Broker Tip: You Are in The Business of Making it Rain

By Stephen Theard, Coldwell Banker

Many enter the real estate industry with dreams of listing and selling multiple homes as either a supplement to existing household income or as a full-fledged business venture. What most new REALTORS® and some seasoned professionals do not understand is that it is your priority to make it rain leads. During my time working for PricewaterhouseCoopers, there was always one partner in the office who was known for making it rain. He/She was usually the relationship partner and was adept at meeting with various clients of the firm bringing back opportunities for projects.  Notice that I said “opportunities” (i.e leads for more projects). Without the consistent flow of opportunities or leads, the partnership was in danger of shutting down. Once the opportunities or leads were brought into the office, it was up to the various specialists to convert them into billable hours. Billable hours equals income for an accounting firm and the revenue needed to keep the firm afloat. Read more

Broker Tip: A Reminder that You are the Value

By Bill Rehbock, Coldwell Banker

I am continually reminded how important the role of the agent is in a real estate transaction. You are the value to your clients through your expertise, your tenacity, your creativity, your good will, your level head and your knowledge. Too often I see agents downplay their role by discounting their commissions, or by allowing the buyer to think differently. As an industry, we are under siege with industry-disrupters, technologies in some cases, and in other cases business models that claim to dramatically change the way we do business. While change is inevitable and we all need to evaluate the value each new concept brings to the consumer, in the end – you are still the value to the consumer.

Read more

Broker Tip: Make Your Home Stand Out to Buyers — 10 Tips to Prep Your Home for Sale

By Doug Evans

Even though selling a home can be a stressful undertaking, why not give it every chance to “wow” potential buyers?  Securing the right offer is not always easy, but here are 10 tips to impress potential buyers and maximize the possibility of obtaining the best price:

  1.      Focus on Curb Appeal: When you meet someone for the first time, you always want to make a good first impression and the “curb appeal” of your home is no different when it comes to impressing buyers.  When the curb appeal is strong, people will want to see what is inside – and that is your goal – to get buyers inside.  Mow and water the lawn, prune the bushes so no windows are hidden, trim the trees, weed the garden beds, and plant some colorful flowers in pots or window boxes.
  2.      Clean the outside:  Make sure to clean the gutters, pressure wash the exterior, properly store bicycles, gardening equipment, and children’s toys.  In addition, be sure the front door has a welcome feeling. A fresh coat of paint on the front door works wonders for a good first impression.  Add a new welcome mat for the finishing touch!
  3.      Make Necessary Repairs: Homebuyers will automatically expect all features in a home to operate safely and efficiently. If a buyer notices any problems, they may question whether the home has been cared for.  Take care of major issues like faulty or outdated electrical outlets and wiring, broken windows, furnaces and water heaters, along with leaking roofs and other plumbing concerns prior to putting a house on the market.
  4.      Remove Clutter: Virtually all homebuyers are on the lookout for one thing – a spacious home. Homebuyers tend to show less interest in an untidy, cluttered home.  In addition, an untidy home tends to fetch a lower selling price.  Consider renting a storage unit for extra furniture to create more open space in rooms.
  5.      Organize Closets and Drawers:  Avoid overflowing closets and drawers which indicate there is not enough storage space in the home. Read more

Broker Tip: So you want to be a Successful Agent? Here are some Tips from Someone with 38+ Years in the Industry

By Diane DeFaria LoVerde, D&F Properties

People often ask me: “How did you get that listing or that buyer”.  And I will be honest — it takes a lot of work, dedication, and passion.  I have been an independent broker for almost 33 years and I have worked in the industry for over 38 years.  I don’t work for a big office so self-motivation is extremely high on my list.  Here are some ideas and tips that I would recommend to anyone that desires to be a top producing agent:

Passion is a must.  You need to love what you do.

Talk, Talk, Talk.  Being shy is not an option.  Speak with everyone and let them know what you do.  This was a challenge for me as I am generally a quiet person.  But once I started speaking more, I instantly started reaping the rewards with new clients.

Return your calls.  I call leads within 15 minutes and I always return my clients call as soon as I can.

“Be Everywhere”.  Having an online presence is important.  I try to create a profile for any new site where potential clients might find me.  But don’t just create a profile on every site you find and ignore it. Make sure you check in on these sites occasionally and always keep your profile information updated.

