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The Commerce Department reports that new home sales in June rebounded 24% from the previous month. You would think this would be good news, but this is very misleading data. March and April homes sales exploded because of the tax credit rush. May was an all time “stinker” month. So, it is not too hard to have a big increase over a previous terrible month. Plus, the June sales pace is the 2nd slowest ever on record since Commerce Department began tracking the data in 1963. Also on Monday, The National Association of Realtors reports that existing home sales fell 5.1% in June.
So what does all this mean? On the same day, we get conflicting data on the real estate market. Home buyers and sellers are frustrated. They don’t know what to think.
So is the real estate market improving? Who knows the answer?
How about Bernanke, Buffett, Geithner or Greenspan….do they know the answer?
The answer is……nobody knows, not even the so called “experts”.
In my opinion, I think we’ve definitely hit the bottom months ago and the market has been slowly improving. But my opinion or “guess” is no better than any other market expert.
But, the 2 things that I definitely know about the Columbus Ohio real market are:
- The real estate market is extremely turbulant and volatile. This is not always a bad thing for home buyers.
- We are still in a Buyer’s market.
Good luck out there!
Please feel free to contact me if you need help or have questions
Representing People, NOT Property!
The guaranteed best representation possible for a home buyer is to hire their own personal Exclusive Buyer’s Agent (EBA).
Exclusive Buyer agent representation for home buyers has recently (Jan. 2010) been endorsed in the new consumer publication from the Department of Housing and Urban Development (HUD); “Shopping for your Home Loan: HUD’s Settlement Cost Booklet“. This is HUD’s first major revision in 10 years and advises home buyers to hire a real estate agent that will only represent their best interests. Page 6 of HUD’s Settlement Cost Booklet states, “If you want someone to represent only your interests, consider hiring an ‘exclusive buyer’s agent’, who will be working for you.”
You would think this would be great news for home buyers & exclusive buyer’s agents. But, now the problem is that many real estate agents are calling themselves an “Exclusive Buyer Agent”, when they really aren’t EBA’s. Real estate agents are just making up their own “titles” or “specialities” just so they can generate more business. But, they are NOT EBA’s or a true Buyer Broker
Quite simply, The only definition of an Exclusive Buyer Agent is an agent that never list property for sale and the company they work for does not list properties or provide any representation for Sellers.
If you are potential home buyer that is interviewing possible Exclusive Buyer Agents then just ask this simple question:
“Do you or any other agents in your office list or sell properties at anytime?” If they answer yes, then the agent is not a true EBA.
Here is what leading national magazines and newspapers say about “true” Buyer Brokers:
“Agents: How to hire one for your side.” Most agents who show you homes don’t represent your interests. They work for the seller, and their object is to sell the house at the highest price.”
“Many people don’t realize that, unless specifically stated otherwise, brokers are legal representatives of Sellers. A buyer’s broker representing only the buyer, may be able to secure a better price and better terms.”
“Unlike the traditional agent who looks out for the seller, a buyer broker acts as your advocate, helping you find the homes you want and then negotiating the lowest possible price. the best buyer brokers are so-called exclusive agents – that is, they represent only buyers, never sellers…”
“Exclusive agencies are best. They remove any conflict of interest, which is the main reason for considering a Buyer Broker in the first place.”
“…A Buyer’s Broker is prohibited from disclosing to a Seller that the Buyer can, or will, pay more than what has been offered… To eliminate conflict of interests, exclusive buyer agents do not take listings. Buyer’s Broker make a great deal of sense”
“Groups such as Consumer Federation of America and AARP recommend using Buyer’s Agents. The reason is they work.”
“Buyer Brokers: agents that buyers can call their own.” “If you real estate agent isn’t a Buyer Broker, he works for the Seller.” Buyers no longer have to fend for themselves.”
“A conflict of interest is more likely when a real estate firm that represents sellers assigns you one of its Brokers as a Buyer’s agents. That’s 
why many people believe, “Exclusive Buyer Broker” is preferrable. Exclusive Buyer Broker aims to get the best deal for home buyer.”
Good luck out there!
Please feel free to contact me if you need help or have questions
Representing People, NOT Property!
In our market, a FROG in your house is actually a really good thing. In real estate terms, a FROG means 
“family room over the garage”
How many of you out there honestly knew what this abbreviation meant? Many real estate agents & brokers don’t even know what a frog is?
Being able to decipher real estate abbreviations & terms has always been a funny, frustrating problem for many home buyers.
“Newer CC style home, 3BR, 1.5BA, WBFP, new A/C with a large FROG, no bsmt and only 209K” Can anyone please translate what I just typed here? heh, heh, heh.
