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Staging homes is really “storming” the real estate industry. In the past few years, staging homes has become an increasingly growing “cottage” industry within the real estate market. In 2007, The National Association of Exclusive Buyer Agents (NAEBA) surveyed their brokers & agents and found that 82% of the respondents stated that buyers were likely to get distracted from important issues when viewing a staged home. In addition, 51% of the respondents noted that staged homes often cover up 
major defects and structural damage. NAEBA is a small, international, professional trade organization that works to represent the best interests of the real estate buyer. A recent article by columnist Blanche Evans with Realty Times ATTACKED NAEBA’s position on home staging. Blanche’s article is one of the most biased pieces of journalism that I’ve ever read! In Blanche’s article she states that “NAEBA is a spoilsport when it comes to staging homes” and NAEBA’s position on staging is SILLY and can possibly do serious damage” Blanche’s article continues the trend of “old school”, traditional real estate brokers, insiders, agents, etc. that just don’t get it. Blanche’s article is just preposterous!!!
OK, let’s try and help all the “confused” Blanche’s in the world. First of all, Blanche is correct that a home-buyer’s decision (right or wrong) to purchase a home is always going to be based on three factors: emotional, practical and financial. A buyer agent’s responsibility is to properly advise their clients not to rely too heavily on the emotional aspect of buying a home. As buyer agent’s, we believe our home-buyers decision process should be ranked: financial, practical and then emotional. The sole intention of staging a home is to get the buyer emotionally attached to a home. So, why attack the “spoilsports” at NAEBA? 
There is nothing wrong with staging homes. Right now, staging homes is “red hot”. In the past, staging homes was limited more to higher end properties. Not anymore, sellers can spend a few hundred dollars to thousands of dollars to stage their homes. Done the right way, staging a home is another excellent way for the seller to market their home. But, I have no doubt, that the increased emphasis and “frenzy” on more elaborate ways to stage homes will definitely increase abuse and deception by the sellers. Sellers will be more likely to try to hide defects in their home through staging options. For example:
It is OK to add small furniture to make rooms appear bigger, but NOT OK to position furniture to hide holes in the walls or termite damage.
It is OK to play soothing, pleasant music as long as you are not trying to hide, “clangy” plumbing pipes.
It is OK to have cookies baking and pleasant smells as long as you are not trying to hide dingy mildew/mold smells.
It is OK to add a nice, expensive rug as long as you are not hiding a stain in the carpet or damaged wood flooring.
All the examples above are based on a seller NOT disclosing these issues or problems in a state required disclosure form (if applicable). Most states require sellers to provide a disclosure form to potential buyers.
It is a buyer’s agent responsibility to protect their clients by uncovering issues or problems that are listed above in the examples. I do not want to diminish the responsibilities and duties of the buyer’s agent. But as staging becomes more prevalent then deception by sellers is going to occur no matter who the buyers have protecting them.
I can GUARANTEE you that the increased emphasis on more complex and elaborate home staging will increase the number of sellers trying to hide major issues that they should have disclosed (ethically and legally).
”So, be careful out there” – Sgt. Phil Esterhaus, Hill Street Blues
Now let’s end this post on a lighter note. The all time FUNNIEST home staging mistake that our office has seen was when a seller left a ”porn” tape on a bookshelf right below their framed picture of the Ten Commandments. No joke, this funny staging “faux pas” did actually occur with one of our agents and their buyer client. Post a comment to this blog post, if you have a funny or deceptive staging story that you would like to share.
Yikes, times continue to be rough in the real estate market, especially for new home builders & lenders. Yesterday another good builder in central Ohio closed its doors for good. C.V. Perry & Co. has gone out of business due to serious financial troubles.
C.V. Perry & Co. was a good, solid builder that had been around for 60 years. C.V. Perry “folding up” was not as unexpected as Centex Homes leaving the central Ohio 
market last year. Centex Homes leaving our market was a total surprise to many people. I’m pretty confident that C.V. Perry probably won’t be the last builder in central Ohio to call it quits or to be bought out by a competitor.
Hmmm, let me guess, maybe Dominion Homes might be the next fatality. It seems like Dominion Homes has been hemorrhaging cash forever and has had a “ton” of lending problems (see additional links below). If you are new home buyer in this market please make sure you are protected. You need to make sure you fully understand your builders deposit policy. Don’t risk losing your deposit money. Contact a real estate attorney ASAP if you have any questions. Good Luck!
