John B McKernan II - REALTOR®

... can go a long way to protecting your client(s)' best interest, even if the scenario presents a challenge.

One of my listings had two viewing by the same party earlier today. In both viewings, the buyer's agent provided the most advance notice she could, and my clients acted consistent with someone who wants to sell the house, and made it readily available.

The second showing time-wise was a long one, as anyone would expect. Everything seemed to be heading towards a favorable situation for my clients, and they were cautiously optimistic. 

However...

I got a call from the buyer's agent and her tone was quite different than it had been earlier in the day. As we spoke, it became evident that she really did not want to say what she had to say. The offer was an extremely low offer. She chose not to write it up at all, but let me know the parameters so that I could advise my clients. I have to say that I really appreciated the phone call, rather than an email with such a ridiculous offer. Had I presented that to my clients in written form, their response would have been quite different. They were able to simply decline with no counter.

By choosing her course, the buying agent did a great job protecting her clients from offending my sellers, and left open the door for a more realistic offer if her clients are so inclined. Further, my clients have no idea who the prospective buyers are, and will not have a negative reaction to their names and signatures being on that offer if it comes.

Bottom line, as agents, we have all had to communicate or present knowingly low offers to other agents or clients. Today, however, pointed out that each of has a choice how we do it, and that putting the "long-term" interests of our client(s) first is paramount to preventing an adversarial encounter down the road.

... then be up front about it. If not, it could end up costing you business.

We had a late addition to some scheduled viewings for a client a few weeks ago. The timing of it did not allow me to preview, nor did my clients have a chance to do a drive-by. I know that we all are skeptical if it is a foreclosure, but the pictures looked really good and it was a good neighborhood. So we took a chance.

BIG MISTAKE. HUGE.

The home was a mess in much more than a flooring and paint sense. There really was not a single room that would not have required major work. I am fairly sure that this house might have even been involved in cooking up some drugs at some point. It was a shambles.

The state of the house really was not an issue for the right buyer, and it should have been marketed that way. However, the pictures had been re-touched big time, and the description included "move-in ready". REALLY?

When we walked in to the house, my clients quickly became furious at having been misled so egregiously. The end result being that no listings held by the listing agent will be considered going forward. End result, another client of his could suffer a non-sale as a result.

Truth in advertising is not some elusive benchmark, and when done improperly it can reflect poorly on us all.

... and why does this feel so damn hard?

We closed a deal earlier this week that turned out to be a bit stressful in the final 24 hours. In fact, it was the first stressful one that a client of mine has been through in quite some time. The overriding problem was one of poor understanding and differing expectations with my client.

The property was purchased at a bargain basement price about 6 months ago, and the owners have done somethings to the house expecting to be there a long time. Life, however, laughs at us when we make plans. The owners have been transferred to LA, which prompted the sale.

They listed the home at fair market value, nothing more-nothing less. However, this price percentage wise was significantly above their purchase price a few months back. Courtesy of Barney Frank and Chris Dodd, the fraud alarm software had a field day with this one prompting a manual review and appraisal prove-up within 48 hours of closing. This prompted the call from the lender indicating that closing "might" (read would) need to be moved.

In most cases this is no big deal. But, in this one, it would have been damn expensive for my buyers. They had workers scheduled to begin making a few changes, flights to Cape Cod early the next morning, and rather than pick up a new car it would have needed to be shipped. To say that the pressure valve was getting a thorough test on my buyers would be an understatement.

This is where working with a good lender really pays off. The deal got pushed to exception processing and all decision makers got in the same room and hashed it out. The end result was a late close , but on the same day as originally scheduled. A very nice job by Mark Zielenski and his team at Fidelity Bank.

Looking at the deal in the rearview, it really is problematic for true credit-worthy people to understand why they end up feeling like criminals much of the time during the mortgage process. I know that we as REALTORS all explain the process, and how much more stringent it is with Chris and Barney's "expert" guidance. I also know that lenders do their best to explain this too upfront. But, in my experience, it gets filed under the "it won't happen to me" heading in many cases, much like many of us were as teenagers.

In the end, the buyer is happy and everything got done thanks to a flexible closing attorney and creative, rush processing by the lender. It does pay to have a good team in place, because absent that this deal would not have gotten done on time, AND many more of my deals would beyond stressful for all parties involved.

So to Tammy Skinner's team at Weissman, Nowak, Curry & Wilco, and Mark Zielenski's team at Fidelity Bank, a heartfelt thank you for helping make Joe & Jill's dream house beome reality.

And, to Joe & Jill, I wish you many, many years of happiness and memories in your new HOME.

...or is it trending to a seller's market?

I know that this will have some thinking I have lost my mind, but I promise I have not. I will point to a few factors that make think we are getting at minimum stable here in the Metro Atlanta area.

