With Terry Story, 28-year veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
The Stress Of Moving Is Keeping People At Home
Today’s conversation with Terry begins with the topic of the stress of moving. By way of a bit of context, Terry notes first that 65% of movers do so between Memorial Day and Labor Day and, secondly that research has shown that Americans move about 6 times in their life. Evidently, that number may be dropping as a good many people find moving to be as stressful as a death in the family or planning a wedding. The result is that a lot of people nowadays are simply opting to not move and, of course, that means not buying or selling a property. Terry admits that it often feels as though real estate pros like herself are used as punching bags by their clients who are just looking to unload their stress on someone.
5 Tips For A Super-Tight Housing Market
Steve moves on to the subject of a recent article outlining five tips for buyers in a tight housing market. The first one has to do with determining what your budget is and sticking to it. Begin by consulting with a lender about how much money you can borrow to cover all the costs of a new home: taxes, insurance, title services, etc. Look at an amortization table of your monthly costs and then figure out the rest of your budget: food expenses, car expenses, bills, etc. You are going to need to hold yourself accountable to this budget from the jump. Knowing these figures is going to be very valuable when you’re out there in this hyper-competitive housing market and will save you a lot of time and agitation that you’d otherwise encounter if you tried to bid on homes you can’t afford. Have your max price in the forefront of your mind and shop accordingly.
Separate Housing Needs From Wants
The second tip is to identify neighborhoods you’re interested in and separate your wants from your needs. Many of the desirable features you’re looking for might not be already present in the homes you can afford; don’t freak out about this. You can make improvements later when you have the cash to spend on new appliances or hardwood floors or whatever. What you can’t change is your location or—short of very major expenses—enlarging the home or even the property. Therefore, it’s key to look at neighborhoods and their various aspects that may be important to you, such as schools, access to shopping, transportation options, or even crime rates.
Speed Is Critical: Be Ready To Buy
Number 3 is to be ready to make a quick decision. Have your money ready. Don’t wait until it’s time to submit a bid to sell investment assets, post collateral for a home loan, or resolve some other issues which ends up delaying the transfer of funds into escrow. In today’s super competitive, multiple-bid environment, you’re dead in the water when the seller catches wind of your money not being ready.
You may well be going up against someone who is offering cash and, while to a certain extent sellers are still motivated by higher bid prices, in many cases, they are looking for buyers with fewer contingencies and will sometimes sacrifice a few thousand dollars to work with them. Contingencies here means attorney reviews, inspection periods, and other processes which add time to the closing process. Steve says that he often comes across articles about buying a home which advise people to make sure they go through an attorney review before making an offer, but Terry argues that good realtors will have all the information that buyers need and can walk them through the process without the need for an attorney review.
The Advantages Of Working With Local Realtors
The final tip is to work with a local realtor. Knowledge of the local marketplace is invaluable and well worth the commissions good real estate agents earn. If the realtor you’re working with doesn’t know the area you’re interested in and doesn’t have professional contacts there, you’re competing against local agents with a much greater chance of getting an offer accepted. You not only want an agent who can help you through the closing process but one who understands the market dynamics at a block level of the area you’re trying to buy in.
Fake Listing Scams
The last subject of their talk today is the issue of “fake listing scams.” Terry says these are apparently back after a period of dormancy. She describes a recent situation where she had a listing, a property for sale that was unoccupied. A scammer took the info from the MLS listing and wrote up a Craigslist post offering the property for rent. People were told they could visit the property and, if interested, have the keys sent to them in exchange for a cashier’s check. She notes that the price—as is typical with these things—was less than it should be. Two potential victims of this particular scam contacted Terry because they suspected something was off. The takeaway is to always do your due diligence, especially if you’re looking at a deal that seems too good to be true. Check the property address online and find out if it’s listed on MLS and, if so, contact the realtor who has the listing.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: It’s time for Real Estate Roundup. This is the time every single week we get together with noted real estate agent Terry Story. Terry is a 28-year veteran with Coldwell Banker located in Boca Raton, Florida. Welcome back to the show, Terry.