Know your areas intimately.  I have been doing BPO’s for over 10 years now.  The pay isn’t great but I get educated in different neighborhoods every day plus I do get an occasional REO listing from these BPO’s. It also helps me with my retail sellers and buyers.

Know your stuff.  Always learn new things and attend classes.  SCCAOR has so many great classes you can take. I try to take about 2 or 3 classes every month.  The “Brunch n Learn” series are also a great way to learn about the business (and network with other members!).

Get leads any way you can.  Wear a badge. Ask your friends, family, and acquaintances for referrals. Don’t be shy! You never know who might be looking for a REALTOR®. Maybe your hairdresser (or your mechanic, restaurant server, kid’s soccer coach, etc.) is looking to buy or sell a home.

Keep in contact with your database.  My database is growing all the time.  I send them mailers about every other month.  I also send birthday cards with a small denomination gift card for lunch or coffee.  They love it.

Have a great network.  I am a one-person shop, so broker breakfast meetings, CE classes, and board activities are great ways for me to meet fellow agents and referral partners.  Working with agents that you know makes the transaction much smoother and a lot more fun.  You might even make good friends from your network.

Great customer service, knowledge, honesty, integrity and authenticity are also some good traits to have.  Remember to work hard, love what you do, and most importantly: BE YOURSELF!

Broker Tip: Three Tips for Disclosures that Protect You and Your Sellers

By Simon Offord, Esq.

One of the issues we continue to see on a regular basis are failure to disclose cases. Failure to disclose cases oftentimes result in the disgruntled buyer placing some level of blame on the real estate agents involved, so to the extent the agents can assist the sellers in this process, not only are the agents protecting the sellers, but they are also protecting themselves. This article is intended to help in this process.

Obviously, the cardinal rule is to be thorough, as the smallest omission could be considered concealment. Use these tips to avoid having to call us after mediation has been demanded or a suit has been filed. This certainly is not an exhaustive list, but is a good way to tighten up your disclosure process.

 

1. Require that your sellers take the time to fill out the Transfer Disclosure Statement and Supplemental Property Questionnaire themselves.

Make sure your sellers understand the importance of the TDS/SPQ by requiring they fill them out themselves, in their own handwriting. Sellers oftentimes do not take the disclosures seriously. This is oftentimes especially true when the sale is an “As-is” sale. Many sellers are under the impression that if their sale is “As-is” they do not need to disclose everything. NOT TRUE!
If there is not enough room on the standard forms, do not be afraid to provide an attachment. Consider also giving them a template or exemplar to use for the attachment. Include receipts of recent repairs as well.

Unless the agent takes the time to sit down with the sellers and stress the importance of the disclosures, you may be putting both the sellers and yourself at risk. Simply emailing the blank forms and asking they fill them out does not stress the significance of thinking through each question and providing all relevant information about the property.

 

2. Do not delegate!

It is not sufficient to merely direct the buyer’s attention to other documents. “See the Inspection Report” will not protect you or the client. You cannot rely on the buyers to actually read third-party reports, or understand what in those reports you are referring to. If there is something specific that you or your client are trying to convey and have personal knowledge of, actually put it in the disclosure!

 

3. Should I disclose ….?

One rule I thumb I like to use is if your client asks if they should disclose something, the answer should be yes! If, while preparing the disclosures, your client thinks something is important enough to ask you about, it is important enough to be included in the TDP/SPQ. This is not the time to sell the property, it is to protect the seller and agent.

In our experience observing the three tips above will go a long way in protecting you and your seller. Please visit the Law Offices of Peter N. Brewer blog and website to learn about other methods to protect yourself and for a host of other informative articles and information.

Broker Tip: How to Stay Connected with Clients


By Bonnie Wilson

Stopping by to say “hello” to our clients is the most important thing you can do to stay connected. Sometimes it can be a little awkward if you haven’t been in touch for a while. Here are a couple of steps I do to make the situation less stressful and more fun.

Always call or email ahead of time and say something like, “Hey, if you’re not too busy I’d like to stop by for a couple of minutes on Saturday morning. I have something I’d like to share with you.” Most people are home on Saturday morning and busy around the house or yard to its usually a good time.

Once I know that a few people are going to be home, I plan my route. Make sure to allow enough time for travel and to chat and catch up with each client.Then I assemble the “little something.”

