Tim's Atlanta Real Estate Blog: January 2007

I try my hardest to use REALTOR® correctly.  But let's face it.  If you use it like the NAR wants you to, you'll hardly ever use it. 

What most people want is just a simple short word to use instead of real estate agent. I don't think it needs to imply anything other than someone who is a real estate agent.   

My attempt at a new word would be Realstor, or Realster.  Maybe estagent.  Maybe Realgent. 

New words are created every year.  Let's get one that is useful and doesn't make us all trademark violators everytime we try to use it. 

 Any ideas?

Today in my broker's prelicense training we studied the Fair Housing Act.  I never had thought that advertising the fact that one is a "family REALTOR®" could get oneself into trouble. There are several protected groups that the law prohibits anyone selling real estate from discriminating  against. This means that you can't show any preference for or against someone based on several criteria: familial status,  race, sex, handicap, color, religion, or nationality.

It does not matter whether your intent is good or bad.  The one thing that matters is the effect that you have.  It is also  not something like affirmative action where one particular group is treated differently due to some past injustices.  Reverse  discrimination is just as illegal as what one normally considers discrimination. So it is just as illegal to say you were  looking to work with black people as it is to say that you are looking to work with white people.

I asked the instructor a simple question.  "Can I advertise myself as an agent who specializes in helping Jewish families  find homes."  He said without any hesitation that that would be against the law.  First, Jewish is definitely race or  religion.  The other thing that was surprising is that "family" could be discriminating using familial status.  I had never  really thought of it that way.  What an eye opener.

I wrote a post last month about a fictitious group, SWEARA, "Straight White European American REALTOR Association".  I wanted  to show how offensive this sounded but was no different to me than someone  marketing themselves as a Jewish agent or a gay agent.  I think some people only read the first part of my post and are now  thinking that I'm a big racist.  I thought I made my point crystal clear but it seems like some just read the headline.  But it does sound like many people think that it is OK to market toward some niches that  might be based on some of those protected groups mentioned above. I'd hate to go to prison because I thought "helping Jewish families buy homes" was a nice thing to do.

I find it interesting that right now sexual orientation is currently something that one can discriminate against.  One can  market themselves as a gay agent and one can also market themselves as an anti-gay agent if one so chooses.  I would imagine  that some day sexual orientation will be a protected group along with the others.  But along with this change for the good,  it would then make it illegal to promote oneself as a gay agent.  I wonder which way is most beneficial. Anthony Clark thinks that it is acceptable to market towards this group. I now understand it is totally legal, but to me it still makes people feel different.  Myself as a straight guy feels discriminated against by an agent who mostly wants to work with fellow gay people.  I would never want to tell a gay guy I didn't want to work with them and exclude them from my business dealings. But to each his own.  If you feel good about using that to your business advantage, then I guess you can go for it.

I still don't exactly understand the special REALTOR® groups like those that cater to women, hispanics, asians, blacks,etc.  I'm assuming that they are OK since the NAR sponsors some. I'm thinking that these groups are trying to help these particular  people overcome some special problems. Maybe they function to help everyone understand these types of people better.  Maybe they want to help a woman overcome some special obstacles unique to women. Or maybe they want to help other REALTORS  understand the special needs of woman in general.  But if this is the case, I don't know why SWEARA would be such a bad  thing.  In many areas whites are no longer a majority.  It might be helpful for them to get together and trade ideas on how  to adjust to this development.  Maybe they could learn about how to deal with different languages and cultures more effectively.

It is interesting that Tom Tancredo has called for the abolition of the Black Caucus and the Hispanic Caucus in Congress. I must say that I kind of agree with him. 

"It is utterly hypocritical for Congress to extol the virtues of a colorblind society while officially sanctioning caucuses that are based solely on race," said Tancredo.

I think that these REALTOR® groups are the same thing. But that is my opinion.  I'm sure many feel differently.

It was very interesting how in class we were able to discuss this with much candor and openness.  We were a pretty diverse  group and we had a very lively discussion about the law and our practical experiences.  This shows me that we are moving along  toward the day when discrimination will be looked at as such a foreign concept to most people.

I saw this bathroom yesterday when I was out showing properties.  It just struck me as very interesting.

There is an expensive intown area of Atlanta that is called Buckhead, but this home was out in the burbs.

Sometimes agents do market homes in the suburbs as having Buckhead style.

