As an Agent - Make Sure you ID a Short Sale Situation Up-front. Listing Agents Aren't Revealing it. Protect Buyer Clients Who Have a Timeline

Many homes that are for sale in various neighborhoods in the Chicago area, are not occupied anymore - and a number of them are pre-foreclosure or foreclosure properties. Others - will be short sale situations.

Homes that are currently occupied may be listed for a figure where the seller will come up short after paying off the principal balance of their loan(s).

If the seller can't cover the shortfall - it will be a short sale situation - meaning that the lender will have to pick up some of the shortfall.

It is important to note that many agents are not advertising that their listed property will be a short sale in the remarks section of the MLS sheet - because they don't want to dissuade a buyer from writing an offer on the property.

Short sale situations can drag on for quite some time - and many buyers have certain time-lines. Negotiations with the lender about how much of the deficiency the lender will pick up can take time.

If a buyer client wants to get into a home in the next 60 days - it might not happen if they are buying into a short sale situation.

So - it is important that the agent representing the buyer find out as soon as possible from the other side what the seller's equity is (which can sometimes be gleaned from the tax record) at the moment - and if there will be a short sale situation - and if so - how much -- so that the buyer isn't blindsided with delays.

As a rule of thumb - the larger the deficiency - the longer the negotiation can take with the lender.

With any short sale situation - we give the buyer "an out" in the contract - if the seller's short sale negotiations with the lender are not concluded within X days.

Our buyer client can then seek a deal elsewhere.

Another Article About The Buyers's Market

I enjoy reading various articles that supposedly knowledgeable journalists write - because there are usually quite a number of mistakes or gross generalizations in every article that need to be picked apart...

We agree - buy smart & buy cheap and read Ilyce Glink's

"100 Questions Every First-Time Home Buyer Should Ask."



We don't agree that you should conduct preliminary research online at Web sites like Zillow.com, Trulia.com and greatschools.net -- these are pretty awful sites in general.
Zillow is extremely inacurrate. Trulia only has a small subset of homes in the MLS (very small subset).

And you won't need cash for your closing costs if you purchase a home through us. We have the seller pay for all of your closing costs.

By the way - there are MUCH better databases on schools than greatschools.net
(Something we provide our clients with..)

Just want to get a handle on what is out there? Email us at info@relocationadvisorsgroup.com and we'll set you up on a familiarization feed - of exactly what you are looking for (please be as specific as you can) -- from the ENTIRE MLS - not just a small sub-set of it.

Should you think about becoming a client at some point - we'll sit down with you in a mutal Q&A session to really explore your needs in greater depth.

Have a nice day :-)

Maryland thinks about Reducing re-set time to 60 days from 180 days for listed property. In Illinois - it is 91 days

In most states - the MLS calculates the number of days a property has spent on the market as a consecutive figure. That amount resets to zero if the property is taken off the market for a certain amount of time. Maryland had it at 180 days - but is thinking about reducing it to as little as 60. Here is an article about the re-set time in Maryland.

In Illinois - for many years - a property had to be off the market for 181 days before being re-listed if the market time was to show zero in the MLS. Then in 2004 - that figure changed to 91 days - and it has been 91 days ever since (re-ratified in November, 20007) with the exception of the summer of 2006 - when the board changed a rule - which only lasted a few months. See the attached for the reason they dissolved it.

At that time - if a property was de-listed and then came back
on the market - it would show zero days on the market - even if it had only been
off the market for a day or two. MLS rules states that if a property is re-listed - it had to have a new listing agreement.

What happened in the summer of 2006 - was that there were so many "new listings" with no new listing agreements - MLSNI had to fine the agents a few hundred dollars - but nevertheless - the statistic in the MLS still zero'ed out. There were so many agents doing this -- re-listing property without new listing agreements - that it became a big headache for MLSNI - and they could not keep up with all the infractions. Here is the postcard that they sent out at that time after they re-thought everything.

So - in September of 2006 - they re-instituted the 91 day rule again. Agents and brokerages put pressure on MLS systems to minimize the number of days a property is off the market - to reset the clock to zero. In some states where total market time (including time with past agents) isn't listed on the agent copy of the MLS sheet (it is in Illinois) -- this can help sellers (if agents are lazy and don't look up the property history).

We Warn Our Buyer Clients About "Staged Homes"

We warn our buyer clients about staged homes. It is easy to tell when a home is staged....and when I see one - I point it out to my client - and try to have them picture the home stripped bare of the decorations.

Here is an article talking about the member survey taken by NAEBA - The National Association of Exclusive Buyer Agents - the association that Relocation Advisors Group Inc. - the Exclusive Buyer Brokerage for Chicago - and Chicago's Northwest Suburbs belongs to.

