This bugs me!

Earnest money:

Have you ever heard of "earnest money"? In real estate, "earnest money" is, "...the 'binder', or 'good faith deposit' you offer a seller when you sign a contract to buy real estate. It is your money and should be held in trust and credited to you on the day of closing, when the real estate becomes yours. If you are buying a listed property, either the listing agency or your buyer agency (in Ohio, it's the "buyer agency" that will deposit the "earnest money" check, or cash) will deposit your earnest money in a (non-interest bearing in Ohio) trust fund until the day of closing, when they transfer it to your closing agent. If the transaction doesn't close for some reason, the funds are dispersed according to your contract (In Ohio, the "earnest money" check, or cash, unless stated in a contigency clause, will return to the buyer)." - www.homebuying.about.com

Ok, so WHY earnest money? Most real estate agents claim it's "the Law" (it is not according to the State of Ohio: http://www.aabor.com/general/pdf/earnest_money.pdf). Others see it as a means to show the seller that the buyer is acting in "good faith", and that "the 'earnest money' shows the buyer's intent on the purchase of the property". Really? So, the offer is really a waste of paper? The buyer is just joking when he/she has an agent "fill in the blanks" on the offer/contract? What happens to the "earnest money" at close? In Ohio, it goes BACK to the buyer, unless otherwise stated in a contigency clause in the offer/contract.

I see "earnest money" as a waste of time. A potential buyer sees a property he/she would like to purchase. They call their agent, and the agent takes him/her through the prospective home. The buyer has financing, and wants to make an offer. The agent fills in the blanks on the offer/contract, and promptly faxes it to the listing agent. EVERYTIME I have sent over an offer on a property, I get a counter offer back requesting "earnest money". I asked one agent why he was requesting "earnest money", and he said, "It's the LAW. You HAVE to have 'earnest money' included in the offer"! It was only $500, but that $500 is being pulled out of my client's (buyer's) savings or checking account that is drawing interest, and being placed into a NON-INTEREST BEARING account! Then, at close, I have to fill out a form that ALL parties have to sign claiming that my broker has returned the money to the buyer. Sounds like a waste of time, money (in interest the buyer does not receive because the money is NOT in the checking/savings account), and paper to me (not like agents don't have enough paper to fill out, anyway)!

So, the next time YOU make an offer on a property, make sure YOU take an extra $500 out of your interest bearing savings/checking account with you to your REALTOR® so he/she can make sure YOU get that $500 back at close, WITHOUT INTEREST, so YOU can put it toward closing costs, or any other "buy-downs" you choose! Remember to FILL OUT THE FORM that says you received your "earnest money" check back from the broker!

It's been a while...

I just closed on a home on Thursday, December 15, 2005. It was a "fixer-upper" in the real sense of the word. It was reasonably priced, and it sold for a little more than the seller thought it would sell. So, my client (seller) was happy with the outcome. The buyer has a home that is solid from the standpoint of structural soundness. Now, with a little work, this house will be in very good condition. I think all parties walked away happy!

Listing Your Home.

If you decide to list your home, the first thing you should do is get rid of the clutter. What clutter? For starters, all of the clutter you have yet to use whether you bought it, or someone gave it to you as a gift. Buyers do not like cluttery homes! One of my brothers has a wonderful idea! If you purchased the item, or if someone gave it to you as a gift, get rid of it after 2 years if you find you no longer need it, or no longer have a use for it. He doesn't keep it any longer because he just doesn't want to take up space in his home. I should take his advice! I seem to be more like the rest of my family when it comes to keeping things longer than 2 years because I am a pack rat, but I digress (I still have stuff from the time I was single)! My wife, and I are not listing our home, just yet!

The second thing one should do is paint the interior of the home. A nice neutral color should be the ideal. I know you're saying to yourself, "These are my wife's/husband's favorite colors"! Sure, but are they the Buyer's favorite colors? Most Buyers will paint the walls their favorite colors as soon as they move in anyway, so make it as neutral as possible. As soon as my wife and I moved into our condo, we painted! I have been in several homes, and I hear clients say they dislike the paint color. When talking to the Seller, I hear the complete opposite. Sometimes, the Seller can't remember what it was like to be the Buyer.

