Action Real Estate Workshop For Buyers and Sellers
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Action Real Estate Workshop For Buyers and Sellers Presentation Transcript

  • 1. Page 1 Real Estate Workshop
  • 2. Why Use a Realtor? Complex, ever-changing real estate regulations! ! Buying or selling a home is not like purchasing a plane ticket. Every home is different, and laws change every year and vary from state to state. Generally speaking, people purchase a new home every 7-10 years, and a lot can — and usually does — change between transactions. Realtors® are immersed in real estate, and they must stay current with all the updates in regulations, laws, contracts and practices. Once you retain your Realtor®, they put that knowledge to work for you. ! Source: National Association of REALTORS® 2012 Survey of Home Buyers and Sellers.
  • 3. Help finding the right home! ! Browsing online is a terrific way to start a home search — in fact, almost 90 percent of people start their home search online.1 But when it’s time to buy, knowing all the pros and cons of a property can help you make the right decision. Realtors® live and breathe real estate, and they can share information about a home that you wouldn’t otherwise know. Your Realtor® can go beyond the aesthetics and tell you important details about homes you’re considering. ! Source: National Association of REALTORS® 2012 Survey of Home Buyers and Sellers. Why Use a Realtor?
  • 4. Pricing and selling a home ! There are lots of sites where you can view price estimates for your home before you list it for sale, but you take a risk using them. In some markets, online estimates can be off by as much as 50% percent. Realtors® know the local market, have access to the freshest sale data, and can price your house in line with the market to maximize your earnings. ! In 2012, sellers using an agent got $40,100 more: The median sale price for the 88 percent of sellers who worked with an agent was $215,000, versus a median sale price of $174,900 for the 9 percent of sellers who didn’t use an agent.1 ! Source: National Association of REALTORS® 2012 Survey of Home Buyers and Sellers. Why Use a Realtor?
  • 5. ! Contracts and negotiations! ! Finding the right home is the fun part. Then the real work begins.: Today’s contracts can be 50 pages long. Realtors® can help you navigate these complex documents and craft an attractive offer that makes sense for you. Plus, when it comes to negotiation, your Realtor® is your advocate and can bring an objective voice to a very subjective situation. ! Source: National Association of REALTORS® 2012 Survey of Home Buyers and Sellers. Why Use a Realtor?
  • 6. Following a code of ethics! ! When you work with a Realtor®, you’re partnering with a professional who operates according to a strict code of ethics. In place for over 100 years, the Realtor® Code of Ethics ensures that consumers who work with a Realtor® are treated professionally and ethically in all transaction-related matters. ! Source: National Association of REALTORS® 2012 Survey of Home Buyers and Sellers. Why Use a Realtor?
  • 7. Commission
  • 8. Working  With  Real  Estate  Agents  In  North  Carolina Rule of thumb: Don’t tell your agent anything until you have a clear understanding of the agent’s role in the transaction. This will protect you and your position through the negotiation process. The first thing a Realtor® in North Carolina does is to review a disclosure.
  • 9. DUTIES vs. RESPONSIBILITIES ! ✓ Fiduciary/Statutory Duties to a Principal (Client) ! Undivided Loyalty, Obedience, Reasonable Care and Diligence, Confidentiality, Full Disclosure and Accounting ! ✓ A Summary of Agent’s Duties to their Principal (Client) ! • Duty to avoid any willful or negligent misrepresentation or omission of a material fact to a principal (or any other party to a transaction). This includes a duty to disclose all material facts about which the agent has knowledge or should reasonably have acquired knowledge. • Duty to avoid making false promises that are of a character likely to influence, induce or persuade a party to a transaction. • Duty to avoid any undisclosed conflicts of interest. • Duty to properly account for funds held in trust for the principal. • Duty to act competently in the performance of services. • Duty to avoid improper conduct and to be honest in all dealings with the parties. • Duty to promptly deliver all offers and contracts to a party to the transaction. • Duty to disclose to the principal any commissions, referral fees, kickbacks and similar payments from third parties. ! !