Terry Story: Thank you for having me, Steve.
Steve Pomeranz: We live in a stressed-out world that I don’t even think I need to go into. All you have to do is read the news. A study was just recently issued that said Americans are overwhelmed with the stress of moving.
Terry Story: Yeah. The average American would move six times throughout their lives, and that’s not the case anymore. They’re just not moving. They don’t want to move. I thought it was kind of an interesting fact that 65% of all the movers, it’s between Memorial Day and Labor Day.
Steve Pomeranz: Oh, yeah. We talked about that.
Terry Story: I didn’t realize it was that high. I know that that’s an active time of year, but I didn’t realize it was 65%.
Steve Pomeranz: You know what? You should just take the rest of the year off.
Terry Story: Absolutely. I should only work between those-
Steve Pomeranz: Make 67% of your nut, and you’re done, kind of.
Terry Story: Yeah. I like the way you think.
Steve Pomeranz: Thank you very much. Yeah, so the stress of moving … I know I was talking with my significant other recently. I wanted more garage space and maybe another room. She looked at me and said, “No. I’m not moving. It’s too stressful.” I guess this backs that up, right?
Terry Story: Yeah, absolutely. I can tell you, being in real estate, we’re nothing but a punching bag. The stress that the people are experiencing sometimes is vented towards us. They actually claim that moving is as stressful as dealing with death in families and divorce.
Steve Pomeranz: Oh, boy.
Terry Story: In a lot of ways, I believe it. They’re actually saying that it’s more stressful than planning a wedding. Now that I’m not so sure about. That was very stressful.
Steve Pomeranz: Well, honestly, maybe for the woman. I don’t know. I never felt that stressed over it.
Terry Story: Just show up.
Steve Pomeranz: All right, all right. I just got in hot water. Five tips for buyers in a tight housing market. We know that the market is tight, tight, tight. What are some five tips?
Terry Story: Okay. First, determine what your budget is going to be and stick to it. How do you do that? Start off by speaking with a lender, finding out what it’s going to actually cost you. Factor in taxes, insurance, the total amount. Get that figure, and then from there figure out the rest of your budget, your food budget, your car … All of your expenses, and stick to it. What’s really important to understand, in today’s market, is there’s a lot of bidding wars. It’s an aggressive market. Know your numbers and stick to them. If you know that the most you can go is X amount, then stick to that. Have a plan.
Steve Pomeranz: Well, especially if your realtor … If you say, “I want to buy a house for 300,000,” your realtor shows you a $400,000 house-
Terry Story: That’s a waste of time. Waste of time. Don’t even tease yourself and have the realtor show you a $400,000 house.
Steve Pomeranz: I know. It’s a terrible experience because then the $300,000 house, “I don’t know. I don’t like it anymore.”
Terry Story: Yeah, “I don’t like it so much.” Yeah, and then that’s in any price range, so stick to your budget.
Steve Pomeranz: Yeah, stick to your budget.
Terry Story: Identify neighborhoods and your housing wants versus needs. You can always add the hardwood floors later. You can change out the appliances to stainless steel, but there’s certain things that you can’t change. If you’re looking to be in a specific school district or you’re requiring a certain size property, stick to those things. The other things you can change over time.
Steve Pomeranz: Good point.
Terry Story: Be prepared. Know the difference between your wants and your needs.
Steve Pomeranz: Okay. Number two. Number three?
Terry Story: Be ready to make a quick decision. Because the market’s so competitive, have all your ducks lined up in a row. Have your money ready. I can’t tell you how many times I go to sell a house and the people have their money tied up in the market, and it’s not liquidated, and they need a longer period of time to transfer the funds for escrow, or they’re borrowing it against their 401K. Just make sure your money is ready because you’re going to be competing against others.
