Building Relationships with Gene Hammett

BUILDING RELATIONSHIPS

“I don’t care about business cards, websites and postcards. Its ALL about relationships. ” Building relationships is a long-term endeavor. And, in the end your effectiveness at building relationships (or success if you define it that way) comes down to one crucial choice on someone else’s part – You have to be THEIR choice.

Focus and Specialization. Differentiate! Uncover your unique story.

BRAND – Unique is Better than Better (than)

It is not what you “think” it is. It is not what you “say” it is. It is not what you “hope” it is. It is what “they” say about you. Make no mistake – you create your brand. If you can, boil your unique gifts and strengths down to 3 words. Class – Integrity – Innovation. Gene’s 3: xxxxx – Connection – Transformation.

There are three components to your brand. Promise, Beliefs and Story. You what I love about my real estate agent is fill in the blank.

In real estate this will probably boil down to a target market. You have to own the story in that target market. Would you rather Communicate or Connect? CONNECT

RELATIONSHIPS IN REAL ESTATE

3% – People Actively Looking to Buy or Sell a House (This is the dog fight of agent competition)

——–

7% – People pen to Buying or Selling a House (not actively)

30% – People Not yet Looking to Buy or Sell a House30%

30% – People who are totally zoned out (Unconscious)

——–

30% – People Who Will Never Use Me to Buy or Sell a House

The key is to reach the 67% in the middle

  • Speaking Opportunities – An unfair advantage – grab it! Go for areas of need for your ideal client and demonstrate expertise in one of those areas.
  • Podcast – A venue to raise brand awareness. Better to be on someone else’s Podcast though.
  • Leverage Platforms with HUGE followings – Success Magazine, Huffington Post, etc.
  • Social Media – A venue for sharing and connecting – NOT ranting and venting.
  • Ethical Bribe – sign up and get a free thing. Make the “give away” REALLY valuable.
  • Automated Marketing – Market like it is… 2016.
  • Ask Questions – Just ask relevant questions – over the phone or in person. NOT some automated survey broadcast to the masses.

DAILY COURAGE LIST (instead of a To-Do list)

  • Create a list to face (or dance with) your fears.

K-L-T

  • KNOW
  • LIKE
  • TRUST

Gene Hammett

Made millions and lost $3M in one day. Now runs a coaching company called Leaders in the Trenches.

Trapped in his own success and stayed in his comfort zone. “I wanted more but I decided to play it safe…”

Success does not equal Significance. COMING SOON: The Trap of Success (Gene’s new book)

 

Flat Grassy Backyards are Boring and Hot!

One thing we never hear in real estate is that flat grassy backyards are boring and hot.

Backyards

Most of the time we hear buyer’s say they want a “flat backyard” or a “usable backyard”. And, yet, when we look at where kids actually play – they get bored with flat green grass. Unless it has white stripes on it somewhere 😉

Organized Sports

Organized sports play a big role with many kids these days. Organized sports are FULL of life lessons. Some of them are indirect though. For parents, it can be a serious challenge to schedule all the practices and the games. Mastering that is a skill that can serve in all aspects of life. This post, though, is about thinking through the pros and cons of buying a house primarily because of the backyard. We have seen that by the time kids get home, they want to rest. They probably also have to do homework. When it comes to play, they usually seek shade and things that are creative (forts, creeks, playhouses, neighborhood pools, etc.).  If they practice a sport, it is usually on a small scale for accuracy (pitching net, soccer goal, basketball goal). So, buying a house primarily because of the flat grassy backyard could be a mistake.

Adventure

Studies are showing that playtime is seriously underestimated in today’s culture. In fact, entire playgrounds are being re-developed to pull adventure back in. Imaginations run wild and get bored easily. In days gone by kids rode bikes all over the place – usually seeking out a trail or a creek or something interesting to explore. There were no electronics. They made up games like “kick the can”. Unless there was a sprinkler or a slip-n-slide involved, the flat grassy backyard was boring and hot!

Comfort

One thing we learned when we bought a playset for our kids was that playing in the shade is a LOT more fun than playing in the sun. Thankfully our yard had a mixture of both. Looking back, our poor backyard would have been judged harshly by the buying public though. Not flat enough. Not big enough. Not enough sun. We loved it. It was great – still is.

