Confidentiality

When a buyer or seller works with an agent, they share personal information.  As a licensed Realtor, I am bound to a code of ethics that requires me to hold my client's information in confidence.  Confidential information includes personal financial information, your motivation for buying or selling, your personal circumstances such as a divorce or relocation and anything else that would compromise your negotiating position. 

As a listing agent, when I list your home for sale, my fiduciary duties include the following:  loyalty, obedience, disclosure, confidentiality, reasonable care and diligence,  accounting and loyalty.  All are important, but the need for confidentiality is paramount.

I often remind my clients that I am working for them to get them the most favorable terms and that I hold their information in confidence.  I do not share this information with other agents as it not only can backfire, but breaching confidentiality leads to lawsuits.  I have  a legal responsibility and duty to my clients to keep their information private and confidential.  How long must I keep the confidence?  Confidentiality never ends.  Even after a sale closes or the listing expires, only a court order can override confidentiality.

What is a Senior Real Estate Specialist Designation?

I am happy to report that am an now officially a Senior Real Estate Specialist.  SRES is the only designation and marketing program specifically designed to serve senior property owners.  SRES designees have acquired unique tools and a special expertise to counsel senior clients with their lifestyle transitions which may include financial, legal and medical issues, tax laws, and decisions on aging in place verses assisted living options. 

As a SRES agent I am able to offer expert assistance to my 50-plus clients.  This group of seniors, now comprises one of  the fastest growing communities in the country.  Did you know that 33% of the United States' population reached age 50 in 2010?  That the average life span in the United States has reached 78?  Another fast growing segment of our population is nonagenarians, people in their nineties, and centenarians, people aged one hundred or more.  Census projections put the number of nonagenarians at up to 2.1 million in 2010 and 2.7 million in 2020.  This growing population will challenge our society's ability to adapt to the elderly's needs for housing, health care and long-term care.  As a Realtor who constantly looks for market changes, I have positioned myself to gain the knowledge needed to help this growing segment grow into their retirement years with grace and dignity.   Feel free to contact me for more information about senior real estate matters.  It would be my pleasure to assist you.

Our Changing Market

I went to our weekly business meeting this Monday morning.  Each week we talk about our market, tour homes and rub shoulders with other Realtors who primarily work Seattle's Eastside.  We had very few new listings come on the market over the holidays and today I went with the expectation that we would have at least a half dozen new office listings to preview.  I was surprised when I picked up the office tour sheet and saw just one home on Mercer Island listed.  I was even more surprised when the listing agent told us that even though it was a new listing at $1.4 M, she already had four offers on it and was expecting a fifth, but more offers were welcome.   This lead to a lively discussion of what is going on in our market. 

Those of us who have been working with buyers in recent months have been frustrated.  A great number of homes closed before year's end  and we've been telling our clients, "just wait until after the holidays...."  Well, the holidays have come and gone and we are not seeing a large number of homes coming on the market...at least not yet.  In quizzing our top listing agents we learned that they have seen the number of homes coming on the market drop and the number of multiple bid situations increase.  One agent spoke about having a competing bid on a property valued at over $1.2M.  There were 33 offers on the property and the winning bid was well over the asking price.  Was this an aberration?   I had a similar situation in recent months.  My clients found a wonderful foreclosed home in Kirkland with a phenomenal lake view.  Price was mid $900s and we bid full price.  The listing agent called me the next day to say it was a multiple bid situation and that we should submit our "highest and best" offer.  My clients  came up $6,000 over the list price but the winning bid came up well over $1M.  Last week in the West Bellevue market in the $1.25M to $2.25M range, 9 homes went pending.    In 2010, 45 more homes sold on Mercer Island than in 2009.  To cite yet another example, the volume of waterfront home sales on Mercer Island tripled in 2010 over the number sold the previous year, indicating that velocity even in this price category is increasing tremendously.

What does this mean for buyers and sellers?  If you are looking to buy a home,  you need to work with a Realtor who has their pulse on the market and sends you listings as soon as they are available. Check your email often and when your agent flags a home and says, "we need to see this one asap," then you need to act quickly.  Just last week, I sent what I identified as a "hot" house to six buyers, letting them know we should see the home within a day if possible.  One of the six heeded my advice and saw the home.  While they decided not to bid on it, it was good they got in quickly,  as the next day the sellers had an accepted offer in a multiple bid situation.  Later in the week, another buyer finally returned my call and said they hoped to see that home on the weekend....but alas, it was too late.

For sellers, you may be rubbing your hands and thinking now is the time to list your home for sale.  You are right!  Finally, we have buyers who are serious about buying.  The rising interest rates are helping push some to act, but what I personally have seen is an influx of new hires in the greater metro Seattle area. Open Houses offer an interesting snapshot of our market.  What we have seen is large numbers of buyers moving into our area, currently renting, but looking to buy in 2011.   Microsoft is hiring from all over the world, but so is Expedia, Starbucks and Boeing, to name a few.  But while the demand has increased, we are noting that buyers are still very discriminating.  People are turning up their noses at dirty, dated or overpriced homes.  Buyers are looking on line, doing their homework,  and ready to act, but the property must be clean, staged and properly priced.  If they are:  the home will sell. 

