Transcript
Episode 15 – Buying a Home During the Pandemic (Part 3)
Introduction 00:00
This is Listen Up Home Buyers. The only podcast offering Home Buying Advice and Tips from True Buyer Agents. And now here’s your host Victoria Ray Henderson.
Victoria Ray Henderson Ray Henderson 00:06
Welcome everyone and thank you so much for taking the time to join me on Listen up Home Buyers. The video podcast. This is Episode Three of How Neighbor Members Are Helping Everyone During The Pandemic. All of the guests here are members of the National Association of Exclusive Buyer Agents from across the country. They do not have listings to sell and we do not represent sellers. We are as our name says, Exclusive Buyer Agents and with that I’d like to introduce Lisa Valenovsky. She is an Exclusive Buyer Agent with buyer’s edge in the Washington DC area licensed in Virginia DC and Maryland. Hi Lisa.
Lisa Valenovsky 00:47
Hi Victoria.
Victoria Ray Henderson 00:49
James Deskin is the owner and broker of the Home Buyers advocate in Columbus, Ohio. Hi, Jim.
James Deskin 00:55
Hi Victoria.
Victoria Ray Henderson 00:56
David Kent is the broker owner of the real buyer’s agent in Charleston, South Carolina.
David Kent 01:02
Hello.
Victoria Ray Henderson 01:03
There you go. Nicholas Martin and Exclusive Buyer Agent with buyer’s choice realty in Massachusetts. Hi, Nick.
Nick Martin 01:10
Hi.
Victoria Ray Henderson 01:10
And Benjamin Clark. He is the principal broker of Home Buyer representation in Salt Lake City, Utah. Hi, Ben.
Ben Clark 01:19
Hey guys.
Victoria Ray Henderson 01:19
It’s a real pleasure to have everyone. And while I was doing my research for this video podcast, I wanted to learn a little bit about each of you. And on Jim’s website, I read something that I really wanted to share and get your opinion and take on. And Jim, with your permission, I’ll just go ahead. On his website, it says ‘Sure, you know, all the big real estate companies around but how many of them are established to protect the rights of the buyer and not the seller? How many of them are there for the consumer, you? There are many good real estate companies but the number one goal of most of them is to sell houses and maybe even sell you one. It is not our job to sell you anything because we work on your side as the consumer. We don’t sell houses, we represent buyers who buy them.’ Since I read off your website Jim, you want to kick off and tell us a little bit about what made you write that?
Jim Deskin 02:18
Well, I wrote that after being in the business for a few years. And when I opened up the company about 14 years ago and I just thought through what drove me to this business. And I’d already done it for 10 years on it as an agent with another brokerage. And I just thought, what are the basics of how we do what we do and why we do it? I was drawn to working only with buyers because my background was in working with the public and I kind of had an advocacy background. And the idea of helping people and protecting them really appealed to me. That’s really where I got the content for what I wrote there on the website. And I truly believe it that. You know, we’re not here to sell anything. We’re here to help people buy and make sure consumers get a fair shake.
Victoria Ray Henderson 03:11
Yes. And Ben, you want to Ben from Salt Lake City, you want to jump in and tell us you know, why? Why did you open your brokerage that way?
Ben Clark 03:19
Yes. When I started when I got my license over 20 years ago, I was a buyer’s agent for listing agent. And what that really meant was, he would go out and get a bunch of listings and he had back then he had signs he put in the yard, people dial in 800 number for information because of course the flyer didn’t have the price on them and all of that. And it was a lead capturing system for him. And then I would take the buyers and my job because I worked for the agent who worked for the seller was to try and– Any buyer who called in try and move that property. But I kind of didn’t feel I would want to be treated that way as a buyer. I talked to the agent and said hey, can I just– If a lead comes in and it’s clearly not a good fit for them can I help them buy whatever? And I would walk them through the process and help them buy whatever home they wanted to not just the listing agents’ homes. And it became I noticed in the industry that buyers were less represented in general than sellers.
Every home that’s on the market with a listing brokerage has professional representation but a lot of buyers were getting double deals by the agents and not receiving a full level of representation. And I saw that going on and about a year and a half in the business. I was on a trip to Palm Springs, California and I ran across a buyer broker only flyer in a grocery store. And I read about it and I said hey, that sounds something I believe in is representing the buyer and helping them get the best price instead of the highest price for the home the best deal for the buyer. And it became something that I got really passionate about and I said, when I go back to town I’ve been working mostly with buyers anyway.