Before I became an Exclusive Buyer Broker - I was personally trained by Barb Schwarz in California - in her most advanced home staging course, after her the initial designation. So I know what home staging is - and what Barb teaches - and what the drawbacks are to a buyer. We know how to warn our buyer clients what to look for.

In reference to her comment in that article - it is not true that homes are never staged to cover things up. I've seen it happen any number of times - from rugs put over discolored floors to things covering up holes in walls.

Barb was even noted on a national TV show during the past year - talking about spray painting dead grass in the yard with green paint. Now - if that isn't a cover up - what is?

We insure that our buyer client pay the "unstaged price" - not the "staged price." Typically staged homes can be overpriced. The seller is trying to get more than the home is really worth. That is their whole rational behind staging it in the first place...

Kiplingers Personal Finance - Use an Exclusive Buyer Agent

A recently Kiplingers article talks about the benefits of consumers using an Exclusive Buyer Agent.

Another Kiplingers article interviews five Exclusive Buyer Agents from around the country - on what the "buyers market" looks like in their area.

And the Kiplinger link to negotiating a good purcahse contract with a home builder.

We don't ever have our buyer clients accept builder financing for goodies. They get the goodies - and we help our clients shop for the best loan - which may or may not be the lender that the builder is tied to (usually not.)

Unlike other agents - we know how to analyze a Good Faith Estimate for our buyer clients - and we take the time to shop for the best loan for our client. On average - we save our clients $30,000 or more over the life of the loan.

Newsweek Article - Find An Exclusive Buyer Agent if Possible - When Purchasing Real Estate

There's a new article in Newsweek about the advantages of using an Exclusive Buyer Agent - as opposed to a "Buyer Agent." Now - if you are in the Chicago Illinois area - there is one near you -- Relocation Advisors Group - an Exclusive Buyer Brokerage

The article references - "If there isn't one in your neighborhood, you can use a selling agent as a buyer agent, but do some screening." I'd have to agree with that... If you can't find an Exclusive Buyer Agent - the next best thing is a so-called Buyer Agent - preferably one with the ABR designation.

But you need to ask them what percentage of their time they spend with buyers versus trying to obtain and market listings. Obviously - the agents who spend more of their time with buyers are the better bet.

In contrast - Exclusive Buyer Agents are specialists - spending 100% of their time serving home buyers - so they are very good at what they do. The analogy is - if you need heart surgery - do you want a general practitioner or a specialist? A purchase of your home is just as important (well almost!)

The problem with buyer agents is their home showing biases (perhaps showing more of their own company's listings or "selling" higher co-op payout properties), and that they can get into dual-agency conflict of interest situations where they may be representing the seller equally with you - which is really non-representation. They may also be reluctant to show for-sale-by-owner (FSBO) properties to you.

An Exclusive Buyer Agent can never get into those types of situations - and many of them actually align their compensation to be in your best interests - instead of the other way around. They show you all FSBO properties meeting your criteria.

The article states, "What about the fear that listing agents won't want to work with you if they know they have to split a commission with your buyer agent?"

In Illinois - every listing in the MLS has a certain payout (called the co-op - which doesn't mean that the agent with the buyer has to "cooperate" (as in give in) to the listing agent) - to someone who brings a buyer - so that is a non-issue.

Also - the payout is not necessarily a split of the total listing agent commission to the seller. Say the listing agent negotiated a 5.5% commission with the seller. The co-op may be 2.5% and the listing agent and their broker would then be keeping 3% (split between them based on whatever split the agent is on.) The seller can choose the payout to be whatever they want - and in fact - negotiate with a listing agent - to pay out more to someone bringing the buyer - than their listing agent - which may be beneficial in the current "buyers market."

Why? Some agents may "sell" the higher payout property to their buyer client - especially if the client isn't under contract with them. When the buyer has no contract with their agent - their agent can pocket the entire co-op payout.

The public thinks that the listing commission is "split" with the buy-side - which is not necessarily the case.

If you contract for a specific rate with your Exclusive Buyer Agent or Buyer Agent in writing - you are reimbursed for what you contract for - by the co-op payout. If the co-op payout is higher than your contract rate - you - the buyer - pocket the difference.

When you contract for a rate - there are no home showing biases - because your agent isn't going to push a higher commission property on you. They have no reason to - because you know your agent will get paid the fixed rate that you contracted for.

If the co-op is less than your fixed rate - your agent can negotiate to have the seller pay the difference - so you are nothing out of pocket to your Exclusive Buyer agent or Buyer Agent. Everything is always built into the price anyway - including the listing agent's cut. Agent's commissions are usually built into the purchase price.

Just as an Exclusive Buyer Agent or Buyer Agent does not dictate to the listing agent what they are going to get paid - neither should the listing agent dictate to the agent bringing the buyer - what they are to be paid. So - the "co-op" payout is really just a proposed payout by the seller / listing firm. The agent representing the buyer - may be worth more or less than that - so by having their buyer decide what they are worth - in writing - the co-op payout may or may not be acceptable to the buyer. If not - they can ask for closing cost credits as part of the negotiation.