Yes, our market is changing.  While we expect more foreclosures and short sales to come on the market in 2011, our projections are that the demand will take care of the supply and we will soon be back in a balanced market situation with property values once again increasing: and isn't that something all homeowners want?

If you are thinking about buying or selling a home on Seattle's Eastside, please give me a call.  It would be my pleasure to help you understand our ever changing market and represent your best interests in either purchasing or selling a home.

Asking a Realtor for a Kickback

I met a couple recently and we discussed their housing needs.  They asked me to show them a property and I made the arrangements.  After spending considerable time at the home, they turned to me and asked if I would give them part of my commission if they bought the home through me.  I explained that they did not pay my commission, the seller did.  They said they understood that and yet wanted me to give them 1/3 of my commission for doing business with them. 

While I am not an attorney, and this should not be construed as legal advice, under Washington law this is considered a “kickback” and is prohibited. Some agents simply ignore this  and offer their services at a reduced rate in order to garner more business.  I have to wonder what kind of service these agents offer.  If they will not conduct a transaction within the law, why, then should we assume they will care for the interests of their clients?   I also wonder if they are astute enough to realize that what they are doing is prohibited  and is grounds for disciplinary action by the Department of Licensing. 

What some home buyers and sellers do not understand is that Realtors do not earn a salary and are only paid when they close a sale.  The 3% commission figure is  historically recognized as one that adequately compensates agents  for the  time, effort, expenses, and other factors involved in this type of business.

It is possible for realtors to legally share a portion of their commission with a buyer, but in order to do so, there must be full disclosure to the lenders involved and all aspects of the transaction must be fully disclosed on the closing settlement documents (“the HUD”).   To pay a kickback either before or after closing without informing the lender or disclosing the transaction on the HUD is illegal and puts both the client and the Realtor at risk of being targeted for mortgage fraud.  To avoid incurring liability for potentially fraudulent transactions, it is best to keep  all the financial dealings open and above board.  Better yet, work with a realtor that will not engage in deals that skirt the margins of permissible or ethical behavior.

Condo investors: do your due diligence

Did you know that some condominiums have restrictions regarding the rental of units in the complex? Many lenders require a minimum owner-occupancy and many condominiums have rules limiting the number of rental units allowed. Some require that the owner live in the property for a specified period before the property is rented. Move in and move out fees may also be imposed and finally, there may be leasing and application requirements imposed by the homeowners’ association. Before you invest in a condominium as a rental, make sure you and your agent do their due diligence.

Earning my Accredited Staging Professional designation

I am proud to announce that I have recently earned my Accredited Staging Professional designation.  This means that I am able to give my sellers even more value as I help them identify ways to improve the staging of their home as they prepare their home for market.   Did you know that 96.4% of ASP staged homes sell on average in 33 days or less? According to Barb Schwarz, my instructor and the creator of home staging, "The Investment IN ASP Staging Your Home will Always be Less than a Price Reduction ON Your Home!"

Now that I am an Accredited Staging Professional I am able to identify key areas of a home that can be improved by staging, often with little to no financial investment.  As a class project,  I was part of a team of ASP students who staged a $1.6M home on Mercer Island.   When I first entered the home, I was disappointed because the home was beautiful and did not appear to need much help from us.  However, after we were divided into teams and assigned rooms to work on, the magic began.  We removed clutter, shifted furniture from room to room, added color and vignettes in key locations.  After a few hours, the transformation was astounding.  With no financial investment, other than our donated labor, the home was increased in value before our eyes.  The home appeared more spacious, more welcoming, and more valuable.  Our instructor estimated the cost for this transformation would have been approximately $2,000.  What was the increase in value?  The Realtors present estimated a minimum increase in value of $30K.  Do you think staging could help you sell your home?  Give me a call and let's talk!

Statutory vs. Special Warranty or Bargain and Sale Deed - What's the difference?

When it comes time in the course of the transaction to transfer title from seller to buyer, a deed is normally required.  In a standard Purchase and Sale agreement, a Statutory Warranty Deed is the document most often requested to convey title from seller to buyer.  With a Statutory Warranty Deed, the seller expressly guarantees the grantor's good, clear title, and often carries the covenants concerning quality such as quiet enjoyment, the right to convey, freedom from encumbrances, and defense of title from all claims.  Our "Form 21," which is our Residential Real Estate Purchase and Sale Agreement, has a section called " The Condition of Title", which calls for title to be transferred via a Statutory Warranty Deed.

Other deeds that are used in special circumstances include Special Warranty Deed, where the grantor covenants to defend title against only those claims and demands of the grantor and those under the grantor (seller) and is often used by someone who is appointed to act on behalf of the true owner, such as a Personal Representative for an estate or other duly appointed person.  The specific language of this type of deed is contained in Limited Practice Board form 16-09.
 
If you receive a bargain and sale deed [LPB 15-05], you are typically buying land without knowing if there are any encumbrances on it, unless stated in the deed. The grantor only guarantees that they have title, and does not guarantee that the title is free of defects.  This type of deed is generally used by a bank, tax or government authority, or Personal Representative who did not occupy the land and does not know of any encumbrances.

This article is presented as a service for your benefit, with the help of my husband, David Hunnicutt, MAI, JD, real estate appraiser and attorney at law.  Should you have further questions please consult with independent counsel of an attorney of your choice.