I started taking a few listings, because that’s what they train you to do. But I really wanted to represent those buyers and give them fair representation in their transactions. And I came back to town looking for a buyer only brokerage and there wasn’t one in town. I went to broker school. And a couple years later, I started my own company. And it wasn’t even until four or five, maybe six years later that I ran across the National Association of Exclusive Buyer Agents. I thought I was the only. First I thought, everybody, there’s got to be companies like this all over the place when I first saw that one company. And I thought I’ll just join them. When I get back to Salt Lake found that there were none in the state that I could find. And then the next thing was now that I was one. I thought I was one of the only ones. Maybe me and this guy. And then I came. And of course realize that there are hundreds of Exclusive Buyer Agents all around the country who believed the same things we do. Trying to work for the buyers.
Victoria Ray Henderson 05:57
Yes. It’s a calling, right? I mean, David Kent, you’re in South Carolina. Well, tell us about how you got this started?
David Kent 06:08
My degree is in construction management and moved to Charleston, and started work for developer and builder and eventually went out on my own building houses and had a real estate company set up just to sell my houses and people were coming to me friends and family and asking me to help them buy a home. And at the time, no one’s representing buyers, it was all sub agency. And I just thought that was weird. I mean, if you’re going to buy a home, you need some representation. Decided open up the first Exclusive Buyer Agents and Charleston was the buyer’s agent, franchise, Tom Hathaway. And, you know, just have enjoyed doing it up, stay building for another 10 years. And eventually now I’m just doing it full time. And since 2003, disrupt visiting buyers, and I’ve got four agents that are still with me that had been with me, you know, 1517 and 19 years. I don’t recruit agents, I found that, you know, if they want to buy into it, they’re gonna call me and if not, I just do the shop that I have. And the agents that I have, I can trust and I know they do a really good job. It really was just something that I feel that the buyer needs a representation when they’re buying home, especially a seller’s market.
Victoria Ray Henderson 07:30
Oh, yes. And you mentioned something that I’d like you to explain. You said it was only sub agency. Can you tell everybody what that is?
David Kent 07:36
Yes, when I started it was you had a listing agent who represented the seller, and anybody who brought a buyer, they were a sub agent of the listing agent as well. They didn’t represent the buyer at all, they may have brought the buyer to the table. But that was the confusing part for buyers. I believe they felt the agent was taking care of them. But at the time, it was all sub agency, no buyer agency.
Victoria Ray Henderson 07:59
Representation, his main thing that confuses consumers. I mean, there’s no doubt. Nick, we want to hear from you in Massachusetts. I know you’re a new board member. But what else are you doing there as an Exclusive Buyer Agent, what brought you in?
Nick Martin 08:15
Well, I would say Ron Heath brought me in. I blame him. But ultimately, I was looking for a flexible schedule as a father of two kids and my wife going to work and what not. I really saw run out to become a home inspector. And then he said, well, why don’t you come work for me? And I didn’t know a whole lot about real estate at that time. But I did have a pretty bad past experience and learning about Exclusive Agency through him. I realize how important that is, especially with the experience I had which ultimately was losing my down payment because the bank didn’t approve our loan before the contingency deadline which was the deadline that you have to have a full approval by. And they would but didn’t have it in the hand and ultimately denied my loan two days before closing.
Victoria Ray Henderson 09:10
Oh my God.
Nick Martin 09:12
And yes, long story short, our lost escrow money, lost everything. Lost my life savings at the time but as an agent who represents buyers, definitely watch out for those things. And if for some reason we don’t have everything in place. If you feel it’s my job to make sure that what happened to me doesn’t happen. And I get a lot of other agents out there taking buyers that seriously. I think a lot of it let’s get this house sold. And if something goes wrong with the buyer, then oh well, I’ll sell it to the next person. With that, in all the stuff that I’ve learned with Exclusive Agency, I don’t know why I couldn’t justify working any other way. I couldn’t justify doing both. And being able to properly represent people who wouldn’t be able to do what I feel an agent is supposed to do.
Victoria Ray Henderson 10:09
Yes, that’s a good point. And Lisa Valenovsky, I want to hear your story. I know your story. But I’d like you to share it with everybody here. And of course all the consumers that are going to be listening to.
Lisa Valenovsky 10:21
Well, absolutely. Actually, I’m– It never entered my mind to become a real estate agent at all. It just wasn’t even on my radar. But there was a confluence of events that led me to where I am today. When my husband and I were leaving Chicago to move to DC, we had a business where we developed what they called serious games for education for K through 12 students. And I loved doing that because to me it helped develop their critical thinking skills. And that was something that I loved doing. And I had just finished a big program for grades six through eight, that were the kids got alone, built a house floor plan, landscaping, selected all the materials, then they had to price the house, market the house, review potential buyers, and try to sell the house. And they also had to take into consideration environmental concerns, community concerns, and all of these things. And they were graded not only on their profit but they were graded on how well they took into consideration community concerns. And that’s what led them to the next level.