A Blend is the Best

I recently visited a client’s yard for a party and had to capture the photo below. First of all, most people would have NEVER envisioned this when we initially looked at the house. We were focused mainly on location and potential. The backyard was a mess of overgrown sloping nothing. These buyers saw the potential and over time created magical spaces both inside and out. The results are amazing! But, it is not flat. There are flat pockets. The grassed area is not big. And there is only partial sun. But there is PLENTY for kids to do and this is a backyard that gets used.

Backyards

Are you getting real coaching in your home search or just someone with a lockbox key?

So many agents are afraid to give advice for fear of liability. We just speak from the heart and many times that slows down the process. That is probably why our buying clients double the national average in the time spent in their homes after they purchase. If you want a real estate agent who takes the long view with you, give us a call! 404-939-3202 Direct or email us at michael@bunchrealestategroup.com

 

 

Selling Homes with a Luxury Attitude

We believe everyone should approach selling homes with a luxury attitude!

Luxury Attitude

Luxury Attitude as it relates to selling houses plays itself out in many, many ways. We believe every home deserves marketing that highlights its strengths, employs great photography and is full of energy! Whether the property is $175,000 or $1,795,000, we want ALL of our listings to sparkle! Ok, yes, we are competitive. But that’s actually great news for our clients.  They usually blow their competition out of the water.

Here’s an Example Slide show at $175,000

Our goal is always to identify the strengths of a particular home and figure out who the most likely buyer will be. Chances are, our Seller will get the highest sale price from the ideal buyer who love the house for what it is and does not need for it to be anything else. Many times our approach means “going all in” for the strengths – even if it means polarizing the buyer pool. That takes some nerve! Any time you purposefully shrink the number of potential buyers, you have to really believe that less is more. Fewer but much more interested buyers means fewer but much higher quality showings. Fewer stranger roaming around your house? Dealing with only serious buyers? No tire-kickers? Sounds pretty good to us.

On the other end of the spectrum, the general approach is the still the same.

Here’s an Example Slide show at $1,795,000

There is no doubt that we go to extra effort on our luxury listings. They are on a world-wide stage. Our syndication channels for these properties are international, our marketing collaterals are more involved and our service package is expanded. But our attitude is the same. High Standards and Hard Work = Results!

Questions?

Email us at michael@BunchRealEstateGroup.com

Split Level Renovations

Split Level Renovations can be tricky because there are some inherent limitations with the split-level layout

Split Level Renovations

Split-level homes generally come in two versions: 1. Garage beside the single story portion and 2. Garage under the two-story portion.  The above photo shows the first version after enclosing of the original garage and adding a new garage wing (on the left). This created a courtyard configuration and changed the entire feel of the house.

The photo below shows another Version 1 with an expansion of the garage (again beside the one story portion) with additional space added above.  The result is a bit disjointed from an architectural perspective but the condition and colors still bring it to life!

Split Level Renovations

The next example is the second type with the garage underneath the two story portion (on the right). This may be one of the most creative split level makeover projects I have seen.  They changed the roof line and took the whole house in the “lodge” direction. So much so that many people might not even recognize the fact that this home is a split level.

Split Level Renovations

 

Chicago Lives up to the Hype

I was skeptical at first but Chicago Lives up to the Hype!

Chicago Night Skyline

Chicago is a fantastic city to visit! In the summertime. Here is the skyline view from the 360 Chicago Observation Deck at dusk (94th floor of the John Hancock building). When we finally made it up to the top, the building was socked in with clouds. Then, gradually they went away around sunset and we were left with this view.

Marina Towers

Two of the most recognizable buildings from the architecture are the Marina Towers. Our hotel was close by so these buildings were some of the first we saw up close. Turns out they have been in several movies and TV shows.

Riverside Towers

Iconic Michigan Avenue

Michigan Ave

Michigan Avenue is a great place to get your steps in. We walked all the way from the river to Bloomingdales.

Riverwalk

The river front is picturesque and there are sidewalks down the south side along the water.

Chicago's First Lady

If you take an Architectural Tour on the river you can see lots of iconic landmarks (like the draw bridge in the above photo -stuck in the up position).

Segway

One of our favorite activities was the Segway Tour which we scored on Groupon. We recommend going first thing in the morning! The temps were mild (even in July) and it was not too crowded at the stops. Plus, some of the views were spectacular!

