Tuesday, August 22, 2017

Time Is of the Essence Clauses and Why to Ignore Them

What is a "Time Is Of The Essence" clause, and why does it matter?



The picture below is from Page 2 of the PA Standard Agreement for the Sale of Real Estate, the boilerplate form most Realtors use to make an offer:


This paragraph says, essentially, that the potential agreement is based upon the time of execution, or the time when both parties agree and sign the document. It puts a time limit on the offer and the agreement. In essence, it says "I want to buy your house, but I need you to sign this contract and agree to close the sale at a certain time, and if you don't do that, we don't have a contract." 

"Time is of the essence" means that the agreement is based upon and contingent upon the precise timing of certain events within the contract. This is all normal and standard practice for many different kinds of contracts. Precise timing allows multiple parties to coordinate and cooperate. This cooperation among many different parties with diverse interests is the main advantage of the idea of a contract in the first place. A contract allows people to trust each other and to coordinate their efforts, even if they're complete strangers. Contracts allow us to achieve much more as a civilization than we ever could without them, and as with many things in life, timing is everything.

However, I would like to draw your attention to paragraph 5(A). I believe this line is abused by most agents, and unsuspecting sellers can make poor decisions if their agent doesn't properly explain the meaning and implications of this sentence.

Often, agents will present an offer with a time limit on line 51 that works out to about a single day. Why do they do this? They want to create a sense of urgency. It's a sales tactic and a negotiation approach. They want to make it seem like a limited opportunity and to create a false sense of urgency in order to pressure the seller into deciding quickly in favor of the buyer. However, if you're the seller, you need to ask yourself this question: "If I don't accept this offer by the date specified on line 51, what will happen?"

Whenever there is a deadline in a contract, and there are many of them in the standard agreement for the sale of real estate, it usually makes sense to ask "Or what?" The contract says you have to do such and such by a certain time, but what's the consequence if you don't or can't?

It's your agent's job to help you understand the consequences, benefits, and detriments of either compliance with or rejection of certain time frames in the contract. Unfortunately, many agents are simply not equipped to do this because they themselves don't really understand the contract, and don't have even a rudimentary understanding of contract negotiations.

I usually advise my seller clients to ignore 5(A). Think about it: what will the buyers do if you don't sign by their desired date? Will they walk away? Possibly, but why would they do that? Are they not really committed? Are they only half interested? If simply waiting for an additional 24 hours can make them walk, what will happen if there there are less than perfect home inspection results?

Does your house suddenly stop being desirable to the buyer after an additional day or a few hours? Why would that be the case? Is the buyer's financial situation shakily dependent upon some arbitrary date, or are they somehow forced to get an offer accepted right now, today?

Is the buyer deciding between two or more homes, and letting time decide for them? If you don't accept their offer by the date specified in 5(A), are they just going to go with another house?

More than likely, the answer to all of these questions is "No." Really, they're trying to force you to sign the agreement right now because they're afraid that a competing buyer will swoop in and make a better offer. It's a big disadvantage for the seller to sign an agreement before all potential serious buyers have had a chance to see the home and make offers. The more offers, the better. If you're getting a lot of requests for showings, it doesn't make sense to sign an agreement too hastily.

In fact, whenever I see a short deadline on 5(A), I encourage my sellers to counter-offer with a significantly higher price. A short deadline on 5(A) signals a desperate and fearful buyer, and that signal can be a big advantage for you as the seller.

When I work with buyers, I usually advise them to leave 5(A) blank. Other agents in my market are mystified and thrown off by this, and I have been able to help my buyer clients negotiate lower prices and better terms even in this extreme sellers market by simply refusing to signal time limits one way or another. Some will criticize this approach in the sense that it leaves the offer "open-ended." Technically, the seller could sign the offer at any time, and the buyers would be bound to the agreement! Of course, I have found ways to protect my buyer clients from this exposure, though I won't share my strategy in this blog post for several reasons.

I won't detail all of my negotiation tactics on behalf of buyers here, but there are many ways to use time toward the buyer's advantage while ensuring that the buyer is not exposed to an offer just hanging out there forever. If you're a buyer interested in looking for a home, feel free to contact me and I'll be happy to explain!

www.jayvillella.com

Friday, February 10, 2017

Why Haven't Realtors® Gone Out Of Business Yet?

