The sales price of neighboring homes is only one part of the equation. Be sure that sellers understand the other factors that affect how their home compares to their neighbors’.
If your seller’s home is in a part of the neighborhood that borders a highway, train tracks, or an industrial area, it’ll likely fetch a lower price. Make sure you pull comps of other homes in similar locations to compare and explain pricing differences to sellers.
Take into account that hilly terrain can affect the usability of each home’s lot and bring your seller’s price down. You can have two one-acre lots next to each other, and one can be fully usable while the other is only half usable because of steep slopes, says Todd Gibbons of William Pitt Sotheby’s International.
Home owners who have done home-improvement projects typically get a higher price for their property. You should know which properties in the neighborhood have undergone renovations and how much they sold for so you can suggest to your seller what projects they should do if they want to boost their home’s sale price.
In some markets, the cost of land has dropped, making building a new home less expensive and, thus, more affordable for buyers. Sellers need to understand how competition from the new-home segment could affect their listing price. For example, in the suburbs of Chicago, where Michael LaFido of Marketing Luxury Group does business, building a house similar in size to an existing structure costs 20 percent less today than before the recession. Pull comps from builders in your area to show sellers the potential impact on their home’s value.
Many sellers will go online to see listing prices for other homes on the market in their neighborhood and ask you to price their house accordingly. You need to explain that listing prices reflect what sellers are asking, not what buyers are willing to pay. That’s why sold inventory is more reliable for determining the realistic price of your seller’s home than the asking price of properties currently on the market.
Sources: Maria Azuaje, Berkshire Hathaway Homeservices Florida Properties Group, Miami; Ann Marie Clements, AHWD, e-PRO®, Keller Williams Capitol Properties, Rockville, Md.; Michael LaFido, Marketing Luxury Group, Chicago; Todd Gibbons, William Pitt Sotheby’s International, Westport, Conn.
John N. Frank is former managing editor for REALTOR® Magazine.
Consumers love the convenience and time-saving aspect of a one-stop shopping experience. Just look at what grocery stores are beginning to incorporate under their roofs: hair salons, coffee shops, banks, and vision centers.
That concept of getting everything done in one place is growing among real estate agencies. More brokers are including in-house mortgage companies, and some offer title and closing services, too. Those who have done it say it helps the bottom line, gives agents someone close by to ask about lending issues, and provides customers with the experience of getting everything done faster and more efficiently.
Caroline Ruhl, president of Ruhl&Ruhl, REALTORS®, in Davenport, Iowa, says having in-house loan officers has been a game changer. Her office has offered the enhanced options for more than a dozen years and, she says, it’s resulted in better service for clients and smoother transactions for agents.
“Communication is better and easier for all parties,” she says. “When we first introduced loan officers to my offices, the time from pending to closing was reduced by 50 percent.”
The loan officers make sure all buyers are preapproved before Ruhl’s agents start showing them properties. They even go so far as to preapprove sellers who plan to buy after their current home closes before listing their properties. This proactive step means listing agents are seeing fewer deals falling apart because of finance-related seller contingencies getting in the way.
The Real Estate Settlement Procedures Act requires that Ruhl keep the two companies completely separate. Regulations include creating separate signs and marketing materials, says Jane Schneider, president of Ruhl Mortgage. Plus, last October, the Consumer Financial Protection Bureau addressed RESPA compliance and marketing services, which made things even more complicated.
“The regulations are cumbersome, and the risk is high if you don’t do everything correctly. Compliance is costly and time-consuming,” Ruhl adds.
Her company does a lot of business with agents and clients not associated with Ruhl&Ruhl. She was concerned about whether agents at competing companies would work with Ruhl Mortgage. But that hasn’t been a problem. Even when a real estate agent moves to another real estate company, the agent continues to refer their clients to her mortgage company because it offers a good client experience, she says.
Schneider states that about 30 percent of Ruhl&Ruhl clients select their mortgage company. “Everyone gets to select who they want. But some find the value of being able to talk to the agent and lender in the same building,” she adds.
Though they are separate entities, branding still matters. Changing the name a few years from 1862 Mortgage — the year Ruhl&Ruhl was established — to Ruhl Mortgage has helped clients understand the connection, Schneider says.
John Collopy, broker-owner of RE/MAX Results, headquartered in Eden Prairie, Minn., just opened his own mortgage company in April. He has been in the real estate business more than 30 years and oversees nearly 1,000 sales agents.
Collopy decided to take the step now due to recent interpretations of RESPA. The arrangement and marketing plan he previously had with loan officers from another company housed in his real estate offices wasn’t going to be acceptable. There cannot be joint marketing agreements between any real estate company and in-house mortgage company. He also owns a title insurance company, Home Title, which he opened in 1992, and a closing company.