Here are some of my suggestions:

  • My favorite is giving daffodils in the Spring. This is a great option because the American Cancer Society sponsors “Daffodil Days.” You order bunches for $10 each and it is a donation to the American Cancer Society which is a great way to start a conversation. Giving daffodils or another Spring time flower is always a hit and small bunches are usually not expensive. I have found great flowers at Safeway and they will help you make them look pretty.
  • Another gift idea is fresh strawberries, tied with a bow and your card. Be sure people are home for this one!
  • Small bags of jelly beans are good anytime. Around Easter, a bag of small chocolate eggs from See’s Candies is always a hit.
  • You can also give a pretty card with a note that says you have recently made a donation to your favorite charity in their name. If you aren’t sure which charity to pick, consider the Santa Clara County REALTORS® Foundation, which continually helps so many of those in need in our communities.
  • For families with little children, I will sometimes buy little Mattel toy cars & trucks for the boys and My Pony or Hello Kitty for the girls. It doesn’t have to be a large toy. If the family has kids, be sure you know their names!
  • Everyone (meaning real estate agents who are never shy except when they have to knock on a door) feels better when they come with a little something. Stopping by is the most important part. Just say “I was thinking about you the other day…”

Remember: Don’t just drop things off! But if you must drop it off, be sure and call and ask if they enjoyed your daffodils, etc. otherwise, in my opinion, it is a wasted effort. Lastly, follow up with a call, saying how much you enjoyed catching up. People remember that you took time from your day to remember them—sometimes for years. Now get out there and just do it!

Broker Tip: New California Supreme Court Ruling and the Implications for Dual Agency


by Tony Ventura and Alexandria Kavalaris

A recent California Supreme Court ruling has potentially far-reaching implications for brokers acting as dual agents in a real estate transaction. On November 21, 2016, the California Supreme Court issued a ruling in Horiike v. Coldwell Banker Residential Brokerage Company, holding that a real estate agent representing a seller owes a fiduciary duty to a buyer in the transaction when the listing and buying agents are licensed under the same broker.

The genesis of the lawsuit was the purchase of a Malibu mansion in which Coldwell Banker acted as a dual agent. The buyer, Hiroshi Horiike, was represented by a Coldwell Banker agent in Beverly Hills. The property was listed by a Coldwell Banker agent from another office. Before completing the purchase, Mr. Horiike signed two agency disclosure forms required by California law (See Civ. Code §§2079.14; 2079.16; 2079.17), as well as the “Consent for Representation of More Than One Buyer or Seller” form.

The dispute arose after Mr. Horiike purchased the property and discovered that the property’s living area was actually 9,434 square feet, as opposed to the “approximately 15,000 square feet of living area” represented in the listing agent’s marketing materials for the property. Mr. Horiike sued the listing agent on the basis that both the agent and the broker Coldwell Banker breached their fiduciary duty by failing to advise him to hire a third party to verify the actual square footage.

The case was tried before a jury and at the close of the case, the listing agent moved for nonsuit as to the breach of fiduciary duty cause of action on the basis that the listing agent exclusively represented the seller in the transaction and therefore did not owe a fiduciary duty to Mr. Horiike. The trial court granted the motion for nonsuit as to the listing agent, and instructed the jury that, in order to find Coldwell Banker liable for breach of fiduciary duty, the jury had to find that a Coldwell Banker agent other than the listing agent (who the trial court found did not owe a fiduciary duty) or the buyer’s own agent (who was never sued) had breached a fiduciary duty to Mr. Horiike. The jury then returned a special verdict in favor of Coldwell Banker on all causes of action.

The Court of Appeals reversed the judgment on the breach of fiduciary claim against the listing agent and Coldwell Banker, concluding that the listing agent, as a salesperson working under Coldwell Banker’s license, owed a duty to Mr. Horiike “equivalent” to the duty owed to him by Coldwell Banker. The court reasoned that because Coldwell banker acted as the dual agent of the buyer and seller in the transaction, it owed a “fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with either the seller or the buyer.” Observing that the listing agent executed the forms on behalf of Coldwell Banker as its associate licensee, the court held that the listing agent owed the same duty to Mr. Horiike and had breached that duty by failing to communicate all of the material information he knew about the square footage, including the apparent contradiction between the marketing materials and the square footage in the public record documents.

