Watch the news and you’ll hear how home prices are coming down. Its not a secret that sellers are getting less than they did a year or two ago. For several years now we’ve been waiting for the market to flip into a buyer’s market - and now we have it.

But now we’re seeing many potential home buyers afraid to commit!

When I say this, it makes some people mad because they think that prices will continue to drop for a long time to come and they’re more interested in timing the market. Don’t worry about housing prices collapsing if local industry is doing well. Pick up a copy of the AJC and you’ll get a sense of the economic environment. Most parts of Atlanta didn’t see a huge bubble, so there is nothing to pop.

I don’t care what you’ve heard, good homes are still selling quickly and some buyers are getting great deals today.  If you’re agent knows how to value homes in the area and knows how to submit a good offer that a seller will consider, you’ve struck gold.

This is what we’ve been waiting for folks. Homes are on sale right now. Once prices start going back up, there is no telling how long you’ll have to wait for an opportunity like this to come along again.

Resources: Alpharetta Real Estate | Atlanta Real Estate | Canton Georgia Real Estate  | Cumming Real Estate | Kennesaw Real Estate | Marietta Georgia Real Estate | Roswell Georgia Real Estate | Woodstock Georgia Real Estate

Your house should always be available for show, even though it may occasionally be inconvenient for you. Let your listing agent put a lock box in a convenient place to make it easy for other agents to show your home to homebuyers. Otherwise, agents will have to schedule appointments, which is an inconvenience. Most will just skip your home to show the house of someone else who is more cooperative.

Most agents will call and give you at least a couple of hours notice before showing your property. If you refuse to let them show it at that time, they will just skip your house. Even if they come back another time, it will probably be with different buyers and you may have just lost a chance to sell your home.

Try Not to be Home

Homebuyers will feel like intruders if you are home when they visit, and they might not be as receptive toward viewing your home. Visit the local coffee house, yogurt shop, or take the kids to the local park. If you absolutely cannot leave, try to remain in an out of they way area of the house and do not move from room to room. Do not volunteer any information, but answer any questions the agent may ask.

Lighting

When you know someone is coming by to tour your home, turn on all the indoor and outdoor lights - even during the day. At night, a lit house gives a “homey” impression when viewed from the street. During the daytime, turning on the lights prevents harsh shadows from sunlight and it brightens up any dim areas. Your house looks more homey and cheerful with the lights on.

Fragrances

Do not use scented sprays to prepare for visitors. It is too obvious and many people find the smells of those sprays offensive, not to mention that some may be allergic. If you want to have a pleasant aroma in your house, have a potpourri pot or something natural. Or turn on a stove burner (or the oven) for a moment and put a drop of vanilla extract on it. It will smell like you have been cooking.

Pet Control

If you have pets, make sure your listing agent puts a notice with your listing in the multiple listing service. The last thing you want is to have your pet running out the front door and getting lost. If you know someone is coming, it would be best to try to take the pets with your while the homebuyers tour your home. If you cannot do that, It is best to keep dogs in a penned area in the back yard. Try to keep indoor cats in a specific room when you expect visitors, and put a sign on the door. Most of the time, an indoor cat will hide when buyers come to view your property, but they may panic and try to escape.

The Kitchen Trash

Especially if your kitchen trash can does not have a lid, make sure you empty it every time someone comes to look at your home - even if your trash can is kept under the kitchen sink. Remember that you want to send a positive image about every aspect of your home. Kitchen trash does not send a positive message. You may go through more plastic bags than usual, but it will be worth it.

Keep the House Tidy

Not everyone makes his or her bed every day, but when selling a home it is recommended that you develop the habit. Pick up papers, do not leave empty glasses in the family room, keep everything freshly dusted and vacuumed. Try your best to have it look like a model home - a home with furniture but nobody really lives there.

Every single person on the planet wants to get as much as possible for their home when they sell. And they don’t want to pay too much in real estate commissions while they’re at it. In recent years, discount brokers have been advertising the fact that they charge less and save people money. I’m going to tell you how they charge less and why it may or may not be the best thing for you.