“There is no law or issue against owning these companies; rather, the issue is when these companies provide marketing dollars or co-market with real estate agents. We always need to do what’s best for the consumer,” he says.
Before opening the mortgage company, Collopy did a lot of due diligence, and followed the model of a fellow RE/MAX broker who has taken the same path in the past.
“The risk in raising capital was significant, but in order to be a competitive, growth-oriented company, we believe we needed to have this component,” Collopy says. He also likes the fact that everything is in one place. “I like having the control over the transaction if there is an issue that needs to be addressed in any of the areas,” he says. “Instead of pointing my finger if something goes wrong, I can make a clear decision.”
Collopy is bringing the high level of customer service he emphasizes at his brokerage into the mortgage side of the business. His loan officers offer a large menu of finance products. “We are going to be competitive or better than the competition on pricing,” he says.
Real estate clients are busy with so many aspects of their lives that they often just want someone to take care of them, says Gary Kenline, senior vice president at Hunt Real Estate ERA in the Buffalo-Niagara area of New York. His company has been offering services through Hunt Mortgage for seven years.
Overall, about 40 percent of their real estate clients use Hunt Mortgage for their home financing. In some of their offices, that number is as high as 60 percent.
“With online mortgage companies such as Quicken Loans and tons of other ones that advertise, the competition is tough,” he says. “But having our own mortgage company inside our real estate offices has worked very well.”
An in-house mortgage company also benefits agents, Kenline says. They’re able to walk down the hall and talk to the loan officer each day to get updates on clients’ loans.
For those thinking about adding a mortgage company to their real estate agencies, Collopy reiterates that it can be a long and complicated process. “It’s a very competitive business, but nothing is easy that is worth doing,” he says.
Lee Nelson is a freelance journalist from the Chicago area. She has written for Yahoo! Homes, TravelNursing.org, MyMortgageInsider.com, and ChicagoStyle Weddings Magazine. She also writes a bi-monthly blog on Unigo.com.
This article summarizes some key California rental laws applicable to residential rental units.
We’ve used the Official State Statutes and other online sources cited below to research this information and it should be a good starting point in learning about the law.
With that said, our summary is not intended to be exhaustive or a substitute for qualified legal advice. Laws and statutes are always subject to change, and may even vary from county to county or city to city.
You are responsible for performing your own research and complying with all laws applicable to your unique situation.
If you have legal questions or concerns, we recommend consulting with the appropriate government agencies and/or a qualified lawyer in your area. Your local or state bar association may have a referral service that can help you find a lawyer with experience in landlord-tenant law.
Note: A landlord can only end a periodic tenancy when a property or unit is sold, and not a fixed-term tenancy that has not yet expired.
Lucas is the Chief Landlordologist at Cozy. He has been a successful landlord for over 10 years, with dozens of happy tenants and a profitable income property portfolio.
Protect yourself and polish your reputation by knowing how to present information—and when refer a client to someone else for assistance.
Your role as a real estate professional is to do what it takes to arrange and close deals—but that doesn’t mean you need to be the authoritative source for answers to every question that might come up. When a buyer asks questions such as how many finished square feet a home has, if it’s in a flood plain, what the school boundaries are, or when a new light rail line might open—in other words, anything you don’t know as a fact on your own—be sure to clearly provide the source of any information you provide in response, says Michael Baucum, a transactional real estate attorney in San Antonio, Texas.
So instead of just casting what you say as a fact, say, “According to,” or, “The appraisal document says,” or something similar, Baucum says. Those few extra words could help protect you if someone is unhappy later on with something you told them.
Be sure to explain that your duty is to the seller before discussing a property with people who stop by an open house or contact you based on a sign or advertisement, advises Mike Hege, broker-in-charge at Pridemore Properties in Charlotte, N.C. Doing so could help prospective buyers avoid inadvertently breaching an agreement they may have with a buyer’s agent—and it could help prevent you from unwittingly entering a dual agency situation, too. Your best bet is to advise people who express interest in your listings to use their own agent, Hege says.
Buyers and sellers might ply you with questions about the tax benefits and implications that relate to a home transaction, but your answer should always be the same: “Consult a tax professional,” says Jim Downing, a sales associate with Berkshire Hathaway HomeServices Florida Properties Group in Clearwater, Fla. Even basic questions with what seem like obvious answers, such as whether mortgage interest is tax-deductible, could invite trouble, because no two people’s financial situations are identical.
Your client has just decided to buy a condo and now has to dig through a thick stack of paper relating to the rules and finances of the building they want to move into. Explaining what the documents mean and helping your client decide if they’re acceptable might seem like an obvious way to demonstrate your value—but this is work best left to an attorney, Downing advises.