Does he go in there and hit the head?

I wonder what a home stager would have to say about this.  I think that the seller was an owner/agent.

 It did make my clients and me laugh and allowed us something to remember the home by.

I've heard many agents spout off that your house is the biggest investment you'll ever make.  It's a reason they give for why one should use a professional real estate agent.  I've also heard many seasoned investors state that you make your money when you buy, not when you sell.  Meaning that the key to a good investment is buying it at a below market price and not hoping that you'll make your money by selling it at an above market price.

So how do successful investors buy below market price?  Different investors have different strategies and philosophies, but one of the most successful investors I know, John Adams, summed up his strategy very simply.  See a lot of homes and make a lot of offers.  The offers he's talking about usually aren't full price offers.  They are low offers that are used to try to identify people who might be willing to take much less than they are asking for.  You never know until you ask.  You'll also never get a true answer until you ask via an offer on paper.

I just don't see that happening much.  I think there was a NAR study that showed that the average agent shows a client 8 homes before making an offer. I also see many agents very reluctant to submit a "low ball" offer.  They advise that it might insult the seller.  This is true in some cases but remember, it's the biggest investment you'll ever make.  Should you really care about a possible insult.  It just might be that your offer is the seller's ticket out of a bad situation. 

Have you ever looked over a list of sales and see one where the seller ended up accepting much less than you ever dreamed of?  I sometimes say to myself "If I would have known he would have taken so little, I would have made him an offer."  I guess someone took the chance of insulting the owner with a low offer and for whatever reason, the seller accepted.

In Atlanta, it's been a pretty stable market.  We haven't experienced any huge run up in prices and now we really aren't seeing any huge drops in prices.  So I did a search of sold homes in my area to see some specific transactions of homes that sold for a lot less than the list price.  I look at each one of them and wonder how the negotiations transpired.  For the prices to have ended up so low, I wonder just how low the initial offer came in at.  Did the agent submitting the offer think that the buyer was nuts to think he had a chance.  Was the agent shocked when the seller's initial counter was lower than what the agent had suggested starting at?

I've been there and have been amazed sometimes at how quickly some sellers come down.  I've learned to bite my lip and "humor" my buyers who want to submit what seems to be a really insulting offer.  I've learned that once in awhile, fantastic deals do in fact occur. 

Original list       last list          sold price       DOM

$849,000        $799,000        $744,000        93
$779,000        $779,000        $715,000        15
$779,000        $779,000        $725,000        18
$699,999        $699,999        $600,000        75
$699,000        $699,000        $601,000        11
$710,000        $599,999        $530,000        260
$448,800        $448,800        $405,000        20

During high school I used to work on a huge turkey farm.  One thing that stuck in my head was how turkeys attack others that are different from the flock.  If you place a brown turkey in a house of all white turkeys, nothing will be left of the brown turkey come morning.

Kristal Kraft and ARDELL DellaLoggia made reference in comments last week to two sayings that made me think about this again.

The nail that sticks out gets hammered down. A Japanese expression. 

Tall Poppy Syndrome  An Australian term that is very similar in meaning.

This applies so well to business and real estate.  Everyone wants to get noticed but if you stand out too much or are a little too different than the crowd, you'll soon be pecked at by others and will be viewed as a wacko.  If you make outrageous claims, even if true, most people won't believe you.  Stand too tall and people want to cut you down.

The good news is that one doesn't have to go to extremes to be noticed and to make a difference.  Incremental differences are enough to stand out from the crowd.  Suzanne Marriott mentioned in a comment yesterday a little video called 212 degrees.  I saw it a few months ago and it sticks with me.  211 degrees is really hot water. One degree more and that water boils and creates steam that can move a locomotive.

Two other books that fall into this type of thinking are Good to Great and Nuts. 

It's fun and exciting to try to be different but I think the money is in being just a little bit different.  It just makes people feel a little more secure.

An annoying telemarketing call can sometimes give you the necessary spark to get you started in an entirely new field. I get a lot of calls throughout the day trying to sell me this or that.  I used to close my mind up when listening to them and then when they would take a moment to breathe, I would politely say no thanks,  and hang up.  When I got into sales seven years ago I began learning about sales techniques and took those annoying calls as an opportunity to learn something. I noticed how some could hold my attention while others lost it the second they said hello.