Wrigley Field

Our visit to Chicago would not have been complete without a trip to Wrigley Field for a Cubs game and a Chicago Dog.

Chicago Dog

There really is nothing like an afternoon game at Wrigley Field.

Wrigley Field

And, then there are the great spots to eat out or get coffee. They are everywhere!

Coffee Shop

One of the day trips we took was on bikes along the Chicago shore.

Lakeshore Trail

Could have been 5 miles or so up to the beach for lunch but it was so worth it! I will have to say though, I was ready to be done with the bikes you have to pedal after this trip! They were a $10 add-on with the Segway tour so it was hard to pass that up.

Beach Club

Ah, yes. The quintessential “bean”. Even on a cloudy day it is something to behold.

The Bean

Below is another view of the river front downtown which was such a nice place to base out of.  There is just something about water that soothes the soul.

The River

This has to have been one of our favorite all time trips! We had perfect weather in July and there was so much to see and do that we ran out of time. Will definitely have to go back!

Zestimate Goes Haywire!

What do you do if your Zestimate goes Haywire? Or drops by over $150k? You reach into the darkness for answers…

Zestimate

Screen Shot 2016-03-09 at 6.30.19 PM

Zestimates are an interesting curiosity for me. Not because this is emerging technology and I’m a stuffy, set-in-my-ways, old school real estate guy with 20+ years in the business. I would offer that my curiosity is precisely the opposite.  I graduated college with a degree in civil engineering, took 5 semesters of calculus and played with algorithms a LOT. I have written software packages that performed automated calculations. I embrace models that show trends. I LOVE statistics! My caution here is that even the best algorithm is still just that… a formula. A formula that needs data. A formula that produces results that need human interpretation and context.

Zestimate can’t pick up on renovations

We recently listed a great house in a desirable zip code in Sandy Springs, GA. The graph above captured with a screen shot on 2016-03-09 at 6.30.19 PM showed this home’s Zestimate running at about $620,000 when we put the home on the market.  The owners spent a year in 2007 totally renovating and expanding this home. They also put in a Pebbletec saltwater pool. If you look at the 2007-2008 part of the graph, it shows a steady decline in the Zestimate but generally correlates with overall market forces. It’s ok though, it’s not really reasonable to expect Zillow to pick up on the renovation. How could they have known, right? No harm – no foul.

Listed the Property and the Zestimate goes Haywire

When we listed the property, it founds its way onto Zillow through the local MLS syndication data feed. Just like all of our other listings. The online data was fairly correct – the only thing missing was the full bath added during the renovation. Everything seemed fine. And then, the algorithm went haywire. In days immediately following the listing being posted, the Zestimate mysteriously – AND RAPIDLY – plummeted over $150,000!

Zestimate Goes Haywire

Revisionist History

Now, compare the graph above with this one captured 3 days later. LOOK AT THE DARK BLUE LINE. What the heck? Same house, same algorithm, now has a different Zestimate history dating back to before 2007?!?!? If today was your first visit to this house on Zillow, you would never know the difference. To me, that is scary.

Zestimate

Screen Shot 2016-03-12 at 11.07.18 AM

If it is online, it must be true! Clearly – not

Our recent experience described above serves as a reminder to all of us as we gather information online. Be careful! Each source has an agenda. Zillow’s agenda is to capture leads so they can rent zip codes to real estate agents by making the agents pop up in a side banner as “Premier Agents”. My agenda is to sell houses.  And that only happens when both the buyer and the seller believe a fair deal has been reached. If a buyer is unknowingly using bad data, they could very well miss out on a great house by drawing incorrect conclusions. Buying a house is a BIG purchase! Get some savvy guidance from a human being with local real estate experience and expertise.

Have Questions?

Email me at michael@bunchrealestategroup.com

Running Your Real Estate Practice like a Business

Running your real estate practice like a Business can allow you to make the most of the money you make!


Real Estate Like a Business

There are 11 questions that you can ask yourself to determine whether or not you have a “real” business. Most real estate brokers focus only on real estate sales skills because they are building their brand and training horses to pull their wagon. Keller Williams Realty also focuses on building business owners. This means that there is an additional conversation going on at KW and that is where lives get changed. Agents who are a part of the Keller Williams Realty training culture may very well graduate from being an agent someday to diversifying, managing a team, becoming an Operating Principle or owning an office by expanding into another city, state or country.