Just as having a log of how many miles you drive and where you go can help you at tax time, maintaining an accurate record of what you discuss with clients can prove very useful if you have to recall what you said in the future. Mindful of the fact that he might need to reconstruct the details of a conversation long after it occurs, John Shipman, director of green operations for Coldwell Banker George Realty in Arcadia, Calif., makes a habit of writing down what he says in meetings, along with the date and time. “I’ve always been told by attorneys that if I said something but it’s not written down, it never happened,” Shipman says.
As a writer-producer for the National Association of REALTORS® based in Washington, Sam Silverstein develops articles and videos for NAR’s members and others interested in its activities, statistics and research.
Is that chocolate ice cream, or something the previous tenant’s baby left behind? Ah yes, the joys of renting a unit with carpet.
While landlords are responsible for ensuring that their rental units are safe and inhabitable, it’s difficult to argue that a dirty carpet is dangerous or makes a house unlivable.
But what exactly is meant by a “unlivable“, and how do cleaning carpet stains fit in?
Aren’t carpet stains considered “normal wear and tear”?
If you, as a renter, are confused about your rights, you’re not alone. This is a common problem, and one that can cause to you live in less than ideal living conditions. Livable conditions typically refer to necessities, such as having a roof over your head, hot water, and heat during the winter.
But you might, for example, be asked to live with a drip in the bathroom or an unsightly stain in the carpet.
Although those problems are pretty minor and are unlikely to be a reason for you to leave your rental property, those irritants can make a living situation unpleasant.
Did you, the renter, spill red wine, or drop your spaghetti dinner onto the carpet? If so, then you’ll likely be responsible to fix/clean it.
Even though most of America eats dinner in front of their TV, food spills are never “normal wear and tear”. That’s why we have dining rooms, and if you choose to each on the couch, you do so at your own risk.
…though common, food spills are never “normal wear”
Was the stain there when you moved-in? If so, then the landlord certainly can’t hold you responsible for it – but he also might not have to clean it.
Be sure to document the condition of the property, including the stain, when you move in so there are no issues later. And while it might be unsightly, the landlord still doesn’t have to fix it unless it’s causing a health issue.
Here’s a related podcast episode:
A stain in the carpet, or generally dirty carpets, do not make a rental unit uninhabitable (obviously); therefore, the rules surrounding whether a landlord has to clean a carpet can seem hazy.
Cosmetic repairs are usually not legally required. But in some cases, such as issues with mold or health risks, landlords may have to make such repairs.
If the carpet stain or condition is a threat to human safety, then the landlord should intervene.
To help you determine whether your landlord is legally required to clean or repair your carpet, you could do some research to see if this is addressed in the following:
If you find out that your landlord is legally required to clean the carpet every X years, or deal with the unsightly carpet stain, then the next hurdle is to actually get your landlord to do it.
Although withholding your rent or using a “repair and deduct” procedure might be allowed by law in some states, it is not advisable to do either because these methods can result in eviction.
Instead, why not try out an alternative to get your landlord to clean your carpet (or make other minor repairs)?
Here are four ideas to get your carpet clean:
Ask your landlord about cleaning the carpet or doing another minor repair job. Your landlord might be very willing to fix the problem, especially if it prolongs the life of the carpet.
Plus, it shows that you take pride in the condition of the unit and your landlord will likely want to make things better for you.
Even if you have spoken with your landlord, writing a letter or an email can be helpful.
It gives the landlord time to think over the request. Additionally, a repair request gives you the opportunity to describe the problem and to explain why it is in the landlord’s best interest to clean the stain in the carpet.
Let them know that the stain may become worse and thus more costly to clean later.
If you can’t get your landlord to cooperate, you can propose a formal mediation.
This is probably one of the last resorts that you should consider with regards to cleaning carpet stains. But in some cases, contacting a mediation service can be the only way forward, especially if oral and written requests are ignored.
Mediators work with both you and your landlord to come up with a solution that you both agree is fair.
With that said, if your landlord is a slumlord, they will just ignore your request and act like you are crazy.
If the landlord is not required by law to clean the carpet stain (which is common), and they are not willing to do so, you could try to clean the carpet stain yourself.
There are many methods to clean carpet stains; one of the most effective is by using a combination of vinegar and baking soda.
This method should remove most carpet stains, so it is well worth a try, especially if your landlord is likely to withhold your security deposit if such stains are evident.
Jimmy is a multifamily real estate investor and bank credit officer. He has written a complimentary bank negotiating guide on how to get around the 80% LTV rule.