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Selling Later Wendy

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Selling Later Wendy last won the day on September 30

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  1. We added a new resource event to help you get ready to buy or sell in Pittsburgh October 28th 11:30am to Noon Selling Later contributor, @Jay Villella will be joining us live for a quick Q&A about buying or selling a home! We will also answer questions about the Pittsburgh market. Learn more and register here. If you can't make it, you can submit your questions to community@sellinglater.com or send me a direct message.
  2. We added a new resource event to help you get ready to buy a home. October 28th 11:30am to Noon Selling Later contributor, @Jay Villella will be joining us live for a quick Q&A about buying or selling a home! We will also answer questions about the Pittsburgh market. Learn more and register here. If you can't make it, you can submit your questions to community@sellinglater.com or send me a direct message.
  3. We added a new resource event to help you get ready to buy or sell! October 28th 11:30am to Noon Selling Later contributor, @Jay Villella will be joining us live for a quick Q&A about buying or selling a home! We will also answer questions about the Pittsburgh market. Learn more and register here. If you can't make it, you can submit your questions to community@sellinglater.com or send me a direct message.
  4. until
    Selling Later contributor and real estate agent, Jay Villella, virtually as we talk about buying or selling a home in Pittsburgh! Register Here Can't make it? Submit your questions by 10/27 to community@sellinglater.com to have it asked during the live session. The recording of this AMA will be posted in the community the next day.
  5. Your post encouraged us to do a quick write up about open houses and who benefits from them. Remember that when you attend these unrepresented, to be aware of dual agency and pay attention to what you sign when you "check in"
  6. A homebuyer asked last week why it always feels like they are "fresh meat" when they attend an open house. This is a common feeling, and there is valid reason as to why they might feel that way. As a frustrated consumer, that got to see the business side of the industry, learning the real benefit for opens houses was an eye opener for us! Take a read below to learn who really benefits from hosting one, and some things you should know before agreeing to host one.
  7. What is an open house?It is a scheduled time in which the home seller vacates the home and allow buyers (with and without representation) to tour their home, typically with one real estate agent in charge of it. What you should know as a seller At times, it can be a safety issue Anyone can come through and look at your home, which could include nosy neighbors and nosy people in general. It can also include buyers that have no interest in buying your home but instead are just curious or just “getting their feet wet.” There is only one agent typically at the home in charge of the unrepresented homebuyer (buyers attending without an agent). If the agent is sitting in the kitchen or talking with someone in the living room, no one is watching the people upstairs who are walking through your bedroom, looking in your closets, and opening your drawers. This could open up an opportunity for theft when someone is unsupervised. Agents utilize Open Houses as a way to find new clients In the multiple agent forums that we follow, most conversations about Open Houses discuss collecting names and converting those leads into a new client. A lot of the commentary in these forums instructs agents to knock on the neighbors doors to invite them to the Open House. Not because your neighbors are going to buy your house, but because they might sell theirs and the agent wants them as a client.Even studies written before the explosion on online listings showed that open houses are not a successful tool in selling a home, but are successful for agents as it puts them in front of homebuyers who might not yet have representation. As a home seller, you clean your house, find a place for your pets, pack up your kids stuff, pack up your kids and leave your house for four hours so that an agent can meet new clients. What is the benefit for us as the seller for putting in this much time and rescheduling for rare results? If our home is being used as a marketing tool for the agent, should we be compensated for our time? What you should know as a Homebuyer It can open up procuring cause issues Here is where it gets murky… In real estate, it is all about who brought the buyer or the procuring cause. If you are going to an open house unrepresented, and you fill out the form when you first get there and talk with that agent, it leaves the door open for them to say that they were the procuring cause if you end up making an offer on that home. This can cause a potential issue if you want to use a different agent than the one you spoke with at the open house. It can potentially put you in a dual agency situation The other situation that can occur when attending an open house without representation is dual agency. This is when the listing agent says "hey, I will represent you and the buyer to get this deal done!" But remember, as we talked about last week in regards to pocket listings, with dual agency, the brokerage (and potentially the agent) walk away with way more money and you as a buyer don't have anyone with a fiduciary responsibility to you. As a reminder, dual agency is not legal in some states.If you are curious about dual agency and procuring causes, Caare.org has a great article about this issue.In our opinion, there is no great benefit for a home seller to host an open house, especially in a seller's market. If your agent is pushing for an open house, be sure to have them explain their reasoning and benefits to hosting it before you agree.