Upon appeal to the California Supreme Court, the sole question before the Court was whether the listing agent, as an associate licensee for Coldwell Banker in the sale of the Malibu residence, owed a duty to Mr. Horiike to take certain measures to inform him about the property’s square footage: specifically, to investigate and disclose all facts materially affecting the property’s value or desirability, regardless of whether those facts could have been discovered by Mr. Horiike and his agent.

The Supreme Court affirmed the appellate court’s ruling, finding that listing agents owe fiduciary duties to the buyer when both buyers and sellers are represented by agents from the same brokerage. The Court reasoned that an agent’s relationship is derived from the agency relationship between the broker and the client. As such, the relationship between the broker and agent cannot be uncoupled.

This ruling further complicates the controversial real estate practice of dual agency, which is allowed by California law, but creates a situation in which one person must act as the agent of two parties whose interests inherently conflict. While this inherent conflict cannot fully be resolved, the take-away from the Supreme Court’s ruling in Horiike is as follows: the primary difference between the disclosure obligations of an exclusive representative of a seller and a dual agent is the dual agent has a duty to learn and disclose facts material to the property’s price or desirability, including those facts that might reasonably be discovered by the buyer.

That said, the Court acknowledged that more difficult questions about the scope of a real estate salesperson’s fiduciary duties when functioning as a dual agent may be raised in future litigation. For example, does the dual agent need to disclose confidential information obtained from the seller or otherwise compromise the agent’s ability to fulfill obligations to the seller? These are questions for another day. At present, the Supreme Court ruling underlines the fact that real estate agents in a dual agency transaction must be careful to observe their fiduciary duties to both the buyer and the seller and must carefully consider the risks of dual agency transactions in general.

If you have further questions regarding copyright issues, please feel free to contact either Tony Ventura or Alexandria Kavalaris at Ventura Rossi Hersey & Muller, LLP.

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Broker Tip: Advising Buyers — How to Hold Legal Title when Purchasing a Home

By Nick and Barbara Lymberis

Once you are in contract with your buyers, just prior to preparing the deed in your buyers’ names in preparation for Close of Escrow (COE), the escrow officer will want to know how they wish to hold title.

It is important that, before letting the escrow officer know, your buyers contact a lawyer or other legal source to determine how best to hold title given their particular circumstances. The decision could have major ramifications, so it is usually a tax advisor that can best help, together with a legal opinion.

These are the following ways to hold title (Note: the legal ramifications of each way will not be addressed):

  1. Tenancy in Common
  2. Joint Tenancy
  3. Community Property
  4. Community Property with Right of Survivorship

As soon as your buyers are in contract, and substantially before COE occurs, we recommend your buyers contact a knowledgeable person to review financial status and personal wishes regarding holding title.

A common question is: “But Mr./Ms. REALTOR®, can’t we pick one and decide later how best to do it?”

Answer: Yes, of course. But we know from experience that making an appointment with the proper person is usually postponed and many times forgotten. With Nick’s background as an attorney and Barbara being a paralegal, we know that when decisions are postponed, life intervenes and it can trigger unintended results. At some later date, what the intentions were are irrelevant, or at least substantially altered by life, in almost all cases. (It’s complicated.)

So, we reiterate that it is best to handle it “on the spot” while everything is fresh in the buyers’ minds and their motivation is current with the purchase of their new home.

If circumstances change after COE,  when the choice has been made and the deed recorded, then a review can take place with an advisor and, if necessary, changes can be made. In fact, Trusts and Wills attorneys suggest reviewing your trust and will at least every 5 years. And with the laws changing from time to time and courts making interpretations of what the law is supposed to say, what was intended 5 years ago may not apply in today’s world.

 


Barabara and Nick are REALTORS® for Coldwell Banker. Visit their website at www.nickandbarbara.com

Copyright © 2017 by Nick and Barbara Lymberis

Note: This article is not intended or offered as legal advice. It has been prepared for educational and informational purposes only.

5 Things To Read Before Doing Your Taxes

It’s that time of year again – Tax Season! Whether you are just starting out as A REALTOR® or you’re a seasoned professional, it is always a good idea to brush up on the latest news and tips when it comes to preparing and filing your taxes. We have compiled some of our favorite resources below:

1)  9 Tax Deductions Every Real Estate Agent Should Know

If you are looking to maximize your deductions this year, then this blog post from REALTOR®Mag is for you. It covers nine of the top deductions that can help you keep more of those hard earned dollars. Vehicle Mileage, Office Supplies, and even software are included in this must-read article.