1. Are you incorporated?

The Key Concept here is an understanding that as a Sole Proprietor, you are personally responsible for everything.  You are also liable for everything. That may not come as any surprise in the beginning of your journey as an entrepreneur.  But as Michael Gerber pointed out in his best-selling book ( The E-Myth Revisited), taking your passion into the business world can have some unintended consequences if you are successful.  Getting incorporated as a real estate practitioner is the first step to creating two worlds: “You” and “Not You”.  “You” are the person you now employ to run your company. “Not You” is the company.

Like a Business

2. Are you capitalized?

In other words, did you forecast what it would cost to operate your practice for 6-12 months (including paying your salary) AND save that amount up? That is the initial definition of capitalization. In real estate, you have to get licensed first. You will then need equipment to start working (signs, lockboxes, phone, car, insurance, computer, printer, pens, paper, etc.).  After that you will have monthly expenses (MLS dues, internet service, gas, oil, errors and omissions insurance, broker support, etc). Once your business is off and running you will still need capitalization in the form of a reserve account to carry you during down times.

Like a Business

3. Do you have separate personal and business checking accounts?

This should be self-explanatory but there is more to it than you might think. You need 7 accounts to keep everything in its place because mixing money blurs the lines.

Checking Account Rules

4. Do you have a budget?

The budgeting process can be tedious the first time you do it. Every dollar has a name and a home. That is why it makes so much sense to hang around people who live by budgets.

5. Do you produce and review a monthly P&L statement and balance sheet?

Bookkeeping is usually not an entrepreneur’s strong suit. Thankfully, there are a number of small businesses that can do bookkeeping for small businesses.

6. Do you have a written Business Plan that you are following and reviewing monthly?

October is business planning month in most industries. That is when the vision and goals for the following year are outlined on paper. Real estate – when operated like a business – is no different. Setting goals is one thing. Achieving goals requires that you think through the daily, weekly and monthly activities needed to produce those goals.

7. Do you have systems in place?

For real estate agents, there is a best-selling book called The Millionaire Real Estate Agent by Gary Keller which researched the businesses of top agents from across the U.S. This book consolidated all that research into systems and models by which real estate agents can build HUGE businesses.

The_Millionaire_Real_Estate_Agent_cover_ls_1_10

8. If you were gone for 3 months, could it run itself ?

Most real estate agents have other agents who can cover their clients while they are on vacation. However, these relationships are not designed for OR capable of handling ongoing client needs for an extended period of time. Plus, surviving is not really the goal here. A true business has plans for growth too. You know you have a business when the people and systems you have in place can sustain the business and possibly even achieve growth while you are gone for 3 months or more.

9. Do you have staff (Employees or Associates)?

This may be one of the first steps after incorporation and separate checking accounts. Once success begins to show up, entrepreneurs can quickly hit a wall in the delivery of their service or product because there are just not enough hours in the day. Knowing what and when to leverage out some of the job is crucial to being able to handle the hard-fought rewards of success.

10. Do you have a Board of Directors?

A diverse board of directors is essential for accountability and peak performance.

11. Can the business fire you for non-performance?

This is the last and final sign that you want this business to prosper. Many times the young entrepreneur who launched the company ends up being the very reason it does not grow beyond a certain point.

So, where do you start?

You can start right here. The Sandy Springs market center of Keller Williams Realty has an agent led Board of Directors called the Agent Leadership Council (or ALC). This is true for all Keller Williams Realty offices. Each year the ALC’s form committees and one of these committees focuses on Finance. As the Chairman of the Finance Committee for the Sandy Springs ALC, I will be leading conversations throughout the year on how to Run Your Business Like a Business. Our committee is committed to reaching out to every agent in our office so that they are aware of the advantages of answering the above questions for themselves.

Questions?

Contact me at michael@BunchRealEstateGroup.com

Chastain Park Breaks Record for Home Sales in 2015

Chastain Park Breaks All-Time Record for Home Sales in 2015Chastain Park breaks record for home sales in 2015 by eclipsing 2005’s record of 98.

Chastain Park sellers achieved an Average Sale Price of $1,239,399 based on the sales from 2015 that have closed thus far. Sometimes a few huge sales can skew the average sale price but that was not really the case here. The median home sold at $1,193,500 so the middle of the pack was around $1.2M.  Days on Market, however, was a different story. The average Days on Market was 91 days which was skewed by several sales that took over a year. The median Days on Market was 47 days which is a much better indication of the true market.