Travel Agents, Taxi Drivers, Checkout Clerks, Bank Tellers...why not Realtors®?


Industry insiders and analysts studying the profession from the outside have something in common: they just don't understand how real estate brokerage has persistently managed to avoid innovating for decades while maintaining or even growing market share and preserving or even increasing profits. It's truly astounding and remarkable. How can the profits secured by real estate brokers possibly be justified by the service they provide? Why should some Realtors® earn more than many attorneys, engineers, dentists, doctors, and other business professionals? They very frequently have less education than these other mentioned groups (only 12% of Realtors® have attained graduate level education). The licensing requirements are not comparatively rigorous. Agents absorb far less financial risk than entrepreneurs or doctors. They often spend surprisingly little time actually engaged in the practical aspects of the job (brokering sales, negotiating terms and price, showing homes, marketing homes, see here). What gives?

Aren't real estate agents merely service providers like travel agents, taxi drivers, bank tellers, or other customer service professionals? Shouldn't the internet and other communication technologies have put agents out of business, or at least automated much of the process, thus causing a steep decline in their numbers? Shouldn't real estate brokerage have been "Uber-ized" by now?

Sure, sales professionals are paid quite well in many industries, especially business to business technical products. However, "top-producing" individual agents make vastly more than even the most highly paid sales representatives, and the brokerages themselves are multi-billion dollar empires. Not only that, they aren't required to travel frequently or at all, unlike other high-paying sales jobs.

Something seems to be amiss. The internet, sites like Zillow, and the easy availability of information should have at least put downward pressure on the price of real estate brokerage, but it hasn't (overall). There is a good discussion of some recent attempts to innovate here.  How is this possible?

Four Reasons


1) A home is more than a house.


Houses are not just objects: they're homes loved by people. Selling or buying a home is an emotional process for most people. Apps and automated services are great for exchanging objects. But, buying or selling a home involves people's inner selves: their desires, their dreams, their hopes, their anxieties, their relationships, their self-images: it all comes out during this process. Some of my clients make me wish I were a trained psychotherapist in order to help them process their emotions. I provide understanding, empathy, and actual care. Lawyers, doctors, therapists, customer service representatives, and agents all have a duty to care. At the end of the day what matters is that we take care of you, protect your interests, and help you achieve your goals. No machine can do that...yet.

No two properties are the same. No two houses feel the same, look the same, or have the same psychological effect on the same people. Even in the blandest of suburbs, each plot of land has a unique relationship to the earth and to its owners self-perceptions. It's the job of the agent to help the current owner and the new owner agree on the exchange of something far beyond mere property. The seller is parting with a piece of themselves, a piece of their history, a story about their family. A trusted, professional, and personal adviser is indispensable for the seller as they attempt to see their home through the buyer's eyes and negotiate a fair deal. The presentation of an offer by the buyer is not the same as clicking on an item to place it in a "cart" online, it's a deeply personal statement about the buyer's perception of value, and must be handled skillfully and carefully. The buyer has to learn to see not just their future, but the seller's past and their personal motivations. There's no app for that.

2) Knowledge is more than data.


"Infobesity" is a pandemic in the real estate market. I first learned this term while reading All About Them by legendary entrepreneur Bruce Turkel. Essentially, we are surrounded by an overwhelming amount of information all the time. We're bombarded by millions of tiny decisions and facts, and it's exhausting. We're drowning in information and piles of data, but wisdom and intelligent discernment have become rare commodities. Buyers and sellers have access to an enormous amount of information about the real estate market. They can read up on the laws, regulations, financing, housing prices, market forecasts, and see every listing everywhere all the time, instantly. Unfortunately, this has actually made the home buying process more difficult and confusing for the average buyer and seller.

When people come to me, they are typically deeply confused and operating on several incorrect assumptions or making decisions based on irrelevant data while ignoring important facts. Several of my physician clients have told me this same dynamic is causing "cyberchondria" in many of their patients. Basically, people Google their symptoms and freak out because WebMD says their stomach ache is probably cancer. Some of my physician clients absolutely loathe that website and others like it for confusing and disturbing their patients. One time, I told a physician client that "Zillow is the WebMD of real estate" and she immediately deleted the app from her phone. I was shocked at the time, but I now understand just how damaging excess irrelevant information can be.

