Episodes
Tuesday Oct 31, 2017
The #DailyReal Estate Show Episode #345 - #349
Tuesday Oct 31, 2017
Tuesday Oct 31, 2017
See Below for the Full Transcript of this Episode Hey I'm Wayne Turner. You're watching "The Daily Real Estate" show.
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Hey I'm Wayne Turner, I'm the broker owner of Turner Real Estate Group.
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You do not want your front door to look like this.
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If you want to buy a house just ask yourself these three questions.
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Purchase these house for literally $500 out of pocket.
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For more than 21 years I have specialized in the sale of homes.
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Beautiful day. I'm going to list a house.
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The reason why I started the show just to give you a quick rundown. I've been selling real estate for 21 years, and closed over 3,000 real estate transactions in 21 years. And the knowledge and the experience, that I can give bring. I just want to make the transaction of purchasing and selling residential real estate, which we specialize in to be easier on the consumer. If it's easier on the consumer then hopefully we put out some information that's easy for agents to learn, and just make the whole process much simpler for everybody.
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So anyway today I want to talk a little bit about the contract. I have a copy of the required Louisiana Real Estate Commission Contract. So this contract is nine, well this one just depends on how you copy it, it's seven pages, eight and a half by 11, seven pages. When I first started in the business any real estate brokerage could use any contract, and a lot of them were just one page. They were a front page, and then they went to a front and back page. And then they started going to two pages, and then three pages, then four pages.
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So now they're seven. I'm sure in 10 years they'll be 15 pages long. But just a couple of things to run down here. In the state of Louisiana they call it closing, or close of escrow, or they call it an act of sale. It's Napoleon Law that's what they call it here in Louisiana. So it's a little bit different meaning that we're the only state in 50 states, that call a county a parish.
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Anyway wanna run down the contract. One of the things people ask me well, what stays with the property. And so here's one of the things that they've changed. All window coverings, blinds, and associated hardware. So a lot of people say, "Well they didn't ask for the drapes." They don't have to, technically it's in the contract. Window, air conditioner units, it's in the contract.
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Built-in appliances. And people ask me about built-in appliances it's like, "Well what's built-in because the stove can slide out?" And so to keep from the confusion, your stove, your dishwasher, and your microwave, those three things if they're built-in, if they're in the house those are the items that have to stay with the property. It doesn't have to stay, but that's what's customary.
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The refrigerator's usually a negotiable item. About 50% of my clients say, "We're gonna get a new refrigerator." And about the other half say, "We want to take it with us maybe we'll put it in the garage of our new house." So, that's one of the things that's a negotiated item.
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As far as price, of course you just put the price in any contract. And if there's anything here on the contract, that you want to not have stay with the property you put it in there. But a lot of people ask me about built-in speakers like, they'll have built-in speakers, and this is what I suggest to everyone.
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If you have a speaker in your house, a light fixture in your house, something that's within your home, that you want to remove, or you don't want to include in the sale, I highly recommend just taking it down before you sell the property, before a buyer even sees a photograph of it. Just remove it, replace it with something comparable. It's so much easier, and a lot less stressful on yourself there.
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So people ask me about appraisals, and looking here, and I can tell you that from the standpoint of a homeowner they pay for the homebuyer pays for the appraisal, the homeowner wants to know what did my property appraise. I can tell you that they don't even tell me. They won't tell me. They won't tell me as a listing broker when I list your home for sale if the property appraised, but they will tell me if it doesn't appraise. And it's a funny thing, I'll get a phone call, and they'll say the home didn't appraise. And we had one that the other day that man, it came in $72,000 less than list price.
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So that's what we're seeing right now in the market. The inventory is low, we need more properties on the market, so we're finding that more people are starting to look, and they're thinking we're seeing more contingency, or predicated offers, meaning that let me go out there and look for a house, and if I see one that I really like then let me make an offer to purchase that property, and then I'll list my home. And we're seeing more of those. We've done two of those recently, and they've knock on wood, they haven't closed yet, but they both worked out really well, both of the properties were sold within three weeks, and the sellers were able to sell their property, move onto another property.