First, lets talk about commissions. When you sign a contract to list your home with a discount agent, you agree to pay them a commission and they share that commission with any other agent in town who can bring you a buyer. How much those discount agent share with another agent ranges from 2% to %4 in most areas. Whether you go with a full service agent or a discount agent, you’ll agree to pay another agent if they bring you a buyer.

So if you agree to pay 3% to another agent who finds you a buyer, the agent listing your home gets anything on top of that. The only difference between full service and discount agents is how much of what is left over they get at the closing table. Discount agents will often take a flat fee at closing or up front. Full service agents typically get their commission at closing. Their commission is typically twice what the agent who finds the buyer gets. In our example, the full service listing agent will get 3% also. This would bring your total commission to 6%. With a discount broker it would be 3% plus a flat fee or something like 4% or 5% total commission.

With either a discount agent or a full service agent, you’ll typically get access to the MLS. Since the marketing strategy will be basically identical, the difference lies in the service.

With a full service broker, you’ll be able to talk to your agent on a regular basis and they’ll most likely be responsive to changing conditions and will answer any questions you might have. With a discount agent, you probably won’t get much personal service. When you call them, they may tell you to “make it quick” and not have time to deal with your issues because they aren’t setup to do that. Since the payoff when they sell a home is less than a full service agent, they spend most of their time trying to get new clients. They don’t have a lot of time to service their existing clients.

But this isn’t necessarily a bad thing if you’re familiar with the home selling process and know how to properly stage your home for showings, negotiate contracts, and handle all the closing details with lenders and attorneys. If this something you’re comfortable with, then a discount broker would most likely be a good fit for you and you could save a little money.

If you see that you’d rather focus on moving to your new home and not all the details associated with real estate contracts, then you’ll probably save money and headaches going with a full service agent. Missing critical details on a contract or at key moments in the process can often be extremely costly for people who don’t have experience selling a home.

So there you go. I hope this helps when you’re deciding which agent to hire to handle the sale of your home!

Resources: Alpharetta Real Estate | Atlanta Real Estate | Canton Georgia Real Estate  | Cumming Real Estate | Kennesaw Real Estate | Marietta Georgia Real Estate | Roswell Georgia Real Estate | Woodstock Georgia Real Estate

We’ve all seen those ads by real estate agents in magazines, on TV, and on the radio promising they can sell your home quickly and for top dollar. These agents spend tons of money to run those advertisements and are actively scouring the streets for people who need to sell their home. They’ve built their businesses on getting as many signs with their name on it in as many yards as possible. Most every real estate agent seminar out there preaches this strategy and Realtors pay top dollar to hear this insider only advice. And the agents who go out and advertise strictly for home sellers do actually sell a lot of those homes every year.

But there is a dirty little secret to this that none of them ever want to talk about.

If you look at their numbers on a monthly or yearly basis, you’ll find that many of these mega agents only sell about 30% to 40% of the homes they list for sale. Why? Because they spend all their advertising dollars on finding people who want to sell their homes, not finding home buyers! Spending money finding people who want to buy those homes just isn’t in the budget. And if you bring this fact up at those real estate seminars, the guru up on stage will say things like “its all just a numbers game” and move on to the next topic. The guru knows that if you have 100 listings, 30-40 of them will most likely sell in any 3 to 4 month period.

Now most of the agents who run their business like this are genuinely good people and I’m not writing this to badmouth them. When you sign a listing contract with them, they seriously want your home to sell in 2 days so they get a commission check. They’ll put your home in the local MLS just like every other agent and hope that things work out in the end. If things don’t go as planned, they’ll send you a letter or you might get a phone call from them asking you to relist your home at a lower price. If you decide to go with someone else, they’ll quickly forget about you and move on to the next house.

I’m sure I’ll catch a lot of grief from agents all over the country for saying this, but it had to be said.

The National Association of buyers reports that 80% of home buyers use the internet as a source when they buy a home. It is at this point most people realize that if you’re selling your home, you need to get your home in front of as many potential home buyers as humanly possible. If your agent is spending those commission checks paying for more TV, radio, and magazine ads trying to find more people who want to sell their homes instead of buyers for your home, you’re getting a raw deal.

Did the light just go off in your head and did I hear your brain go clunk? Good. Keep reading.