Additional info:
Dominion 5.9 million in red for 3rd quarter
M/I Homes post 21.7 million 3rd quarter loss
Dominion Homes sales drop nearly 25%
Beazer Homes report weak earnings
This is not Real Estate for Dummies. But, it probably should be. The basic definition of dual agency is “The same real estate agent is representing both buyer and seller in 
the same transaction”. Dual agency is the single worst issue involved in real estate. The average “Joe” out of the street easily understands that dual agency is WRONG. This seems like common sense to the regular guy. So, why can’t the politicians and many real estate agents & brokers understand this simple terrible concept? The main reason why dual agency exists is because of the glorious MOOLAH. Real estate brokers and agents have a huge financial incentive to be involved in a dual agency transaction at the detriment of their buyer or seller. Dual agency has no benefits to protect the consumer (buyer or seller). One of the simplest and best examples that I’ve ever read about the problems of dual agency actually came from a traditional real estate agent (Matt Difanis) in Illinois and not an Exclusive Buyer Agent. A few years back, Matt had a sent this letter to the Realtor Magazine.
Here is another real simple definition; agency is when a real estate broker discloses “who” & “how” they are going to represent a buyer or seller. Home buyers need to STOP spending all their time on the Internet looking at pretty pictures of potential homes and START spending more time fully understanding all types of agency (dual, single, transactional, limited or designated). Understanding agency is definitely not the most exciting part of the home buying process. As a matter of fact, it is down right boring. But, PLEASE, PLEASE, PLEASE; before you start down the path of buying a home make sure you spend time fully researching everything. As with many major financial decisions (car, home, vacation, etc.) most of us end up rationalizing decisions based on emotion, don’t make a decision based on emotion!!
Non-disclosed dual agency is ILLEGAL in all 50 states. But, only a few states have made (disclosed) dual agency illegal. Dual agency should be”outlawed” and made illegal in all 50 states. If you are a buyer or seller involved in a dual agency transaction and you don’t completely understand dual agency than you should immediately contact or RUN to your nearest real estate attorney.
Here are a few other good blogs and web sites that just say NO to dual agency: Bloodhound Realty & Homebuyer Representation
Representing People, NOT Property!
In 2000, we won FIRST PLACE in the television advertising category for a medium/small real estate firm in the State of Ohio. The advertising & promotion contest was 
sponsored by the Ohio Association of Realtors (OAR). These television commercials were conceived & produced in Central Ohio by a good friend of mine who is in advertising. We produced these commercials for the National Association of Exclusive Buyer Agents (NAEBA). NAEBA is our professional trade organization. I hope you enjoy these spots. I am really proud of the commercials. I think the messages of these commercials are very powerful. Today’s home buyer really has to question their “so called” buyers agent’s loyalty, competency and advocacy. The home buyer really has to be aware of their agents duties and required disclosures to them or LACK OF! The 30 second spots are funny, informative and controversial.
Cannonball II http://youtube.com/watch?v=agN7p1lGvtQ
(This is not a clip of that great Burt Reynolds sequel movie in the 70’s – Cannonball Run)
Problem http://youtube.com/watch?v=1c15qPWkAz8
Flight Path http://youtube.com/watch?v=1ASHpSARguU
Watercooler http://youtube.com/watch?v=5OR8JSETKVs
SOB http://youtube.com/watch?v=C1KfYDx_DAI
Thinking http://youtube.com/watch?v=mTaiJqGDmPg
Hounds http://youtube.com/watch?v=cKFtTGCzHJ0
Cannonball http://youtube.com/watch?v=1xD37nhebGU
In the future I hope to have more home buyer advocate clips on my main youtube site:
http://youtube.com/profile?user=OSUMike64
Ohio Association of Realtors Award Certificate
I hope you enjoyed these funny, informative spots.
The Energy Policy Act of 2005 offers generous energy tax credits to consumers and businesses that purchase fuel efficient cars and/or energy efficient items for their home. 
Homeowners can receive a tax credit up to $500. Homeowners that purchase and install certain energy efficient products for their home such as; windows, exterior doors, heating and cooling systems, water heaters, storm doors, insulation, etc. (see chart for more information) prior to the end of the year will be eligible for the tax credits. The energy tax credit program is scheduled to end December 31, 2007. So HURRY up and ACT now! A tax credit is more beneficial than a tax deduction. A tax credit reduces your actual tax amount due “dollar for dollar”. A tax credit can provide substantial savings to the homeowner. Click here for more information about tax credits from the Internal Revenue Service (IRS). Good luck and stop procrastinating. Uncle Sam wants to give you money for going GREEN!
Another great, informative web site to check out is the Energy Star Program.