Chastain Park Breaks Record for Home Sales in 2015

The Highs and Lows on Price

The highest sale posted in Chastain Park was $3,600,000 for a king-sized flip project on King Road (pardon the pun).  The lowest sale was for an older, partially complete contemporary house on Dykes Drive at $420,000.  The days of buying a property in Chastain Park under $500k are getting fewer and farther between! There were only three in 2015 out of 104 total sales.

The tables below show the four market slices we track and how they fared each month. First for supply and then for sales.

Chastain Park Breaks Record for Home Sales in 2015

The Highs and Lows by Month

January really set the pace in 2015 with four times as many homes sold as in 2014! April, June and July also more than doubled their 2014 counterparts.

Chastain Park Breaks Record for Home Sales in 2015

The Highs and Lows of Supply

Sellers did their part! They managed to put more homes on the market without flooding it. As the green bars below show, the overall supply of homes ranged between 50 and 60 throughout 2015 which exceeded the numbers from the previous three years.

Chastain Park Breaks Record for Home Sales in 2015

Summary

As a resident and local expert, we study and preview the homes for sale in Chastain Park every day. You can feel even the slightest change in momentum when you watch anything that closely. We have a custom search running constantly that alerts us to any listings or sales in Chastain Park.  That information can be crucial for both selecting the most strategic List Price OR the best starting Offer Price – depending on which side you are on. If you are considering a move in Chastain Park, you owe it to yourself to meet with us first. 

Call or email Michael Bunch directly on his cell at 404-307-4915 or at michael@BunchRealEstateGroup.com

Georgia Real Estate Contract Forms-2016 Changes

Georgia Real Estate Contract Forms change at least once a year to keep pace with legal actions and new laws.

Georgia Real Estate Contract

Before you get all “Realtors just complicate the process” on me, consider this: Without some standardization in the forms that incorporates the legal decisions from recent court cases, buyers and sellers would have to hire an attorney to draft the contracts they use or get one from an office supply house and Google how to fill it out. I would submit that both of those options get you no real representation during the process and could set you up for HUGE liability. Why not learn from the mistakes of others?

Here is a recap of the changes coming in 2016 to the Georgia Real Estate contract forms.

1. GAR FORM F50, SELLER’S PROPERTY DISCLOSURE STATEMENT

One of the major accomplishments of the Committee was a major overhaul of the Seller’s Property Disclosure Statement. For several years now, the Committee has been working to shorten and simplify the Seller’s Property Disclosure Statement. How best to do this has been the subject of an ongoing debate that has largely revolved around whether the purpose of the Disclosure Statement should be limited to a disclosure of latent defects in the property or whether it should also cover past repairs and details regarding the systems and fixtures in a property. Both types of information can be useful to buyers and help prevent claims. However, in an effort to shorten and simplify the Disclosure Statement, the Committee eliminated some of the questions that were focused on the systems and fixtures in the property particularly in cases where the information could be easily determined from an inspection of the property.

So, for example, there is no longer a question in the Disclosure Statement about whether the property contains low-flow toilets since this information can usually be easily determined by simply looking at the inside of the toilet tank. Similarly, the lengthy disclosure of the condition of each heating and air conditioning system serving the property was replaced with a shorter and simpler question on whether any part of the heating and air conditioning system is in need of repair or replacement. The view of the Committee was that unless the Seller’s Property Disclosure Statement was shortened and simplified, it might be hard to continue to get the overwhelming percentage of sellers to fill it out.

The Committee also reformatted the Seller’s Property Disclosure Statement to make it easier to line up the questions with the space where the questions are to be answered. The new form now puts a box around every question on the Seller’s Property Disclosure Statement making it much easier for the eye to travel to the correct spot to answer the question. When the question does not have a “yes” or “no” answer, the “yes” and “no” boxes are shaded to make it clear that it is not a “yes” or “no” question. Most importantly, the box for “Do Not Know” was eliminated from the form leaving only a place on the form to answer “yes” or “no”. This was largely done to prevent some sellers from checking “Don’t Know” on the entire Seller’s Property Disclosure Statement. The directions for the Disclosure Statement now clearly states that all questions should be answered to the “actual knowledge and belief” of the seller. In theory, with this as the standard for answering questions, all questions should be capable of being answered “yes” or “no”. Whether it works this way in practice is yet to be seen. Even though the seller is directed to answer all questions on the Statement, some sellers may choose to leave some questions blank if they truly do not know the answer to the question. There is still an explanations section of the Disclosure Statement (now more conveniently located throughout the Seller’s Property Disclosure Statement) where “yes” answers and presumably the reason for leaving a question blank can be given. Hopefully, sellers will find the reformatted Disclosure Statement shorter and easier to fill out.