HUD considers buyer broker fees to be an allowable closing cost.

We have found that buyers enjoy performance-based compensation for agents - in addition to just a flat fee. But very few agents structure their compensation to be performance based. In fact - a traditional buyer agent usually makes more when their buyer's price goes up. We believe that the opposite makes more sense. So do our clients.

If you want to learn more -- call an Exclusive Buyer Agent in your area.

Evidence That Traditional Agents Can Have Home Showing Biases

Some people don’t believe me when I tell them that “buyer agents” at traditional firms tend to push their own listings over others…due to perhaps getting in-house spiffs…. Remember - as a home buyer, when you hire an Exclusive Buyer Agent to represent you - that agent and their company never list property for sale - and so there is no biased home showing or dual agency conflicts of interest situations.

This is evidence….

“Besides camaraderie, @properties uses other techniques to encourage sales, including rewarding the two brokers who sell the most properties listed in-house with overseas trips. One quarter last year, the winners went to Italy. Another time, to Paris. And any broker who sells $10 million worth of real estate, in any type of transaction, is offered the choice of a Rolex or a Cartier watch.”

Obviously – when an agent pushes their in-house listings or worse yet - their own listings - the buyer experiences biased home showings - and can experience dual agency conflicts of interest with the buyer being equally represented with the seller. The buyer doesn't have someone fully on their side in that case – and doesn't have all the information available to get a good buy on a property that they would have had - had their agent not declared "dual agency" on them.

Kiplinger's Personal Finance - Recommends Using an Exclusive Buyer Agent

Kiplinger's Personal Finance - Recommends Using an Exclusive Buyer Agent in this March, 2007 article. (They have written many along the same lines in previous years..) Consumer Reports, Money Magazine, CNN Money, the Wall Street Journal, Medical Economics Magazine, the Consumer Federation of America, and many others have all done the same..

An Exclusive Buyer Agent is an agent that never lists company for sale - nor does their company. They never represent sellers - ever. On the other hand a "buyer's agent" works for a company that lists property for sale - and they themselves usually list property for sale. Whether they are practicing designated agency or dual agency - those are not good things for the buyer...

I like the fact that the article points out that "Agents are paid a cut of the selling price, so the higher the price, the better for them -- but not for their clients." As Exclusive Buyer Agents - we ensure that "the higher the price - the worse for us" - which puts us in alignment with out buyer client's interests.

The definition of insanity is hiring someone with financial interests that are in opposition with yours. When you purchase a used car - the used car saleman's interests are just that.

Like a dog - we "work hard for our scraps" - and we believe that everyone does in this world... So when consumers hire a so-called buyer agent that makes more when their price goes up - they are really doing themselves a dis-service....

When I bought a home when coming in for a position at Motorola in the 90's - the "company referred agent" (read relo company) I had - kept trying to work me over to come up in price - and it really teed me off. She was acting like she was representing the seller and not me. She also referred an awful home inspector - who glossed over many things that should have been found. Many agents refer inspectors that "won't blow the deal" which is really a disservice to the buyer.

I realized then that home buyers needed much better protection than what they were getting - which is why I started this company.... to provide the best possible protection and representation to home buyers... I feel great about what I do for a living - becuase it has the most integrity to buyers in the Real Estate industry....

As a Buyer - Why Take the Risk of Hiring a "Buyer Agent" (Dual Agency Possibility) When You Can Have an Exclusive Buyer Agent (No Dual Agency)?

The answer is - you shouldn't take the risk... It's a no-brainer. When you use an Exclusive Buyer Agent (they and their company never list property for sale) - and you are assured of 100% representation - 100% of the time.

Unfortunately - Dual Agency is legal in Illinois because traditional firms lobbied for it - in order to preserve the ability for their agents to obtain "double dip" commission. Never mind that it isn't good for the consumer...

How can a Realtor, in all honesty, work for two Clients on opposing sides of a transaction? How can you place your Client's interest first, when there are two of them, one trying to get the highest price possible and the other trying to get the lowest price possible? You can't.

Unfortunately when consumers meet with a so-called "Buyer Agent" the first time - and there is no contract - over 80% of consumers in Illinois aren't told by their agent that they can get into a "Dual Agency" situation until it happens.... when their buyer client wants to write a contract on their own listing (that they happened to "sell" to their client.) The law says they were supposed to disclose that they could - upon first contact - but it rarely happens. Thus - the home buyer is left in the dark - and doesn't realize the conflicts that can crop up. (Would have never happened - had they used an Exclusive Buyer Agent.)