  • 10. ✓ Agent’s Responsibilities to Third Person (Customer) ! • Responsibility to refrain from misrepresenting or failing to disclose a material fact as prohibited by the North Carolina Real Estate License Law. • Responsibility of “honesty and fairness” under the common law. • Responsibility to refrain from unfair deceptive trade practices which are prohibited by consumer legislation. !
  • 11. Communication Buyer’s Agent Seller’s Agent Buyers Sellers
  • 12. The Home-Buying Process
  • 13. Selecting the “Right” Realtor 704-458-4213 ! frank.meadows@cbunited.com
  • 14. Why Pre-Qualify for a Mortgage? 1. You'll know how much money you can qualify to borrow depending on your income, your debts and your credit history. ! 2. You'll have more leverage in negotiations with the seller. A pre-approval letter is an especially favorable point in a close multiple offer situation. And, you can feel more confident about making an offer with a pre-approval letter in hand and the knowledge that you'll be able to obtain a mortgage.
  • 15. Once the search begins… 1. Your Realtor will send you e-mail alerts with all the new listings. 2. Feel free to drive by and take a look. 3. When you are ready to view the property in person, let your Realtor know. 4. Your Realtor will schedule all of the appointments for you. 5. Your Realtor will accompany you on all showings. 6. It is important to remember that the “Listing Agent” is representing the seller, while your Realtor is representing, “YOU”…
  • 16. Confidential Information • At times the listing agent or sellers of the property may be present during our appointment. ! • Keep in mind that any expression or excitement that you show can dramatically decrease our negotiating power. ! • Once we are alone you are encouraged to share your thoughts with me, so that I can advise how we should proceed.
  • 17. Where  is  your dream home?
  • 18. Your  Home  Wish  List Creating a list of the desired features and amenities for your new home will help me target them properties that meet your criteria. Please consider the following and record any notes or preferences: 1. House style_________________________________ ! 2. Number of bedrooms________________________ ! 3. Number of bathrooms ________________________ ! 4. Living room________________________________ ! 5. Dining room_______________________________ ! 6. Family room_______________________________ ! 7. Fireplace__________________________________ ! 8. Home office_________________________________ 9. Kitchen__________________________________ ! 10. Basement_______________________________ ! 11. Garage stalls____________________________ ! 12. Lot size_________________________________ ! 13. Pool___________________________________ ! 14. Age of property__________________________ ! 15. View____________________________________ ! 16. Fencing_________________________________
  • 19. Terms of an Offer To Purchase Due Diligence Fee ! The buyer pays a fee to the seller because they incur a loss of market time while the buyer is exercising due diligence. In other words, the home is substantially ‘off the market’ and is marketed as ‘under contract’. Hence, the fee charged to the buyer.
  • 20. Terms of an Offer To Purchase Earnest money ! The earnest money deposit is generally submitted along with the contract (or at a subsequent time as dictated in the offer to purchase) to  demonstrate  a buyer’s sincere interest in seriously pursuing the purchase of the property. 
  • 21. Offer and Counter Offer • Now that we have found your home and come up with a strategy it is time to put it in writing. • We will draft your offer. • We will take your good faith deposit. • We will submit your offer. • We will wait. • Waiting will be difficult for you. • The moment I get word, I will contact you. • It is important that I have all of your contact information. • The sellers will either accept, counter or refuse your offer.
  • 22. Negotiating • Refusal – The seller can simply say “NO” and I can guide you on how to proceed from there. • Counter Offer – The seller can say “Maybe” if you agree to my new terms. • Acceptance – The seller can accept your offer as written. • Depending on the response from the seller, just remember that I am here to guide you every step of the way. • As your trusted advisor, I will communicate with you every step of the way. • What I know, you will know.
  • 23. Done negotiating, now what? • Per our contract we now have an opportunity to bring in inspection professionals during the Due Diligence Period to make sure that the home is: Sound, Safe and Secure. • The mortgage company will order an appraisal to verify the homes value.
  • 24. Effective  date Termination   Date Closing Due  Diligence  Period Due   diligence   is   when   the   buyers   find   out   everything   the   seller   and   agent   never   told   them  that  they  need  to  know.   Due Diligence Period
  • 25. Home  Inspection..    What?  &  Why? A home inspector typically examines the condition of the property, including the plumbing, heating, cooling, and electrical systems, and the structural components. In North Carolina, professional home inspectors must be licensed. ! Read the home inspection report carefully. Not having a home inspection may save you money “up front”, but it could be very costly if you find after the due diligence period or after closing that there is a major defect in the property.