The Statement also tries to explain more clearly to buyers that caveat emptor or buyer beware is the law in Georgia and that buyers must carefully inspect the properties they are buying.

2. REVISED GAR FORM F64, FINANCING CONTINGENCY EXHIBIT

The Financing Contingency Exhibit was also significantly revised for 2016. The first major change was to eliminate the obligation of the buyer to apply for a mortgage loan within a set number of days from the Binding Agreement Date. In its place, the Committee added language obligating the buyer to apply promptly for the mortgage loan or loans described in the exhibit such that the buyer could fulfill his or her financial obligations under the agreement. This change was made because the Committee had received a large number of complaints that the old approach left too many buyers in breach of contract when they inadvertently missed the deadline by a day or two to apply for a mortgage. The new approach eliminates this risk to buyers. Buyers are still obligated to promptly inform the seller of the names of the lenders from whom they have sought a Loan Estimate and the name and contact information of the lender to whom they have given a Notice to Proceed with Loan Application. Part of the thinking of the Committee was that requiring buyers to apply for a mortgage loan within a set number of days was generally inconsistent with the wide open nature of the Due Diligence Period and the Financing Contingency Period. The Committee is including two different stipulations in its Forms package for those REALTORS® who still want to require that the mortgage loan be applied for within a defined period of time.

The second major change in the Financing Contingency relates to when the buyer must provide the seller with a letter of loan denial. For many years, the Financing Contingency Period has provided that this must be done before the end of the Financing Contingency Period. The Committee was worried that in trying to comply with all of the new lender regulations in the marketplace, some lenders may not provide loan denial letters to buyers (for them to pass on to their sellers) as quickly as they once did. This could leave buyers in breach of contract for a delay over which some buyers will have limited control. As a result, the Committee decided to give the buyer seven (7) days from the termination of the Purchase and Sale Agreement to provide the seller with a letter of loan denial. This would be the case even if the termination is on the last date of the Financing Contingency.

Let’s look at the examples below to better understand how this will work.

Example #1: A buyer has a 30 day Financing Contingency beginning on May 1. The buyer is verbally turned down for the loans at the end of the first two weeks of the loan contingency period. The buyer sends a letter to the seller terminating the contract due to a failure of the buyer to obtain the loans specified in the Purchase and Sale Agreement. How long does the buyer have to get a loan denial letter to the Seller?

Answer: The buyer has seven (7) days to get the loan denial letter to the seller.

Therefore the buyer would have until the end of the day on May 21 to get the loan denial letter to the seller.

Example #2: The buyer has a 30 day Financing Contingency beginning on May 1. The buyer works hard to obtain mortgage financing but is unable to do so. The buyer finally terminates the contract on May 30 when the buyer is told verbally that the buyer’s loan request was denied. How long does the Buyer have to get the loan denial letter to the seller?

Answer: The buyer has seven (7) days from the date the buyer terminated the contract to get the letter of loan denial to the seller. Therefore, the buyer would have until the end of the day on June 6 to provide the letter of loan denial to the seller. This is the case even though the Financing Contingency ended on May 30. With the letter of loan denial not having to be provided until after the Purchase and Sale Agreement is terminated, this does mean that disputes regarding whether the Purchase and Sale Agreement was properly terminated due to the failure of the financing contingency will, in money unless the buyer can expedite the delivery of the loan denial letter.

Finally, the Financing Contingency Exhibit was revised to make it clear that if the buyer agrees to apply for a loan with a specific lender, the loan denial letter must be from that lender. Also, the loan denial letter must be for the loan or loans for which the buyer agreed to apply.

3. CHANGES TO GAR FORM F20, PURCHASE AND SALE AGREEMENT

Most of the changes to the Purchase and Sale Agreement for 2016 were made in anticipation of TRID (or the TILA RESPA Integrated Disclosure).

