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Selling a Home on the North Fork of Long Island

September 10th, 2008 category: SellersNo Comments »

To home sellers on the North Fork of Long Island: Agency Choices Matter!

You’ve decided to sell your home; you’ve located the perfect listing company. Pricing is established. A question remains: WHO TO COOPERATE WITH? When your agent opens up exposure by utilizing the MLSLI on your behalf, you have choices to make.

When you list your home, the agency that you “hire” will likely be signing up to be a “sellers agent.” The primary function of your listing company is to offer a transaction that covers you, the seller, in a required fiduciary capacity. You will agree to a fee for this service.

You will be making a decision with whom to cooperate, or split the fee that you are paying to the listing company. As most properties are now in the mlsli, a “co-broke” is likely. This simply means that of the total amount that you are being charged by the listing company, a percentage (generally one half) will go the the agent that brings the buyer.

You have choices.
1. You can permit agents to view, bring buyers, and make offers on your home as your “employee.” The result of this arrangement is that while the cooperating broker has loyalty to you (seller), YOU can be held vicariously liable for anything misrepresented to the buyer by the cooperating real estate salesperson. For this reason, “sub agency” offers a gamble for you, the seller. This is shown as “seller agency” on your disclosure.

2. You can permit agents to view, bring buyers, and make offers on your home under a second agreement: broker agency. Under broker agency, the listing broker could be held liable for the misrepresentations by the cooperating broker, to the buyer. For the same reason that sub agency is a poor choice for you, so it is for your listing company under “broker agency.” It isn’t possible to be present for every dialogue between a real estate salesperson and their buyer. For this reason, this agency is a less preferred method of cooperation.

3. You can permit agents to view, bring buyers, and make offers on your home under a third agreement: buyer agency. Under buyer agency, neither the seller, nor the listing company is held liable for the actions of the cooperating salesperson to the buyer. While normal disclosure and ethics, as well as legal ramifications remain, you are NOT responsible for any misinformation (intentional or not) from the cooperating salesperson to the buyer, when unbeknownst to you or your listing company.

Fairness is owed the buyer from the listing company, assuring that disclosures are properly handled, and that integrity is present. That’s why you chose your listing agent- fiduciary to you; fairness to the party entering into an agreement to purchase your home.

A large majority of real estate salespeople representing buyers will do a perfectly seamless job.

In the event, however, that YOUR buyer is unfortunate enough to be misinformed by THEIR agent, let liability fall where it should: to the buyers agent.

The last thing that you, as a seller, need is an issue after closing that is outside of your control, and perpetuated by the party receiving payment from you, that ends up in YOUR lap, or that of your listing broker. Cooperating with a buyers agent is money well spent, relative to the other two options available, if it avoids a liability issue later on. Your fee provides an absence of vicarious liability for you, as a seller, in this agency. Additionally, by the nature of the diligence required, you better the odds of your cooperating salesperson providing accurate information to your buyer.

Yet another discussion that you may well have with your listing agent (and we suggest that you do) is dual agency. This scenario occurs when the listing company procures a buyer for your property. Some companies still utilize this method; many avoid this choice due to inherent conflicts of interest. If the company that you choose does not participate in the multi list service, the odds are greater that you’ll encounter this type of agency. As the NYS disclosure indicates, consider this agency carefully before engaging.

For a copy of the New York Department of State disclosure form, click here.
**AS IS REQUIRED IN THE STATE OF NEW YORK, IN MATTERS OF LEGALESE, CHECKING WITH YOUR LAWYER TO CONFIRM THE SUGGESTION ABOVE IS ENCOURAGED. THIS IS NOT TO BE CONSTRUED AS LEGAL ADVICE.

Home Sellers and Home Buyers on the North Fork of Long Island…Read This

August 23rd, 2008 category: Buyers, SellersNo Comments »

Weather Vane For those interested in purchasing a home on the North Fork of Long Island, but unsure about eligibility for a loan, a great place to begin is at the New York State Mortgage Agency.

As prices come down, reaching levels of attainability for more buyers, awareness of state sponsored mortgage loan programs bear watching.

For example: For VA purchasers, up to $5000.00 is available toward closing cost assistance .

That’s a nice incentive for VA qualified purchasers.

If you are selling a home on the North Fork of Long Island, and have a prospective buyer that might fall into the parameters of any NYSMA program, understand it to develop a selling strategy.

The website www.nyhomes.org provides time frames for buyer qualification. Knowing how long a program takes might offer a bit more clarity for a move in date. And a move out date. Having a good feel for a closing date works for all involved.