  8. This was one of the first things I learned when jumping into the business side of real estate (was originally just a frustrated consumer).... Open Houses are more for agents to find new clients than to sell a home, especially in this market. Sometimes it isn't even the listing agent at the open house and instead is a newer agent hosting it so that they can try to gain new clients. CAARE.org had a great article about this a few year ago. You can read it here.
  9. If you are selling your home, you might be approached by an agent to be an "office exclusive" listing. Take a quick read below to learn what that is, and who really benefits when you sell this way.
  10. An office exclusive is when your home is sold by an agent, but not put on the MLS. Instead, it is shopped around where your agent works, or their "Brokerage.” Another word you might hear for this is a "pocket listing." Just as a refresh, the MLS is a database that is created and maintained by real estate professionals. There are over 800 MLS in the US and to go by definition it's in which brokers share information on properties they have listed and invite other brokers to cooperate in their sale in exchange for compensation if they produce the buyer.Some, but not all of the MLS info on these specific homes are then pulled into aggregator sites like zillow, realtor.com, trulia, etc. which is what they use to get your info and sell it to agents and other services (learn more here). Typically an office exclusive is promoted to a seller as giving them more privacy because the public doesn't see their home sale. Sure, if you are Kim Kardashian maybe you need that privacy, or maybe you are going through something personal, and that is fine. But the everyday home seller will want as many buyers as they can looking at their home. Because fewer buyers looking at your home means fewer offers, fewer competing offers, and quite possibly less favorable terms within those offers. It's also promoted to a seller as not having strangers in your house. However, you are still going to have strangers, but these strangers are buyers that are clients of agents that work with your own agent at the same brokerage. Remember, you do not have to host an open house when you sell your home. In our opinion, they are more for agents to find new clients than it is to find you a buyer for your home sale. More importantly, studies have shown that these office exclusives can have an impact on fair housing issues and the disproportionate amount of buyers that are excluded, who do not find out about these exclusives are people of color. What happens to commissions when you become an office exclusive? Below are a few different scenarios as to who gets paid when you sell your home. For these examples, we are going to assume that every time the home sold for $300,000, even though we know at times an office exclusive (a pocket listing) might sell for less.Let’s also assume that of the commission, there was an agreed 5.5% split evenly between the buy-side and sell-side. That's $16,500. That amount will be split in half and then each broker, where that agent works, is going to get a set percentage of that commission before it goes to the agent. Every single agent has a different agreement with their traditional broker. Some pay 5%, some pay 10%, some pay 60%, but to make it easy, let's assume it is at 30% for these examples. We are going to also assume that both the buyer and seller contacted their agents directly, and not via a referral platform. In a traditional system when you put your home on the MLS and the agents work for different brokerages In this common scenario, broker A (where the listing agent works) will take $2475 and the listing agent will walk away with $5775. Because you put it on the MLS for all agents to see, there is a good chance that the buyer's agent works for a different brokerage. Assuming that the buyer's agent also has a 30% agreement with their broker, then Broker B is getting $2475 and the buying agent is getting $5775. But let's look at what happens when you sell as an office exclusive... Remember your home is only being shopped within the brokerage and the buyers are represented by agents within that same brokerage. So again, let's assume a $300,000 home sale, with $16,500 paid in commission but this time both agents work for the same broker. So instead of almost $2500, the broker now gets $4950 from your sale, and the agents still end up making about the same. Here is what happens when someone offers to do dual agency for an office exclusive. In this scenario, the buyer also works with your listing agent and they represent