First, the number of days that the contract could be unilaterally extended was changed from seven (7) to eight (8) days.

Second, a new provision was added in which the buyer and seller both consent to the closing attorney preparing and distributing to all parties in the real estate transaction and their brokers an American Land Title Association (“ALTA”) Estimated Settlement Statement – Combined. One of the major effects of closing attorneys becoming vendors of mortgage lenders under TRID is that they are obligated to preserve confidential information of the borrower to the same extent as the lender. This has led to an industry wide discussion of what is considered confidential information and whether the seller is allowed to see the buyer’s side of the Closing Disclosure. While most experts have recommended against such an approach, they also recognize that a review of the information in the Closing Disclosure by all parties and their REALTORS® is a great way of ensuring that there are no mistakes. In response to this, the American Land Title Association convened a group of industry experts to prepare a settlement statement that did not contain confidential information. This resulted in the creation of the ALTA Estimated Settlement Statement – Combined. It is expected that most closing attorneys will incorporate this form into their closings and provide a copy of the same to all of the parties in the transaction and their brokers. Nevertheless, to help ensure that closing attorneys felt comfortable providing this information to all parties, the Committee decided to include a consent by the buyer and seller to the closing attorney preparing and distributing this form to all parties in the transaction and their REALTORS® and allowing all parties to use the form for their various uses.

Section B8 of F20 was modified to clarify when the buyer is entitled to a return of his / her earnest money. Specifically, the word “unexpired” was added to the second basis for the buyer to receive back his / her earnest money so that it now reads: (2) failure of any unexpired contingency or condition to which this Agreement is subject. The failure of a contingency is when it does not occur.

So, for example, a financing contingency would fail if the buyer does not get financing. If the contingency has already expired, it no longer applies to the transaction at hand. Adding the word “unexpired” simply clarifies that the contingency still has to be in effect to fail.

4. REVISED BROCHURE: FORM B2, PROTECT YOURSELF WHEN BUYING A HOME

This brochure was revised to warn buyers about a scam where buyers receive a second and false set of wiring instructions regarding where to wire funds to purchase property. Buyers who fall prey to this scam often wire money which they intended to use to buy a home to fraudsters where it is incapable of being recovered. Buyers are, therefore, warned to check with the closing attorney if they receive more than one set of wiring instructions. The brochure was also revised to warn buyers about companies whose advertisements make them appear to be connected to the government who offer to obtain for the buyer a recorded copy of a deed for a fee. Since most closing attorneys offer to provide buyers with a copy of a deed at no cost to the buyer, the brochure explains that buyers do not need to incur this expense.

5. NEW BROCHURE: GAR FORM B8, WHAT NEW LANDLORDS NEED TO KNOW ABOUT LEASING

PROPERTY

A major accomplishment of the Committee for 2016 is the creation of a brochure on whatproperty owners should know before leasing their properties. The leasing of houses is increasingly used by sellers as an alternative to selling, particularly when the seller cannot realize the price for which the seller had hoped. In one brochure, sellers are taught most of what they need to know about leasing. Some of the major topics included in the brochure are as follows:

  • a. Confirm that leasing is permitted.
  • b. Conduct a thorough background check of the tenant.
  • c. Fair housing laws apply to rentals.
  • d. Have a written lease.
  • e. Evicting a tenant is not necessarily a quick process.
  • f. Possession of the property belongs to the tenant.
  • g. Be careful in selling a leased property to a tenant.
  • h. Contractors performing work on property should be insured.
  • i. Landlords need special insurance.
  • j. Follow all Georgia mandated procedures applicable to landlords.

6. NEW FORM: GAR FORM 148, CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT

For 2016, the Committee revised its existing confidentiality agreement and created a new one. The form entitled Confidentiality Agreement, GAR Form F142, is to be used when there is a desire to keep offers confidential. Considering that sellers are entitled to shop offers, it is surprising that this form is not used more frequently. For 2016, this form was revised so that both offers and counteroffers can be kept confidential by the buyer and the seller. The Committee also created a new form entitled Confidentiality and Non-Disclosure Agreement, GAR Form 148. This form will likely be used more in commercial transactions, rather than residential transactions, and will largely be used by sellers who want to keep confidential information about the properties / businesses they are selling. It is very common for sellers in commercial transactions not to want to release this information without such a confidentiality agreement being signed.

