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Relocation Confusion

Making a move is rarely an easy process.  There are often a great many steps that need to be taken, with advance planning required, and with a large financial outlay at stake. #relocation #moving #dtla

Most relocation companies focus on moving, storage and resources for helping to find a new home or office.  Some relocation companies, however, have real estate revenue in mind as well. A recent Downtown Los Angeles home seller recently had some confusing issues arise from a relocation company provided by the transferring employer.

Early in the listing period, the listing agent received a concerning call from the seller, who had been difficult to reach by phone. The home seller asked the listing agent to contact and coordinate with the relocation company.  The agent called the relocation company, which was attempting to get a referral fee for referring the home sale to another real estate company.  The only problem is that the listing agent, (a successful specialist in the condo building that has a 55.6% failure rate) already had a listing agreement with the home seller, and the relocation company was apparently not respecting the pre-existing agent-client relationship.

The relocation company talked to the home seller again, seemingly to pressure the seller into cancelling the listing agent’s agreement by threatening to take away the relocation benefits due to a lack of “compliance”. This left the seller feeling very concerned that the listing agent was not complying fully with their process. The employer offers wonderful relocation benefits and the home seller cannot afford to lose them. The seller can’t proceed without complying with the employer’s policies.

The home sellers asked for the listing agent’s assurance that they will comply completely with what the relocation company needs from the to act as the seller’s realtor? If not the seller will have to cancel the listing agreement.

The listing agent and senior agents had never seen a relocation company behave in the manner.

Relocation companies do not usually interfere with hired brokers, and it is usually unacceptable in California for brokers to interfere with other brokers and their clients. In this unusual situation where the relocation company really wants to make real estate money, the seller and listing agent need to know exactly what they and are being asked to comply with. The relocation company needs to explain how and why the home sale is allegedly causing the seller to lose relocation benefits, and exactly what benefits stand to be lost.

The seller became concerned enough as to put off showing the home to prospective buyers. This is very serious, and of great concern that any company could be possibly make the home seller lose money by threatening or otherwise causing the seller not show their home to buyers. The listing agent must take extra care to make sure this situation is handled properly for the seller client.

First of call, we want to make sure the seller doesn’t lose $17,490 to $39,750 on their real estate transaction while trying to gain what is commonly only $1,500 to $3,000 of relocation services. Those are the approximate amounts at stake by switching from the best home sale plan to a less effective idea in order to seek relocation services that most home sellers do not feel they need. It appears as though one home seller was being steered off-course, away from a highly successful home sale plan, toward a plan that is questionable, by a non-real estate expert, a completely unknown salesperson.

Relocation companies typically focus on their core competency of moving furniture. Most employers and home sellers do not employ a relocation company at all because the costs outweigh the benefits.

Listing agents need to cooperate with relocation companies even though the relocation company may have no interest or expertise in complying with real estate industry best practices, such as not interfering with broker-client relationships. Relocation professionals are not usually real estate agents, thus they have no ability and no requirement to represent the seller’s best interests regarding a home sale.

Real estate transactions are far more valuable and important than relocation services. The vast majority of home buyers do not use this kind of relocation service. Downtown loft and condo sellers usually obtain best results from a local area specialist who is obligated to look after the seller’s best interests with guarantees in writing. A successful home sale plan is a big deal to throw away. In fact, using out-of-area agents is one of the most common big mistakes in Downtown Los Angeles real estate.

Jeopardizing a home sale based on pushy, threatening sales techniques of a unknown relocation company is guaranteed to be a big mistake. Relocation companies are not real estate companies. Some relocation companies go as far as offering the seller an uncommon real estate transaction like a BVO with unknown tax implications, out-of-area broker referral or other inferior transaction. With these unorthodox home sale methods, the condo unit is likely sell for far less than the full market price. Instead of these sketchy methods, Downtown sellers particularly benefit from using a proven Downtown specialist who has a list of buyers, and a history of very successful sales in the neighborhood.

The listing agent called again and discussed compliance requirements with the relocation company, and provided additional information, including the date of the signed listing agreement. The relocation company confirmed by email that the company will not interfere with the home sale, confirming that they will not ask for additional requirements. But if they should need anything, the listing agent agreed to cooperate fully. The home seller will not lose relocation benefits.

If the seller is not yet ready to sell, then the listing agent should be 100% on board with taking as much time as necessary, otherwise the home seller should be sure to get all pertinent relocation benefits information in writing from the relocation company and employer.  Home sellers should not jeopardize a successful home sale plan all based on a verbal promise by an obscure salesperson.

The seller has the most successful possible plan for a home sale that will get the seller $17,490 to $39,750 more than average agents or inferior home sale options.  The listing agent reminded the home seller client to let other real estate professionals know that the seller has a listing agreement so that they may not push or hassle the seller.

