My New Blog

Buyers of real estate never had it better. For one thing, interest rates are low. For another, there's a large inventory of unsold homes on the market. Buyers have more to choose from, and they can strike a bargain with lots of sellers.

There's another reason. Beginning this year, the real estate contract, called the Purchase and Sale Agreement, that almost all Georgia REALTORS use allows buyers to opt out of the contract. By paying the seller a consideration of $10, the buyer secures the option of terminating the contract without penalty during a specified term.

To further explain: The 2008 Purchase and Sale Agreement gives the buyer a "Due Diligence Period" in which he or she may inspect the property, think about it, and get out of the contract if the buyer so chooses. 

The buyer may give written notice to the seller that he/she is opting to terminate the contract. The buyer gets his/her earnest money back and walks free. The option must be exercised before the end of the Due Diligence Period, however; after that, the buyer is on the hook to buy the property "as is."    

This may sound like it's all in the buyer's favor. However, it can work to the seller's advantage as well. Under pre-2008 contracts, the buyer would have a period of time to inspect the property to identify defects, and then submit a list to the seller of things to be repaired or replaced. This often led to negotiations back and forth, and unhappy buyers and sellers trapped in a contract. Now, at least, if the buyer decides to walk within the short Due Diligence Period, the seller is free to continue showing the property to others. 

If you're going to buy a home or land this year, and you are preapproved for a mortgage loan, you are in the driver's seat. If you are looking for a particular kind of property, and would like an experienced REALTOR to help you find it, call or email me. If you have already found the home or land of your dreams, and would like for me to prepare your offer, submit it to the proper person, and stick with you through the closing, please get in touch. 

My services to buyers are free. And if you buy a house through me, you will get a free one-year home warranty covering the major systems of the house (if the selling price is $75,000 or more).      

My company slogan is: This is Real Estate today.  I do things a bit differently, and my customers seem to like it.  

The following is borrowed from another source:

RISMEDIA, March 28, 2008-Most sellers have an emotional connection to their home and feel it deserves top dollar when being sold. Everyone naturally wants to get the most money for his or her product, but “sellers must not be hasty with this all-important decision,” cautions real estate expert Robert Jenson, founder and CEO of The Jenson Group. “Indeed, the most common mistake that causes sellers to get less than they hope for is listing the sale price too high.”

Jenson notes, “Listings reach the greatest proportion of potential buyers within the initial days and weeks after hitting the market. If a property is overpriced early on, it will be dismissed - or outright missed - by prospective buyers and may result in price reductions that will reflect poorly on the listing. Overpriced properties languish on the market, and most end up selling at a lower price than would have been realized had it been priced properly in the first place.”

To help would-be sellers foster maximum profits with their real estate transaction, Jenson offers these insights on the various elements that must be considered when establishing a fair, competitive and marketable sale price for a home:

1. Square footage: Total square footage is an important consideration when establishing a home’s sale price, but this is usually just a starting point for buyers who will use it to narrow down the field, but make an actual purchase decision based on many other factors. There are some general rules of thumb to know when considering a home’s price per square foot, such as smaller homes generally get a higher price/foot than large homes, and single stories will sell for a higher price/foot than a two story.

2. Location within community: Homes that back up to a busy street get, on average, 10-20% less than homes elsewhere in a neighborhood. Anticipate this type of obstacle and factor it into the original sale price to avoid inevitable price reductions down the road, which reflect poorly on the listing and will likely cause it to sell at a lower price than would have been realized had it been priced properly at the onset. Quiet cul-de sacs, golf or water frontage, lots that offer privacy are value adds that can certainly justify a higher sale price than other homes in a community - or be leveraged as an advantage against competing listings.

3. Views…or lack thereof: Whether it is the ocean, a downtown skyline, the mountains, water or some other desirable landscape, buyers are willing to pay a premium for views and a home should be priced accordingly. Just be realistic. A view that can only be had by standing on the counter from the second story looking out the window to the left simply doesn’t count, and it’s inadvisable to dupe a prospective buyer by adding this to the listing’s MLS description.

4. Upgrades and features: It’s a simple formula: upgrades = sold. For a home to sell quickly and for the price desired, it must be “finished” with as many structural and interior design upgrades as possible…and nothing’s too small to leverage in establishing a home’s price point. From crown molding to faux paining to door handles and cabinet handles/knobs with modern finishes, to more obvious upgrades such as appliances, window, counter, cabinet and floor treatments, to swimming pools and surround sound wiring…any functional or beautification enhancement to a home are considerations in establishing its true value and strategic sale price.

5. Community amenities: Guard-gated communities or those with amenities such as a clubhouse, swimming pool and/or fitness center are also elements that often raise a home’s price per square foot. When pricing a home without these benefits, know whether you are competing against other homes that do offer such value adds so that you can price your home as aggressively and competitively as possible.

6. Comparable sales: Price your home referencing sold comparables -price per square footage of other homes that have already sold in your community - up to 3-months old maximum, as looking beyond 3-months is simply not a realistic portrayal of current market conditions and may steer you in a wrong direction. It’s also as important to compare your listing to active competing listings - homes currently for sale, which is the best tool for honing an effective pricing strategy - particularly for highly motivated sellers.

