On Sunday, it might not be the best time to think about motivations some owners might have or some of the considerations going into a sale. I’ve had some odd experiences and over the years and I’ve become aware of the need to get as much of the story as possible, before making an offer.
Some years ago, I can remember writing an offer on a home being sold in a divorce…or so I thought. It was obviously a difficult sale and the offer was geared toward sensitivity to the owner’s circumstance. An option to remain for time after closing was a part of the offer. Move time seemed important and I felt removal of a financing contingency, might make a difference. We offered it as an option, since time was not an issue for us. We also offered terms like the option to pick up maintenance prior to the sale and no cost for a period after closing. In considering the offer, I found loans and foreclosure information, leading me to believe this would be a short sale or cash at closing from the owner to pay off the loan. Oddly, no one seemed to be willing to negotiate the price at all or even respond to the offer. This was, by the way, a strong offer and a prequalified/proof of funds was attached. The offer failed and about a year later, the property sold at far less than our offer at a foreclosure auction. So, why didn’t we see a reply? Why wouldn’t a couple facing foreclosure consider or even reply to an offer? Knowing what obstacles might stand in the way of an offer or what each party might actually want, can make offers work. The failure to reply, underlined the importance of considering the “why”. Money, timing, wording of an offer is important, but I was convinced I’d missed something. Months later, I was told one party had hoped to purchase the property at auction…possibly through a family member. It explained a lot, but is something I might never know.
Motivation might be financial or emotional. It might involve ego and the way you present an offer. I tend to think of offers in hard/soft or aggressive/passive terms. Am I going to counter? Do I want to make my best offer first and what is the other side thinking? Words, response, demeanor and timing all might telegraph intentions and learning how to share information, without creating damage, is something that comes with practice.
I’ve been in the industry for a very long time, but only a broker for the last 30 +/- years. We all develop thick skins, but there are a handful of behaviors, whether intentional or oblivious, I still find annoying. You may have experience with similar behavior and, I hope, clients will consider the value of listening to an experienced agent and showing consideration to a professional. Erasing the below behaviors would make my days much more pleasant and, in turn, lead to a higher level of service to each client.
- Initially a client looks at a listing with the listing agent or a selling side agent, but writes the contract with another agent, completely unfamiliar with the property. This can happen in an industry as numbers increase, but paying attention to relationships makes a difference. Personally, I think the intent of Article 16 of the
Code of Ethics covers this for REALTORS® and I make every effort to avoid interfering in an ongoing relationship. If an agent worked with a client months ago and there is an obvious interruption in relationship or if the client is obviously offended/unwilling to work with an agent, I feel comfortable moving forward with a relationship. Interfering with an active interest and uninterrupted contact is something I would always avoid, but, from a broker’s view, it can be very annoying to complete all the work and showings, only to have someone else drop in to write the contract. I’m overly aware of this, because it is a common issue and our responsibility to be sure we consider agency relationships, whether written or simply ongoing. Think procuring cause.
- A client sometimes talks to the list agent or owner, giving away the farm…. literally! I think this is self-explanatory, but I would always hope to discuss terms, provide cost estimates and take the time to consider an offer “before” making intentions clear to the other party.
- Openly complimenting a property is polite, nice, considerate…. but hardly the thing you want to lead a conversation, if you plan to offer anything below the full list price. I ask clients to think about questions, but to wait until we leave to share opinions on the property. “I love this home!”, “This is the ONE!”, “I’m SOLD!”….is not the way to prepare a seller or list agent for negotiation. I’m accustomed to thinking in terms of agency relationships and the limits of discussions I should have with a client or clients. Walking back a statement can be difficult.
- Some Buyers love to write Low-Ball Offers in a “Seller’s Market”. We all have aggressive clients. I consider whether the creditworthiness and demeanor of the client is worth my time. If someone is unrealistic, I do consider the value of my time and I’m pretty sure every good agent considers the same. Agents have specialized knowledge and need sales to stay in business. Most experienced agents pay attention to productive uses of time and will avoid wasting time….so it makes sense to never give an experienced agent the idea you’re wasting your time.
- I’m on time 99.99% of the time. About once a year, I might run late or make a call to tell someone I’ve been detained. Not showing up on time for appointments is far more common with clients. I’d guess 10% to 30% of the time, a client shows up 5, 10 or even 30 minutes after the time scheduled. The record, in the last 5 years, is 4 hours. A client’s flight delayed, then they were lost, then needed to stop for lunch. I understand delays, but it can be frustrating when your time is money. One appointment can make it difficult to do anything else in the same day or half-day. Showing consideration means a lot and I make a point of avoiding all habitually late clients.