both of you. This is called dual agency and is not legal in some states. With the buyer and seller both working with the same agent that agent might say "...since I am working with both of you, I'll do this for 4%." Now the broker will get $3600, instead of the $2500 in the other scenario and the agent is now walking away with $8400. But what if your agent doesn't want to represent both sides... What that agent might say is that they are not comfortable with representing both sides and that they will find someone else to represent the buyer. This is typically going to be an agent from their brokerage. When this happens, the broker is getting almost $5000. Assuming both agents have a 30% agreement with their broker, they each walk away with $5775. BUT, because the buyer was originally a client of the listing agent, the new agent that came into the fold is most likely going to giving that listing agent a referral fee. These referral fees can be anywhere from 20% to 50% of whatever that new buyer agent made and would go back to the listing agent. This means the listing agent will walk away with more than $5775. So who wins when you do an office exclusive? In our opinion, the agent and the brokerage make more money. They can also use your exclusive home to bait in new buyer clients because they have "special access" to homes that no one else has. Who loses? Most homebuyers because now pocket listings, homes sold by agents that are not on the MLS, are up 67% since November 2019 when the National Association of Realtors put policies in place to diminish pocket listings. What's interesting is when NAR announced these policies in 2019, within 6 months, multiple brokerages rolled out shiny new “Office Exclusive” programs. In our opinion, these are the same thing as a pocket listing. If your number 1 priority is privacy, you can certainly sell your home this way, but please make sure you understand your options and your costs because there are many ways to sell your home but they all come with different conveniences and expenses. Remember at some point you are going to be a buyer, and it's going to be really frustrating and discouraging when you find out homes that you love were sold already because it was an office exclusive, but for an agent that works at a different brokerage so you never found out about it.
  11. If you are struggling to find a home, take a minute to check out our latest article and how the industry is estimated to sell 400,000 homes that you will never find out about.
  12. Here are the current postings on Selling Later SOON Holbrook, NY 6 bed/3 bath: https://www.sellinglater.com/property-details?id=1132 Bothell, WA Condo: https://www.sellinglater.com/property-details?id=1134 Cardinal, VA Waterfront 3 bed/1.5 bath: https://www.sellinglater.com/property-details?id=1106 Chandler, AZ 3 bed/2 bath: https://www.sellinglater.com/property-details?id=1095 October Pittsburgh, PA 4 bed/2.5 bath: https://www.sellinglater.com/property-details?id=1133 Elverson, PA 5 bed/4.5 bath: https://www.sellinglater.com/property-details?id=1123 Washington DC 3 bed/2.5 bath: https://www.sellinglater.com/property-details?id=1131 November Pittsburgh, PA 5 bed/3.5 bath: https://www.sellinglater.com/property-details?id=1124 March 2022 Alpharetta GA - https://www.sellinglater.com/property-details?id=1104 April 2022 Everett WA - https://www.sellinglater.com/property-details?id=1105 May 2022 Aurora CO - https://www.sellinglater.com/property-details?id=1117 Houston TX - https://www.sellinglater.com/property-details?id=1116
  13. This new section is the first piece to our big mission of helping you prepare and save money for the biggest financial decision of your life! Stop by often to learn simple tips to help you save time and money while you get ready to buy or sell!
  14. This is a great question! I am sure a few lenders will answer this, but here are a few things you can focus on... As a general tip, set up automatic payments as best you can to help avoid any issues of missed payments. If you have any big balances on credit cards, I would focus on paying some of that down. Some reports might tell you to open new credit depending on what your report looks like, BUT if you are getting close to buying, I wouldn't open anything new or make a big purchase unless necessary. Even then, chat with your lender before you do it just to be safe. While working on your credit score, you can also work towards making a budget for your new home purchase. Specifically what changes when you add in your home loan and what you can comfortably afford while still maintaining to pay down debts (credit cards, loans, etc).