 

2)  Real Estate Tax Tips from the IRS

The IRS has compiled several great tips specifically for people in the real estate industry. Whether you are an employee or self-employed, you will find some great advice on this website.

 

 3)  5 Real Estate Tax Secrets the Rich Don’t Want You to Know

If you have any investment properties, then this blog post from realtor.com is for you. The highly wealthy are maximizing their tax savings every year, so why shouldn’t you? here are a lot of great tips here, including taking advantage of ‘safe harbors’,  depreciating your rental property, and taking advantage of the 1030 exchange.

 

4)  7 Tips to Help Late-Filing REALTORS® Avoid an IRS Audit

Let’s face facts: REALTORS® are busy. Like many Americans, we often wait until the last week to prepare and file our taxes. If you fall into this category, make sure you read this article from RISMedia on how to avoid an audit from the IRS.

 

5)  NAR Discount on QuickBooks® Self-Employed + TurboTax®

Finally, if you are preparing your own taxes this year, the National Association of REALTORS® is offering several discounts on QuickBooks® Self-Employed + TurboTax®. Find out more details here.

 

Broker Tip: HOA Sales — 6 Important Tips for Buyers

by Guy Berry

When a buyer is looking at a single-family home, they usually focus on location, how it shows, property condition and price.  If a house meets these four criteria, they will make an offer. However, my experience is that when a buyer is looking for a condo or other HOA properties, they fail to understand that there is so much more to consider. Too often the buyer (and their buyer’s agent) are overwhelmed with the 300-page HOA documents. Don’t forget, these documents are a contingency of the contract. The following 6 things need to be reviewed very carefully:

 


1. Financing

The rate and type of financing available for that specific complex will be based on many things, including percentage of owner occupied, percentage of past due HOA, FHA approval, multi-story condos, litigation, and other factors. Make sure you get your buyer to a lender that understands HOA financing.

 


2. CCR’s

The important issues to investigate are the restrictions for that specific complex. The HOA might require you to park only in your garage, decide what animals you can or can’t have, the colors of your house, what you can and cannot have on your balcony, whether you are allowed to repair your car on site, cable antenna restriction, etc. This list may seem endless but even if your buyer loves the property, the restrictions might affect the buyer’s enjoyment living there.

 


3. Finances

The Buyer will be provided with a large stack of financial documents.  The first thing to focus on is how well the complex is managed. Take a look at the budget. Are they raising enough money in income to cover the HOA day to day expenses?

 


4. Reserve Study

Since the HOA will be responsible for repairing and replacing all the major components on the property (e.g.  pool, clubhouse, parking lots, lights, roofs, etc.), make sure to check if the HOA has done a recent reserve study.  Did your buyer get a copy? HOA law requires the HOA to frequently hire a 3rd party to do an onsite inventory to determine four things:

– The total life of that item (“tile roof – 40 years”)
– The remaining life of that item at time of survey (“25 years”)
– The estimated cost to replace roof (in 15 years)
– Divide that estimate replacement cost by number of years and number of units to determine how much the HOA has to collect this year from each owner for that item. This will insure they have the funds pre-collected when the roof expense comes due in 15 years.

 


5. Reserve Funds

The reserve study tells us how much the HOA should have collected in the past. HOA law states that the HOA must disclose:
– How much reserve money the reserve study should have collected to date. That would be 100% fully funded.
– How much money they have actually collected.
– The percentage between what they should have in reserve vs. what they actually have.

It is not uncommon for an HOA to be behind on collecting reserves because no one wants their dues raised.  So, should your buyer buy into a complex that is only 25% funded?  More money will be needed in the future, whether the HOA has collected enough or not.  The result may be a major dues increase or a special assessment of all homeowners.

 


6. Financial Statement Knowledge

Remember it is the seller, not the HOA, that is responsible for itemizing and delivering the correct documents to the Buyer. Is this HOA ran well?  Are they large enough to hire a property manager? (Or is the Board Treasurer, who is actually an engineer at Google, preparing these complex set of documents?) And the big question: Is your Buyer sophisticated enough to read and understand these documents? There are companies that the Buyer can hire to analyze and review these documents for them. It seems to me that when you are discussing the inspection options with your buyer, you should advise them to get qualified help in understanding what they are buying into.