Forbes magazine recently posted a great article about housing trends in America, “Americas Most Stable Housing Markets” The article ranks the Top 10 most stable housing markets in America. The real estate market has been dreadful in the last year. But, the good news is that Columbus, Ohio ranked 3rd on the list. Even though the 
State of Ohio & central Ohio consistently rank very high on many of the recent foreclosure rankings list, our area has ALWAYS had a very, stable housing market. One of the big advantages of living in central Ohio, even prior to the latest downturn in the real estate market, was our stable market. We’ve almost always enjoyed a solid, decent appreciation rate without the wide volatility swings that many other areas in the nation experience.
Great News! The Federal Reserve (Fed) on Tuesday had a bigger than expected drop in the federal funds rate. The aggressive drop will really help the local real estate 
market. Lenders in central Ohio now have approximate 30 year mortgage rates in the “low” 6% range. Many “so called” experts predict additional lower adjustments by the 
Fed over the next three to nine months.
In my opinion, in 2008 we will see many loan program rates between 5.50% – 5.99%. The low rates and Buyer’s (slow) market continue to make it a great opportunity to purchase a new home.
Current homeowners should continue to watch the mortgage rates to see if it would be advantageous to refinance their mortgage. You can click here to check your local mortgage rates. If you have questions about possibly refinancing then I would recommend that you contact your mortgage originator/lender or your Buyer agent for more help and information.
In the last year, many of my clients have reported problems with their home warranty plan. Most of the complaints dealt with legitimate/valid claims that were denied by the warranty company.
A home warranty is a insurance policy (but not regulated by the State of Ohio Department of Insurance) that covers most major mechanical components (heating, cooling, plumbing, electrical, air conditioning, etc.) of a home or condo for one year after closing. A home warranty typically cost $375 – $400. Homeowners pay a service fee (deductible) the first time a service provider is dispatched by the warranty company to make a repair. The service fee is typically $50-$100 and is applied for each new repair claim.
Home warranties have become a fairly standard item in real estate transactions in the central Ohio area. As an advocate of the home buyer, I’ve always tried to have a Seller pay for a one year home warranty plan for the Buyer. A home warranty is usually a good value and nice “piece of mind” for the new homeowner. The problems have been so bad with a few of my clients that I am seriously re-thinking the value of a home warranty.
Below is some good information about home warranties that the average consumer might not be aware of. I’ve also provided some tips on dealing with home warranty companies and how to process a successful repair claim.
- You will probably have to pay MORE than just your deductible. Make sure you read the fine print of your home warranty contract. Most homebuyers don’t realize that they will have to pay for some misc. parts and labor that might not be included in a warranty claim. The good news is that even on a major repair claim the total cost is typically no more than $100 – $200.
- Be prepared to be an “SOB”. Many homebuyers have to call in the same repair claim multiple times. This is typical with most home warranty companies. Remember, the home warranty company is a profit company that will try and do the “least expensive” repair. For example, your 20 year old A/C unit stops working. The warranty company repairs your A/C unit and everything seems to be working fine. Even though the unit probably just needs to be replaced with a new unit. Your A/C unit stops working again a week later. The warranty company authorizes another repair. A/C unit is working fine but then again a week later the unit fails.
- What is the renewal rate on home warranties? Homebuyers are allowed to renew their policies every year. Some home warranty companies claim a renewal rate of 50% – 75%. I think this number is BOGUS. In my experience since 1996, my clients have only renewed LESS than 25% of their home warranties.
- Ask your agent about any bonuses. Most home buyers are not aware that most real estate brokers receive a small bonus for every sold home warranty policy. This bonus is typically $50 – $75. You want to check with your real estate agent (buyer agent) and see how their office deals with this bonus. In my opinion, the bonus should be passed through to the home buyer or provided to a non-profit charity.
- Pre-existing conditions & Inspections. You need to make sure all of your mechanicals (furnace, A/C, electrical, etc) and appliances have been inspected. If home inspector finds even a minor problem it should be addressed in a repair request to the Seller. If an item is not working satisfactorily prior to closing then it will not be covered under most home warranty plans. Also, ignorance might void a possible warranty claim. If you just assume everything is working fine in your new home and you don’t check/inspect every item than any possible warranty claim could be denied. This seems like common sense. But, this has been a major misunderstanding for a lot of homeowners. For example; a Buyer does NOT inspect a home. A month after moving in the Buyer turns on the furnace or an appliance for the FIRST time. Homeowner discovers the item is not working. Home owner calls in a warranty claim. Home warranty representative ask home owner, “When did the item last work?” Homeowner answers, “I don’t know. My home is only a few years old and I didn’t inspect”. There is good chance that the item will not be covered under your warranty policy. You need to inspect everything and have documentation that all items are working satisfactorily prior to closing.