  15. As if the market wasn’t challenging enough, especially for first-time homebuyers, Redfin reported earlier this year that an estimated +400,000 homes will be sold by an agent this year without the public knowing about it. This number is up 67% since the National Association of Realtors created a policy to prevent hidden home sales (also known as pocket listings). Here is how it’s happening and who really benefits from these hidden homes. First, let’s go over the definition of a hidden home (known as a “pocket listing”). A pocket listing is a home that is sold by an agent but NOT listed on the MLS. I know what you are thinking…. ”Wow! 400,0000 homes that I don't know about as a homebuyer seems unfair! Why doesn’t someone do something about this?” In 2020, the National Association of Realtors began enforcing their new policy to ensure hidden homes would diminish. So how is it possible that pocket listings have increased by 67% since then? In our opinion, it is due to two loopholes that NAR put into their policy. Loophole 1: Internal Sharing From what we can see in this policy, an agent is allowed to share information about upcoming home sales within their brokerage (where they work) but not with the public. Oddly enough, once NAR's policy was put in place, we noticed the launch of new programs like Coldwell Bankers "Exclusive Listings", Howard Hanna's "Find It First," and Lamacchia "Links" which all encourage you to work with their buyers and not list on the MLS. As a homebuyer, you typically have to give them your info and work with them to get access to these homes since these brokerages do not share their "exclusive" listings with other brokerages. While some brokerages are finding ways to make more money off of consumers, Redfin has been the only big brokerage to speak about the negative impact of pocket listings, especially on minorities. Loophole 2: Privacy This was meant for sellers that requested their home not be on the MLS. If you are Kim Kardashian and need privacy, then sure, we can understand that. But for your average American home, you will want as many eyeballs on your home as possible. Also, as much as we try, we don't live in a private world. Most of your info is already accessible online, and that data is typically sold within the industry. How else do you think agents end up sending you mailers, cold calls, etc.? So who benefits the most from these pocket listings? In our opinion, the brokerage is the big winner. Remember that a brokerage (where your agent works) will take 5% - 60% of what your agent makes in commission. If they can sell your home to someone represented by the same brokerage, they would then get part of the buy and sell sides of the commission you paid out as a seller. Two Big Questions To Think About: Whose data is it to control and do they have a right to hide listings from the public? Housing is a basic human right, yet many home buyers are battling it out in the trenches just to find a home to buy right now. It should anger you that in these situations, some companies are controlling what home sales you get to see, and which you do not see. What benefits do I really have of not listing my home on the MLS? Your home will not be viewed by as many people when not listing on the MLS. You also do not typically save money on commissions when using an agent and selling as a pocket listing. If you have concerns about privacy, you can control when people can view your home and you do not have to host an open house. In our opinion, open houses are used more for agents to find new clients than to sell your home, especially in seller's markets where homes are getting multiple offers within the first day of listing. Key Takeaways: We live in a world where we can research anyone and anything, yet future home sales and future homebuyers are under lock and key? Why is that? Our opinion is that the industry makes way too much money off lead generation, selling services (and now gaining perks of pocket listings). They stand to lose a lot if that information was accessible to every consumer. Selling Later doesn’t work within the industry and is a group of frustrated consumers on a mission to add more time, transparency, and fairness to real estate. This is why every post on Selling Later is accesible to everyone. It's also why we refuse to sell or share member information. Key Terms: MLS: A multiple listing service (MLS) is a database established by cooperating real estate brokers to provide data about properties for sale. Pocket Listing: a home sold by an agent that was not listed on the MLS 400,000 Hidden Homes: Redfin reported 4%-10% of all listings were pocket listings. The average (7%) of last years existing home sales (5,640,000) is 394,800. Redfin estimates the % of pocket listings will increase by the end of the year.
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