I'm not saying that buyers and sellers are helpless waifs who can't sort through the data to help themselves make better decisions, it's just that an experienced and well trained agent does this every day, all day, and has developed a deeper understanding and intuition about the market. No blog article, no automated valuation model, no crowd-sourced answer to your anonymous online question can provide truly reliable and professionally competent advice. No app can help you search your inner motivations, or help you sort through your priorities.

3) Service is more than a transaction.


I love Amazon.com. It's awesome. When I know exactly what I want, I go to Amazon and buy it. Boom, done. When I want to get rid of some useful stuff I no longer want, I list it on Amazon for the lowest price and it sells. I throw it in the mail and get paid. Fantastic. Like I said before, the internet is amazing for the exchange of simple objects and a wonderful achievement in the communication and dissemination of ideas. One downside, though, is that our interactions with each other are becoming increasingly cold, one-dimensional, and "transactional." I think we all feel it, and cultural commentators have been talking at length about this for a while. As a side note, if you have Netflix, I think The Black Mirror (NSFW) is a brilliant illustration of some of the dark aspects of our technological progress. Anyway, the buying and selling of a home is not essentially "transactional," it's essentially personal. Each home is unique, each buyer and seller is unique. I believe it is fundamentally impossible to simply build an app or website that can cater to each buyer's and seller's specific human needs and idiosyncrasies. 

Buying and selling a home is a deeply subjective, personal, and human experience. I can't tell you how many times I've seen adult men and women cry at the closing table. And while they're crying, I'm right there next to them making sure the taxes were calculated correctly and that the deed was written properly. When they were dreaming about where to put the furniture, I was making sure they weren't overpaying and that they understood the legally binding details of their contract with the seller. One of my many jobs is to create a space to allow the buyer or seller to be human. I watch out for their interests, I help them sort through the avalanche of data, and I lead the dance of negotiation to make sure no one's toes are crushed. It's a subtle, demanding, nuanced, and emotionally stressful job. It can't be done by a computer program, and really, would we want it to be? A home is not a commodity, like soap or toilet paper. It's not just an exchange for cash, it's a major step in a human person's life journey. An app or an online chat bot is not a suitable companion for something like this. Would you crowd-source your decision about whom to marry, or whether you should go for a promotion, or how you should handle your mother in law?

Now, if our grim future is to be filled with undifferentiated gray box houses and undifferentiated gray box-like homo sapiens, agents will no longer be valuable. They will not only have lost their value because the houses are all the same, but because there are no longer any people to buy and sell them.

4) No one wants to be a Realtor®


So far, I've offered an explanation for why there are still Realtors at all, even though it seems like the internet should have caused them to become an endangered species by now. I haven't explained, however, why they continue to command such seemingly outrageous fees. Essentially, it's because there isn't a lot of competition among experienced agents so these agents don't feel the pressure to cut their fees. Also, the average age of Realtors continues to climb, and older demographics are more resistant to technological innovations that would streamline their operations and increase productivity (thus putting downward pressure on wages for less productive agents). Further, the license requirements and MLS agreements among established brokers effectively prevent innovative business models.

No one wants to be a Realtor. Seriously. The National Association of Realtors reports that 87% of new agents are out of the business within 5 years. In addition, young people aren't entering the profession. I am one of the 2% of Realtors in this country under 30. While the official barriers to entry are alarmingly low (in Pennsylvania, a criminal record and lack of high school diploma aren't disqualifying) and brokers are constantly hiring anyone and everyone because of the massive turnaround: it is quite difficult to actually survive as an agent. An honest job description would be something like this: "100% commission, no benefits, no security, work 24/7/365, exposed to 6-7 figure liability, constantly meeting strangers in empty properties, many people will assume you're a scumbag and an idiot, might work for months or years for no pay, monthly costs just to stay in business somewhere $300-$1000 or more depending on your business strategy." Ready to sign up?