Colleen Kulikowski's post about some people using Active Rain as a list of potential prospects made me stop and realize that I got started blogging due to a salesman calling me and trying to sell me a blogging system.  I am so glad he called and made me actually stop and look into this blog marketing phenomenon.

He was actually a very nice fellow.  Very respectful and full of information.  He was selling a SEO'd blogging system that would have you up and running with your own personal search engine friendly blog in the matter of a day or two.  I have had blogging on my radar screen for over a year but never took the time to explore the details.

I'm a big do it yourself-er so before I committed to their program, I felt obligated to research the world of blogging to see if it was something I could tackle myself. I found out about Word Press, stumbled through the documentation and after a lot of aggravation, I was able to get a decent blog up.  In the process of my research, I stumbled upon a post by Mary McNight who recommended signing up on Active Rain. 

So I am very grateful for that nice telemarketer for taking the time to call me. 

When I get those sales calls, if the person isn't too abrasive, I'll sometimes take the time to find out how they are doing.  I ask them questions and start a conversation.  I kind of feel sorry for them for having such an awful job.  They must really be hard up to be willing to take so much rejection all day long.

But that's just me.  My wife hates it when I invite the Jehovah Witnesses in for a good discussion about religion.  I see it as an opportunity to practice my powers of persuasion. Some day I'm going to help them see my way of thinking :)

How do you create raving fans? By mastering your craft and playing it to the limit.  Just a bit more effort and a little more skill can make you stand out against your competitors and have people chanting your name.

Monster Jam at the Georgia Dome attracted a sellout crowd of over 65,000 people this weekend.  I only went because a friend of mine took his son last year and said both he and his son were in awe of what they saw.  I knew nothing about the sport and just considered it was for the local yahoos.  But I thought it might be an interesting cultural experience for me and my seven year old son.

All around the stadium we saw people, young and old, with Grave Digger apparel on.  I wondered what was so special about Grave Digger.  Apparently this was a special truck that has legendary status. 

There were 12 trucks in the competition and all of them looked pretty much the same.  They had some timed races in the beginning of the show and the Grave Digger didn't even end up winning.  But then came the event everyone was waiting for, freestyle monster trucking.  Each truck had 90 seconds to do whatever they wanted on the obstacle course on the floor of the Dome. 

They apparently let the best go last.  The first truck got stuck in the vertical position on it's first attempted trick.  Another truck flipped itself over and had to be flipped back over by a tow truck.  A few other trucks did a few jumps and tricks without any problems.  The judges were three fans in the crowd who the drivers had to impress.  No exact rules or scoring system.  They had to figure out what their fans wanted and give it to them with style and skill.

Grave Digger was a truck that wasn't mechanically any better than the others but it had a driver who seemed to know what the crowd wanted and delivered it with precision skill and amazing style. He did the same tricks that the other trucks did but jumped just a little higher and pushed everything to the limit. You could just tell that this guy had mastered his craft.  He knew his truck and wasn't afraid to use it.  It's hard to describe in words but I found myself up on my feet cheering him on.  My son and his friend were screaming for more along with 65,000 other fanatics. 

How does this relate to real estate?  At first glance, most agents look pretty much the same.  They use pretty much the same tools and do the same tricks.

What earns you raving fans is mastering your craft and doing it with style.  How do you know what style is?  It's seeing what your competition is doing to get the customers cheering and then doing it just a little bit better with a little more gusto.  You push it to the limit without getting stuck or crashing. Don't worry about what your competitors say about it.  The only ones who matter are the judges in the crowd.  Find out their hot buttons and give it to them with power and style. 

Many agents can give good service and get the job done.  A few can do things that make their fans say "Wow, that is so cool?" Are you doing things in a way that creates raving fans?  My goal this year is to crank it up a notch or two and have a Monster Jamming year.

Sometimes it takes all of 2 seconds to eliminate a home from a buyer's list of possibilities.  Just one good wiff and it's on to the next home.

People are very sensitive about body odor and bad breathe.  No one wants to be the one to tell them about it.  It's the same thing with HO(house odor).  Everyone notices it except the person who can do something about it.  Everyone is embarrassed to bring it up.

 Smoke odors aren't too difficult to discuss any more.  People seem to realize that most people find it offensive.

But what about people's precious cats and dogs.  How about the curry spices or the Chinese stir fry odors that permeate a house?  Many sellers are really oblivious to these and might be offended if you came right out and said that their house stinks and they need to do something about it.