The other little secret in the real estate business is that getting your home in the local MLS is the single most important factor in marketing your home regardless of what your agent might say and accounts for about 75% of the marketing process. Think about it, getting your home in front of real estate agents who get paid to find buyers is the single best option you’ve ever had or will have in the foreseeable future. But everyone selling their home using a real estate agent gets in the MLS anyway. In today’s competitive market, how you allocate the remaining 25% of your marketing strategy will definitely make the difference between selling your home quickly and the frustration that comes with having it sit on the market for months at a time.

So all things being equal, wouldn’t it be smarter to list your home with a local agent that advertises for buyers and has hundreds, if not thousands, of potential home buyers on their website every week by featuring your home on their website since you listed with them?

It’s a no brainer.

When you’re selling you home, the ONLY thing you should care about is getting your home in front of as many potential home buyers as humanly possible! You shouldn’t care whether or not your agent has their face on a billboard or does flashy TV and radio commercials. Getting 10, 20, 50, 100, or 200 potential buyers on a local real estate website to look at your home every single week will increase the odds that someone will buy it. “Its all just a numbers game”…sorry, couldn’t resist.

So the bottom line is when you’re selling you home, look for are local agents who heavily advertise for home buyers. You can find these agents by doing an internet search. After all, this is how 80% of home buyers mentioned in the National Association of Realtors study are finding them. If you put yourself in a home buyer’s shoes, you’ll realize they’re looking for local agents with homes for sale and no barriers to being able to easily search. If the agents advertising for buyers require registration before searching for homes, that agent probably isn’t a good candidate because home buyers typically don’t like divulging their information. They just want to see homes for sale and don’t want to run the risk of being e-mail spammed or hassled on the phone by real estate agents.

There is too much at stake in today’s buyers market to leave the sale of your home up to chance. Smart sellers know that taking ever single advantage available to them counts and sometimes the obvious or popular choice isn’t always the best.

Resources: Alpharetta Real Estate | Atlanta Real Estate | Canton Georgia Real Estate  | Cumming Real Estate | Kennesaw Real Estate | Marietta Georgia Real Estate | Roswell Georgia Real Estate | Woodstock Georgia Real Estate

The following article was written by Seth Weismann. He is counsel for Heritage Real Estate Brokers.

The 2007 GAR Purchase and Sale Agreement Hits the Streets

It’s a new year, which means that a new version of the GAR Purchase and Sale Agreement has been released. There are more significant changes in this year’s contract than in previous releases. This article will review these changes and explain why the GAR Forms Committee decided to make them.

1. New Organization to GAR Contract.
The GAR Purchase and Sale Agreement has been reorganized so that most of the significant deal points are on
the first page of the Agreement. The purchase price, the amount of the earnest money, the date of the closing, the seller’s contributions at closing and the method of payment are all now on the first page of the Agreement. This should make it easier for REALTORS using the GAR Purchase and Sale Agreement to immediately see and
understand the important terms of any offer being presented.

2. Changes to Earnest Money Section.
The earnest money section of the GAR Purchase and Sale Agreement was divided into two sections in the new
Purchase and Sale Agreement. The first deals with the amount and deposit of earnest money (paragraph 3). The
second deals with the entitlement to and disbursement of earnest money (new paragraph 15). Other than breaking the old section into two sections, the earnest money paragraph was not changed.

3. Right to Unilaterally Extend Closing Date Modified.
In earlier versions of the GAR Purchase and Sale Agreement, either the buyer or seller could unilaterally extend the closing date if there was a problem with either the title or the loan. In the new contract, the closing date can be
unilaterally extended by the buyer or seller if there are either title problems or the closing attorney or buyer’s
mortgage lender (including in “all cash” transactions) fail to timely complete their respective obligations. The idea
behind this change was to narrow somewhat the type of loan problem that can be used to extend the closing date more to situations where the delay was the result of a problem with the lender or closing attorney rather than the
borrower.

In addition, the right to extend the closing date in the new contract expires once it is exercised. Therefore, the new language provides that “exercise of this right by either party shall cause the unilateral right to extend the closing
date to terminate and no longer be a part of this Agreement”. To ensure that the parties have a full seven (7) days to resolve any problems caused by the exercise of the right to extend the contract, the extension period is set at “seven (7) days or such shorter period as may be agreed to by the parties in writing”. In this way, while the parties can mutually agree on a shorter time frame, neither party can cut off the other party’s right to extend the contract by exercising it first for a short period of time (for example, for one day).