Third, make the bathroom(s), and kitchen remodel as tasteful as possible without breaking your budget. If you want the Twenty Thousand Dollar, modern bathroom, and Thirty Thousand Dollar modern kitchen, make sure you understand you may not recoup 100% of those costs. It may make a difference for the Buyer, but don't expect the Buyer to like your taste in decoration! An intelligent Buyer will know if you listed your home based on all of the remodeling you completed because other homes in the area may have similar square footage with a newer kitchen and newer bath(s), but those homes may be listed at Twenty Five to Thirty Thousand Dollars less than your home! If you have little time to update the kitchen, and bath(s), be willing to give back to the Buyer, a credit at the time of close for the cost of the remodel(s). I recommend at least Three estimates of remodeling costs if you are willing to give the credit.

Fourth, make sure the basement (if you have a basement) has no water leaking through the walls, the walls are not bowing into the basement, or there are major cracks in the basement walls. These are structural problems that needs serious attention! It will cost several Thousand Dollars to repair, but worth every penny to make sure the basement doesn't cave in, or seriously flood when there is heavy rain. If you have a finished basement, make sure the Buyer has access to the walls to see if there is any major problems with those walls.

If you have several major remodel jods you need to do, and you are seriously considering listing your home in the next few months, do small remodel/repair jobs around the house to prepare it for listing. Don't be surprised if you get a "Remedy to Repair" from the Buyer's if you're home is not up to their expectations! Buyers can be VERY picky!

If there are other things you think should be on this list, feel free to add to the list! All are welcome to voice their opinion!

Should I Have A Real Estate Agent If I Am A Buyer?

When one looks for a home, most people think the agent on the sign will give them the best price for the home if they choose to purchase that home. So, they call the agent on the sign, and set up an appointment to meet with that agent. Ok! Who represents YOU? That agent represents the SELLER, and not the BUYER! That does not mean the agent will cheat you, and take advantage of you, but he/she has the seller's best interest in mind, not your's!

Most people think if they "hire" a real estate agent to represent them as buyers, they have to pay him/her a fee to help them find a home. With this in mind, most people will choose to be represented by the agent on the sign rather than "hire" an agent to represent them. Just a reminder; in Ohio (and in most states), the buyer agent works for the buyer AT NO COST TO THE BUYER! What? That's right! The buyer agent works with you at no cost to you. How does the buyer agent get compensated? Good question! The listing agent, once the home is sold, splits his/her commission with the buyer agent. That's why the commission is from the seller, and not the buyer.

So, to answer the above question, you SHOULD have a real estate agent help you find the home you need! Don't go it alone!

Who is a "REALTOR®"?

I saved my text books from real estate school. In the text book titled, "Ohio Real Estate Principles and Practices", the definition of a REALTOR® is, "Any (state) licensee who is a member of the National Association of REALTORS® (NAR), and their affiliated state and local boards. Only members (of the NAR, and their affiliates) may use the term 'REALTOR®' because (the term) is a registered trademark of the NAR".

In other words, a real estate agent who is not affiliated with any local board of REALTORS® cannot be called a REALTOR®, though both are licensed real estate agents.

Open Houses.

I love to go through other real estate agents' open houses. This gives me ideas I can use when I do open houses. One thing I find somewhat humorous is the idea an agent can make the sale by having snack foods, or cookies. Bad idea! Do you REALLY want the prospective Buyer going through YOUR home with cookies? How would it look if a child, let alone an adult, went through the house leaving a trail of crumbs? Will the agent walk through the home with a vacuum cleaner to sweep up all the crumbs? Not likely! So, when you list a home, and the agent wants to do an open house (good marketing tool), tell the agent you do NOT want any snack food given out to the prospective Buyer(s), unless the agent is willing to vacuum up the mess left behind!

Just "food for thought"!

I love advertising.

Many claims are made by agents saying they can "sell" your home in 90 days, or less. Really? How can one make this claim? What about all those listings the agent takes that do not sell within the 90 day period? Will his real estate broker buy the homes? Will he buy the homes? I really would love to know! My friend keeps asking me when I am going to make the same claim. "Doug literally sold my home in just one day! Thanks, Doug"! Well, I would love to sell someone's home in one day. However, after all is said and done (unless it was a "Quick Claim"), there is no way a home can sell in one day.

I started a new blog because my old was was messed up!

Ok, here we go with part 2 of the blogworld! Let's hope this one works!!!