If you are buying a home on the North Fork of Long Island, awareness of loan programs provides an edge, and possibly more buying power.

For example: For a first time buyer seeking a “fix up” property, check out the Remodel New York term sheet.

Greenport Grate

The site provides all income level requirements, purchase price requirements, and parameters, as well as all lenders that are participants.

As many eye a fix up property as an opportunity, a loan program like the above might be interesting.

possibly Options Realty. Your Source for a North Fork Buyers Agent. Riverhead, Aquebogue, Baiting Hollow, Calverton, Jamesport, Laurel, Mattituck, Cutchogue, Peconic, Southold, Greenport, East Marion, and Orient, New York.

North Fork Long Island Home Buyer/Seller Agency

August 18th, 2008 category: Buyers, Real Estate News, SellersNo Comments »

7 biggest home price negotiation blunders

Emotion. Ego. Not doing your homework. Don’t let these or other bogeymen derail your chance at your favorite home. Here’s how to keep them at bay.
By Luke Mullins, U.S. News & World Report

This is a very interesting article for home buyers on Long Island.

This is a more interesting article for sellers of homes on Long Island.

This is the BEST article for those home buyers or sellers that don’t believe that, if your home is for sale with a real estate agent, there is negotiation involved that would make representation (either a buyers agent, or a listing agent representing the seller) the only way to go.

This is most definitely NOT the market for dual agency.

If you are buying or selling a home on Long Island, New York, please make certain that you’ve read the disclosure.

North Fork, Long Island Home Sellers Paying Less?

August 14th, 2008 category: Real Estate News, SellersNo Comments »

“Home sellers can haggle over commissions

Consumer Reports study showed 71 percent who bargained got lower rates”

Read the article by clicking the link below.

http://www.msnbc.msn.com/id/26014600/

As proponents of flexibility in the marketplace with regard to real estate commissions for consumers, we found this article of interest. DISCLAIMER: I’m biased; I’ve never purchased a car or appliance without input from Consumer Reports- getting info from other consumers is an impartial way to gather information that is based on consumer experience, and has kept me from making a purchase that while on the surface, offers value, doesn’t delve quite deeply enough to offer the value that hindsight from an experienced consumer does.

Just What Long Island Real Estate Consumers Need…More Junk Fees

July 11th, 2008 category: Buyers, SellersNo Comments »

junk yard Bob Sullivan from MSNBC’s Red Tape Chronicles posted this today. We thought it was valuable enough to show it to you here, at least the opening paragraph. Click here to read his entire post over at the Red Tape Chronicles.

“Traditionally, buying a home has been “free,” at least with regard to real estate agents. Sellers pay steep commissions — usually around 6 percent – which are split with the shoppers’ agent. That allows home buyers to focus their energy on hunting for hidden fees from their mortgage provider.”

To home sellers and buyers on the North Fork of Long Island: Please click here to read the entire article.

While I had heard of vague “administrative fees” becoming common, it was something that seemed minor relative to the rest of certain real estate issues that occur on Long Island, in addition to an ever changing market.

Deciding, as a broker, to add fees that (if they are explained as competently as the agency disclosure often is…NOT…you will likely view this inserted creative “fee” at closing) is unacceptable, whether in a slow market or not.

Not because there are certain administrative tasks associated with a real estate transaction, but because fees charged to consumers is for the purpose of a completed transaction. Isn’t that what “commission” is supposed to cover?

Hopefully, awareness of what we concur is a sneaky and unacceptable “fee” (what- paying a real estate agent along with an attorney isn’t enough for Long Island consumers??) will eliminate it. Awareness is everything, and administrative fees coming from a real estate broker/owner are completely ridiculous. Opinion, of course…

Photo: sxc

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Working with Buyers on the North Fork of Long Island

April 11th, 2008 category: Buyers, SellersNo Comments »

SELLERS OF HOMES ON THE NORTH FORK OF LONG ISLAND: YOUR BUYER IS OUT THERE.

Options Realty 0993_2.jpg

While frustration has been, of late, the order of the day for home sellers in general, there are homes going under contract, and there are buyers looking for properties.

The homes that go “quickly” are priced in such a way as to get the buyer to land, with a bit of negotiating on occasion, and a willingness on the part of both buyers and sellers to compromise.

Nationally, we are in a precarious place- with the recent down payment increases becoming common, buyers are educating themselves in impressive numbers, as they decide if things are close to “hitting bottom” in a declining market.

Presentation of your home on the Internet is critical- a single photo on Realtor.com (a spin off of the MLSLI) doesn’t cut it with today’s home buying contingent. Additionally, while exposure on numerous websites has gained ground, there are still hold outs that are not maximizing the exposure needed for your home.