  • 26. Wells  and  Sewage  Disposal  Systems   Inspection  …    What?  &  Why? A well inspection and separate water test should be done to determine whether there is an adequate amount of water and water pressure for the property and if there are any harmful contaminants in the water.
  • 27. Title  Insurance  ..    What?  &  Why? The lender will require the borrower to purchase title insurance to protect its interests from potential title problems. Problems such as unpaid judgments, taxes, mortgages, etc. on the property.
  • 28. A  Survey..    What?  &  Why? A survey provides accurate measurements of the property, its precise total area, the location of buildings and other improvements to the property, and any encroachments, easements and possible setback violations. The buyer is typically responsible for paying for the survey. ! You should also be aware that the title insurance company may exclude from coverage problems shown on the survey which are not resolved before closing.
  • 29. An  Appraisal..    What?  &  Why? The buyer should review the appraisal report prior to the end of the due diligence period to make sure the value of the property matches what you were told by the seller or real estate brokers and what is shown in the purchase contract.
  • 30. How Do Appraisals Determine Price? A lender is going to base their loan to value off of whichever is lower, the appraised value or sales price.  So even if a seller gets what they are asking for a property, say $325,000, and the house appraises for $294,000, they are going to base our loan to value, or what the buyer can borrower off the $294,000. 
  • 31. How Do Appraisals Determine Price? Lenders require appraisers to use properties that are closed sales within 30 days and are within 1 mile of the subject property.  The reason for this is that lenders want to make sure the property they are securing the loan against is obtaining a value of other like properties around it in the same neighborhoods.  Unfortunately, this can create a stress on sellers in our current market environment if they have had the misfortune of having a lot of foreclosures in their neighborhood, but a home is only worth what the market will support at that time, so if there are a lot of foreclosures to choose from then that is part of the market and those will be considered as comps and if they are listed that would be considered as a property that a buyer would look at and purchase.
  • 32. How Do Appraisals Determine Price? If a seller has a house that is all brick and all the other homes in the neighborhood are siding the borrower will get an adjustment made for their brick, but the appraiser will not go outside the neighborhood if other homes have closed in that neighborhood.  He will just make a market adjustment for that cost.   
  • 33. The bottom line is that the house has to appraise and it has to appraise based on comps located close to the subject property.  That is why Realtors do market summaries prior to going on listing appointments.  If you can’t find the data to support what the seller wants to list the property for then neither will the appraiser. How Do Appraisals Determine Price?
  • 34. Results Based on the due diligence results, the buyer’s agent communicates the results and advises the buyers on their next steps.
  • 35. Repairs • Refusal – The seller can simply say “NO” and I can guide you on how to proceed from there. ! • Counter Offer – The seller can say “Maybe” if you agree to my new terms. • Acceptance – The seller can accept your requested repairs. ! • As your trusted advisor, I will communicate with you every step of the way. ! • What I know, you will know.
  • 36. Repairs
  • 37. Buyer To Do List • Now that inspections are done…. • Finalize mortgage paperwork… • Chose a closing representative, attorney, title agent… • Obtain Home Owners Insurance. • Home Warranty • Arrange for Movers…
  • 38. Pre Closing Inspection • Prior to signing the final documents on your home we will visit the property to make sure it is being transferred to you the way you expected it. ! • It is time to start getting excited.
  • 39. Settlement  Day The closing attorney may disburse funds immediately after closing has been completed, the title has been updated, and the documents have been recorded. ! 1. The seller should discuss the timing of disbursements with the closing attorney in advance so you can be aware of any possible delays. ! 2. The buyer should be aware that the seller will not give you possession of the property until he/she receives their proceeds from the sale.
  • 40. Did  you  forget  to  sell  your  previous  House?   ! That’s  Okay  !!
  • 41. Steps Before Listing & Marketing ! Let’s Get Your Home Ready To Sell !! 1. Pricing 2. Seller Net 3. Staging your home
  • 42. ASKING PRICE VS. SELLING PRICE Price too low and you lose the value. Price too high and you lose the buyers.
