Why Your Purchase or Sale May Not be Considered an Arms Length Transaction.

You may have heard the term before and thought that it probably did not apply to you, or that it didn't really matter one way or the other. But it can, and it does- and it also applies to your home purchase or sale with non-arms length transaction(s) that were recently consummated in your immediate neighborhood.

An Arm's Length Transaction  has no direct or indirect relationship with any party involved in that transaction, with the few exceptions being Spousal buyouts, an interest buyout of inherited property, or a gift of equity.

A NON-Arms Length transaction (NAL) will have a Conflict of  Interest (COI)  A Conflict of Interest may arise when any party to the transaction has a direct or indirect personal, professional, or financial relationship with any other non-borrowing party.

Some examples of Conflict of Interest include:

The Realtor or Lender is selling  the property you  are buying. Recent developments in lender requirements  may necessitate the need for the buyer  to obtain TWO bank appraisals rather than just one. (Just a note- you may want to negotiate that additional cost  if you are buying a property that is owned by a Realtor)
The Builder of the home is also a Real estate Broker.
The broker or Realtor is representing either him/herself AND the buyer in a purchase or sale.
The buyer works for the lender.
The seller is the Lender's employee, or is related to, or associated with the seller of the property

Here are some examples of  potential NON-Arm's Length Transactions.

Purchasing with intent to "flip" the property.
Properties purchased at auction.
Short Sale Transactions with a recent Notice of Default and a purchase price  that is less than what is owing on the property.
Contractors or sub-contractors as purchaser.
Purchasers  who are in the real estate, financing, or construction trades.
Employee purchasing from an employer, or any parties related by a business relationship.
Parties related by blood, marriage or domestic union or partnership.

Non -Arm's length transactions will have a negative effect on property values, and appraisers can identify them quite easily when appraising a home.  The presence of any conflict of interest  in your transaction should always be disclosed to the other party, and in some instances, it's the law.

If you have any questions about these types of transactions and how they can or may affect you, contact your attorney for clarifications.

 And a note From Judy: If you have a question about buying or selling Real Estate in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Would You Rather Have an Agent Lie to You or Tell You the Truth?

The truth, right?

I hope your first reaction to this question is  for your agent to tell you the truth.  Do not let your emotions about getting the highest price for your property get in the way of listening to reason, especially when there is evidence to support it.

Telling the truth to homeowners who are interviewing a few agents to list their home for sale sometimes costs me business- because it's not exactly what these homeowners want to hear.

There are, however,  plenty of agents who would rather lie to you,  give you false hope on a suggested list price that is over and above what the market will bear. It's an awful sales tactic- so be on the  lookout.

And why do real estate agents  lie to you about how much your home is worth?

Certainly one reason is lack of market knowledge, or the inability to price homes correctly, and that may not even be an overt lie on their part.

The second reason is that this is a sales tactic that is purely intentional. The agent gives you a price above what they know is appropriate, so that you think that they really love your home and can sell it at that high price.

These agents intentionally give you an inflated price  just to get you to  sign the listing contract- and once you are signed up, they will get you to reduce the price- sometimes even within the first week to ten days. This type of agent induced  "analysis paralysis" causes the homeowner to  dismiss an appropriate price and choose the highest price an agent gives them, even though the analysis says differently.

You should never start any type of relationship on a lie, let alone a business transaction. What will happen  next? What will the next lie be about? This is just a nasty,  shamelessly unprofessional and selfish business tactic, and unlawful in my opinion as well.  

Insist on a detailed Market Analysis- that's called a True Market Analysis.

A  market analysis is just that. Take the time to review it. Are the comparables on the other side of town or are they close by? Are the comparables of similar square footage? How many comparable properties are included in your analysis? Is the price obvious to you by looking at what's in front of you? It should be.

Without any exceptions, the analysis should be detailed enough that it should suggest a price to you, and sometimes you may not like that price. It is important to control your emotions enough to look at what's in front of you, and  as much as you may not like it, understand that analyses don't lie. Agents do.

Trust your gut when you meet an agent. Ask for testimonials. Hopefully, you should be able to spot  the less than truthful agent and remember that when you  get to the pricing part of the presentation.

Consistently telling my clients the truth allows me to sleep peacefully  at night, and I wouldn't have it any other way. If you need a price opinion on your home, and are ready to sell, call me, or email me. I'd love to hear from you- and that's the truth, too :)

And a note From Judy: If you have a question about buying or selling Real Estate in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Don't Fall into the Trap of Listing Your Home For the Highest Price

It's time! You have decided to put your home on the market, and of course you want to get the highest price possible. Agents want to get you the highest price possible, too.

BUT....

You must look at the comparables, and past sales history for your town and your style of home, along with a square footage analysis.  A detailed analysis will most certainly point to the correct number for the market, but  you may not like what the numbers point to,  and there are many agents who will tell you what you want to hear, rather than tell you the truth.

They do that to ensure that they will get the listing, and control the sale. The only problem is that if you list with the "highest bidder", your home will not sell, because it will be overpriced for the market.  This is a trap that way too many home sellers fall into.  That is, listening to the agent and hiring the agent who cannot back up their claim to be able to get you the highest price for your home.