4. Seller’s Contributions at Closing.
In the old version of the GAR Purchase and Sale Agreement, the Seller’s Contributions at Closing section was a
subparagraph of the financing contingency. As such there was no place for a seller to make a contribution towards
closing costs in an all cash transaction. This was changed in the new contract by making the Seller’s Contributions
at Closing paragraph its own stand alone section. As a result, the seller can now make a contribution to the closing cost in both “all cash” transactions and transactions in which the buyer is obtaining mortgage financing.

5. Method of Payment.
The most significant change in the GAR Purchase and Sale Agreement was to the Method of Payment section.
Under the old version of the GAR contract, the buyer had up until the date of closing to be approved for any loan to which the agreement was subject. This approach created numerous problems for sellers and REALTORS® when
buyers who were initially pre-qualified or approved for a loan found out shortly before closing that the loan had been denied.

The consequences of buyers not obtaining or losing their financing fell squarely on the shoulders of the sellers
under the old contract. This is because while the buyer received back his or her earnest money, the seller was
often saddled with thousands of dollars of unrecoverable costs to pack up and move his or her home and/or
purchase another property.

In an effort to solve this problem, the GAR Forms Committee modified the financing contingency so that the buyer
now has a negotiated period of time, referred to as a Financing Contingency Period, to determine if he or she has
the ability to obtain the loan(s) described in the contract. If the buyer does not have the ability to obtain the loan(s), the buyer must present to the seller a letter of loan denial (setting forth all of the reasons why the loan was denied) prior to the end of the Financing Contingency Period. If the buyer does not provide the seller with the required letter of loan denial, the loan is deemed approved and the financing contingency is removed from the contract.

This approach is similar to what many builder contracts already provide. While it should improve life immensely for
sellers, it will definitely create some new issues for buyers. For example, if a lender verbally denies the loan but
fails to timely provide the required letter of loan denial, the buyer is deemed to have the ability to obtain the loan.
Similarly, if the lender neither approves nor denies the loan during the Financing Contingency Period pending the
receipt of additional information from the buyer, the buyer is deemed to have the ability to obtain the loan and the
financing contingency is terminated. Finally, if the lender approves the loan during the Financing Contingency
Period but later denies the loan, the buyer will now be in breach of contract if the buyer fails to close on the
purchase of the property.

Clearly, the new language creates significant disincentives for buyers to pursue mortgage financing from anyone
other than a reputable mortgage lender. More than ever, buyer will need to work with lenders who deliver on their promises. More buyers will also likely start the loan approval process before they ever sign a contract to ensure that they know whether or not they can afford a property. Buyers are also likely to try to negotiate longer Financing Contingency Periods so that they have enough time to get letters of loan denial should that become necessary. For that matter, a buyer can effectively give themselves the same protection they have now by having the Financing
Contingency Date expire on the date of closing.

Smart buyers will also likely select a Due Diligence Period in Paragraph 10 of the new contract that is equal to or
longer than the Financing Contingency Period. In this way, if the buyer cannot get a needed letter of loan denial,
the buyer can simply terminate the contract under the Due Diligence section of the contract. In many respects, the
buyer does not need a financing contingency at all so long as the buyer has a due diligence period of sufficient
length for the buyer to arrange for financing and do all necessary inspections.

Under the new financing contingency, the buyer is also not required to apply for a loan within a specific time frame,
or for that matter, at all. This is because if the buyer does not produce a letter of loan denial, the buyer is deemed to have the ability to obtain the loan.

One point which should be emphasized is that just because the buyer is denied the loan within the Financing
Contingency Period, does not necessarily mean that they buyer automatically gets back his or her earnest money.
So, for example, if the basis for the loan denial is that the buyer lacks sufficient funds to close, the buyer would be
in breach of the provision in the GAR contract because the buyer warranted that he or she had sufficient funds to
close. In such a situation, the buyer would not be entitled to a return of his or her earnest money. This concept did not change from previous versions of the GAR contract.