7. Professional appraisal: Sellers often frown on the idea of paying for an appraisal before there’s even an offer on the table, but doing so is actually one of the most important things a seller can do in pricing a home relative to current market conditions. Want to sell the home quickly? Price it at or below the appraised value as buyers are educated, are shopping deals, and will recognize your fair price and be more apt to pay it with less haggling.

8. Current mortgage conditions: The current mortgage market has tightened its proverbial belt and many lenders now require higher credit scores coupled with higher down payments, which can cash strap a buyer who will most definitely be holding out for the best deal possible. Every seller naturally wants to get the most money for his or her product, but a savvy seller will understand the mortgage industry’s impact on the buyer and will price accordingly.

For more information, visit http://www.thejensongroup.com.

A few years ago, while I was showing some land to a prospective buyer, he asked me how much mileage my broker paid me for driving my own car. I had to suppress a loud laugh. Mileage -- are you kidding? What mileage?

Another time I was driving a prospective buyer in my car, and her daughter and son-in-law were in the back seat. The lady said she would like to go back to see a particular house a second time, adding, "but I hate to ask Mr. Dixon to take me back again." At that her daughter piped up and said, "Mom, he gets paid for that."

I stopped the car beside the curb, turned on my hazard lights, turned in my seat, and said:

"Actually, we REALTORS don't get paid for anything we do until and unless we close a transaction. I can show you 50 houses, but if you don't buy one, I don't get paid anything. Real estate agents are paid commissions only. There's no weekly paycheck. There's no monthy paycheck.There's no paycheck at all unless there's a sale.

"REALTORS are self-employed independent contractors. I am working on my own time at my own expense, and nobody will pay me one cent today or this week. If you buy something, I'll get a part of the commission. If you don't, I'll get nothing for my time and effort. I will have worked for free."

We continued on our way in silence. Later, the lady bought a house, so I got paid my part of a commission. My broker got the other part.

Many people may not know that REALTORS are independent contractors, not paid employees, and they work at their own expense. Occasionally, a customer buys something, or a house listed by an agent is sold, and the agent gets a paycheck. Until that moment, he or she has been working for free.

Speaking of commissions, how much does the agent typically get? Let's say the commission was 6 percent of the selling price. As often happens, the property was listed by one company and sold by another. In that case, the commission is split 50-50 between the two companies.

OK, so now the agent's company has been paid 50 percent of the 6 percent commission, or 3 percent of the selling price. Of that 3 percent, the broker takes, perhaps, 11 percent off the top to cover operating costs. Now we have 89 percent of the 3 percent left as a net commission, or about 2.67 percent of the selling price. The selling agent gets half of the 2.67 percent, or about 1.34 percent of the selling price.

So if a house sells for $100,000, and the commission is 6 percent, and two real estate companies were involved -- the listing company and the selling company -- the commission is 3 percent for each company, or $3000. By the time the broker has subtracted operating costs and split the net commission with the agent, the agent gets about $1,340 of the $100,000 sale. 

It may be weeks or even months before that agent gets another paycheck. Meanwhile, he or she will be working for free.

By the way: The guy who asked me about my car mileage -- he never bought anything.  

Once in a while someone will ask me why I advertise FSBO -- For Sale By Owner -- properties on two of my websites free of charge.

I don't feel that it's costing me anything to give a plug to a FSBO. Having a variety of properties for sale makes my websites more interesting to people looking at them.

Maybe the property owner will eventually turn to a professional for help, and that professional just may be me. For the small cost involved, it's worth taking a chance.

Did you know, most properties that start out as FSBOs wind up being sold by a real estate agent? Some estimates place the percentage at about 80 percent. So I know that most FSBOs will be turned over to an agent in due time, and if I've already shown an interest in helping the owner, I may get the listing. If I don't, what have I lost? 

Do you wonder why most FSBOs eventually are sold by  real estate agents? It's because selling real estate may not be as easy as it appears on the surface. There are many potential pitfalls and setbacks. Many owners discover some of these hazards after they have wasted months trying to find a qualified buyer, and then get all the "i"s dotted and all the "t"s crossed so they can close the sale. It can be a frustrating and time-consuming "mess." 

We in the real estate business know this: Murphy's Law always applies in real estate, that is, "If anything can go wrong, it will, and it will go wrong at the worst possible time."

So ... if you would like to sell your property yourself, you have my blessing. If I can help with some pictures and ad copy on one or two of my websites, please call me. You can see a sample of FSBO properties on: www.clientrealty.net.  

It snowed in Schley County today. There were snow flurries in Americus as well. The storm system that brought the snow is supposed to usher in some cold weather. My cousin Margaret McMickle Gooding called to tell me they had some accumulation out at Concord. I would have loved to see it. That's where I am originally from, and it is still near and dear to my heart. I fondly call Concord "the Holy Land." When I cross Buck Creek I can feel the aura of Concord come over me.    

Margaret also pointed out to me that the spring equinox will occur on March 20. The next day there will be a full moon, and it will be Good Friday. Then Sunday, March 23, will be Easter. It comes early this year.

If anyone would like to reply to my blog, feel free to do so. I have another blog called "Come Home to Southwest Georgia," and you can see it by clicking on:

http://www.realtown.com/michaeldixonrealty/blog.