Selling is Showtime

It’s SHOWTIME, folks!  Grab up the toys, wipe down the counter, turn up the lights, and send in the clowns… oops.  Send in the BUYERS.  Buyers, not clowns (guess they could be clowns, but we don’t know that yet).  And their agents.  (No more clown comments.)

When you have your home on the market, here is how a showing works from curtain up to curtain call.  The audition is the listing appointment in which you engage me as your agent.  The rehearsals are the staging work we do prior to taking pictures.  Unless we have sold your home before putting it on the market, we put those beautiful professional pictures up on the MLS (multiple listing service) and at that point you are ready to welcome the audience.  You want exposure to as large an audience as possible.  In the Atlanta area, that means advertising in both multiple listing services: Georgia MLS and First MLS and syndicating your listing to all websites that provide the public access to listings.

Once in the MLS and across the web, buyers and agents are able to see your home.  When a buyer and/or agent has identified your home as one they want to see in person, they will ask for a showing.  An unrepresented buyer may call me directly to arrange a showing.  The represented buyer will have their agent call me to set up the showing.  Or, depending upon how you, the seller, and I decide to handle showings, the agent may call you directly.  In any event, you will (hopefully) have 24 hours or more notice to have your home show ready.  BUT YOU CANNOT COUNT ON THAT.  Here’s why an agent might tell you between 2 and 3pm but actually show up at 1:30 or 3:30 (or anytime in between).

A buyer’s agent is typically showing their buyer more than just YOUR home on that day.  They may be showing anywhere between four homes and fourteen homes (or maybe more).  It’s difficult to tell in advance if a buyer is going to breeze through some or all of the homes before yours, or if they are going to want to take extra time and sit a spell at a prior listing.  Traffic may be particularly bad.  For any number of reasons, a buyer and agent may not show up at your home at the time that they say that they will.

So when they show up thirty minutes early or thirty minutes late or even are off by an hour, the key is to be friendly and understanding.  How you react greatly effects how the buyer is going to feel about the home.

Recently, I went with my buyers to see a home and when I knocked on the door, it was clear the frazzled Dad had no clue that we were coming.  But he put a big smile on his face and explained (you guessed it) “I had no clue that you were coming, but it’s totally fine!  Give us just a minute and we’ll be out for your showing.”  Dad and the two kids cleaned fast and headed to the driveway to play basketball.  My buyers had a great feeling about the house.  It’s like the home has good “mojo” because nice people live there.

Contrast that with the time I knocked on the door and was regaled by the person answering the door who practically screamed “YOU ARE EARLY.  You *(#() agents are always early!”  I apologized profusely, but then looked at my watch: I had said we would be there between 2 and 3pm and it was 1:59!  My clients didn’t even want to go inside after being yelled at.  Turns out the person answering the door was a home manager (more on that in a future blog post).  The home manager did not keep that position for long (no surprise).

So the moral of the story is to be the first seller, not the home manager.  Be ready and be courteous if the agent shows up early or late.  It’s totally fine if they are outside their time window to politely excuse yourself to sit on the front porch or to take a short walk.  Don’t act exasperated.  Just smile.  How a buyer feels about YOU really does affect the way they feel about the HOUSE.

While it’s okay to leave when an agent gets there if they are off their appointed time, as a seller, you always want to leave for a showing before the buyer and agent get there if at all possible.  Trust me on this.  The buyer needs time to LOOK at your house – experience it – and talk with their agent freely about their feelings, thoughts, and questions.  A seller in the house is distracting whether that seller is trying to engage the buyer or not – either way it’s bad.  A seller who is just hanging out in the home doing their thing makes a buyer feel that they are intruders and should get out quickly (not to mention the buyer feels that they can’t reveal their true feelings about the home or talk about it with their agent).  A seller who tries to give a tour of the home is even more disruptive.  If the buyer is looking at and listening to you, they aren’t experiencing the house.  And believe me, they don’t care about your hand painted kitchen backsplash tiles or the age of the windows if they haven’t even had a chance to decide if they like the house.

So if you have left prior to the showing as I am suggesting is best, how are agents and buyers going to get into your home?  As your listing agent, I will leave you a SUPRA ibox.  It’s a very secure blue box that can be attached to an exterior door or simply left out behind a planter when it is buyer showtime.  Buyer’s agents have SUPRA “keys” (or an app on their phone) that can open the lockbox through an infrared signal.  The lockbox even signals me, the listing agent, who is accessing the lockbox and when.  A great advance from the days when Realtors would have to pick up keys from the office for every listing they wanted to show.  The ibox is a good security measure since it identifies the person opening the box.  Always have the agent use the ibox for entry even IF you are there when they arrive.