You'd think that an easy job with fat paychecks would attract tons of people. Unfortunately, perception is not reality for the vast majority of agents. Sure, the barriers to entry are low, but the barriers to success are formidable. Simply becoming an agent isn't difficult at all, but being a good agent is extraordinarily difficult. The public perception of agents as lazy, dumb, and dishonest rent-seekers is understandable given the actions of poorly-trained and desperate agents. It's unfortunate that many people end up dealing with agents like this, but there are also many competent, professional, and ethical Realtors.

All of that said, here's a warning:


Inasmuch as a good, ethical, knowledgeable, caring Realtor can make your moving experience wonderful, an incompetent or dastardly agent can ruin your experience and cause tremendous stress, financial loss, and long-lasting frustration. A good Realtor can make an enormous contribution and is well worth the expense. However, a bad one can be extremely destructive and dangerous. It would be better to stick a "for sale" sign in your yard than hire a bad agent, but if you have the chance to hire a good one, you won't regret it. Choose carefully!

Seller's Assist

What is "Seller's Assist?"


I often find myself explaining "seller's assist." Hopefully this brief article will clarify a few things. For those who prefer video, I've made a silly and extraordinarily low budget video here.

"Seller's assist" is money returned to the buyer at the close of escrow which is used to pay some of the buyer's transaction costs. There are a few different ways to conceptualize this, but I see it as enabling buyers to roll some of their closing costs into the mortgage.

Let's take a look at the following example:

  • List price of the home is $300,000
  • Closing costs will be about $20,000
  • Fair market value of the home is somewhere between $280,000 and $300,000

Let's say the buyer loves this home, but they really don't have $20,000 available. They are comfortable paying $10,000 at closing, but $20,000 is just too much. No problem: "seller's assist" is a great solution for this issue: just make a $10,000 seller's assist part of the offer. That way, at closing, $10,000 of the closing costs will be paid by the seller.

If the offer is $300,000 with $10,000 seller's assist, the net price to the seller is actually $290,000 since the seller will be paying $10,000 of the buyer's closing costs. There are pros and cons to consider here:

Pros of Seller's Assist for the Buyer:

  • Less cash required at closing

Cons of Seller's Assist for the Buyer:

  • Slight relative increase in closing costs indexed to sale price (taxes, some fees)
  • Some increase in monthly mortgage payment and total debt
  • Possible higher tax assessment and resulting higher property taxes

Pros of Seller's Assist for the Seller:

  • Enables a larger pool of well qualified buyers to make offers even if they don't have quite enough savings.

Cons of Seller's Assist for the Seller:

  • Slight relative increase in closing costs indexed to sale price (taxes, some fees, commissions)
When I say "slight relative increase," I mean to compare an offer with seller's assist to a similar offer with the same net price. An offer of $300,000 with $10,000 seller's assist will net the seller slightly less than an offer of $290,000 with no seller's assist. The reason for this is that several of the closing costs for the seller are based on the total sales price, not the net.

Hopefully this brief article is useful. If you have further questions, don't hesitate to contact me!




Wednesday, May 4, 2016

Cicero and Seller's Disclosure

In my quickly dissipating free time, I enjoy reading classical authors. I believe the ancient Greeks and Romans had many insights that remain useful today. I also drive frequently (whether to show houses or play concerts) and listen to many recorded courses and books. A few months ago I was listening to an excellent course called "Famous Romans" by J. Rufus Fears. If you're interested in the course, you can find it here. I can't recommend it highly enough.

Anyway, he was discussing Cicero and his famous work De Officiis (44 BC) where he examines the tension between morality and expediency. In one section, he discusses this conflict in the context of home sales. The following passage is a dialogue between Cicero's characters Diogenes and Antipater:

Diogenes: "Suppose...that an honest man is offering a house for sale on account of certain undesirable features of which he himself is aware but which nobody else knows; suppose it is unsanitary, but has the reputation of being healthful; suppose it is not generally known that vermin are to be found in all the bedrooms; suppose, finally, that it is built of unsound timber and likely to collapse, but that no one knows about it except the owner; if the vendor does not tell the purchaser these facts but sells him the house for far more than he could reasonably have expected to get for it, I ask whether his transaction is unjust or dishonorable.
"Yes," says Antipater, "it is; for to allow a purchaser to be hasty in closing a deal and through mistake[...]is deliberately leading a man astray."
"Can you say," answers Diogenes," that he compelled you to purchase, when he did not even advise it? He advertised for sale what he did not like; you bought what you did like. If people are not considered guilty of swindling when they place upon their placards FOR SALE: A FINE VILLA, WELL BUILT, even when it is neither good nor properly built, still less guilty are they who say nothing in praise of their house. For there the purchaser may exercise his own judgment, what fraud can there be on the part of the vendor? But if, again, not all that is expressly stated has to be made good, do you think a man is bound to make good what has not been said? What, pray, would be more stupid than for a vendor to recount all the faults in the article he is offering for sale? And what would be so absurd as for an auctioneer to cry, at the owner's bidding, 'Here is an unsanitary house for sale'?" In this way, then, in certain doubtful cases moral rectitude is defended on the one side, while on the other side the case of expediency is so presented as to make it appear not only morally right to do what seems expedient, but even morally wrong not to do it. This is the contradiction that seems often to arise between the expedient and the morally right. But I must give my decision in [this case]; for I did not propound [it] merely to raise the questions, but to offer a solution.
I think, then, that it was the duty of that [seller] not to keep back the facts from the [buyer], and of this vendor of the house to deal in the same way with his purchaser. The fact is that merely holding one's peace about a thing does not constitute concealment, but concealment consists in trying for your own profit to keep others from finding out something that you know, when it is for their interest to know it. And who fails to discern what manner of concealment that is and what sort of person would be guilty of it? At all events he would be no candid or sincere or straightforward or upright or honest man, but rather one who is shifty, sly, artful, shrewd, underhand, cunning, one grown old in fraud and subtlety. Is it not inexpedient to subject oneself to all these terms of reproach and many more besides?

Sellers ask me all the time: "do I need to mention this in the seller's disclosure?" I believe Cicero gives us a great answer: if you think you have something to gain at the buyer's expense by neglecting to mention it, then yes, you should disclose.

Additionally, the law in PA requires that a seller disclose known material defects which are things that would affect the value of the home if they were known at the time of purchase. Some examples would be a broken HVAC system, termites, a failing roof, high Radon levels, broken appliances, water damage, mold, or anything that would cause a potential buyer to reconsider the value of the property. Agents are required by law to disclose known material defects.

Admittedly, there is some moral and legal "gray area" here. It can sometimes be difficult to determine what should be disclosed. No one wants to make their home seem like a horrible dump, but at the same time, there is a strong legal and ethical duty to ensure a buyer is aware of any known problems.

I advise my clients to err on the side of too much disclosure rather than too little. There are issues with every older home (and most of the housing stock in Pittsburgh is older) and nothing surprises the professionals involved. The buyer's agent will help the buyers understand that old termite damage or some wetness in the basement isn't really such a big deal. But, if the seller conceals defects or attempts to deceive, trust is broken and a transaction can fall apart when the buyers inevitably figure out something isn't right. Pretty much everyone gets a home inspection, and the inspectors are trained to uncover problems. Also, you can be sure that if the home inspector doesn't find it, the buyers will very likely discover the problem soon after moving in. The statute of limitations for this is four years in PA: plenty of time for the buyers to get very angry and sue.

In conclusion, take the 2,060 year old advice of Cicero: it is both right and expedient to disclose known material defects when selling a home!

Mortgage Broker VS. Mortgage Lender

Some of the most common questions I get are about the differences between a mortgage lender and a mortgage broker. For the sake of convenience, I wrote this blog post which I hope will be a thorough explanation for future reference.

Mortgage Lender


The term "mortgage lender" could refer to an institution or an individual. If it is an individual, the person will sometimes call themselves a "loan officer" or "mortgage consultant" or something like that. Basically, this person works for a lending institution directly. Their job is to be the "face" of the lending institution like a commercial bank (e.g, Wells Fargo, Chase) or a smaller bank or credit union. If you come to them, they will offer you various loans available through their institution only.

Mortgage Broker


A mortgage broker, by contrast, is able to offer you a loan through several different institutions. They will gather information about you and then approach a few lenders to see what is available to someone with your credit profile, assets, and income. Often, these are individuals, but there are also mortgage brokerage websites like Lendingtree.com or Quickenloans.com. Mortgage brokers charge a fee for their service.

Which is better?