The appraiser that comes out on behalf of the buyer's chosen bank will only look at comparable sales within the last six months. If you or your agent are comparing your home with a sale that happened outside of that six month window, remember, the appraisers will not even consider that. So on the off chance that you do get a buyer for your home at a price that is higher than the market would generally bear,  a low appraisal would negate that sale. You have heard of appraisals that come in low?  Either the transaction falls apart, or you will have to reduce your price. It becomes a big mess.

When you interview  an agent to price your home, remember  these facts. the highest price that am agent tells you  is not always the correct figure,  or most honest one.

If you would like an honest market evaluation, contact me. You  can most certainly make future plans with confidence with me.

And a note From Judy: If you have a question about buying or selling a home in Fairfield County, and are in need of an Realtor to represent you, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

Have You Chosen Your Realtor, But Not Signed the Agreement Yet?

Get a jump on the market- it's called pre-marketing. If you have decided to sell your home, and met with a Realtor that you intend to have represent you, don't wait to tell them until after you have completed minor touch ups or repairs, or come back from vacation.

There is a lot of leg work that goes into getting the marketing materials ready for your home. For instance, photo-staging and photography, write ups and brochures take time to do them right.

Sure, it's quick to put an MLS listing sheet at your home that can easily be printed once your home is on the market, but what about the details,and the positioning of your home before it hits the market? At the very minimum. having a brochure at your home on DAY ONE when it hits the market is very important.

Pre-marketing  boils down to meeting with your agent and signing the representation agreement  that states the home will go on the MLS as of a certain date, therefore allowing your agent some time to jump start the marketing process.

When buyers come to look at your home, they usually are making a day out of searching for their next house. That means that your home is not the only one they are looking at. By the end of the day, many buyers forget which house had what feature, and that's not even mentioning all the information that your brochure has that the MLS listing has no room to include. One of these additional features that may not have been obvious from the listing may just be the reason why a buyer chooses to come back to your home for a second look, or makes an offer.

You have one great opportunity to do it right, and initial pre-marketing, whether it's for one week or two weeks helps the agent to help you tremendously. Pre-marketing can build up demand for when your home actually hits the market, and you can make the most of your new listing status.

If you have chosen a Realtor but are not absolutely gung-ho excited about your choice, then we haven't met. You owe it to yourself  to just give me a call, and see how my marketing strategies and campaigns can benefit you.

If you would like to set up an appointment, click here.

 A note From Judy: If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.

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What is Supposed to Be Included With Your Home Purchase or Sale?

Whether you are buying a home or selling a home, you can avoid completely unnecessary last minute disagreements at the closing table that can very well escalate into deal-breaking issues by understanding the difference between personal property vs. real property.

Avoid confrontation and issues by

itemizing what stays and what doesn't.

For Sellers: When you list your home for sale, you should be thinking of itemizing what "personal property" will be included in your home sale, and what commonly requested items will not be part of the transaction.

For Buyers:  When you place your initial offer on the property, make sure and itemize all of the personal property that you wish to be included in the sale. Do not assume that everything stays.

Personal Property vs. Real Property

Personal Property:

In regards to a real estate transaction, Personal property, generally speaking, is private or personal  property  or possessions that are"moveable"- that is, it can be easily moved from one location to another. Also referred to as "chattel or "personalty".

A few examples  are as follows: Any appliances that is movable and not built-in.  Blinds, drapes, curtains and curtain rods. Chandeliers, Light fixtures and/or Ceiling Fans.

Real Property
Generally, anything which is part of the land, or attached to the house and is unable to be moved, or cannot be removed without creating damage is Real property.  

The intent and manner with which an item is attached is used in determining whether an article or fixture is real or personal property. If removing the item requires pulling nails, it’s probably real property. (This does not include picture hangers). If something can be unscrewed and removed without leaving any damage, it might be a good idea to discuss this when negotiating the offer.  

A few examples of Real Property:

Built-in microwave, built-in wall oven, an air-conditioning unit that has been built into the wall, a shed on a concrete slab, or a swingset.

......and a little story

I remember conducting a final walk-through with a buyer client a few years back, and everything seemed to be in order as far as I was concerned, and then all of a sudden, my client went from bathroom to bathroom checking the house, and came to me in a near state of panic, because there was no toilet paper in the holders . He thought it was a law that owners had to sell their homes with toilet paper. No, I am not kidding. He was furious until I let him know that there was no such law on the books.

He got over it, but  something that seems so inconsequential to you it could really make life miserable for everyone involved.- and while we are on the subject of some of the smaller things, leaving light bulbs is not mandatory either.

Bottom Line: If it's important to you, put it in writing

so there are no mis-impressions or misunderstandings.

As with everything else in real estate, remember, it’s all negotiable. If there is a unique item you want included in your purchase, ask for it. If you are selling, and the chandelier in the dining room has sentimental value to you, it's best to replace it BEFORE your home goes on the market. That way it won't ever become a bone of contention.

If you have a question about buying or selling Real Estate in Fairfield County, and are in need of representation, I invite you to contact me, and if you have an idea for a topic that you would like to see on The CT Realty Blog, please include it in the "Post a Comment" section link below this post. We appreciate the feedback and look forward to providing you with the best real estate content, advice and service in Fairfield County, Connecticut.