I had to learn a lot about houses. And I’ve always been really nosy. I’m one of those people who walks down the street at night in Windows and see what people have done their houses.
I was fascinated. When we moved to DC, we were looking for a house. And a friend of mine recommended Steve at buyer’s edge. Steve was lovely. He took me out and I just kept commenting on stuff. I’m like, wow, there’s no vapor barrier under here. You can tell the floors cupping because what. Have you ever thought about being a real estate agent? I don’t even know. No, I never thought about it. But then I recalled, well, it was hard to forget, when we moved from Chicago, we also had a horrible experience a lot like next, but we were on the seller side. And we had the supposedly number two agent in Chicago representing us and the buyers had the number one agent, the deal fell apart at closing on the loan. And I felt horrible for us. But I felt horrible for the buyers.
Once I spent some time with Steve and started thinking, well, this would be advocating for buyers, advocating for one side. And education is a really important component of this. And education is something that I really love I thought here’s a way that I could advocate for buyers so that nothing happened for the buyer or the seller as what happened in our deal. But I can also help with the development of the critical thinking and the decision making skills.
I mean to me, I want my buyers making an informed decision. When we write an offer, I want them to feel that they’re making an informed decision. Part of my job is to be a guide but a large part of my job is to help educate my buyers. I thought what this actually sounds like a place where I could do good and feel good and really put my education skills to work.
And I love it. I love helping my buyers. It’s just there’s no other feeling like that. And I did go for a couple of years, as you know, back I left buyers edge and I went to a very large agency. And you know, in Virginia, they allow dual agency, and I even I’m licensed Marilyn Virginia and DC I just had a problem with that and never ever felt right. Never not even from day one. Luckily everybody at buyer’s edge was, you know, willing to welcome me back. And I’ve been back for about what about eight months now and it’s the best move I’ve ever made.
Victoria Ray Henderson 13:49
Yes. Just real briefly, you mentioned dual agency, tell everybody who’s listening. What is dual agency?
Lisa Velenovsky 13:55
Well, in Virginia dual agency is the fact that an agent can represent both sides of a transaction. And in fact, they’re not really representing anybody, effectively, they really can’t. You can’t give advice, you can’t do anything that’s going to be a conflict of interest. Essentially, you’re sort of a transaction manager is about all you are in Virginia, and you can do both sides of that, and really nobody’s going to be getting adequate representation and it just never felt right to me that you could do that. There’s clearly a conflict of interest. I don’t care what they say.
Victoria Ray Henderson 14:31
Yes. Well, I mean if they’re the one person who makes out like a bandit on that is the real estate agent, who is the agent, the dual agent will just add that the reason I got into this is I had a whole norther career before this. And I too all of you I wanted to make a living but I wanted to make a really honest living and when I found out about this kind of representation. I thought boy, I can wrap my head and my heart around and I had recently had an agent who had never heard of this kind of Exclusive Buyer Agency. And she said, well, why on earth would you do that? And it occurred to me that if it doesn’t, if it isn’t something that is in you a choice that you really want to look out for people’s best interests, it isn’t going to be on your radar. But the way I basically responded was, it never occurred to me to do both sides. I wouldn’t be in real estate, I would not be an agent. If I had to say, Oh, I can represent you, Mr. Seller. Oh, hey, over there, Mr. Buyer, I can represent you and pick up whatever in house bonuses are there. All of that just turn me off. I’m just going to toss a couple things out guys and feel free to jump in. I want to know what market conditions are in where you are. If you don’t mind, just jump in and tell us what’s going on?
Lisa Velenovsky 15:53
Well, in Virginia, Maryland, in DC. I mean the market is still really crazy, especially for single family homes. All of my buyers in the last four months have had to go over list and dump some contingencies in to get a ratified contract. I’ve seen anywhere from 2% to 15% over list with people just throwing everything out the window. It was even that way with the condos and the townhouses, condos have slowed down a little bit in our market, single family homes, it’s still crazy. Of course, the inventory has dropped precipitously now that we’ve had Thanksgiving, but it has been crazy. And you had to pull out all the stops. And it’s really been important to educate my buyers because they have to understand the ramifications of everything and they have to feel comfortable. And I’ve found with many buyers that the more offers you make, the greater their confidence in what they’re offering and their greater their confidence in making a decision about whether or not they’re going to ask for certain contingencies or not. It is definitely a fast market and market where you really need to educate your buyers and communicate very closely with buyers.