I've showed several smelly homes where the buyers ask me how in the world would one ever eliminate the odors.  I'm not an expert, but I would imagine it might take a completely new paint job and all new carpeting.  Even with that you never know if it will completely be eliminated.  Personally, I wouldn't take the chance.

I wonder if appraisers have a stink adjustment that they use.  How much do you deduct for foul odors?

Do any of the experienced agents have a good technique for dealing with this situation?  Do you take the initiative and tell the sellers that they have HO or do you wait to let someone else bring it up?

Serious buyers shouldn't let a little rain(or even a lot of rain) stop them from looking at homes.  What a great opportunity to observe if there are any problems with water management.

Many times I'll find homes with wet basements when looking at homes in the middle of a storm.  It's easy to spot clogged gutters or holes in the gutters.  You really notice the importance of a covered front entrance while you are getting soaked opening up the lock box.

If a home looks nice while it's raining you know you have a winner.

If you aren't lucky enough to see a home under rainy conditions before you write a contract, make sure you visit it on a rainy day before closing.  Our Georgia contracts state that both parties agree to allow the buyer to inspect, at reasonable hours, the home as many times as they want before the closing date. 

So if it's storming  during the day and you want to make sure that basement is dry as the seller says in his disclosure, call the agent and take a look for yourself. 

I just had a great idea.  I think I'm going to make a CD of all my favorite rain songs and play it in the car on those special days.  "Raindrops Keep Falling on My Head",  "Rainy Night in Georgia", "Rainy Days and Mondays" to name a few.

In my office I have a huge 8 foot by 4 foot map of Atlanta hanging on my wall.  I copied and cut and pasted together 90 pages from my MLS map book.

It's amazing how much clarity a good map can give when figuring out areas to target in a home search.

When my new clients come in, it's easy to points things out on a map.  It only takes seconds to point out areas that are too far away from where they want to be.

I want to get other maps to hang around the office.  I had walked into a small town real estate office once where they had zoning maps and school district maps and such hanging on their walls.  My initial thought was that they must really know the area and what's going on. 

A map is worth a thousand words. 

What's your first response when you see a listing without a picture?  Usually it's "NEXT".  The normal agent or consumer just doesn't have time to deal with a listing that has no pictures.

What a great opportunity!  That home is probably not going to get very many showings so there is going to be less competition. 

It also means that the listing agent might not be on top of their game. They probably won't do a very good job in negotiations.  Their inexperience could be your advantage.

Maybe the agent's camera just broke and it's the most beautiful home and the agent is easy to work with.  You just don't know.

The saying goes, Don't judge a book by it's cover.  Maybe we should change that a bit to Don't judge a listing by it's lack of pictures.

I love a story that I heard Joe Stumpf of By Referral Only tell once.

He said that most agents and loan officers are trained to be hunters.  Go out there and cold call and network.  You need to sell, sell , sell.  So many go out there and begin shooting at the birds as they fly by.  Once in a while if your skills are good, you've learned all the techniques, you can bag a client.  You'll get one but you'll probably scare the flock away.  You'll eat for that day but that bird isn't going to attract other birds to you in the form of referrals.

What if instead, you begin to build a beautiful bird house.  You make it really nice so as the birds are flying by, they are attracted and come by to visit.  You make them real comfortable and happy.  Then as their friends are flying by high in the sky, they look down and see how nice their friends are being treated and come down to take advantage of the nice bird house. 

I like building vs. hunting. My website is my bird house.  It's a great feeling when birds stop by and want to do business because they were attracted and not shot at.  I haven't shot a cold call in years.  It's a beautiful feeling.

Have you ever had new client show up for their first appointment late?  I bet most of the time those same clients continue to show up late most of the time after that.  They probably are also late in getting documents to the lender and late in everything else that they do.

My favorite recent quote is "How you do anything is how you do everything"  I read it in T. Harv Eker's book, The Secrets of the Millionare Mind I don't know if he is the first to say it but I find it to be so true, especially with myself.

In a positive way, it is very empowering and can get one to be able to make big changes with very little effort.  If one wants to organize their life, start with something small like organizing your car.  Some how this small effort automatically gets you on auto pilot in organizing the bigger things in your life. Things just begin to fall into place because it just doesn't feel right otherwise.