An Agency relationship creates a fiduciary between the Agent and Principal. Take away the fiduciary and there is no Agency. When entering into Dual Agency relationship, this fiduciary must be modified, to the point of no longer existing, in order to assist both clients equally. A fiduciary is NOT equal. Here lies the problem. Dual Agency, by it's very nature, is not an Agency relationship. Below are some excellent links that delve into the problems with Dual Agency a little further.

http://www.realestatelawyers.com/Dual-agency.cfm

http://www.realestatejournal.com/columnists/housetalk/20031010-barta.html

http://realtytimes.com/rtapages/20050208_dualagency.htm

This is why I've chosen to sacrifice half of my potential income - to only be one "one side of the fence" - that of the buyer. If it was about the money - I'd be like every other agent - working both sides. It is about the ethics to me..

Don't Visit New Construction / Builders Without Representation!

As a consumer - did you know that when you sign into a new construction community by yourself - that you lose your ability to be represented at a later date on that same property (without any cash out of your pocket)? It is a dirty little secret that the builders never tell you about. Of course - they don't. If you sign in on their sign-in sheet without an agent - they get to save 3-4% (what they would have paid out to the agent's brokerage.)

When you sign in to new construction - the builder has you by the yin yang. If you visit again later - with your preferred Real Estate representative - they won't get paid if you purchase in that community. If you have a buyer agency agreement with that rep - you'll have to pay your agent out of pocket - because the builder isn't paying out.

On the other hand - lets say you had a buyer agency agreement for 3% with your agent - and the builder pays out 4%. Guess who gets the extra 1% when you sign in as being represented by that agent? You do - the buyer! That is one great advantage of having a buyer agency agreement. (The other advantage is that it spells out your agent's responsibilities to you in writing. You know if dual agency is possible or not for example.)

Builders LOVE IT when buyers come in unrepresented. That means that they can charge their normal rate for the property - plus save paying out a 3-4% commission for example. They don't discount the property by that - to the unrepresented buyer. So - as a buyer - it is lose/lose proposition.

You also lose out on:

--knowing about extra incentives that you may not have known about - that could have been offered that the agent has seen offered in the past.

-- an agent ensuring that you are getting the best possible price vs. other properties in the community, and analyzing the re-sales there and in nearby areas - to make sure you don't over-pay.

-- an agent helping you through the home inspection phase (there should be at least two inspections for new construction... one before the drywall goes up, and one at the end.)

-- an agent helping you with the many other details that will ensure you get to closing smoothly.

-- If your agent helps you "loan shop" (not many of them do unfortunately) - that is another thing you miss....saving tens of thousands over the life of the loan - and perhaps having lower lender fees.

Toll Brothers - Hawthorn Woods - and Hawthorn Woods Real Estate and Luxury Home Communities

Toll Brothers - Hawthorn Woods Country Club development is especially flexible on their "quick delivery" homes and townhomes in this community. They have "Tournament Collection" Townhomes starting from the high 300's and single family homes- such as the "Signature Collection" starting in the low 700's, or the "Golf Villa Collection" (starting in the high 400's) - offering 3- and 4- bedroom home designs backing to the Arnold Palmer "signature golf course."

(Call us at 847-566-7558 or email: info@relocationadvisorsgroup.com to learn more..)

Golf membership initiation fees are in the mid 30's at the moment - and 2006 golf memebership monthly dues are $515 per month. Social Membership monthly dues are $225 per month. Guest fee is $70 (for a guest to golf). Cart fee - $20. Swim guest fee is $7. Annual locker rental is $240. (If you become our client - talk to us about having some of that stuff "thrown in")

There is a 25 meter swimming pool, three clay surface tennis courts, two platform tennis courts, a fitness center and aerobics room, and hiking and biking trails. Hawthorn Woods Country Club has a variety of social events.

Fees for the Signature collection are $295/month which includes $225/month for social membership and $70 per month for homeowners association dues. Golf Villa Colelction dues are $397/month with landscape maintenance and snow removal provided. ($225/mo for social membership and $172/mo for HOA dues) The Tournament Collection of townhomes also has landscape maintenance and snow removal as services - the $225/mo for social membership and $261/mo HOA dues.

If you are thinking about purchasing a luxury home in Chicago's Northwest Suburbs over one million dollars - talk to us.

Hawthorn Woods is really one of Chicago's best kept secrets. Many people haven't heard of the community - located between Mundelein and Lake Zurich. There are other great communities all over Hawthorn Woods - from Countryside Glen, White Birch Lakes, White Birch Meadows, Abbey Glen Estates, the Ridge of Hawthorn Woods, Countryside Meadows, Hawthorn Knolls, Pheasant Creek Estates, Copperfield, Hawthorn Grove, Rambling Hills West, Briarwood Estates, Walnut Creek, Camden Trace, The Summit, Lakewood Estates, Woodland Estates, Lakewood Meadow, Thornfield, Heather Highlands, Estates of Indian Creek, and Glennshire.