 
 Strategically price your home to get it sold for the most money in the least amount of time.
  • 43. ! Starting too high and dropping the price later misses the excitement and fails to generate strong activity. PRICE COMPETITIVELY—THE FIRST 30 DAYS ARE CRITICAL
  • 44. PRICING VS. POTENTIAL BUYERS Pricing your property competitively will generate the most activity from agents and buyers. Asking Price Compared 
 to Market Value Percentage of Potential Buyers who will look for Property Market Value +10% +15% -15% -10% 60% 30% 10% 90% 75%
  • 45. IMPORTANCE OF PRICING I will negotiate on your behalf to get you the best price at the best terms in the shortest amount of time. Over time a home that has not been sold may attract offers below market value.
  • 46. In a market with rising home values, if a seller wants a price that’s ahead of the market, the market may go up enough to make that price attractive for buyers. Pricing Your Home To Sell
  • 47. If sellers fall behind a market with falling home values, they can end up chasing the market down, because home values are always falling faster than their price reductions. Pricing Your Home To Sell
  • 48. • Pricing your home right the first time is key. • Proper pricing attracts buyers. • An overpriced house will not sell. Pricing Your Home To Sell
  • 49. The bottom line is that the house has to appraise and it has to appraise based on comps located close to the subject property.  ! If you can’t find the data to support what the seller wants to list the property for then neither will the appraiser. How Do Appraisals Determine Price?
  • 50. Seller’s Net: ! Approximately, How Much Money Will You Make?
  • 51. Staging •Sell Faster •Sell For More Money
  • 52. You could receive multiple offers!
  • 53. Terms of an Offer To Purchase Due Diligence Fee ! The buyer pays a fee to the seller because they incur a loss of market time while the buyer is exercising due diligence. In other words, the home is substantially ‘off the market’ and is marketed as ‘under contract’. Hence, the fee charged to the buyer.
  • 54. Terms of an Offer To Purchase Earnest money ! The earnest money deposit is generally submitted along with the contract (or at a subsequent time as dictated in the offer to purchase) to  demonstrate  a buyer’s sincere interest in seriously pursuing the purchase of the property. 
  • 55. Offer and Counter Offer ! • The sellers will either accept, counter or refuse an offer. • Countering an offer is a great way to begin negotiations.
  • 56. Negotiating • Refusal – The seller can simply say “NO” and I can guide you on how to proceed from there. • Counter Offer – The seller can say “Maybe” if you agree to my new terms. • Acceptance – The seller can accept your offer as written. • Depending on the response from the seller, just remember that I am here to guide you every step of the way. • As your trusted advisor, I will communicate with you every step of the way. • What I know, you will know.
  • 57. Done negotiating, now what? • The Due Diligence Period takes place to make sure that the home is: Sound, Safe and Secure.
  • 58. Effective  date Termination   Date Closing Due  Diligence  Period Due   diligence   is   when   the   buyers   find   out   everything   the   seller   and   agent   never   told   them  that  they  need  to  know.   Due Diligence Period
  • 59. Results Based on the due diligence results, the buyer’s agent communicates the results and advises the buyers on their next steps.
  • 60. Repairs • Refusal – You can simply say “NO” and I can guide you on how to proceed from there. ! • Counter Offer – The seller can say “Maybe” if you agree to my new terms. • Acceptance – The seller can accept your requested repairs. ! • As your trusted advisor, I will communicate with you every step of the way. ! • What I know, you will know.
  • 61. Settlement  Day The closing attorney may disburse funds immediately after closing has been completed, the title has been updated, and the documents have been recorded. ! 1. The seller should discuss the timing of disbursements with the closing attorney in advance so you can be aware of any possible delays. ! 2. The buyer should be aware that the seller will not give you possession of the property until he/she receives their proceeds from the sale.
  • 62. 704-458-4213 frank.meadows@cbunited.com
  • 63. My Commitment to You Real Estate Consultant / Broker ! No one will work Harder to get you the Results you deserve than Frank 704-458-4213 ! frank.meadows@cbunited.com