- Home warranty companies are out to make a PROFIT. You can’t forget this important point. Home warranty companies will always favor repair or multiple repairs over new replacements. I’ve had many complaints from my clients of having to deal with unprofessional and non-responsive customer service reps. Customer service reps actually hang up on homebuyers and also routinely kept home buyers on hold for 30 – 45 minutes. So, just be prepared to deal with the worst possible situation.
- Who is really the main customer for the home warranty companies? Let’s review everything so far. Home warranty companies pay bonuses to real estate brokers. My experience has been low renewal rates on existing policy. Home warranty district/area manager salaries are paid mainly to “drum up” business via soliciting real estate professionals. In my opinion, the business model of home warranty companies is mainly geared toward real estate brokers and NOT the home owner or policy owner. I think this is the main reason for the increased complaints from my clients in the last year.
TIPS:
- Don’t call at peak times. Mornings, lunchtime and late afternoons are peak times. Call at a non-peak times and plan on having 20 – 30 minutes of time to file your claim.
- Document everything. You need to obtain the name and phone extension of every customer service rep (CSR) that you talk to. You also want to take notes of the conversation, date and time of all calls.
- Ask to speak to a manager or supervisor if you feel you are not receiving adequate customer service.
- Submit your claim via the phone. Repair claims submitted via an email form (if applicable) appear to have a slower response time
- Most home warranty companies have district mangers that deal directly with real estate brokers. If you are having difficulty getting a satisfactory claim result, then the district managers can be very helpful in negotiating a satisfactory solution. Contact your real estate agent (buyer agent) to help you resolve your claim and to contact the district manager.
- Don’t be abusive or rude even if you are dealing with un-cooperative CSR. Always try to be calm and persistent. Never take no for an answer. But, you might eventually have to act like an “SOB” to get satisfaction.
- Check into other pro-consumer organizations that might be able help you resolve your home warranty claim issue.
State of Ohio Attorney General
Better Business Bureau
State of Ohio Department of Insurance*
Small claims court (Franklin County)
*House bill 243 – April 2004, Ohio Department of Insurance is now not responsible for regulating home warranty companies and policies.
Representing People, NOT Property!
How are our schools doing? Not too bad, according to the latest data from the State of Ohio Department of Education. All the public schools in the State of Ohio were given a “solid B” (effective rating) based on state tests results from the 2006-7 school years.
All of our local central Ohio schools did fairly well in the latest test results. For the first time, all central Ohio school districts were rated a “C” or higher. The Columbus school district (central Ohio’s largest school district) improved to “continuous improvement” over “academic watch”.
The main web site for the Ohio Department of Education is a tremendous resource for statistics, data and information on our schools. If you like to review statistics and data then you will love this post. You can research every imaginable statistic (proficiency test results, enrollment, student disciplinary actions, attendance, graduation rates, etc.) that deals with your local school district.
Survey results from our clients have shown that the condition of the school system is always one of the homebuyers top “biggest fears” when buying a home.
Below are some good links to review:
- Department of Education’s iLRC (Interactive Local Report Card)*
- Rating local central Ohio schools
- Report cards for local central Ohio schools (nice graphic)
- Central Ohio schools with the biggest improvements & declines
- The performance rating of local charter schools.
- The 10 highest and lowest rated school district in central Ohio
- Map graphic of how central Ohio school districts fared
I hope this information helps.
*You will need to “uncheck” the match case box to utilize the power users reports section. This section is also incredibly slow.
eSORN is the electronic sex offender registration and notification web site for the State of Ohio. Attorney General Mark Dann has implemented one of the most advanced and effective web sites in the country to deal with sex offender notification. Most states have a antiquated patchwork system (mailing postcards) to notify the public of sex offenders in their community. The eSORN database is one of the first systems in the country to link all of the state’s county sheriff’s offices and correctional facilities records offices together. The eSORN web site is easy to use and provides great information to the public. Some of the great benefits of the new system are:
- Email Alert; you can quickly sign up to be notified via email if any sex offender moves into your community (within one mile)*.
- County Sheriff Offices; “one click” access to contact your local county sheriff to obtain more information or to submit a tip/sex offender.
- Instant Offender Search; you can instantly search to see which sex offenders currently live in your community. A great map tool**.
- Most Wanted List; View a list of the state’s most wanted sex offender
Everyone should check out the new eSORN system today, especially if you are thinking about buying a new home.
*To ensure that you receive email notifications please place notifications@icrimewatch.net in your address book and adjust your bulk or junk mail settings.
**make sure any “pop up” blocking utility program are turned off.
My Buyer Broker Advocate! 
Cool Comments!