Victoria Ray Henderson 17:14
Jim Deskin we want to hear from you what’s been happening in Columbus
Jim Deskin 17:18
Again, I am in Columbus, greater Columbus area, our MLS, I believe we have seven counties. The majority of listings, though, are probably in about three counties, Columbus sits in the middle of that, and I usually work in two or three counties. The market is crazy if you’re a seller, very similar what Lisa described there, we are low on inventory, we have been for several years, our running average inventory is I think around maybe 3700 units and seven years ago, we had about 13,500, we’re at 1.2 months of inventory. And we should of course, as you all know, be at six months. It’s very difficult. This year has been extremely difficult for really everybody in my market. One because of the inventory, and of course because of COVID and how that’s affected it. We typically have multiple offers, even up into the higher price points. There, there have been houses I have heard that had 30 offers on them, which is unheard of here. I believe I had one last year that had maybe 32 offers.
The average being probably five to seven offers on any house that goes on the market, really up and even into the higher price points. As Lisa said, removing contingencies to be competitive, and it’s not uncommon for a house to go 10% over asking price. It’s rather difficult, especially for somebody who works only with buyers. I’ve scratched my head the last few years because of this. The the odd and ironic thing is though in this extremely difficult market for everybody. Even with COVID, I’ve had the best year I’ve ever had. I don’t understand how that happened, especially considering where all of us were at back in the spring. But there’s something about the market and the anxiety that has propelled buyers into getting into the market and staying in it.
Victoria Ray Henderson 19:39
Ben Clark, did you want to add something?
Ben Clark 19:42
Yes, I wanted to talk about what Lisa said. She talked about educating the buyers about the competition. And some of that is some buyers just need to go through that process a time or two. And when I meet with clients for the first time. Right now our market is very seller leaning as well and it’s taking my time client’s on average five to six offers before we get a contract. And I think that really puts my clients at ease knowing that the competition is going to be kind of fierce. And we’re going to write offers and we’re not going to get them and we don’t have to our market. Yes, you could throw 10% on and probably get it but you don’t have to. If you’re willing to work on the other aspects of it and be smart about how you’re finding the homes, catching homes on the rebound after they don’t appraise or they have inspection issues. Being creative with your– Being creative with contingencies.
Rather than remove contingencies all together sometimes we just have three clients that went under contract in the last couple of weeks. And we said, we won’t ask the seller to do any repairs unless they’re over $1,000. Still protecting the buyer. They’re not just saying, hey well, we’ll lose it all. If we don’t, if we find something and we’re telling the seller upfront, we’re not going to ask for any money for that. But making the seller feel at ease because a lot of buyers are putting things under contract waiving contingencies and then canceling out and leaving the seller high and dry weeks into the transaction. It makes our offer appear even stronger even though we’re still protecting our client.
Another thing we are– You hear a lot from the traditional agents that were low on inventory. If you look at our active listings, we’re about 3000. But if you look at the actives plus the under contract listings and that includes homes that are active with a backup status, they’re not fully active but they’re under contract looking for potential backups. We’ve got about 9000 of those. In reality, we have about 12,000 listings but on any given day there’s only 3000 of those available. And then if you add on the number of homes that have sold in the last 30 days, there’s a lot of inventory, it’s just going really quick. And it’s not like there’s a housing shortage, there are no homes, it’s that on any given day, there are very few available. If the client has the ability to understand that this is going to be a process of a couple months rather than, Hey, we go out 1, 2, 3 times and we’re under contract that allows us to more effectively find and negotiate a deal amongst the mix.
Sometimes, like I said, we have homes that for whatever reason had been under contract two, three times they fail, that seller is starting to get– Starting to question things especially if it’s been back on the market. It’s the third time and they haven’t had any showings anymore because their 90 plus days on the market doesn’t mean the homes a bad home especially if they were significantly overpriced at the beginning. Those buyers are taking off sometimes because they feel buyer’s remorse for overpaying for a house they shouldn’t have. We’re picking up those homes on the rebound. We are still trying to play the upfront game where you get in on the first day of listing and try and negotiate something before they have a ton of offers but.
Victoria Ray Henderson 23:00
Yes. You mentioned a lot of strategies that I know a lot of us in the buyers edge brokerage are using whether it’s getting creative in a lot of ways. Sometimes it’s giving up a contingency and sometimes as I tell a lot of my clients, let’s not chase the pretty shiny objects.