When you are getting ready for the showing, here are your ground rules:

Leave ALL lights on. Every home looks better with the lights on.  In our staging consult, we’ve made sure that the light is of the right “quality”; make sure that all lightbulbs are operational and all lights on.

Leave all window shades open (unless there is a strategic reason for keeping one closed, or half closed – say if a view isn’t ideal).

Be cognizant of SMELL. No strange cooking smells, no locker room smells, no pet smells.  If you suspect any of these, the best counter-smells are citrus or pine (cleaning products).  Don’t use those plug-ins.  They are heavy scents, give many buyers headaches, and make it appear you are trying to cover up some particularly problematic odor.

In appealing to all senses, don’t forget TASTE. Leave cookies, chocolate (or both) with a sign that says “help yourself”.  Guess who it really helps?  A buyer with higher blood sugar will stay around longer and like your home more.  Leave water too – hydration improves perception as well!

While we’re appealing to all senses, sometimes leaving music on just feels creepy. Buyers think that there must be someone home so they are a bit on edge.  Silence is best.

You’ve set the stage and put your best foot forward for your buyers.  Afterwards come the reviews.  The best review of all?  AN OFFER.   Here’s to you being showered with offers like the star performer is showered with roses…..

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne s a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

Backup Homebuyers

Wanna be a backup?  It’s a common question among Realtors these days.  So what are we talking about?  We have a shortage of inventory right now – not enough homes to sell for the buyers who are out there.  That means that there are often multiple offers when a hot property goes on the market.  It can be tough on the average homebuyer.  Say you have a loan, but one of the OTHER offers is all cash.  All other things being equal, cash is king and tough to beat.  Now, there are other ways to win in a multiple offer situation; perhaps money is not the only thing important to the seller.  The thing to do is to have your agent quiz the seller’s agent about what other terms would make the seller happy.  Perhaps they need a quick close – or perhaps they haven’t found a home to move to yet and need a longer close.  Maybe they need to “rent back” for some period of time.

In other instances, perhaps what is important to the Seller is bringing a great neighbor to a neighborhood they’ve known and loved.  In that instance, a letter from the buyer can make all the difference.  In fact, I recently had a client, a single mom looking for her first home purchase all on her own.  She fell in love with the “perfect” house and wrote a letter to the seller detailing all the reasons that she loved the home.  There were seven total offers on the house, and after we won the bid the listing agent told me that there were two other offers that were stronger and higher in price than ours was, but that the LETTER made the difference.  The letter touched the seller and convinced the seller that my buyer was the best buyer for the house.

But say you’ve tried the multiple offer strategies and you still lose out to another offer.  Perhaps the price went way over list and you offered less.   Maybe another buyer took out the appraisal contingency and you weren’t willing to that.  But you still loved the house.

THIS is where the backup offer comes in.   When another buyer wins the property you want, you can offer to “be the backup.” What that means is that you make an offer to the seller that if the first contract falls through, you are waiting in the wings and fall into the first position without the property ever coming back onto the market.  The backup offer, of course, has no legal effect until the seller signs it – at that point, it becomes the backup contract and is basically a right of first refusal for the backup buyer.

How it works is this – if the first contract falls through, the backup comes into effect when the seller notifies the second buyer that the first contract has fallen through.

So what’s in it for the seller?  Well, if a property comes BACK on the market after being under contract, others wonder “what’s wrong with it?”  There’s a certain stigma attached to a property that’s been under contract and that contract is terminated.  This is why you will see an agent write into such a listing something like “BUYER’S FINANCING FELL THROUGH” – the idea is to signal to future buyers that the contract termination has nothing to do with anything wrong with the house.  With a backup offer, the seller doesn’t have to risk any stigma attached to coming back ON the market.

For the buyer, of course, it’s a risk free proposition if there’s a due diligence period in the contract.  Most contracts in Georgia have a seven to ten day due diligence period during which the buyer can terminate for any reason or no reason at all.  So submitting such an offer as a backup is risk free.  Even if the contract becomes primary, the buyer can decide to terminate and get earnest money returned.

So how is it effectuated?  There’s a backup agreement exhibit in the Georgia Forms that’s used.  With the exhibit, the seller can sign because they are *not* selling the same property to two different buyers – they are granting an option to the second buyer should the first contract fall through.

With the due diligence period, the second buyer is able to terminate at any time, even before the backup contract moves into first position.  Thus, the backup buyer can continue to shop for a home and if they find the perfect place, simply terminate the backup contract.

 Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

BUYER’S BROKERAGE in ATLANTA and WHAT IT MEANS

            Signing legal contracts.  Not on most people’s list of favorite things to do, but in a real estate transaction you will sign many contracts leading up to and during the closing.  In Georgia, we use form documents drafted and provided to us by the Georgia Association of Realtors.  There are individual modifications that may be made, but for the most part they are “forms”.  The first form a home buyer will encounter is the Buyer Brokerage Agreement. 

Let’s take a look at what it is and what it means.  The first thing to note is that it’s an “exclusive” buyer’s brokerage agreement.  That means that you are only entering into such an agreement with one Realtor; you cannot enter into multiple “exclusive” agreements.  The form explicitly states that if you have entered into other such agreements, they must be expired or you must terminate them – in other words, you are representing that they are no longer in force.  (There is also a NON-Exclusive Buyer Brokerage Agreement, but most Realtors will work with you on a continuing basis only if you have agreed to work with them exclusively).

While the contract refers to “Broker” it also relates to the individual Realtor.  We Realtors are agents working under a Broker – and so when there is reference in the contract to “Broker” you can also read that as “Realtor” or agent, and those terms are used interchangeably in this article.

                

            You will see that the agreement also states that Georgia Law, code section 10-6A-1, prohibits a Broker from representing a buyer without this agreement in place.  Therefore, before I place on offer on your behalf, I must have this brokerage agreement signed.  Otherwise I cannot act as your agent.  There’s also a “term” to the agreement.  After the ending date, the parties are no longer bound by the agreement.  But even before the end date in the contract the agreement may be terminated by either party simply by written notice to the other.  If that happens, your only obligation as a buyer would be to notify the Agent if you purchase a property you have viewed with or through the Agent so that they can collect a commission on that property. 

                

             The agreement obligates the Broker to attempt to identify properties for Buyer to purchase.  Note the word “attempt”.  Sometimes the Buyer themselves will find a property either online or by driving by; but a Buyer under a Buyer’s Brokerage Agreement is still obligated to go through the Buyer’s Broker to see, consider, and make an offer on that property.  It’s important to note that identifying a property to purchase is not the Buyer’s Broker’s only or even sole obligation.  The Buyer’s Broker has a fiduciary duty to protect the Buyer’s interest during the process of purchasing a home.  Identifying the property to purchase is only one small step in that process.

             While obligated to make all disclosures “required by law”, the Realtor is expressly NOT allowed to make representations with respect to the race, color, religion, national origin, sex, familial status, disability, sexual orientation or gender identity of a given neighborhood or community.  Notice that AGE is not mentioned in this paragraph.  In certain instances, it is all right for Brokers to talk about age restricted communities.  For instance, there are “active adult” communities in which residents must be over the age of 55.    

  

             What about liability for commission?  In Georgia, the Seller pays commissions of both agents – the listing agent and the buyer’s agent.  This obligation is contained in the form listing agreement signed by Sellers and is reflected in the Buyer Brokerage Agreement, under which the buyer is not obligated to pay a commission ever unless expressly set forth in the buyer’s brokerage agreement, or if a FSBO, or For Sale By Owner, refuses to pay the Buyer’s Agent.

              The Agreement also provides for dual and designated agency.  Designated agency is common and occurs when two Realtors working for the same Broker are both working on a deal, one representing the buyer and the other representing the seller.  Generally there is no cause for concern, since both agents are obligated to protect their party’s best interest.  But what about when only ONE agent is involved?   It is not impossible for the Listing/Selling Agent to represent the buyer as well as the seller. The type of relationship created here is known as a dual agency and as long as the Listing/Selling Agent fully discloses the dual agency and obtains the written consent of both parties, he or she may represent both the seller and the buyer.

  Georgia law provides very specific and strict disclosure of the nature of the dual agent's role and deals harshly with agents who do not follow the prescriptions, including a description of the types of transactions involved, a statement that the agent will be representing parties whose interests are potentially adverse, that all material information will be disclosed to both parties, and that the client voluntarily consents to the dual agency.  

              The Buyer Brokerage Agreement, like many real estate forms in Georgia, contains an arbitration provision requiring the parties to arbitrate any disputes arising from the contract.   It also mentions several consumer protection brochures that should also be provided to the buyer:” Protect Yourself When Buying a Home” and “What Buyers Should Know About Flood Hazard Areas and Flood Insurance.”

              When you have signed a Buyer Brokerage Agreement, you are embarking on a mutual adventure with your Realtor.  You not indentured to that agent, and if things are not proceeding as you wish there is no shame in terminating the Agreement; but first see if you can work things out with your Agent by letting them know what you need and what you feel you are missing.  Home buying is a life changing process and you need a committed advocate on your side!

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.