I can't answer this question for you, it is really up to you. It might make sense to approach a mortgage broker to see what they can offer you. It's entirely possible they can get you a better loan than you would find on your own, and this could be well worth the fee. If you're in a rush to buy your dream home, I would recommend talking to a lender directly since they will be able to qualify you and start the process more quickly, which could lead to less hassle down the road. 

One note: I do not recommend using an online or totally remote lender because the tax structure and municipal requirements in Allegheny County cause a lot of confusion for people who aren't used to dealing with it everyday. If you choose an online lender, that's fine, but be aware it may cause some frustration for you later on in the process. If they offer you amazingly better terms, that temporary frustration could be worth it. But, be aware that you are taking a risk. If they screw up and fail to close on time, you may lose the house or incur unexpected expenses.

My Business Values

Many businesses have "mission statements" or "mottos." These ideas or phrases help them shape company policy, create business plans, contribute to the coherence of marketing, and give the leadership a more or less clear goal when making decisions. I personally do not have a mission statement or a motto, but I have formulated three values that I believe are essential to my method of being a real estate agent. They are (in no particular order):


Excellence


I have a deep need to do excellent work. I can't settle for mediocrity, and I work tirelessly until whatever I'm doing is done right. Obviously, I'm not perfect. I will never be perfect regardless of how hard I work or dedicated I am. No one is perfect, but I will tell you that errors or oversights on my part are the most stressful aspect of my job. 

Yep; I've witnessed stress-induced meltdowns, threats of lawsuits, overflowing plumbing, termite swarms, and many other difficulties, but my personal mistakes or errors are what keep me up at night. I want all of my work to be extremely well done and to be certain my clients are getting a fair deal. When I put my name on that yard sign or offer, I need to know everything is top-quality. 

Unfortunately, and this has been one of the hardest things for me to learn, the "real world" makes this kind of excellence impossible sometimes. Everyone makes mistakes, and I am not working alone. I depend on a whole network of people, some of whom drop the ball occasionally. I feel responsible for everything affecting my clients, but realistically I know that I am not able to influence everything for the better. I've had clients negatively affected by lenders, closing companies, inspectors, contractors, and of course the people on the other side of the sale too.

Even if I didn't cause the problem, I feel 100% responsible and will do anything I can to find a solution for my clients. So, in order to stay sane, I focus on absolute dedication to excellence as a goal and a process, but try to help my clients understand that the "real world" involves mistakes and unpredictable difficulties.



Transparency


I believe in complete transparency between myself and my clients or customers. I strive to be direct, clear, and open in all my dealings with clients. If I think a house isn't worth buying, I will unambiguously communicate exactly that. If I think a house is a good buy, I will say so and make it obvious. 

I believe transparency creates mutual trust, and trust is essential for any transaction. On the flip side of transparency is a respect for confidentiality. I carefully guard my client's information and spend a lot of time improving my understanding of how information affects negotiations and other aspects of the transaction. I refuse to charge deceptive fees, and I'm not a cheerleader for every and any offer, or every and any house. I don't dodge difficult conversations, and I want my clients to tell me if they are unhappy because I'm not delivering what they expect or want. 

Real estate transactions sometimes contribute to a lot of fear and anxiety on either or both sides of the sale. I find that these emotions can erode trust and cause paranoia. Part of my job is to help people through these difficult emotions, and I know that a high degree of transparency is absolutely necessary in achieving this.

Treat those who are good with goodness, and also treat those who are not good with goodness. Thus goodness is attained. Be honest to those who are honest, and be also honest to those who are not honest. Thus honesty is attained. -Lao Tzu


Creativity


There is a lot of "buzz" about creativity among business commentators and educational professionals. What exactly is "creativity?" I think that's a question too broad to answer fully in this blog post, but as a rough definition, I think creativity is the ability to make opportunities out of obstacles. Creativity is the ability to take the givens of a broken or limited situation and make it work by synthesizing it with unlimited imagination. 

Creative people aren't just dreamers per se, rather they have the ability to recognize their dreams when they come out of the clouds and land on the ground. Everyone has dreams and imagination, but it's the ability to recognize when our dreams and imaginations are coming to life in the "real world" that people call "creative." Creative people recognize and reject the false dichotomies everywhere. When a problem seems unsolvable, creative people change the problem. Creative people don't so much "think outside the box" as realize that the "box" is a self-imposed illusion and limitation. It isn't that "creative" people are wistful dreamers, but rather they are deeply pragmatic and imaginative. 