First, and probably the most shaky point because it involves BoA, is that even BoA finally realizes that shifting their held foreclosures one-by-one makes no sense at their size. Manpower alone dictates this course of action is ridiculous. Consequently, they just announced their second round of bulk sales opportunity. They are looking to package deal 500 homes at a time. All indications are that private investment groups and hedge funds love this idea. Their goal is to rent the properties and let them perform until it makes sense to release the homes back to the market to achieve their targeted ROI. Bank of America is happy with the homes off the wrong side of the balance sheet, and we should be happy with a much more controlled release of homes back to the open market down the road.

Second, the rental market is so strong right now that it does make sense to buy in more cases than rent. There are still many out there with no other option than to rent right now, but those with options are coming off the sidelines to save money on a month-over-month basis. 

Third, and most likely not cooked into the numbers yet, is how strong move-in ready "A-space" is performing. More and more deals are selling at or slightly above list price. I am not saying all properties are doing this because they are not. We have many foreclosures that are just sitting there, and have become stale to the point that only an investor will want to take on the challenge. Consequently, buyers are moving away from them toward traditional sale homes. The sellers whose homes are in good shape, and give the buyer the option of doing nothing to the home unless they want to are flying off the shelves so to speak.

I am not ready to call it a seller's market myself, but I can say that the market is much more neutral which is quite refreshing. This shift though could be the catalyst that swings the pendulum toward the seller's side as more buyers come off the sidelines because it now makes more sense to their bottom line.

We'll see in time, but the tone of the conversation with buyers and sellers is certainly much more upbeat than the one we were all having this time last year.

is always an interesting way for a conversation to start. It is made more interesting when a client is the one asking the question.

Well, that is just how my day started when a client called to make sure that he had not offended me by getting "testy" on the phone yesterday. It seems, like many of us, he had become confused and frustrated with the seemingly meaningless pieces of information that the underwriter had requested. In fairness, I would venture to say that underwriters are confused and frustrated too by the seemingly meaningless pieces of information they have to request to remain compliant in today's environment.

To bring things down a notch yesterday, I calmly stated, "you are not mad at me, so please stop yelling and let me try to help." Consequently, we came up with a plan of action, and he was much better prepared for his evening, rather than having a bad night obsessing about the things he cannot begin to control.

Well, the sun came up this morning with all but a couple of pieces not being resolved. So, I answered his question about the apology with an emphatic no, and explained that my job, above all else, is to remove as much emotion from the process as each client will allow. It is much better to vent to me than to make angry an underwriter, or anyone else for that matter, that could make this process more stressful for him just because.

So Joe, we are almost done, ahead of schedule I might add. Now, go have a great day on purpose.

... is not a bad thing in the end.

Let's face it, the housing market has taken a huge hit, and there are plenty of fingers that could be pointed in countless directions. But, I never thought I would be thanking the banks for screwing things up so badly, that they have actually helped the market gain some strength.

Before many of you think I have completely lost what is left of my mind, I will explain. Banks are not geared to own homes, and their inability to get the countless foreclosures back to market, off their books, or turn them into performing properties has been laughable. But, it is in their inability, that they have helped the rest of us.

The foreclosed homes have grown stale, and the "deals" they might have initially been have been replaced with a project home feel that quickly eats up anything saved on getting that deal in the first case. In many cases the banks tried to save money and turned off the power, and thus stopped all air movement in the home. This is a very bad decision for homes in Georgia. They have effectively created mold incubators which they will not address in an as-is sale. Consequently, an investor is the only option left for these homes, and the numbers dictate that transaction which definitely will not favor the banks.

I know, back to the fixing it part. Well, move-in ready A space has seen a rebound. We are experiencing multiple offers and even bidding wars on properties. There are homeowners now starting to come off the sidelines because the market is at least neutral in favoring neither buyer or seller.

So, to the banks I say, "Keep it up." You are finally doing some good for the rest us.

...then it will not be a struggle.

The Atlanta market is suffering a bit from a lack of move-in ready "A" space. Consequently, several clients have become a bit frustrated that they have yet to find "the one". I recently sat down with a couple and talked about the frustration. I told them that while annoying, it was actually a good sign. I went on to say that it meant they were truly engaged and now knew exactly what they wanted.

Well, they were not entirely thrilled with my take because it did not solve the dilemma, but I promised that their patience and not settling would be rewarded. I reminded them that when the right property presented itself, that making an offer and getting the property under contract would not be a struggle.

So, yesterday morning we were reviewing the new options, and found a home that looked promising. In fact, I had a gut feel that told me to go ahead and print a contract, do a CMA and confirm the tax info. This was definitely not a mistake. 

For ONCE, the house was as good as the pictures. It had everything, and I mean everything, that my clients had hoped for. It is a house they could "grow" into. The body language, the eyes and the words all matched up for them. I might have even said, "I told you so. When it is right, there is no struggle."