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So if you're watching this, and you're hanging on to it, and you're kind of wondering I don't really see anything out there. Well look just keep looking. You can look for free, and you go to My Local Real Estate dot com, or Wayne Turner dot com, or call Wayne Turner dot com. I'm all over the place. You can look for houses. If you see something that you like, call us nine eight five, six two six, 13, 13. We're all over the web. You can call us, text us, and we'll show you the property. If it's something that you like make an offer on it, and just make it contingent upon your house selling.
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We haven't done that for a long time, but we have to understand inventory's low. So when a house comes on the market that you see, that you like, that you would ... Go for it. Go for it. So, as far as appraisals I only hear it when the house doesn't appraise.
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I'm wanna mention, and talk a little bit about deposit for a second. And the deposit in some cities, states, other areas call it, they won't call it deposit, they'll call it the escrow check, or the earnest money check. And it's all the same definition, that's what can be confusing about this business is well there's a buyer agent, and there's a selling agent, and there's a listing agent. No there's a listing brokerage, there's a listing agent, the selling agent, and the buyer agent is one in the same, they're just two different terms. Sorry it's just confusing that way.
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A little bit about deposit. A buyer makes a deposit. They put in a $1,000 deposit anywhere from a 1,000 to I've seen them as high as a $100,000. So they put a deposit on a property, they're basically telling the homeowner, I want to buy your home in good faith, and I'm willing to show you this money. But I can tell you that this contract is seven pages. You rest assured there's about four ways they can get out of it. One if the house doesn't appraise, one if it's got termites, two if it's got termites, appraisals, they can't get financing, they can't sell their house, and the big one is financing. You know? They can say they'll get financing.
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Here's the thing that people when we talk about home inspections on a property, and a buyer makes a contract to purchase a property, and I'll give you a prime example. I had a client the other day that we listed their house, sold their house, got a contract on their house. The home inspection is typically done within seven to 10 days from the accepted contract date. And that's something to think about too. As a buyer when you make an offer to purchase on a piece of property, and you say, "Hey, we don't want to close, we don't want to do a home inspection, we don't want to close for 30 days, but we reserve the right to have it inspected within 14 days."
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Well that's just not enough time, and if you put 14 days on there it's just too much time. And so what I mean by that is you're better off to put it at seven days, and from the seven day mark, you're basically, you're doing all your home inspections. So back to the story. I had a home inspection on a property we listed, and it was supposed to have been inspected within 10 days. It was inspected within three, and then homeowners are like, "Wayne did you hear anything from the home inspection? Did you hear anything from the home inspection?"
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And here's the easiest way to put it. A buyer in the contract can do their due diligence, and have it inspected, not just through a home inspection company, or home inspector, but they can have it, the HVAC looked at, they can have the stucco looked at, they can have windows looked at, they can have a roofer look at the roofing. And I've had particular buyers, that do all of that.
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Most importantly as a homeowner it's important to know that if they have 10 days to do a home inspection, and they do a home inspection ... Literally we had one this week where we got the contract on Sunday, and we finalized it on Sunday, and everything was done, and stamped on Monday. On Tuesday they did a home inspection at 3:30. And then so as a homeowner, and you're selling your property, you're like, "Hey give it to me tell me what they want? What do they want us to fix, so we can fix it?"
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And most of the time the home inspector gets the report to the buyer, and the buyer's agent within 24 to 36 hours. Sometimes it takes little longer, but it's important to know that legally in the contract if you have, if the buyer has 10 days to inspect a property, and they inspect it on a second or third day, they don't have to give you the list of the items, that they're requesting to be fixed, repaired, replaced until literally the last day if they don't want to if there's other inspections they want to do.