- Some people have little loyalty, no matter how much you’ve been working together. This moves back to the same theme. Show consideration to an agent. Loyalty, common courtesy and consideration makes a difference.
- Sometimes we work with a beer budget and champagne taste. Asking to see homes in a price range a client can’t afford is not such an issue if the home is vacant and you aren’t inconveniencing anyone. I avoid sightseeing tours and am very clear with curiosity seekers, if I’m sure.
Back in about 1988, I worked with a couple looking for a retirement home. They gave me a price range and they were detailed in their story. Prequalification was covered, they didn’t need to sell a home and they were visiting friends on a buying trip. We had lunch at my expense, looked at every home in their price range. After lunch, they took a break, only to go back to see homes for the rest of the day. I think we spent around 8 hours together, diligently looking at everything. I turned down another appointment to spend the second half of the day with this couple. Several homes were on their favorite list and, based on their comments, I felt certain we were nearing an offer. Oh….I didn’t mention the travel arrangements. I picked them up at their friend’s home. Anyway, the wife turned to me as we pulled into their driveway and said, “If we ever move to Florida, I’m sure Amelia Island will be on our list. We’ve had so much fun today, you really were a pleasure!”. I’d love to say this “lovely” couple, considering retirement, acted out of ignorance, but no one could possibly be oblivious enough to work an agent all day, in the Summer, let the agent pay for lunch and….well, basically show no consideration at all. I began to think seriously about choosing clients carefully. Time is valuable and picking clients can save a lot of time.
- Interest rates are rising. In 2017, payments and rates will, almost certainly, go up. The good news…credit is loosening and the current administration is pushing to remove regulation like Dodd Frank. I would hope the market we’ve been seeing for the last few years will continue.
- Inventory of existing homes low and sales are healthy. In fact, some price ranges are remarkably low in inventory, especially in desirable neighborhoods. Are people holding homes after locking in an interest rate or are desirable locations more important than moving up or moving down? I’m not sure….but the result is a lower inventory as the price range drops. Smart builders are targeting the gaps in supply.
- Building costs are going up. The change to the cost of labor, delay in labor and increase in cost of material all contributes to an increased cost to build. I think this may improve in 2017, as supply adjusts.
- Prime sites are scarce. I’m noticing this on Amelia Island as my wife and I look for another homesite. Few lots are available and the few available lots are sometimes beyond reach. In lots without unusual frontage, like water or ocean, I try to keep the total land cost below 30% of the build. This can be difficult and other trends in lot size or construction seem to make it even more challenging in coastal areas.
- Shrinking lot sizes are one trend I’ve noticed. As construction costs go up, the new construction is frequently in a very small footprint. I’m seeing lot sizes in the 1/8th acre or less range, with some lot sizes of 45’x80′ in new PUD development. This makes the design a challenge, but trends toward smaller, energy efficient homes, makes the size and unexpectedly easy sale. PUD development will reserve common preservation area or recreation areas for all residents, but usually sacrifice lot size or setback, as a consolation to the developer.
- Formal space missing in design and I see this as a “chicken or egg” change. Smaller homes and increasing costs may drive design, but I prefer less formal space, ceiling height and light. Removing interior walls and changing the focus to truly practical space, means a smaller home feels or “LIVES” bigger.
- Kitchens are bigger. I’ve got to find another word. Bigger, sizeable, huge….massive… Kitchen trends are definitely moving toward larger spaces, integrated with living area and with most including islands and seating. Live in the kitchen is the trend, not a separate room. Speaking of separate rooms, there is a definite increase in wine cellars, butler’s pantry or elaborate annexes to a kitchen space as homes move up in size. Think about catering or a second preparation area near the kitchen. Spaces under stairs for wine, cigar or wet-bars, instead of a traditional pantry make the most sense.
- Tubs are out! One tub in a home is fine, but the expectation of a tub in the master bath is now an expectation of a premium shower, dual sinks and dual walk-in closets. No one uses Hollywood strips and mirrors should be custom, not wall-sized and behind a sink.
- Energy efficiency is in. Efficient windows and doors are only one change. Insulation, HVAC systems, roofing, wrap and appliances are all more efficient. Buying a new home might cost a little more, but the savings in replacement and a utility bill really add up. Check to see if your area is serviced by the new gas lines. On demand water heaters are expected as price ranges climb.