Pricing is tantamount to success- with buyers deciding that a fence upon which to sit is a safe route, offering a home that is accurately priced is still the best formula. Determining this can be tricky, but there are several ways in which to approach the dilemma- not the least of which is to take a hard look at your competition.

While ignoring the headlines in favor of local results is difficult for both sellers and buyers, the fact remains that real estate is LOCAL, and our area appeals to many outside of the North Fork. A home priced within the range of recently closed properties is far more practical than pulling up properties that closed more than a few months ago- while we haven’t seen NEARLY the disastrous market in evidence in other states, there is a knowledge among buyers that things have dropped from the highs of a few years ago.

Viewing the entire process as one in which cooperation is essential will provide sellers with able buyers, and buyers with properties that don’t run the risk of being “under” appraised- starting out with accuracy is, and always has been, a key component.

CALL US FOR AN ACCURATE ESTIMATION OF THE VALUE OF YOUR HOME. GETTING BUYERS TO LAND ON YOUR HOME IS OUR PRIORITY.

(PHOTO OF OSPREY AND A VISITOR- Options Realty)

Before You Buy or Sell a Home on The North Fork of Long Island

March 17th, 2008 category: Buyers, Real Estate News, Real Estate Philosophy, SellersNo Comments »

Before you buy or sell a home in New York, you might want to read the article The practice of Sub-Agency is Dead. For Gosh Sakes, Let’s Bury It!
by Avery Yarbrough located here.

While we strive to provide updated market information, the above article does a better job than many others of explaining the practice of agency relationships, as presented to consumers in New York. If your listing agent is offering compensation for a “sub” agent, vicarious liability is present in the purchase. Something to think about.

Read the article Vicarious Liability
From James Kimmons here.

If you are considering a home on the North Fork of Long Island, check this out before you list your home, or purchase a home. Engaging in “dual agency” is a bad plan; better for all simply to have your real estate agent represent you, and allow the buyer’s agent to have their own representation (for whom you carry no vicarious liability).

We operate with the knowledge, having practiced Real Estate in other areas of the country, that is offered in the above article. Long Island, New York is one of only a few areas having difficulty with a transition that took place in many areas over ten years ago- don’t be behind the times!

images: Tory Byrne – stock.xchng.com

North Fork -Long Island Real Estate Market Update

February 5th, 2008 category: Buyers, Real Estate News, SellersNo Comments »

What has gone under contract so far in 2008 on the North Fork of Long Island?

The following report, using figures from mlsli, indicates properties that (while some are not closed) have enjoyed a contract in 2008. These transactions occurred from Jan.01, 2008- February 5, 2008.

The towns included in the search are: Aquebogue, Baiting Hollow, Calverton, East Marion, Jamesport, Laurel, Mattituck, Riverhead, and Southold, New York. Included in the search, but showing no contracts, are Greenport and Orient/Orient Point, New York. *Always check figures with MLSLI for the most up-to-date numbers.

Aquebogue: 2 U/C. One was priced at $339k, the other at $375k. The days on market average is:231.5
Baiting Hollow: 1 U/C. This home was priced at $599,750. The days on market average : 59
Calverton: 2 U/C. One was priced at $369k, the other at $649,999. The days on market average:168.5
East Marion: 1 U/C. This home was priced at $865k. The days on market average:92
Jamesport: 3 U/C. One was priced at $479,846, one at $544k, one at 599k. The days on market average:183
Laurel: 1 U/C. This home was priced at $469k. Days on market was:259
Mattituck: 3 U/C. One was priced at $470k, one at $525k, one at $799k. Days on market average:303. This figure is skewed by a home that spent 772 DOM.
Riverhead (excluding mobile home sales): 8 U/C. Pricing: $150k; 225k; 290k; 428k; 450k; 469k; 599k; 649k. Days on market average: 196.
Southold: 2 U/C. One was priced at $525k; the other at $699k. Average days on the market:81

This snapshot provides activity (buyers) making their presence known (performing a contract) from Jan.01, 2008 to Feb.7, 2008.

It does NOT include buyers that may have entered into a contract prior to Jan 01.

The following is a report on available homes on the North Fork, Long Island.