Years ago, selling homes via classified ads in the back of newspapers and magazines was common place. But, now traditional real estate agents use other marketing venues, especially the Internet. So, the good news is that heavy use of vague real estate terms, abbreviations and euphemisms in real estate marketing is on the decline. But, abbreviations and euphemisms are still a problem in real estate that the homebuyer needs to be educated on.
Before I give you more important information on this problem, take a quick second and review our award winning TV commercial (SOB) below about the abbreviation problems in real estate.
I hope you enjoyed our funny commercial. You can click here if you would like to view our entire TV commercial series.
Now, back to the important information that you need to know! Our professional trade organization, “National Association of Exclusive Buyer Agents” (NAEBA) recently released an excellent home buyer informational report; “2008 Report on Home Buying Euphemisms and Lingo-How to read between the lines when you’re shopping for a home”
(you will need to have adobe software on your computer to view/print report. Click here if you would like to download the free adobe reader)
For years, I’ve told my clients that you have to be able to read between the lines when you are looking for a home. The information about the home on the main listing page usually has misleading descriptions.
For example:
Needs a little TLC or fixer upper…………really means the house is a dump and hasn’t been updated at all.
Cozy, cute home……………..really means the home is so small that it is difficult to turn around in.
Great landscaping, beautiful yard……………..really means the house is a piece of crap, but the seller has to found something positive about their house.
Damp basement in the spring…………really means we usually get 2-3 feet water in our basement once a year.
Sometimes sellers think minimizing problems in their listing descriptions, like, “damp basement” will protect them from getting sued for non-disclosure. I don’t think so!
One last tidbit of information for you. Many times in the listing description you will see the words “many updates” or “mechanical’s updated”. The problem is how do you define recently “updated”. My personal definition of “updated” is anything that has been done in the last 5 years.
You really have to be careful when you see a sellers and/or listing agents that uses “many updates” in the listing description. I had one personal experience where a listing agent stated that the roof was recently updated. After evaluating the home with my buyer client, It appeared to me that the roof had some prominent signs of aging (lost granuales, slight peeling/curling of roof shingles, etc.) and didn’t really look like the roof was recently updated. I contacted the listing agent for additional information and/or paperwork on the roof. The listing agent provided documentation that the roof was nearly 9 1/2 years old.
I asked the agent how they could describe a nearly 10 year old roof as recently updated. The listing agent’s 
explanation was that the new roof’s expected life expectancy was somewhere between 20-25 years and since the roof was still less than “half old” that they felt they could list the roof as recently updated.
Geez, are you kidding me! So again, be very careful when you see these words. You always want to make sure you have a full home inspection completed by a qualifed home inspector. Your Buyer Broker should also always ask for copies of receipts and/or invoices of any recent updates.
These are just a few of the funny, informative listing descriptions that you will find in the “Home Buying Euphemisms and Lingo report”. There are 50+ listing descpritions in this report that will help you understand the lingo when review listing information. But, remember your best protection is to have an Exclusive (True) Buyer Broker representing you.
If you thought this blog post was helpful, then you should also check out the “Problem With Staging Homes” blog post. Both articles deal with the same general topic.
Representing People, NOT Property!
Last week there was a great article in the Columbus Dispatch newspaper, “Independent Title Agents Sue”. A group of small, independent title agents is petitioning the Ohio Supreme Court to STOP real estate brokers, banks, mortgage companies from steering business to affiliated title companies.
In a nutshell, the independent title agents are suing the Ohio Department of Insurance for failure to protect the consumer and to enforce state laws against what it calls “the spread of kickbacks and referral schemes in the real estate industry” (aka, affiliated business relationships).
Good news, Ohio law prohibits banks, real estate brokers and mortgage companies from being licensed title agencies. But, since 1974 the federal Real Estate Settlement Procedures Act (RESPA) has allowed affiliated business relationships. In my opinion, overall RESPA has been great legislation that has helped protect the consumer. But, RESPA really dropped the ball in regards to affiliated business relationships.
Let’s hope the independent title agents will be successful with their lawsuit. I will keep you updated with future blog posts. “Affiliated business relationships” are really bad for the consumer. These relationships raise the cost of many title company fees with no benefits to the consumer.
In my opinion, if this lawsuit wins it could really open an “ugly door” into our state departments and agencies that are set up to monitor and regulate many industries, such as real estate, lending, financial securities and insurance.
The “average Joe citizen” would think these agencies are set up to protect the consumer. But, in many times, the actions and decisions of these agencies have worked to protect the industry that they are monitoring more so than protecting the consumer.