If you find you have a lot of unfinished projects, make sure you start a small one that you can complete in a short amount of time.  Before you know it, completion of larger projects will just begin to happen out of habit.  Or simply fill out a contract completely and leave no blanks unfilled.  Be a stickler for those little details and you'll find yourself taking care of the big things automatically.

If you are shy and reserved, take a small step and leave a comment on a post on Active Rain.  Before you know it you'll feel compelled to leave comments automatically.  All of a sudden you'll find yourself standing up in front of strangers and voicing your opinions like never before.

Big changes start with little changes. 

What a listing to get.  A "country" that is only 550 square meters, Sealand, is being listed for 997 million dollars.  But the grapevine says that anything over 8 figures, that's $10,000,000, might be acceptable.  A Spanish company has the listing.  It's not a very fancy listing presentation.  I wonder if they are using a discount broker? You know, you get what you pay for.

I couldn't find what they are offering for a buyer's agent split.  I sure hope they didn't get cheap and make it less than 3%.  It's going to be a tough show since it's out in the ocean and you'll need a helicopter to show it. Here's a bit of history from the website.

 The Principality of Sealand is the smallest independent state in the world. It is located on an abandoned WWII anti-aircraft platform seven miles off the coast of England. Founded in the late 1960s by debonair entrepreneur Paddy Roy Bates, the country has enjoyed peace and solidarity for nearly 40 years now. They have their own government, flag, currency, stamps, passports, national anthem, and even national defense. E Mare Libertas chronicles the queer history of Sealand and its self appointed royals through its years of pirate radio broadcasting, a hostile takeover by German terrorists, and the establishment of a web based data haven.

I have no idea whether they will place it in a MLS.  I did not find it on www.WorldProperties.com .  But if they are really willing to consider $10,000,000 I would suggest they use the range pricing technique in order to not miss out on country buyers who have a top limit of $10,000,000.  Being listed at $997,000,000 will make it invisible to many country buyers out there. 

Maybe I'll try to get the listing when it expires. 

I find that when times get tough, I find comfort in remembering a good quote that fits the situation.  It reminds me that I am not the only one who has faced a challenge.

At my weekly BNI networking meeting, we always try to end with an inspirational quote.  It seems to be a moment we all anticipate.  Here are five quotes that I really like and think about throughout my daily routine.  Einstein has a book full of great ones but I wanted to pick out my favorites.

• The strongest man in the world is he who stands alone.  Henrik Ibsen
  
  
• One man with courage makes a majority.  Andrew Jackson
  
  
• Imagination is more important than knowledge.  Albert Einstein
  
  
• There are only two ways to live your life.  One is as though nothing is a miracle.  The other is as though everything is a miracle.  Albert Einstein
  
  
• Nothing can stop the man with the right mental attitude from achieving his goal. Nothing on earth can help the man with the wrong mental attitude.  Thomas Jefferson

Feel free to share a few of your own.

I think anyone found guilty of creating computer viruses, spyware, malware and anything else that messes with my computer should be put to a slow and painful death.   I know it is harsh but enough is enough. I am mad as hell and if I ever find the people who create this stuff, watch out.

I know that this stuff will never cease.  Thank God there are some good guys out there who like to do battle against these evil hackers.  I found a site that takes you through a few steps to clean up most of the problems out there.  It is all free and it worked a miracle for me. 

My computer has been really slow for the past week and I was pulling my hair out every time it took a minute for a new page to come up.  I could hear my computer chugging away doing something even when I was doing absolutely nothing.   I use the Norton software and had a scan go on for 24 hours without it finding anything.  I also did the AdAware program and the SpyBot Search and Destroy without resolution.

I stumbled upon this site, http://forums.thatcomputerguy.us/index.php?showtopic=1190  where it gave step by step directions on running three scans that will clean up most problems.  The first two were AdAware and SpyBot that I had already used but I had used older versions and I never had known what specific settings to set it up with.  It took me a few hours to go through it all but I finally got my computer back up to speed.  If these three things don't fix your problem, you run a fourth scan and post the results on a forum where othe computer geeks try to help you figure out what other things can be done to solve your problem.

I am really a nice, calm, cool, collective person but for some reason computer problems bring out the worst in me. 

One hears a lot about the Fiduciary responsiblity of an agent.  I wanted to refresh my thinking on what exactly that meant and what exact responsiblities an agent really has.   I went back to the key source documents and found that agents are really responsible for a lot less than I have previously thought (at least in Georgia).