The other major change to the financing contingency is that the contract now includes a place for the buyer to
describe both a first and second mortgage being sought by the buyer. This change was made to reflect the growing reality that more buyers are seeking both first and second mortgages in order to purchase real property. The
buyers’ ability to obtain a loan is then tied to whether he can obtain all of the loans described in the contract.

6. Closing Attorney Section.
The closing attorney section of the GAR Purchase and Sale Agreement was modified so that the parties can
negotiate the selection of a closing attorney in both “all cash” transactions and transactions in which the buyer is
seeking mortgage financing. The revised closing attorney section also includes a disclaimer that the closing
attorney is representing the lender in a closing in which the buyer is seeking mortgage financing. Finally, this
section of the GAR contract now includes a check box for the parties to negotiate who the closing attorney will
represent in an “all cash” transaction.

7. Revised Inspection Section.
The inspection section has now been broken into three categories. In addition to the buyer’s traditional right to
inspect the property, a new section has been added imposing a duty on the buyer to inspect the neighborhood. This section includes an acknowledgement by the buyer that he or she has had the opportunity to become acquainted with neighborhood conditions which could affect the property including such things as landfills, quarries, high voltage power lines, cemeteries, airports, prisons, stadiums, odor producing factories and crime.

8. Termite Inspection Is Now The Responsibility Of Buyer.
The other major change made to the GAR Purchase and Sale Agreement was to shift the responsibility for
inspecting for termites and obtaining any Official Georgia Wood Infestation Report from the seller to the buyer.
Termites are now treated like any other condition in the property for which the buyer has a right to inspect. The
seller no longer has an obligation to provide the buyer with an Official Georgia Wood Infestation Report at the
closing indicating that the property is free of any evidence of active infestation from termites and other wood
destroying organisms. Instead, the contract now provides that “buyer shall be solely responsible for inspecting for
any wood destroying organisms and obtaining an Official Georgia Wood Infestation Report that may be of interest
to buyer or required by buyer’s mortgage lenders.” Buyers should therefore immediately determine if their mortgage lender will be requiring a “clean” Official Georgia Wood Infestation Report at closing. Similarly, just as the buyer normally arranges for a home inspection as soon as a property is put under contract, the buyer should now be encouraged to also arrange for a termite inspection of the property. If the inspection reveals termite infestation or damage, the buyer can, depending on the repair option selected by the buyer, request that it be treated or repaired.

So, for example, if the contract provides for a due diligence period, and termites are discovered during the due
diligence period, the buyer can seek to have the seller treat the same by timely submitting to the seller the GAR
Amendment to Address Concern with Property form. Similarly, if the “Property Sold With Right to Request Repairs”
section marked, the buyer can request that termite damage be treated and/or repaired as a Defect in the property. The term “Defects” in this section has been revised in the GAR contract to specifically include infestation and
damage from termites and other wood destroying organisms.

9. Due Diligence Period
The Right to Terminate Period in the former GAR contract was renamed a “Due Diligence Period” in the new
contract to make it consistent with the GAR Commercial Purchase and Sale Agreement (which uses that
reference). This section also now includes a check-box where the buyer can warrant whether or not he or she has: a) other property under contract and b) the right to enter into other purchase contracts during the Due Diligence
Period.

10. Lead-Based Paint Section Modified
Another major change to the GAR Purchase and Sale Agreement was in the area of lead-based paint. The
previous GAR contract provided that the buyer would have a period of not less than 10 days during which the buyer could inspect for lead-based paint and lead-based paint hazards. This provision was somewhat confusing because
the inspection right was not accompanied by a corresponding right to request repairs if lead-based paint or lead based paint hazards were discovered. The new GAR Purchase and Sale Agreement includes an express waiver of all of the buyer’s rights under federal law to test for lead-based paint and/or lead-based paint hazards for 10 days from the binding agreement date and not be obligated under any purchase contract during this time period. Instead, lead-based paint and/or lead based paint hazards are treated like any other potentially adverse property condition that the buyer can address to the extent and for the length of time of any due diligence period or right to request repairs negotiated into the contract by the buyer.