Aquebogue (excluding mobile homes/seasonal cottages): 60
Baiting Hollow (excluding mobile homes/seasonal cottages): 50
Calverton (excluding mobile homes/seasonal cottages):19
Cutchogue: 46
East Marion: 25
Greenport: 35
Jamesport: 27
Laurel: 17
Mattituck: 47
Nassau Point: 3 (likely located under Cutchogue)
Orient: 16
Riverhead (excluding mobile homes/seasonal cottages): 145
South Jamesport: 8
Southold: 104

TOTAL PROPERTIES AVAILABLE: 487
TOTAL HOMES U/C IN THE FIRST MONTH OF 2008: 23

To sellers of homes on the North Fork of Long Island: competition is accumulating. While selling your home is always a possibility, it is critical (in a market that shows no indication of immediate improvement) to determine whether the need to sell is paramount. If not, based on reports of a challenging year, it might be better to hold off, and sell when things begin to improve. Patrick McGeehan at The NY Times, recently quoted Jeffrey Otteau about this in his article entitled Home Prices Start to Dip, Recalling ’90s Slump.

Homeowners who are waiting for the market to rebound to sell their houses will regret that decision, Mr. Otteau said.

“For those sellers who’ve decided to wait until spring to get what they think their house is worth, the spring they’re waiting for is a very long time off,” Mr. Otteau said. “Unless you have the ability to wait this out for five years, waiting is a losing game.”

While it is very early in the year, we are in a “buyers market”- and as those buyers consider properties, pricing appropriately is paramount to success. Choices are plentiful, but the reason behind the choice is clear: we’ve lost many of our “first time” buyers. Lenders have tightened the grip, preventing many from purchasing. This impairs the “move up” buyer- and so on. We haven’t seen the impact of foreclosed properties yet- while they are present (often the result of those that purchased in the last few years, and are now upside-down) the impact has not been fully recognized in this area- YET.

There are occasions in real estate that make it sensible to “test the waters”. In our opinion, we are not experiencing one of those times- to the contrary, less is (for the market as a whole) a better alternative- properties that are languishing with reluctant sellers are impacting the area negatively. Buyers are making their ability/interest clear: if it’s not priced appropriately to the current buying climate, it isn’t going to sell.

If you NEED to sell your home, get a current, accurate market analysis. Don’t gamble in a downward market by shutting out buyers that may have an interest, but are waiting. Accommodate buyers by pricing correctly.

Real Estate Agency, North Fork, Long Island

January 25th, 2008 category: Buyers, East End LI Foreclosures, Real Estate News, Real Estate Philosophy, Sellers1 Comment »

If you are thinking about selling or buying a home on the North Fork of Long Island, New York, real estate companies have a revised document for you to sign with regard to AGENCY RELATIONSHIPS.

Acknowledgement of agency laws is required by the New York Department of State in order to encourage all consumers to understand what role a Realtor will play in the way of representation to each party- the seller and the buyer. In our opinion, the bold-ed verbiage is worth note. In that way, it differs from the form that you will be signing. THIS FORM IS NOT A CONTRACT.

The following is taken directly from the New York Disclosure Form for Buyers and Sellers, and will be presented to you, with an explanation of each representation so that you are able to determine who is on your “side”, once the agency relationship has been determined. As offered by the DOS, “this disclosure will help you to make informed choices about your relationship with the real estate broker and its sales associates.”

Sellers Agent: A sellers agent is an agent who is engaged by a seller to represent the seller’s interests. The seller’s agent does this by securing a buyer for the seller’s home at a price and on terms acceptable to the seller. A seller’s agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience, and duty to account. A seller’s agent does not represent the interests of the buyer. The obligations of a seller’s agent are also subject to any specific provisions set forth in an agreement between the agent and the seller. In dealings with the buyer, a seller’s agent should a) exercise reasonable skill and care in performance of the agent’s duties; b) deal honestly, fairly, and in good faith; and c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.
Buyer’s Agent: A buyer’s agent is an agent who is engaged by the buyer to represent the buyer’s interests. The buyer’s agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer’s agent has, without limitation, the following fiduciary duties to the buyer: reasonable care,undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyers agent does not represent the interests of the seller. The obligations of a buyer’s agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer. In dealings with the seller, a buyer’s agent should a) exercise reasonable skill and care in performance of the agent’s duties; b) deal honestly, fairly, and in good faith;and c) disclose all facts known to the agent materially affecting the buyer’s ability and/or willingness to perform a contract to acquire seller’s property that are not inconsistent with the agent’s fiduciary duties to the buyer.

Broker’s Agent: A broker’s agent is an agent that cooperates or is engaged by a listing agent or a buyers agent (but does not work for the same firm as the listing agent or buyer’s agent) to assist the listing agent or buyers agent in locating a property to sell or buy, respectively, for the listing agent’s seller or the buyer’s agent’s buyer. The broker’s agent does not have a direct relationship with the buyer or seller and the buyer or seller can not provide instructions or direction directly to the broker’s agent. The buyer and the seller therefore do not have vicarious liability for the acts of the broker’s agent. The listing agent or buyers agent do provide direction and instruction to the broker’s agent, and therefore the listing agent or buyer’s agent will have liability for the acts of the broker’s agent.

