are.  (Silicon Valley Realtors have long heard local real estate trainer Guy Berry admonish us in class to simply read the forms.  He scrawls in large letters on the board for his class on the purchase agreement: What does the contract really say?)

So let’s do that.  Let’s see what the Seller’s Affidavit of Nonforeign Status And/Or California Withholding Exemption really says. To begin with, I uploaded the 2 page FIRPTA document onto my Valley of Hearts Delight website, so you can access the entire document by clicking on the link (it will download into a new window – it’s a pdf).  You might be surprised, especially if you are taking your information second-hand and have not read this form yourself in the last two years. (And if in doubt about any of it, please contact a real estate attorney for clarification.)

What is the purpose of the Seller’s Affidavit or FIRPTA?

Why do we have this form at all? The very first part of page one answers this question. (Words in red are mine.)

Internal Revenue Code (“IRC”) Section 1445 provides that a transferee (buyer) of U.S. real property interest must withhold tax if the transferor (seller) is a “foreign person”.  California Revenue and Taxation Code Section 18662 provides that a transferee (buyer) of a California real property interest must withhold tax unless an exemption applies.

So for starters, we are told that buyers must withhold tax from the sellers unless an exemption applies when they buy real estate in California. That’s what this FIRPTA form is all about: it tells the buyer that there is an exemption.  By completing this form and providing it, the seller is giving an affidavit that he or she is not subject to the withholding tax for either the Federal Government or for the State of California. The buyer is off the hook for holding money back in escrow from the seller. (more…)