Steve Pomeranz: Well, is cash still king?
Terry Story: Absolutely. If it’s in a multiple-offer situation, guarantee there’s somebody with cash. Thanks for raising that point. It’s not necessarily he who has the best offer wins. It’s also going to be a matter of who has the limited contingencies. You can actually be not in the best monetary purchase price position but have fewer contingencies and-
Steve Pomeranz: What do you mean by contingencies?
Terry Story: Well, for example, some people make it a contingent on attorney review. Tighten your inspection period. Make things more attractive to the seller. Sometimes for a seller, an extra few thousand dollars isn’t worth taking a higher price with an offer with contingencies versus a lower price with no or little contingencies.
Steve Pomeranz: You’ll see articles, they say, “Here are the rules for buying a home. Make sure that it’s subject to attorney review,” or whatever. In the real world, you may want to have something like that, but it may not fly.
Terry Story: Right. Honestly, if you’re working with an experienced, knowledgeable real estate professional, they’re going to guide you through what’s necessary and what’s not and how to better present your offer. Listen to them. They know what they’re doing.
Steve Pomeranz: Okay. The final one?
Terry Story: Work with that realtor.
Steve Pomeranz: You didn’t write this, did you? No, but seriously-
Terry Story: Her name is-
Steve Pomeranz: Yeah, her name is. Her website address, yeah.
Terry Story: No. You want to work with a professional who knows the marketplace that you’re looking to purchase in. There’s so many reasons for it, Steve. If you’re dealing with a local agent that knows all the other local agents, there are relationships that take place. If you’re trying to purchase a home in a specific place and you’re working with an agent who’s not even familiar with the area and you’re competing against a real local agent who knows the other agents, the agent who knows the other agents has a better chance of getting an offer through than the outside agent.
Steve Pomeranz: There’s an old saying that many people know the price of something but the value of nothing. It’s not only about commission costs or whatever, which are obviously an important part of the formula for making your decision, but it’s what you’re getting in return for the money that you’re paying. I mean, I would agree with you. I think using a real estate professional … It’s not my area. I don’t spend my days in the real estate market. Knowing what communities are priced which way, what the general market’s looking like, and helping me through the closing. I think that’s invaluable. That my two cents, and you’re not paying me for that answer. It’s the truth.
Terry Story: Agree.
Steve Pomeranz: Yeah. Let’s talk about one last thing, fake listing scams. I know you have some thoughts about this. We have about a minute left.
Terry Story: This was something I’d seen in the past and now, apparently, it’s come back. What is this fake-listings scam? I’ll give you a real scenario. I had a listing. It was for sale. The property was empty. A scammer saw the information on Zillow, hijacked it, put it on Craigslist, marketed it as a property that was for rent.
Steve Pomeranz: Oh, boy.
Terry Story: A would-be victim calls up that scammer. Scammer tells them, “Oh, you can walk by, through the property. If you’re interested, I’ll send you the keys. Send me a cashier’s check.” Note that the prices are always less than they should be. In two cases, the potential person that was going to be scammed did their homework, called me, and found out that the house was not even available for rent.
Steve Pomeranz: That’s crazy.
Terry Story: Be very, very careful. Make sure you know who you’re dealing with.
Steve Pomeranz: Yeah. I think it’s the too-good-to-be-true rule. If the rent is just too low, there’s a reason. There’s got to be a reason.
Terry Story: Yeah, exactly. You shouldn’t be sending money and then somebody saying they’ll send you the keys.
Steve Pomeranz: Oh, and then a cashier’s check, sending money. Forget that.
Terry Story: Yeah. There’s your first clue.
Steve Pomeranz: Right. My guest Terry Story, 28-year veteran with Coldwell Banker located in Boca Raton, Florida. She can be found at terrystory.com. Thanks, Terry.
Terry Story: Thanks for having me, Steve.