- Drive distance is more and less important. This trend toward life quality, instead of home size, seems to bode well for Amelia Island. I care about my time as much as I care about the home I buy or build. I think buyers are beginning to think about quality of life and considering the one thing we can’t replace….time.
- Lifestyle makes a difference and I think most buyers are considering the variety of factors adding to a lifestyle, instead of looking for a box to sleep and eat. If you consider the changes and the time without much construction, the older and newer homes are remarkably different. Consider the way we live, social media’s education of consumers, the move toward efficiency and even advances in technology over the last 10 years. The crash around 2007 was 10 years ago now. Consider the changes and the recent health of the construction industry. This is, in my opinion, an exciting time to build and the furthest thing from a sideways move. Even moving from a similar price range and size, might net space, efficiency and an improved lifestyle. Consider building, before considering a simple more or refinance. There is, in my opinion, a reason new construction is booming.
- Downsizing is a thing for everyone. I’ll revise that to say….”almost” everyone. My wife isn’t convinced, but I am doing what I can to convince here the square footage in a home we keep for the next 20 years is more important on the porch, not in the heated and cooled space. Downsizing is trending as buyers begin to live on porches and courtyards, but also as formal spaces are seen as unused or wasted.
- Garages…..I’m confused. I’m really confused. In the last 30 years, a 2-car garage became almost expected. Now, we’re seeing tandem, single, triple and even, like a home I sold a few months ago, double 4-car garages. Garage space is a bit like the informal porch or outdoor areas replacing heated space. We’re using recreational vehicles more often and a bigger space to store toys is becoming more important. This trend is difficult, given the trend toward smaller lot size.
…..Snapchat, Plaxo, Google Plus, Youtube, Pinterest, Flickr and let’s not forget Myspace…is it still around? I’m at home on a Friday night, just recovering from a common cold and reading the headlines. Years ago, I started to think about the way communication was changing and the value of connections. I was probably an early adopter and in one case a beta tester for all the social networks listed above. The popularity of Facebook continued to grow, while some of the others struggled to maintain users or invent a way to make a profit.
I’m not sure if “social media guru” is accurate, but I have used all the services and have definite opinions as a user. Most of the envoronments are, essentially, varying kinds of forums or blogs. They all share the idea of content and sharing content to others. Some, like WordPress, offer a way to syndicate the feed. Twitter has an embed feature, Facebook has something similar and Instagram can be embedded into a page or traditional blog. By far, Twitter best enables me to find content I would ordinarily never see. I read a brief news story about $TWTR , the stock and began to think about the future of social media. Making a profit is good, but being unique and having a loyal base of users is also important.
Here is my logic in support of Twitter’s future or an eventual buyout.
- If I try to share a story to social media, Twitter is almost always a choice.
- On my personal blogs, I never considered leaving off a “share to Twitter” button.
- Facebook, my other “most used” social media site, is interchangeable over my morning coffee. I use Facebook to talk about events with friends or for business, but Twitter for unfiltered news and opinion.
- Twitter is more integrated as a micro-blog, into mobile phones.
- I can search by event, subject, thread, location or user….(partial list)
- I’m easily able to select or block content and finding interesting influential celebrities is a kind of accessibility no other media offers.
- Moments, a new addition is interesting. I can make a kind of online magazine, with stories I want to follow, keep or share.
- Lists are a kind of abbreviated or specialized list of users to follow. You can make a list or follow existing curated lists on almost any subject.
Twitter has something unique, adds value to my day and has a very loyal user base. I’m not sure they can solve the profit issue, but Twitter compliments so many other social media platforms, it makes sense as an acquisition. Consider offering a way to merge user names with another social media platform like Facebook or Instagram. Facebook has a better messaging client, but Twitter’s simplicity and ease of use translates better to mobile. Sometimes I’m just in the mood for 140 characters and feel like talking with a few thousand strangers. I also like the ability to participate with a news story, while anywhere. Interactivity? This isn’t unique, but the flavor is different.
I’ve been using Twitter since 2008 and with my 10th year approaching, I want a platform I use frequently to find it’s way. I’ll end with one thought. Politicians (many), news organizations cities, disaster relief and every reporter I know, uses Twitter. The challenge is profit and, in my opinion, finding a logical merger partner.