I pulled out my pre-licensing text book and reread the chapters on agency where it covered what fiduciary meant.  I kept reading and came to the chapter where the BRRETA(Brokerage Relationships in Real Estate Transactions Act) of 1993 actually made an agent in Georgia  a "limited agent" which means that:

a limited agent shall not be deemed to have a fiduciary relatioinship or fiduciary obligations to anyone, but will only be responsible for exercising ordinary care  in carrying out specified duties under the brokerage engagement.

It listed what an agent had to do

1. Perform under the terms of the brokerage engagement
2. Advise client to obtain expert advice on matters beyond the expertise of the broker
3. Timely submit all offers
4. Account for all money
5. Seek a sale at such price and terms as the client may accept
6. Exercise reasonable skill and care
7. Comply with all laws

I checked the Georgia laws that I always see cited, Title 10 chapter 10-6A sections 1-16, to see if there was some other things that I might be missing.  Again, they say that agents in Georgia are responsible for exercising ordinary skill and care.

I then went on to the Exclusive Buyer Brokerage Agreement that we hand out to every buyer.  I really read it closely to see exactly what the Broker's Duties to Buyer are.  I wanted to develop a nice marketing piece and list the many things that we are responsible for. 

Because of the way they are listed on the agreement, I'm almost embarrassed to show my clients exactly what my duties are  because they seem to be so few and simple.  This is one area where things are not exaggerated and puffed up by agents.  They state that the Broker's sole duties are:

1. Attempt to locate a property suitable to Buyer.
2. Assist ... Buyer in negotiating the terms of and filling out a pre-printed real estate purchase and sale agreement
3. Comply with all applicable laws including O.C.G.A. 10-6A-1 et.seq.

Again, all this must be done with ordinary skill and care.

That's it. Nothing else.  Not much for a buyer to get impressed with.  Send them home to read this agreement and I'm sure they are going to say "Is that it?"

It then goes on to state what the Broker is not responsible to advise the Buyer on:

1. Anything that could be revealed through a survey, title search or inspection of the property.
2. The condition of the property
3. Building products
4. Construction techniques
5. Necessity or cost of any repairs
6. Mold
7. Hazardous or toxic materials
8. Termites and other wood destroying organisms
9. Tax and Legal consequences
10. Availability and cost of utilities
11. Community amenities
12. Appraised or future value of the property
13. Any condition existing off the property which may affect the property
14. Terms, conditions and availability of financing
15. Uses and zoning of the property whether permitted or proposed
16. Shall not be responsible for insuring that Buyer complies with the duties and deadlines in Agreement
17. Not liable for inaccurate or incomplete information provided by Broker to Buyer

In the purchase and sale agreement it has a few other disclaimers specifying that it is the Buyer's sole responsibility to:

1. Become familiar with neighborhood conditions of concern to buyer
2. Check a web site for possibility of a registered sex offender in the neighborhood.
3. Not to rely upon any advice, representations or statements of Brokers and waive and shall not assert any claims against Brokers involving the same.

I've always lived by a simple policy, Under promise and Over Deliver.  By always making sure my clients really understand the Agreements, I think I can certainly keep using this policy.

I'm not knocking what we do.  There is a lot that goes into locating, negotiating, and completing forms.  We need to be the best in these specific things and make sure we get the buyer  to seek the best experts for everything else.  It's a big job in itself to make sure you advise a buyer to get advice from an expert for each one of those items in the list of things that we are not responsible for. But then we are also telling them not to rely on any advice that we give them.  It's a catch 22.

To an untrained observer, it just doesn't look like we have to do much.  I always like to act in a fiduciary way but it's very important that a client knows exactly how much liability everyone in the transaction really has.  I guess that's the whole point of these disclosure laws.

I'm sure things are different in other states. Do you really know what your responsibilities are?

Have you ever had a person that is really good at what they do but every interaction with them takes much longer than necessary?  A simple one minute telephone call turns into a half hour conversation because they just go on and on.  I'm all for being friendly and polite but sometimes you just have a lot to do and don't have time to get bogged down with chit chat.

I had a great pest control person who I used personally and referred him to all my clients.  He was a real good ole boy and loved to talk.  He loved his profession and loved to talk endlessly about bugs and termites. He knew his stuff and made sure everyone knew that he knew his stuff.  I really got a good education on pests over the years that I used him.  He also was the friendiest guy and always talked about family and friends and things that had happened years ago. 