We have been mixing “big business industry” with politics for years. This has fostered an environment of 
“sleeping with the enemy” and/or “the fox is guarding the chicken coop”.
This is a dangerous mix of power, control and greed that has been dormant for a long time. If this lawsuit is successful, hopefully it will expose other agencies and open up a lot more questions.
If you can’t tell by now, I am no proponent of “one stop shopping”. The problems of affiliated business agreements are just a smaller component of the entire “one stop shopping” farce.
There is only ONE reason why big banks, insurance companies and/or real estate firms offer you the convenience of one stop shopping and that is profit and greed. It will almost never be in your best interest to make a major financial decision on one stop shopping.
If you need to buy or sell a home in Central Ohio and you are thinking about using the largest real estate broker in our market to help with everything (real estate transaction, new loan, home warranty, title services, etc.) then you need to be really careful. As Dr. Phil would say, “You need to get REAL” (or not real, if you know what I mean).
You need to do research and work to be a smart, informed consumer. Shop around, make phone calls, get multiple estimates or quotes. If you do your research you will make the best informed decision and you will be better off financially.
In my opinion, there has always been a public perception that the real estate industry has been notorious for kickback schemes and unethical referral arrangements. Eliminating or better monitoring of affiliated business relationships/agreements will be a good start toward improving our public perception. Let’s hope the Ohio Supreme Court can do the right thing!
After we fix affiliated business relationships we will move onto stopping one stop shopping. heh, heh, heh!
Here are some related links:
Ohio Department of Commerce (Real Estate, Mortgage & Financial Securities)
Division of Financial Institutions
Be careful out there!
Last week, The Homebuyer’s Advocate Blog was used as a reference for a good article in the Columbus Dispatch by Jim Woods – Moldy Home Cost Builder $3 Million.
Jim put out a thorough follow up article about the moldy Maronda house and resulting lawsuit that has been in the news for the past few months.
Our very popular blog post (over 500 views) in late February reported on the same Maronda issue – Maronda Home Verdict Cost Nearly $3.2 Million.
I especially liked the way Jim “touched” on the Reynoldsburg Building Department signing off the home.
The house passes all building code requirements, but yet the south side of the house was not attached to the foundation and was inadequately attached on the other three sides. This was hilarious and sad all at the same time.
I’m sure I wasn’t the only person reading this article and saying “hmmm, how does that happen?”
How new homes pass building inspections & get occupancy permits is a mystery to most consumers & home owners.
I think the Columbus Dispatch has the start of whole other investigative exposé
I’ve heard many stories from experienced home inspectors that talk about the same problems and issues with homes passing building inspections.
For example, a home can pass plumbing & electrical inspections but yet have water leaks and no 
working lights. There are two main reasons why these problems sometimes happen with building inspections. First, many building inspectors just check to make sure homes are built to the correct specs, materials, items, hardware, clearances, etc. As long as a home is built to the correct specs and material it could possibly pass a building inspection. The second main reason why bad homes pass building inspections is human error. This happens even in spite of pressurized plumbing checks and other tests on mechanical systems.
I think it is about time to stop beating a dead horse. It is time to move past the issues of some new home builders in Central Ohio, like Maronda and Dominion homes. (Another Builder Casualty) The last few years, their issues have been thoroughly documented in every type of media & press publication. If you are an informed home buyer in Central Ohio then this is all old news.
The key phrase above is “if you are an informed home buyer“. I’ve been an Exclusive (true) Buyer Broker since 1996. I only represent residential and investor buyers. I’m sorry to say that the definition of a truly informed home buyer varies greatly. In most situations, a home buyer will spend only a few minutes researching the home buying process on the Internet sandwiched in between their favorite TV shows, American Idol and Dancing with the Stars. In one short evening a potential home buyer thinks they have thoroughly researched everything they need to know about the home buying process.
The reason this occurs so frequently is because researching on how to find the best representation possible for a home buyer is not fun and feels too much like work. Home Buyers just want to look at beautiful pictures of fabulous homes.
The first and most important decision a home buyer needs to make is who will represent them, NOT which home they buy or what builder to use. An Exclusive Buyer Broker (EBA) is the highest and best representation possible for any home buyer. Would an EBA been able to protect the buyer that purchased the moldy Maronda home. Maybe, yes or no. There are no 100% guarantees in life. A true Buyer Broker (EBA) isn’t always going to be a “Knight in Shining Armor”. But, we are the best base or foundation of having a successful home buying transaction.
My Buyer Broker Advocate! 
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