7. GAR FORM C010, BROKER TO BROKER REFERRAL AGREEMENT

The Referral Agreement (Broker to Broker) was revised to clarify that the commission being shared with the referring broker includes any monetary bonus received by the broker to whom the transaction is referred. The Form was also modified to more clearly state when the referral agreement ends and ties the end date to a specific number of transaction for which the referring broker has completed and been compensated.

8. NEW FORM: GAR FORM F13, AGREEMENT TO WORK WITH TENANT AS A CUSTOMER

GAR has long had a customer agreement form for use with buyers who do not want to be the client of a REALTOR®. GAR has now created a new customer agreement from that can be used with tenants. Getting buyers and tenants to sign the customer agreement forms gives the REALTOR® tremendous legal protection. With the new F13, the tenant is agreeing to limit any damages claim against the REALTOR® to the real estate commission actually paid to the REALTOR®. If no commission is paid, the damages claim is limited to $100. The Agreement also contains and arbitration provision which keeps any disputes out of the courts. In this day and age where people sue others at the drop of a hat, having these protections is tremendously helpful to REALTORS®.

9. GAR FORM F76, REMINDER OF IMPORTANT DATES IN PURCHASE AND SALE AGREEMENT

The Reminder of Important Dates in Purchase and Sale Agreement was revised to make it more up to date. This form is an extremely valuable tool for agent not to miss or forget important dates. REALTORS® are encouraged to use this Form (or similar ones that REALTORS® have developed on their own).

10. REVISED GAR FORM F124, BINDING AGREEMENT DATE NOTIFICATION

The Binding Agreement Date Notification was revised to try to make the Form clearer. It includes a revised definition of Binding Agreement Date as “the date when a party to this transaction who has accepted an offer or counteroffer to buy or sell real property delivers notice of that acceptance to the party who made the offer or counteroffer in accordance with the Notices section of the Agreement.” This new definition will replace the old definition throughout the GAR Forms.

The new Form contemplates the Binding Agreement Date being filed out by someone other than a party. There is also a place for the buyer and seller to sign that they are in agreement with regards to the Binding Agreement Date. Finally, there is language incorporating the Binding Agreement Date into the Agreement for which the Notification is given and shall control over any other conflicting Binding Agreement Date previously included elsewhere in the Agreement.

11. REVISED GAR FORM F3, AUTHORIZATION TO SHOW UNLISTED PROPERTY

The Authorization to Show Unlisted Property form was revised to make it applicable to both the sale and lease of property. This change was made to broaden the potential uses of this form.

12. NEW FORM: GAR FORM F24, CONSTRUCTION EXHIBIT

This exhibit had been deleted from the GAR Forms library because much of what had been in this form was incorporated into the New Construction Purchase and Sale Agreement, GAR Form F23. However, it was brought out of retirement and reinstated for 2016 because some REALTORS® wanted to use this form with non-GAR new home contracts.


Hopefully, the changes which have been made will help protect REALTORS® and get transactions closed. REALTORS® with ideas for changes are encouraged to submit them to the Committee for consideration. Under the leadership of Pat Johnson, the Committee carefully considered every request for a change last year. With Karen Loftus as the new Chair of the Committee, this approach is sure to continue.

Seth G. Weissman is GAR’s general counsel, an attorney at Weissman, Nowack, Curry & Wilco, P.C. and a Professor of the Practice of City Planning in the College of Architecture at Georgia Tech.

 

Dekalb County Low Flow Plumbing Fixture Requirements

Moving to Dekalb County? You need to know the Dekalb County Low Flow Plumbing Fixture Requirements

Dekalb County Low Flow Plumbing Fixture

Does this apply to me? Great question! The Dekalb County Low Flow Plumbing Fixture ordinance only applies to properties located in unincorporated DeKalb County. If the property is located within a city in DeKalb County, such as Decatur, Chamblee or Lithonia, the ordinance does not apply. So, if you don’t want to mess with it let’s hope you found a house in one of Dekalb County’s wonderful cities!

Time to look at a map and find your house:

Are you in Brookhaven?

Are you in Chamblee?

Are you in Dunwoody?

If you (or the house you are buying) happen to be located in unincorporated Dekalb County, get a home inspector or licensed plumber to complete a Dekalb Co certificate of compliance.  There may be rebates available too if older fixtures need to be replaced.