Dual Agent: A real estate agent may represent both the buyer and the seller if both the buyer and the seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, the buyer and the seller. An agent acting as a dual agent must explain carefully both the buyer and the seller that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.

Dual Agent with Designated Sales Agents: If the buyer and seller provide their informed consent in writing, the principals or the real estate broker who represents both parties as a dual agent may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of real estate. A sales agent works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales agent for the buyer will function as the buyer’s agent representing the interests of and advocating on behalf of the buyer and the designated sales agent and the designated sales agent for the seller will function as the seller’s agent representing the interests of and advocating on behalf of the seller in negotiations between the buyer and the seller. A designated sales agent range of fiduciary cannot provide the full duties to the buyer or seller. The designated sales agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales agents before agreeing to such representation.

(emphasis added)

For sellers, the other consideration when reviewing agency is to make a determination as to which agency, if any, you will offer compensation, particularly if your Realtor is promoting your property on the Multi List system of Long Island (MLSLI, with the feeder to Realtor.com). Realtors utilize this system to provide exposure for your property, and your compensation is advertised to the Realtor community with the following designations defined above:

SA, or seller’s agent

BA, or buyer’s agent

Broker’s Agent

For sellers, understanding the advantages/ramifications of each agency compensated is imperative. Establish what is best for you by discussing this with a few Realtors to gain as much comprehension as possible. Full understanding on your part of each designation is the responsibility of the Realtor who lists your home, sells your home, or facilitates the purchase of a new home- clarity on the part of the Realtor involved will facilitate an easier transition for both sellers and the buyers that purchase your home. KEYWORD: FIDUCIARY.

Call us if you’d like to have a conversation about Agency relationships. While we offer opinions on all things real estate, this is a serious consideration for consumers- too much information isn’t enough.

If I Were Selling or Buying a Home on the North Fork of Long Island

January 21st, 2008 category: Buyers, East End LI Foreclosures, Real Estate Philosophy, Sellers1 Comment »

If I were a seller on the North Fork of Long Island, New York, I would ask the following question of the Realtor offering their services: Do you understand fiduciary?

What is fiduciary, from a seller perspective? Here are some good questions:

1. Will my property be entered into the MLSLI immediately? I want all agents with buyers to know that it’s for sale; that will potentially increase the offer that is made to me.

2. Are you seeking the best offer for ME, or are you interested in excluding Realtors that may have a good offer, but will take half of the fee that I’ve offered you to sell the property, preventing you and your company from getting it ALL? I don’t want an agent or company that’s not complying with fiduciary here; what you and your company receive is what I’ve agreed to, and I don’t care who it goes to. Nor should you, if you understand your fiduciary to me.

3. Will your sign out front be welcoming to all that might have an interest, without that antiquated “exclusive” part attached to it? I don’t want to discourage anyone from seeing my house. What’s up with the “exclusive” on my sign?

4. Will you provide me with ALL binders, so that I can make the decision? I think that I deserve that- after all, I’m paying your fee. Can I trust you with this?

If I were buying a home on the North Fork of Long Island, I would demand a buyer agent. Buyers agents operate with fiduciary- that’s what the Realtor code of ethics requires.

If I want a home, the “fee” for the buyers agent is already in the price. Hey, I’m not stupid. And no, I don’t want to be a “customer” of the listing agent or anything else- my agenda is to locate the best value, and that means my own Buyers Agent. Period. If I want to make a low-ball offer through the listing company, that’s my right, too- respect that I do NOT want to buy through the selling company, but they can facilitate a low-ball. Anything else and I’m compromising my own money.

AND, I want to see ALL of the available homes. I’ve given a price range, and I want to see them all. If my buyers agent wants to show a home that I may have to “pay” him or her for, no thanks- I’d take it off of the offer price, anyway- we all KNOW that sellers have included some kind of payment if you offer it to agents that only represent sellers- “SUB-AGENTS”. What are those types of agents still doing around, anyway? If you can pay a sub-agent, you have made financial room for a buyers agent- they often have buyers. I want their offers.

What? You’ve counseled your seller to pay less to a buyers agent, or nothing to a buyers agent? Hmm. I wonder what’s wrong with the house- is there a problem that a buyers agent will uncover?

Oh- and if you want to make it difficult, so what. The market is declining anyway. Hey, I want to buy a house. You can make it easier, or I’ll just wait.