As we were leaving, two other groups showed up. My guys were hating the thought of getting into a bidding war. I noted that I did not know if their agents had all the information needed to make an offer right then, but we did. So, we did just that.

When I called them last night they were a bit anxious, but were quickly over-the-moon when I said, "Congratulations!" And my client said "I now know what you meant by it not being a struggle. Thank you so much for being prepared."

Aside from a happy client, I must admit being a bit sad too. Joe and I shared the same mentor for many years. He passed away last December. I would have liked to have seen O.K.'s face and heard his voice when Joe and I told him the good news. He would have been proud. 

So to Joe and Jill, I offer you one of O.K.'s best lines...The best is yet come...

I have a client who is set to close on Friday. The process has been very smooth, and both the buyers and the sellers have been most gracious and accommodating. Very, very little stress on this front.

The lender has been challenged with a few special circumstances, and in fairness has really gone to bat for my clients. The closing did get pushed last week, but it was more timing of responses than anything else. 

However, everything came to a head yesterday between the buyers and lender simply because the lender did not speak buyers, and the buyers did not speak lender. In an effort to not bore the buyers with every detail or challenge, the lender was just going about the job to get it done. But, this set up a scenario that my clients only heard from the lender if there was a problem and were always fearing the worst. Not a familiar or comfortable situation at all for buyers with great credit histories.

Until yesterday, they had no idea just what and had been done in the background to put this deal together. Consequently, I spent a good hour on the phone with the lender and buyers separately since I was lucky enough to speak both lender and buyer in this case.

The end result is a deal that will close just fine, and both sides now understand each other as much as they can. For my part, I was reminded again how important it is to let my clients know what is going on; no matter how small it may seem. Better communication and more information would have made this scenario a non-issue. Frankly, I really like non-issue events...

...was my response during a recent conversation with a client.

She laughed and explained that it suddenly registered that if one is going to put their home on the market, then one might actually be moving. However, this does not mean that she is de-cluttering. She is merely packing to move.

Truth is, she and her husband believe that de-cluttering means getting rid of things that mark important moments in their lives and that of their family. In my experience, you cannot fight or overcome these emotions without re-framing it from negative to positive.

The really funny thing is that now they are really in to it, and have even vocalized that the memories and emotions are not in the things at all. They reside in their hearts and minds. So, things to be kept have been put in PODS, and I might have called my client the "Imelda Marcos of PODS". Things to be released to their destiny have been, albeit reluctantly, have been so released.

I do not know an agent that has been faced with the "THERE WILL BE NO DE-CLUTTERING" before, but it does me good to remember that emotion takes time. I have yet to have a serious, committed client that did not do the things necessary to buy or sell a home. It is always a matter of timing.

Besides, this one prompted a good laugh for us, and a new option for having the everfun de-cluttering discussion.

My son has just started T-ball season in the 4-5 year old age group. Having just turned four in December, he is one of the youngest kids. Just prior to the evaluation training day, and I do mean just prior, he decided he wanted give it a shot. Mind you, he had never thrown a baseball or put on a glove. Needless to say, he was pretty challenged on the first round of fielding and throwing. So much so, that the coach did not heed my warning when it was his turn to bat. The coach was standing directly in front of the plate about ten feet away. I told him to back up, but it was clear that Trey's lack of experience left him unimpressed and not the least bit concerned.

Well, a very timely and lucky pirouette and he managed to save himself from severe "swelling" and pain. I could only say I told you so. Later, I let the coach know that while he had never fielded before, he had the designated hitter part down.

The interesting thing to watch though, was the coaches that took a moment to show, rather than tell Trey what to do. In fact, the one he connected with the most ended up being one of his team's coaches. We have practiced a bit the past few weeks, and they had a team practice the other day. Words cannot express the happiness on my son's face when he saw "HIS" coach. Really cool. The guy made an impact in that few moments that registered very well with Trey.

Truth is, this is not unlike working with a first-time home buyer. I can use a lot of technical terms and rush through the process, get frustrated and many more things. The result being a ticked off client that will surely give me a "telling" endorsement.

However, if I just take a moment to remember my first house, and all the emotion surrounding that transaction, I can make the process much, much smoother for them than it felt to me when I was in their shoes. It doesn't take much to achieve this outcome...nothing more than a bit of patience, acceptance and tolerance. Seems to me that is what I am meant to be anyway.

It is funny that Trey's first experience with T-ball is where the message to remember that was, but it is quite appropriate. The last card sent by mentor before he passed this past December was to Trey wishing him a Happy Birthday. The sentiment he added was, "Dear Trey, it sure has been fun watching you help your daddy grow up these past four years." How true. How true, indeed.

Bottom line, the message is always there if I pay attention, and when I do, I have a better chance of being better today than I was yesterday.

Have a great week people.