Monthly Archives: October 2016

Buyer Agency

Regardless of hopes, expectations, and myths, buyer agency places the licensee and the buyer on the same side with a shared perspective. Buyer agency is a privileged relationship where the most effective assets a Realtor legally has at her disposal are available for the buyer. Without buyer agency the licensee is unquestionably working as a sub agent for the listing broker with clear obligations to the interests of the seller. There is no gray area in Wisconsin real estate agency law.

In my opinion, there is one reason for working as a buyer agent and this is it: I intend to legally provide all of the services, share all of my insight, and work with the buyer to create appropriately safe terms. And this is important: Some of those terms may be to the advantage of the seller. I believe an informed person, given logical choices, is  comfortable taking on risk commensurate with the reward.

The assumption that buyers are best served by tipping the scales of every point in their favor is dangerous in the real estate market. Price is always important and to some extent it may be second to risk. Given a competitive price, prudent sellers weigh the risks of the contingencies before committing. An attractive number with high risk and low probability of closing might appeal to the gambler, but for the typical home seller who has other plans and commitments to meet, shifting risk to the buyer in exchange for a reasonable price is a more acceptable strategy.  The wise buyer agent knows the areas of a boiler plate contract ideal for softening.   We will find some of those easy to improve areas of offers in the coming weeks of Skill Share Thursday’s at Restaino & Associates. 9:30 to 11:00. Let me know if you want to attend.

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Dare to go where perspectives are not what they used to be. Seth Godin and Simon Sinek inspire a new generation to go beyond “sales training” and become remarkable people connecting with remarkable people. You are a remarkable person. What the remarks are is up to you.

As proof that the torch has been passed, take a look at Ted  Ideas Worth Spreading.  You will not find one Ted Talk encouraging you to embrace the tired old sales ideas of manipulation by fear of loss, or “handling objections”. Ted is a Milky Way of bright ideas for being authentic, human, considerate, patient, and sincere. Given the choice, and we do have choices, what do you prefer to be remarkable for?

 

Broker Liability for Misrepresentation

Cases and Lessons from Wisconsin Courts provided by the WRA in the October 2016 issue of The Wisconsin Real Estate Magazine could keep you out of harms way.  Intentional fraud is one way to be found liable but deception is not required to be liable.  Being negligent  or failing the expectation of strict responsibility (A licensee is expected to know better or the law was specific in my obligation and I failed to be responsible) will put us on the wrong side of liability just as well.

If it hasn’t happened yet, it will happen where an owner balks at disclosing and asks you for your advice on disclosure.  Case Study #1 in the feature article makes it clear and simple—Disclosure is the way to go.  Case Study #2 we see too much of. As-is is no protection for seller or brokers. There  is no way to wash hands of liability for saying take it as is when an adverse fact is known.

The WRA legal division has a finger on the pulse of Wisconsin real estate law issues. Take time to read their Cases and adopt their advice. Maybe share the Case Studies with your clients.  You will never regret disclosure.

Earnest Hemingway on Writing Counter Offers and Contingencies

My aim is to put down on paper what I see and what I feel in the best and simplest way. Earnest Hemingway on writing

Real estate Counter Offers are ideal forms for saying a lot without writing much. In fact, if we have a well drafted Offer to Purchase, the less we write on a Counter Offer, the better the chance of being understood and steering clear of creating a contradiction or a whole new issue.

Here’s a simple method of saying the most while writing the least.

You have an Offer where the drafter used  Additional Provisions on page 3 of the Offer to insert this condition:  “This Offer is contingent upon Seller crediting buyer $3,000.00 at closing to be applied toward buyer’s mortgage loan costs and prepaid expenses.” You presented the Offer and the seller’s only objection is this $3,000 credit. Seller is willing to agree to the rest of the terms, provided the buyer will accept a $1,000 credit instead of $3,000.    Pick up a WB 44 Counter Offer. Notice on line 6 the first condition is already written in. It reads All terms and conditions remain the same as stated in the Offer to Purchase except the following:_________________________________.  

Rather than rewriting the entire contingency and possibly altering the intention, change only what needs to be changed.  In this case $3,000 needs to be changed to $1,000.0.

Line 7 of the Counter offer will look like this:

7 (1) Page 3 of 9. Lines 165 to 172. Additional Provisions. Line 167 change  “$3,000.00” to “$1,000.00”.

I like this method as a recipient of the Counter Offer because the wording tells me where to look. Done right, it’s like having an instructor saying: “OK Meyer, See the Offer in your hands? Good. Now first go to Page 3 of 9. Then go to Lines 165 to 172. This is the Additional Provisions section. Here’s all you gotta do,  change $3,000.00  to $1,000.00.

We are licensed  to write terms that make sense, can be understood, and properly reflect the intentions of the parties. If everything else is acceptable, leave it alone and walk the reader through the form to the changes your client prefers. That should work for anyone who wants to be precise and isn’t paid by the word.

It’s none of their business that you have to learn (how to write). Let them think you were born that way. E. Hemmingway

 

 

When is the best time to sell in Madison?

WRA Home Sales Graph Without looking at the graphics, in what month do you think home sale closing activity bottoms out in Wisconsin? What month is peak? Are you surprised? What do you think are the reasons for the rise and slide of home sales in Wisconsin? What do you think Florida sales closing data looks like?   This is California’s data.  Imagine that, the three areas of the country have similar peaks and valleys.

People buy and sell homes when they’re ready. Obviously more people are ready to put their homes on the market in the spring even in states where four seasons is only a hotel chain. In Madison we have to agree, looking for a home is more enjoyable weather wise when we’re not slipping and sliding over ice and up to our knees in snow. Of course with high demand and relatively low inventories early spring to July packs a competitive punch to the spirit of home buyers.

So we know the best time to be on the market is April and May…2016. What now? It’s October 2016 and turning back the clock is still a future fantasy. We live in a real estate reality world. The best time to put a home on the market is always, when you are ready. And there is much more to consider to determine your readiness than how the flowers have grown. An orderly real estate process is more likely when the parties are prepared financially and emotionally. Regardless of the weather, there are market conditions that make fall and winter a fine time to put a home up for sale. Consider how battered and bruised buyers were in the spring, those who came in second, third,…sixth on homes in your neighborhood are educated and reluctant to come in any less than first on the next great home in your neighborhood. Fewer buyers have fewer homes to choose from in October through January. Sure the competition is down, but remember who the buyers are—many of them are more inspired today than they were in the spring. The new buyers in the market are looking at sales price data from June 2016…their spring counterparts were looking at sales price data from June 2015. Guess what happened from June to June? Prices went up. You may not need competition to push price up because the evidence is there to support your asking price….that wasn’t the case 5 months ago.

Put your home on the market when you are ready and be prepared to negotiate with people who know what it’s like to miss out on a great home in their preferred neighborhood.

 

 

 

The Wisconsin Offer to Purchase

I’m not a lawyer but I know lawyers and I know of a Wisconsin Real Estate Lawyer with a blog. James N. Graham is the lawyer, and while I don’t know him I like what he presented on the “As-Is” sales.  Last night I read the  Court of Appeals of Wisconsin Published Opinion James gave a link to. Yup. I read it just before lights out.  If you wonder how a court might interpret failure to disclose provisions of the Offer, you’ll get some insight from Attorney Graham’s work.

The WRA created a fantastic resource for licensees and the public. See the Explanation of  the State of Wisconsin Residential Offer To Purchase.

While I don’t want to discourage you from getting your law degree, staying up on the real estate law can be done by finding legitimate expert lay person’s explanations. These are two worth looking into.