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'Cause what happens is they're gonna do their due diligence, and have it inspected. After they've had all the inspections done then they have to meet with the inspector, and then meet with their agent, and show their agent, and tell their agent this is what we want fixed on the property before we can move through with the purchase whether it be a broken window, a leaky faucet, that sort of thing. So, that's just something to note. And don't get me wrong we try our best to get that information to our clients as quickly as possible after the home is inspected, but just to give you a heads up on that.
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And I'm talking specifically at this point to sellers. Another thing is it's one of those deals where the contract is written for the premise to purchase a piece of property, but it says in here that the buyer can basically provide a homeowner, you the homeowner with a copy of their approval letter. Now here's the difference between being qualified and being approved.
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Qualified. I'm qualified to fly a plane if I took the proper schooling, and got my license. But I don't fly a plane, but I'm qualified, I'm healthy enough. So it's kind of a gray area. So I don't like the word qualified, I like the word approved. Approved means that they have approved you the buyer to get a mortgage. They've pulled tax returns, they've looked at your credit, they've pulled your credit, they've verified your income. Those are the big ones. You know?
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Do they make the money they say they're making? We verify. Let's see tax returns. What's their credit score? If you have a 620, or higher let's roll down the road. There's other variables of course, but those are the three biggies. And then most importantly the property has to appraise. A buyer can do a home inspection.
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The approval letters may state that they've been approved, but I give you a quick scenario. We have a file right now we've had three extensions on that house. And we've had it under contract now for going on 60 days. The homeowners are frustrated. We're doing everything within our power. We were given an approval letter, everything is legit, checks out fine, talked with the lender.
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And here's the thing too the lenders they can't tell me the buyers personal information. But what we always do is say look on a scale of one to 10, 10 meaning that buyer is rubber stamped, and ready to go, they're approved, all we need is clear title, clear appraisal, a home inspection done, and we're closed. Or one there's not a chance in hell. There's no way. And so we ask the lender that. What would you grade them? Where would you position them? Are they a five or six? And they'll say, "Well they're typically, they're about a six and a half, they're about a seven."
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And then we can say okay is there anything that we can do, or what can we do to help them get to a 10? And I don't mean, I mean like, is there credit issues, is there bruises on their credit, is their debt to income ratio too high? So they really can't divulge a lot of that information, but you try to put your trust and faith in a lender.
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Now in this particular instance, that I'm referring to we've had a contract on the property now for 60 days or so. They're at three extensions. It was supposed to close two days ago, and has not. But here's what the buyer went out, and purchased things on credit before they closed on their house, and that is the big ... Don't finance a piece of bubble gum if you're buying a house, a property, and here's the reason why.
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Every time you purchase something it makes your credit score go down. Every time you purchase something it's going now on your credit. So that lowers your, that raises, I'm sorry it raises your debt to income ratio. So something to think about. Don't buy anything. And the things that we see people purchase are typically it's houses and cars because they ... I mean shit not houses. Typically, it's cars and furniture. And the reason being is that they think well their credit's already been pulled, so they're good to go so there's no problem just roll with it. You know?
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What happens is this, it's becoming so strict now to where they pull your credit, they can pull it as many times as they want, and they always pull it before they close. So they want to make sure that you're still on your job, that nothing financially has changed. You even sign a document agreeing to legally that you have not lost your job, changed a job, added any more things on your credit, or anything like that as a homebuyer.
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So I'm Wayne Turner. Hope you're having a good day. Hope you've enjoyed. Check us out on the web Wayne Turner dot com. We'll see you.
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Hey I'm Wayne Turner, I'm the broker owner of Turner Real Estate Group.
|
You do not want your front door to look like this.
|
If you want to buy a house just ask yourself these three questions.
|
Purchase these house for literally $500 out of pocket.
|
For more than 21 years I have specialized in the sale of homes.
|
Beautiful day. I'm going to list a house.
|
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