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Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

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The High Cost of a Slow Home Sale

Now that the pace of home sales is slowing dramatically, while home prices begin to dip, the only home sellers in the market are those who are moving out of the area.  #dtla #sellhome #realestate

This includes homeowners who are downsizing to save money or moving to a new job.  After several years of rapid prices increases, most homeowners are happy with their homes and happy with their careers at the moment.  Most are not even contemplating a home sale.  But for those who are thinking about moving, many are still in the mindset of an increasing real estate market, which is now the opposite of reality. The number of property transactions has tumbled by 12%, taking down home values.

As the market changes, home sellers must re-educate themselves on the realities of today’s real estate, and thus be prepared to make wise decisions and effective strategies to fulfill their goals.  The first item to learn is that there are only about 1/5 as many buyers in the market looking for a home today as compared to several years ago.  The next item to learn is that home prices are generally not going up, but are beginning to fall in many instances.  The final notion to remember is that it is taking longer on average to sell a home, especially if the sellers does not consider the first two points, and the home is not priced accordingly.  Today, we must consider the costs of a slower home sale.

Find out what the home down the street sold for

Most home sellers are paying a mortgage. In Downtown Los Angeles, for example, the monthly expense for  home is nearly $3,000 including mortgage, interest, taxes and HOA homeowners association dues.  This is the amount that home sellers must calculate as the cost of a slow home sale, especially if the unit is vacant.  A unit that is being lived in may afford more time to sell, but a vacant home is often easier to sell and sells faster on average than a lived-in home.  A lived in home that takes longer to sell also costs the seller money, but especially time and delays in reaching the seller’s goals as it frustrates the seller’s reason for selling.  The overhead equates to about $100 per day in excess costs to the seller for each day that it takes to sell the home.  The average loft condo unit in Downtown L.A. currently takes more than 60 days total to sell: about 31 days of showings, plus an average of 30 more days for escrow.

For home buyers, more opportunities appear due to the shifting market.

Taking Advantage of a Slow Housing Market

If someone asked you if you would rather purchase a home for $600,000 or $560,000 you would probably say $560,000. Why spend more than you have to? Yet, in reality, because we tend to look at what others are doing when making our decisions, many people purchase when prices are higher, because everyone else is buying and avoid buying when prices are lower (during slow housing markets), because no one else is buying. Concerns about further depreciation have also kept many people from purchasing homes during slow markets. However, by recognizing the opportunities slow housing markets present prospective buyers can break away from the pack and take advantage of good deals.

Opportunities
Buying during a slow housing market is advantageous for many reasons:

Sellers often set their asking prices lower than the prices of similar houses that sold months before. Sellers are also often more willing to offer other allowances, such as paying for closing costs, leaving appliances, and doing repairs.

Sellers are more likely to accept offers for less than the asking prices, unlike during a hot housing market, where the buyer may have to offer more than the asking price to get a home.

Because it is less likely for condos and houses in a slow market to get multiple offers, buyers have more time to search before deciding whether or not to make an offer. They do not have to make a hasty offer on a home they are not sure about because they are concerned someone else will make an offer on it first.

There tends to be an increased availability of foreclosed properties, which are usually priced low.

How to know if housing market is slow
You may be asking yourself, “How do I know if the market is slow or not?” There are several signs to look for. Drive around the neighborhood and see if there are any “Reduced Price” signs on the homes for sale. See how long the “For Sale” signs stay up at homes. Is it two weeks or two months? Look in the local newspaper. If the housing market is slow often the newspaper will write about it. Also, look in the real estate classified section and see how many people are advertising a price reduction. A helpful real estate agent should be able to do much of the work. Real estate agents have access to a listing service that shows how long homes have been on the market and if there have been any price adjustments.  Some top local agents have access to unlisted homes, called “pocket listings,” which are often the most amazing properties and the best deals.

Further depreciation
One of the reasons that many people avoid purchasing a home in a slow housing market is because they are worried the value of the home will depreciate further. No one wants to purchase a $500,000 home, only to have it be worth $480,000 a month later. Unfortunately, while home buyers can usually tell if a market is slow or not, they cannot tell when the bottom will hit. People who wait for the rock bottom prices often actually wait too long, thus purchase when prices are on the rise. If you are planning to stay in the home for several years, then further depreciation does not need to be a major concern. You are getting a better deal than many people who have bought before you, and long-term the value of your home will in all likelihood rise.

When to avoid buying
While a slow housing market presents a good opportunity for many buyers, buying is not necessarily the best choice for everyone. If you are planning to flip a house (buying a fixer-upper and renovating and selling it quickly) or only have it for a year or two before selling, it may be best to wait, because it is possible that home prices will depreciate further short-term. Regardless of the condition of the housing market, it is never a good idea to buy a home when a buyer cannot afford the mortgage payments. Even when prices are dropping, in high-cost areas purchasing a home is still not affordable for many people. Creating a budget can help you to determine how much house you can afford and if purchasing a home now is right for you.

Get a free list of recently sold homes, along with a free list of homes currently on the market. Also included in information on pocket listings.  Fill out the online form:

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SEARCH LOFTS FOR SALE Affordable | Popular | Luxury
Browse by   Building   |   Neighborhood   |   Size   |   Bedrooms   |   Pets   |   Parking

Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com  Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.