I’ve been working as a broker on Amelia Island for a long time. Some of the most difficult conversations for me, have to do with perceived value of a site or property. Investment property is often valued, based on a capitalization rate, with a target rate of return for certain classes of property. The problem in using this method to consider an area like Downtown Fernandina Beach, is the “DEMAND” and scarcity of available property. As the area becomes desirable, demand can force pricing past the range indicated by cash flow. Another way to consider value is by looking at the lot cost and current construction costs for a similar, but likely unavailable, location….
The conversations often start with, “How did the owner arrive at this price?”. Assume a similar lot sells at $300,000.00 and the design is correct for the location. If the cost to build is around $200/foot….you get the idea. Think about oceanfront or waterfront property. The values are “NEVER” based on cash flow. Downtown Fernandina and, to a degree, Amelia Island, is priced at a premium. The location is scarce, the demand is high and pricing is based on that pressure, not always cash flow.
The Amelia Island Concours D’Elegance is one of the best, if not the best, car show in the known world. I’ve been told it surpasses Pebble Beach and the last time I enjoyed the show, I talked with several people, insisting this was the finest show of it’s kind. Amelia Island benefits each year and, personally, I had a family member in the local hospice, the Jane and Bill Warner Center for Caring. Beyond economic impact, beyond the fun, beyond the local charities benefitting each year, the Concours brings attention to Amelia Island and promotes the lifestyle we all take for granted all year.
Judge for yourself, but exposure like this is irreplaceable.
Following the Concours week, the SVRA Race comes to the local airport. If you’re into motoring history, fine cars, luxury lifestyles or the best destination for a vacation, this is a great time to visit.
Fair housing posters came up in conversation this week and I thought about the, sometimes missing, posters you might assume should be in all builder model homes. Since these homes are used as an office and part of a development, should a fair housing poster be displayed? The latest version is linked “HERE“, if you aren’t in the industry and want to look. I began working as a full-time broker in 1987 and fair housing compliance was always on my checklist. As I remember, displaying the poster in a visible location was one of those things everyone thought about…. automatically. (Excellent article on placement and compliance) http://journal.firsttuesday.us/brokerage-reminder-displaying-the-hud-fair-housing-poster/24038/
Going through several different builder’s models in the last month, I noticed some appear to be unaware of the requirement. A portion of the law is quoted in bold below, but thinking about where to display can sometimes make a big difference. Some site agents aren’t licensed agent or considered employees of a builder/developer, but this does not remove the requirement. Being subject to a fair housing suit “AND” not displaying a poster or showing awareness of the law and need to treat everyone with the same consideration, is probably a good way to increase liability. So, take a few minutes to consider the requirements and, if you own a model home or maintain a sales office in a model home, it would be prudent to think about the display of the proper paperwork. This link to HUD resources for Florida is worth a quick look if you sell or rent housing, not only if you’re a Lic Real Estate Broker.
A portion of the requirement is quoted below, with a link to more.
§ 110.10 Persons subject.
(a) Except to the extent that paragraph (b) of this section applies, all persons subject to section 804 of the Act, Discrimination in the Sale or Rental of Housing and Other Prohibited Practices, shall post and maintain a fair housing poster as follows: (1) With respect to a single-family dwelling (not being offered for sale or rental in conjunction with the sale or rental of other dwellings) offered for sale or rental through a real estate broker, agent, salesman, or person in the business of selling or renting dwellings, such person shall post and maintain a fair housing poster at any place of business where the dwelling is offered for sale or rental. (2) With respect to all other dwellings covered by the Act: (i) A fair housing poster shall be posted and maintained at any place of business where the dwelling is offered for sale or rental, and (ii) A fair housing poster shall be posted and maintained at the dwelling, except that with respect to a single-family dwelling being offered for sale or rental in conjunction with the sale or rental of other dwellings, the fair housing poster may be posted and maintained at the model dwellings instead of at each of the individual dwellings. Source: https://www.gpo.gov/fdsys/pkg/CFR-2003-title24-vol1/pdf/CFR-2003-title24-vol1-part110.pdf
Beyond simply complying with a law, REALTORS® subscribe to a code of ethics, encouraging active efforts to support equal opportunity in housing and never discriminating or tolerating discrimination. These policies are good business, but also go a step beyond simply complying.
The Code of Ethics: Article 10 of the National Association of REALTORS® Code of Ethics provides that, “REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.”
