Real Estate Questions Answered Here
by Art Santellen, REALTOR®
Note: For the last week, I wrote about some clients of mine who are shopping for a new home. You will recall that we looked at several new homes and the husband had decided they better stop and think things over. The defining moment came when they realized that the purchase price of the home they wanted was outside of their budget. You will also recall that I thought the wife might insist on purchasing the home. Well, a week has gone by and the husband is digging in his heels.
In a way, this true life real estate adventure highlights the basic message of this week's column: a Realtor's primary job is not to be a sales person but, rather, a real estate advisor and counselor.
More on this home buying adventure next time.
Q: Uncle Art: I have noticed a growing number of houses for sale on the Internet, complete with pictures, description and direction to the property. My question is, do you see the necessity of REALTORS® in the future? Would not a transaction broker or a real estate lawyer be the norm in the future?
A: Part Two. You will recall that my view of the Internet is simply a high tech "For Sale" yard sign. You will also recall that I mentioned Realtors were in the vanguard of efforts to capitalize on the use of the Internet to bring buyers and sellers together. So, the next part of the question is an examination of what value a Realtor brings to the table. I'd like to begin by reviewing the three definitions I mentioned last week:
REALTORS® are real estate agents, licensed by the state, to practice as a real estate broker. In addition, they belong to a trade association with a code of ethics and rules of standard practice which are stricter than the law mandates.
Transaction Broker, in real estate, actually defines the agency relationship between a real estate agent (or, REALTOR®) and a buyer, seller, or both buyer and seller. In other states, they are called, Facilitators, because that's what they really do. They facilitate a real estate transaction and neither represent the buyer nor the seller.
Real Estate Lawyer are attorneys who specializes in real estate law. Some states, like Colorado, encourage buyers and sellers to have their attorney review all real estate contracts before signing. Other states, mandate that a real estate lawyer Must review and approve all real estate contracts before signing. In every state, a person may use the services of an attorney to help them buy and sell real estate.
Since anyone, even people who want to sell their own home, can place their home for sale on the Internet, why would anyone want to use the services of a Realtor to help them sell their home? In addition, since anyone can get on the Internet and look for a place to buy, why would anyone want to use the services of a Realtor to help them buy their home? Besides, as you have accurately pointed out in your question, there are other people who can help you with a real estate transaction besides a Realtor. The quick answer is that generally speaking, attorneys do not market your home and transaction brokers do not represent you (and only your best interests). The April issue of Realtor Magazine (published by the National Association of Realtors) begins with a few words from our President,
Dennis R. Cronk. "Information Age prophets predicted not too long ago that the Internet would reduce or eliminate the role of the real estate professional )Realtor). High technology would do away with the 'middle man,' because Internet users could get their own information and get it free. But now we see that the explosion of information on the Internet...is increasing the need for experts to place data into a meaningful context for customers. Professionals...who find success...are those who've evolved from mere providers of information to interpreters of information." So let me continue by telling you a story.....
I have been fascinated by the profusion and success of little automotive shops that will change your oil for a modest charge. Every time I drive past a "Quik Lube" or "Super Fast Lube" or "Jiffy Lube", I smile when I notice that they're always so busy. I am not a mechanic and I don't aspire to become a mechanic. My idea of fixing my own car is me writing a check to my mechanic. Still, I'm not a complete dunce. I have changed the oil in my car in the past. I know how many quarts of oil my car would need for an oil change. I know what 10W30 means. I know the oil filter part number for my car. I even know where the oil pan drain plug is located. The problem is that I just don't have the time to do it myself. And, even if I did find the time, what do I do with
the old oil? You can't simply toss it into the gutter. Besides, sometimes it gets too cold to work on my car. Some days, it's too hot. The sun goes down too early, or it stays up past my bedtime. My favorite sports team is losing, winning, or just stinks. Get the idea? I know how to change the oil in my car but I have other, more important things to do. Real estate is something like that.
Selling your own home. Buying your next home. All these things are like changing the oil in your car. If I do it, anyone can do it. The fact is that some people, without any real estate training, have sold and purchased their homes without any difficulty. People who have bought or sold real estate without the help (and the cost) of a Realtor wonder why anyone, anywhere, would want to hire a Realtor. The sad truth is that before I became a Realtor, I personally bought and sold 4 parcels of real estate. They included homes, land, and commercial property. In each case the closing went through without a hitch. Boy, was I dumb.
My first mistake, in each case, was not knowing the market value of each property I was buying. So, for my first home, I simply took the word of the listing agent. For my second home, I simply took the word of my friend who was selling his home. For my third purchase, I simply took the word of my wife's parents and their attorney. For the final purchase, I simply took the word of the seller. Boy, was I dumb.
My second mistake, in each case, was not knowing the market value of each property I was selling. So, for my first home, I simply took the word of the agent who sold me my first home and was willing to buy it back as an investment for herself....now I know how real estate agents get rich. For my second home, I simply let my friend buy back his home for what I bought it plus a little more. To this day, I don't know if the "little more" was too little. For my third sale, I gave the property back to my-in-laws, divorced my wife, and signed a Quit Claim Deed (prepared by my in-laws' attorney) with no money being exchanged. For my fourth sale, I sold the property back to the original sellers for the same price...but, after I had spent several thousands of dollars repairing the
structure. Boy, was I dumb.
The rest of the mistakes have to do with not knowing about the physical condition of the property. What was the purpose of title insurance. What additional coverages I might want in home owner's insurance. What a Trust Deed was, and why I was signing all those papers. Well, you get the idea.
They say that ignorance is bliss. People who buy and sell real estate without the help of a Realtor simply don't know what they don't know.
Q: What is the smallest property for sale in El Paso County?
Q: How many houses are sold in a year? How many are from people moving out of the community?
Q: How much of what you write in your column is just a lot of baloney?
Q: What's the average amount of time a person stays in their home before they sell it?
Q: What rooms do people look at most when buying a home and why?
Q: Which school district is the best and most popular?
NOTE: As you can see, I really do get questions from the public. To add your question to this list, please send them to me at the address listed below. Thanks.
The answers to these, and other fascinating real estate questions will be answered here, in Hispania News, next week.
When you're ready to buy or sell a home, see a REALTOR® Art is a REALTOR® with Heritage Realtors in Colorado Springs.
If you have a real estate question you’d like answered, please send them to:
Art Santellen, care of Hispania News,
PO Box 15116,
Colorado Springs, CO 80935
Art Santellen via e-mail