It's the presence of both qualities, practicality and imagination, that we call "creativity." Everyone has a story to tell, a song to sing, a building to design, or a business to innovate, but "creative" people are those who work with the given limitations and transform reality by setting pen to paper, brush to canvas, or funds to a business plan. I value creativity highly, and I'm continuously attempting to cultivate it in myself and others around me. All human beings are creative to a certain extent, we just sometimes need inspiration or motivation to pursue a creative mindset.

I like to stay open to the unknown and embrace risk. I try to follow inspiration and allow myself time to let the creative process unfold. Even in the day-to-day of black and white contracts, creativity is essential.


We have to continually be jumping off cliffs and developing our wings on the way down. - Kurt Vonnegut


Thank you!


Thanks for reading this blog post. If you resonate with these values, feel free to contact me at this link!

Saturday, January 23, 2016

Why Agents Aren't Returning Your Calls

The Question:



"Why don't any of these real estate agents ever respond to my calls/texts/emails/messages?"

The Answer:

  • Incorrect listing information. Third-party real estate advertising websites are riddled with errors, including incorrect contact information. The agent might not be calling or emailing you back because you have the wrong number or address.
  • Automated "Lead Management" software. Many agents are using automated contact management software to organize the dozens or hundreds of contacts they receive on a weekly basis. Unfortunately, one wrong click and your request for information can disappear into oblivion. Often, these lead management programs will publish emails and phone numbers for the agents online that don't get to the agent directly. You'll call the number or send the email and it will get "lost" in the tangle of automated forwarding and management algorithms. Try "Googling" the agent to find their real phone number and email.
  • "Lead Capture" websites. Sometimes home search websites are little more than "lead capture" sites for agents looking to build their businesses. Unfortunately, the website creators have no idea which agents are competent or interested in specific markets, so the "leads" (i.e. your request for more information or a showing) get distributed to agents who have no familiarity with the neighborhood or who are disinterested in the market. Some agents don't like to work with condos, for instance. So, if you "request more information" on a condo, and your request gets sent to an agent who hates condos, they might not call you back.
  • Difficulty distinguishing "window-shoppers." A lot of people like to look at houses online. There is nothing wrong with that at all! However, it is impossible for an agent to know whether the person contacting them online is ready to make a move or not. Since we get paid only when transactions close, we try to prioritize those who are closer to buying/selling. Some agents get dozens or hundreds of contacts per day while they're running around showing homes, negotiating contracts, appeasing government regulations, and closing sales. If they get a vague request for information from someone with no last name, no phone number, and a bogus-looking email address, the request is going right into the trash. Unfortunately, some of these requests are legitimate, and it leads to many frustrated customers!

How Do I Get A Response?

  • Call the agent's mobile phone. Don't leave a message on Zillow, Trulia, Realtor.com, or even the big broker websites. Find the agent's phone number and give them a call. If they don't pick up, leave a voicemail with your real name, phone number, an email address, and a clear description of the property in which you're interested. This is going to get you a response. If the agent doesn't get in touch with you very soon, find a different agent. If an agent isn't responding to a call like this, then they're either too busy or unprofessional. Either way, you'd benefit by finding a more professional or less over-worked agent!
  • Make your expectations clear. What do you want? Do you just want to go look at property? That's fine! Do you want the agent to give you some free advice? Also fine. Do you want the agent to show you a couple of houses or neighborhoods, or maybe refer you to a bank? Totally fine. If you make it clear to the agent exactly what you want, it will save them guesswork and time, and you'll get better service.
  • Text the agent directly. If you prefer to text, be sure to include your real name and an email address along with the property's address or a specific description of the property.
I hope this is useful advice. These few simple things don't seem like much, but they will increase the likelihood that you'll receive better and more useful real estate advice from agents. I know it can be frustrating when it seems like the industry is full of incompetent or unprofessional agents ignoring your calls and emails. While there are a good number of less than professional agents out there, most of us want to serve our clients! Please help us do that by letting us know that you're really interested. Thanks!