A REALTOR® pledges to conduct business in keeping with the spirit and letter of the Code of Ethics. Article 10 imposes obligations upon REALTORS® and is also a firm statement of support for equal opportunity in housing. Source: https://www.nar.realtor/programs/fair-housing-program/what-everyone-should-know-about-equal-opportunity-housing
I wanted to post a brief link to a page noting proper use of the term REALTOR®. It seems to be a common question and many clients seem to interchange the term with Lic Real Estate Broker or Salesperson. The term means something different and is far from interchangeable. Beyond the benefits of education or contact with those interested in raising the industry standard to a higher level, all REALTORS® subscribe to a code of ethics, beyond the requirements for licensure.
The definition of a REALTOR® is a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.
Source: NAR: REALTOR® Trademark/Logo FAQs
Use of the logo or term both have a proper form and the term associated with a name tells the public the licensee is making an effort to raise his or her profession’s standards to a higher level. Yes, I am proud to be a REALTOR® and a member of the local association here in Nassau County.
Leave no trace is something to consider, when vacationing here on Amelia Island. Whether you’re considering the wildlife or considering someone else using the beach, littering or leaving personal items out for days at a time takes away from the island and experience of a pristine beach. These shots were taken several years ago, but show two things I find ugly. Cigarette butts on the beach and obstacles like the cabanas you see below, left on the beach. During turtle nesting season, these can mean a nesting female simply turns around at best or, at worst, is entangled in chairs or furniture. By the way, if you have an interest in protecting the turtle
nesting sites here on Amelia Island or if you just want to learn more, the Amelia Island Sea Turtle Watch is an excellent place to start.
The following message was furnished by the Amelia Island Tourist Development Council and, I think, covers the logic from a lodging and economic impact point of view. Our environment and the tourism industry both require respect for the beaches and consideration for the local wildlife.
TO: Lodging Partners
FROM: Gil Langley, Managing Director
DATE: March 1st, 2017
SUBJECT: Leave No Trace Ordinance
Pristine beaches are the number one reason 650,000 visitors come to Amelia Island each year. In 2016, Nassau County and the City of Fernandina Beach passed a new “Leave No Trace” beach ordinance. The law is straight forward. As written “Leave No Trace” means exactly that – it is illegal to leave unattended items overnight on the public beach. Items that are left, including beach chairs, cabanas, tents, canopies, etc. will be considered abandoned and declared a public nuisance. They will be removed from the beach and destroyed immediately. There is no provision for storage or
retrieval of the items.
Our role as the AITDC is to educate guests as to existence of the ordinance and its goal of maintaining clean, safe beaches for. The Board of County Commissioners mandated that all owners and operators of lodging establishments
are required to post notice of this ordinance and notify renters of its requirements. To assist in compliance, last year we produced a brochure (enclosed) which you can provide your guests. This publication contains the basic language of the ordinance and reminds visitors to “Leave No Trace” when they leave the beach for the day. We also created a small in-room display rack should you choose to place them in each unit. If you decide to notify guests in a different manner, such as part of their check-in portfolio, the Ordinance requires you provide copies of the notification to the County
Manager’s Office and to the AITDC.
The AITDC spends nearly $180,000 on beach cleanup efforts annually. If residents and visitors continue leaving unattended or discarded items on the beach, cost will certainly increase. Making our guests aware of the importance of taking all items with them will help contain those expenses.
There is no cost for you to participate in this effort. Your only requirement is to let the AITDC know when you need more brochures. Please call our Welcome Center at 277-0717 to request restocking. We will have new materials delivered to you promptly.
Earlier this year, Amelia Island was recognized by the Hospitality Sales & Marketing Association International (HSMAI) and National Geographic Traveler as the Platinum Winner in a special category of Leader in Sustainable Tourism for the Clean Beach initiative. Our entry was judged to be exceptional by sustainable tourism experts from National Geographic Traveler and HSMAI, and showcased as a model for other destinations.
It benefits us all if we can reduce the amount refuse left on the beach. In addition, removing such items benefits the wildlife that calls Amelia Island home, including nesting birds and sea turtles. As good host, we don’t want guests to become disappointed or upset because they were not made aware of the rules governing the beach and their items were removed and destroyed. We can avoid that by making sure everyone enjoying the beach knows the rules. As noted above, not only is it our duty to inform our guests of the rules, it’s the law.
There are a few exceptions that allow permits for the disabled and storage of items behind the frontal dune. You can get additional information on those exceptions from the County Manager’s Office. We can also provide help with training on the issue, so please call the AITDC at 277-4369 or email me at firstname.lastname@example.org if you need assistance.
Remember: Unattended items left overnight will be removed and immediately destroyed.
Don’t let that happen to your guests!