The Seller’s Property Disclosure Statement was also modified to eliminate the lead-based paint disclosures
required under feral law. These disclosures are now provided in an exhibit that must be attached to all contracts
where the property was constructed prior to 1978. The Seller’s Property Disclosure Statement continues to include
a question on whether the property was constructed prior to 1978. If the answer to this question is “yes” or “don’t know” the seller is instructed to attach a Lead-Based Paint Exhibit to the contract in which the appropriate
disclosures are made.

11. Title
Two changes were made to the Title section (Paragraph 12) of the GAR Purchase and Sale Agreement that are
worth noting. First, there is now a checkbox for the parties to indicate whether or not a survey is attached. Earlier
versions of the GAR contract merely provided that, “If a survey is attached…” making it somewhat unclear from the
face of the contract whether or not a survey was actually attached.

The second change was made in the Warranty of Title section, where the following sentence was added to the
contract, “The deed of conveyance and owner’s affidavit in this transaction shall be prepared by the closing
attorney referenced herein and the cost thereof shall be treated as a closing cost.” In many parts of Georgia,
particularly outside of the metro Atlanta area, closing attorneys charge the seller a separate fee for the preparation of the deed of conveyance and owner’s affidavit. By making the cost of preparing these items a closing cost, the
seller will not be responsible for the cost of preparing these items above and beyond the amount of the seller’s
contributions at closing.

12. New Disclosure Added Regarding GAR Forms
A new disclosure has been added to all major GAR Forms to protect GAR from possible claims from users of the
forms that they did not in some way meet their needs. The new disclaimer states that the forms are provided “as a courtesy to the parties”. It goes on to state that the forms are “not required to be used in any transaction, [and] may not fit the needs, goals and purposes of the parties…” This disclaimer language should hopefully make it clear that GAR is not guaranteeing the appropriateness of the forms in every (or for that matter any) real estate transaction. The disclaimer also provides that while the GAR forms can be altered or modified by the parties to a real estate transaction, at their own risk, the form “may not be reproduced with sections removed, altered or modified unless the changes are visible on the form itself or in a stipulation addendum exhibit or amendment thereto”. This change was made to try to make it clear that parties are not allowed to excise provisions from the GAR contract and then reproduce the form where the excised area might not be readily apparent to other parties using the form.

13. Miscellaneous Changes
Several changes were made to the GAR Purchase and Sale Agreement to address minor but occasionally
frustrating situations. So, for example, a reference was added in paragraph 19(e) that “all references to time shall
mean the time in Georgia”. This change was meant to eliminate any debate over which time applied when a party is temporarily located in a different time zone when some obligation under the contract is to be performed. Language was added to paragraph 19(h) that filling in the binding agreement date shall not be deemed a counteroffer.

14. Notice Section
Changes were also made to the notice section of the GAR Purchase and Sale Agreement. Specifically, e-mail was
added as an acceptable means of giving notice. However, notice may only be sent by e-mail (and for that matter by FAX) to a listing or selling broker to the extent that a FAX number or e-mail address is provided in a contact
information section that is part of the signature page of the GAR contract. If no FAX number or e-mail address is
provided, then notice by that means is not permitted. So, for example, let’s assume that the selling broker knows
the e-mail address of the listing broker, but the listing broker does not include his or her e-mail address on the
signature page of the contract. In such an event, notice may not be sent to the listing broker by e-mail.

The “contact information section” is also now for the “listing broker/licensee” and the “selling broker/licensee”.
Whether the FAX number or e-mail address of the broker or licensee of the broker is included is a matter for the
parties to decide for themselves. This is different than in earlier versions of the contract where only the broker’s
FAX number could be used in the contract.

Conclusion
Changes are continually being made to the GAR Forms to try to protect REALTORS®, fairly balance the rights of
buyers and sellers and eliminate issues that could derail real estate transactions. Hopefully, the new GAR
Purchase and Sale Agreement accomplish these goals.

Seth Weissman serves as general counsel to the Georgia Association of REALTORS®. This article appears in the
January/February 2007 issue of Georgia REALTOR® magazine.

Resources: Alpharetta Real Estate | Atlanta Real Estate | Canton Georgia Real Estate  | Cumming Real Estate | Kennesaw Real Estate | Marietta Georgia Real Estate | Roswell Georgia Real Estate | Woodstock Georgia Real Estate