The problem was that after awhile, every little contact with him began to drain me.  He would just tell me too much and it would take forever to place a simple referral to him.  I began using another pest control professioinal who was nothing but business and  I started enjoying fast and efficient interactions with them.  Polite, experienced and efficient. 

When my guy had to raise his prices, I switched over to the other company.  It made me wonder if all the talking my original guy did was his version of "full service".  I guess it ended up making him less productive so he had to up his price.  He probably thinks that a company that charges less just can't provide the "full service" that he can.  I found that to me, "full sevice" isn't just about how much time someone spends with me but how much time they can save me. 

Might this apply to other professions such as real estate agents and loan officers?

I love going to continueing education courses that go over the purchase and sale agreement in detail.  There have been some major changes to our contracts in Georgia so everyone is trying to get up to speed as quickly as possible.

The biggest thing I learned, or what I was reminded of, had nothing to do with any changes.  It was just plain old contract law.  The attorney teaching the class said that 50% of the contracts that he sees at closing could be deemed unenforceable if taken to court all because of one thing, failure to complete the legal description of the property.  Many times only the address is written in the contract because no one took the time to find out the legal description.  Without a precise description, the contract could be deemed too vague and be unenforceable.

When writing up a contract you usually rely on the listing sheet to provide all the necessary legal information.  Many times the listing agent doesn't have it there because they don't know what it is.  The owner might not know where the deed is because it is usually sent to them several months after the closing and ends up lost in a stack of papers.  Many times it can't be found online.  You can run to the court house but who's ever going to do that when time is of the essense in getting an offer submitted.  I now know I am not the only one who has just used an address as the description.

The other item that he sees 10% of the time is either not putting a precise interest rate in the description of the loan details or putting in nothing at all.  This too would make the contract vague and unenforceable.

It's really  frightening to learn how little items can totally void a contract. This has been a real eye opener.  I'm going to really study that contract and know what the negative consequences of every little detail are.  Sometimes one gets lazy and stops reading what the contract actually says.  They just fill in the blanks without even thinking about it. 

Completing that contract is one big thing that we get paid for.  It also makes for some compelling reasons to make sure you use an agent who knows what they are doing.

This year the Georgia Association of Realtors has made some really significant changes to their contract.  I plan on writing a series of posts on the more significant items.

The biggest thing that I see, and I really like it, is the Financing Contingency Period.  It used to be that the financing was contingent all the way up until the day of closing.  Many a deal has fallen apart because the loan was denied at the last minute.  Sometimes buyers would get cold feet and get the lender to give them a loan denial letter in order to get out of the contract with their earnest money intact.  Not any more.

Just like there is an inspection period after which you are buying it as-is, there is now a financing contingency period, after which you lose your earnest money if your loan gets turned down.  You now will negotiate a period of time in which your financing contingency is good for.  This is the only time where you can show that you have been denied for the loan and be able to get your earnest money back.  So if your loan isn't approved or still has some conditions to be met, you better be confident that it will be approved before closing or you risk losing your earnest money.

I see this as very good thing for everyone involved but it's going to take more upfront planning and some quicker turn around times or else there are going to be some unhappy people.  I see buyers making sure they are really preapproved before they negotiate a contract.  Appraisals will have to be done at the same time as the property inspection.  Usually the lender would wait to make sure there wasn't a deal breaker in the inspection period.  Anything that the lender requires, the buyer is responsible for obtaining during this period, including the termite letter and flood certification. 

It has usually been accepted that one needed the entire time to work out the loan details.  Not too many sellers placed time limit demands for final approval of the buyers loan.  If you did, it was a special stipulation that had to be added.   Now that it is part of the regular contract that needs to be negotiated, I think a 10-14 day window is what will seem to be acceptable.  Will lenders be able to get it done so quickly?

I think this will really hurt the mortgage brokers who don't have in-house underwriters.  I know as an agent I'm going to make darn certain my buyers know the risks involved if their loan isn't denied in time.  Their lender better let them know exactly what documents are needed and they better be able to get them quickly. 

One technical thing is that the denial must be for the loan that is described in the contract.  If they apply for a different loan, they better make certain that the contract is amended to reflect this.  Just another little detail that a good agent worth their commission will need to keep track of.