Sunday, November 24, 2013

Consumer Beware

This week I received a floor call on a company listing from a young lady who wanted to know more about a vacant house she had seen for sale in Broken Arrow. There wasn't anything unusual about her questions until further on into the conversation when she said she had already talked to the owner about the house. Since our company has an exclusive right to sell agreement with the home owner and his name wasn't anywhere in the Broker's public information, that seemed a bit odd. She wanted to see the house so we made an appointment for her to take a look. But before the appointment took place, the rest of the story came out.

She had been looking on Craig's List for a rental property. Under rentals she had found pictures of this house. It looked interesting so she sent an e-mail to the contact in the ad and drove by to see the outside. The house is in very good shape so this only made her want to see more. But the "owner" who replied back to her via e-mail lived in another state. And he had no intention of coming into town to show her the house. If she wanted to rent it, all she needed to do was sign the rental contract and send money. Then she would get the keys and be able to move in.

By now you're probably warming up to the fact that she wasn't talking to the owner at all. And you are right. The person she had been talking to lived in Colorado. The true owner of the house lives in Dallas. And now you know about the latest scam designed to dupe unsuspecting people out of their money.

It's hard to imagine that someone would send money to anyone without seeing them in person or seeing the inside of the house they are supposedly trying to rent. But they do. And apparently enough people are willing to do it that it's become a nice cottage industry for unscrupulous individuals with no conscience. The pictures are easy to come by. They can be copied off of the original listing from any Real Estate website. An online search of the public records at the courthouse will give the perpetrator enough information to sound convincing, even to the point of passing himself off as the actual owner of the home, name and all. Fake rental contracts can be created to keep the fraud going. But if you send him money you will never see a key. And when you consider that it is normal to ask for a deposit equal to one month's rent and the first month rental payment in advance, we're talking somewhere in the neighborhood of $2500.00. Gone. Good-bye.

You hear this all the time. Never, never, never send money to anyone in advance for anything if you don't know who they are. Reputable businesses sometimes require it but if their only online presence is a listing on a garage sale website, guard your wallet.

Or better yet, stay local. Talk to people you can find after the deal is over. The internet has opened up a wealth of choices for consumers. But it's also been a gold mine for thieves and fraudsters. I cannot count how many e-mails I've gotten from the National Bursar of Nigeria wanting to send me $20 million. After all this time and no reply from me I would have thought he would have spent the money by now. But they just keep coming.

Incidentally, Chinowth & Cohen has a leasing department, too. And all of the houses we have listed are truly available. If you need to lease I can help you with that. Call me at 918-809-5199 and I'll get you in touch with the right person at no charge whatsoever.

Thursday, November 14, 2013

For Sale By Owner

Selling a house isn't something you do every day. In fact, the average family lives in a home for at least five years. But when it's time to move you want to get it done with the least amount of hassle possible. For many people that means placing a FOR SALE BY OWNER sign in the yard and waiting by the front door until the future owner drives by and falls in love with your castle. It can't be that hard, right?

How can I say this tactfully? Yes, it can.

There are many reasons why it's a good idea to use a Real Estate agent to sell your house. For sake of brevity let's discuss only three of them. The first one would be price.

Many people who try a FSBO approach use Zillow, Trulia, or any number of other internet home valuation sites to help them set their price. They don't realize that as trendy as those sites are, they are always behind the local market curve with their modeling. And no one from any of those internet sites has ever stepped foot into even one of the houses on their national list. Not one. So they have no idea what mitigating factors might exist, whether pro or con, in the pricing of that house. Pricing is a local phenomenon best done by someone who works in that local market every day.

Also, homeowners can tend to augment the value of their home by adding sentimental value to their sales number. That's the value someone might place on the house because it's theirs and no one else's. In reality sentimental value has absolutely no value to anyone but the homeowner. Buyers are buying the house, not the memories.

In addition, sellers can be just as prone to undervalue their house as overvalue it. It's just as bad to leave money on the table as it is not to sell an overpriced house at all. And when the house doesn't sell right away, since selling a home isn't something they do every day the homeowner may think the only way to change that is to lower the price. And of course, when showing the property every buyer will come up with some reason why the house isn't worth what the seller is asking. A professional can help maintain the integrity of price because local research was used to price it correctly in the first place. And he or she has been through the process before. But the issue of why the house isn't selling might be something else entirely. This brings us to reason number two: buyer pool.

People who try going the FSBO route do not have the resources that a Real Estate company does to get the word out about their property. In Tulsa there are 4500 Real Estate agents that are members of the Northeastern Oklahoma Real Estate Services. When you hire one Real Estate agent to sell your house, by extension you get all 4500 agents and their clients. That's a far site better than a weekly ad in the Sunday paper, Craig's List, or an internet listing on a FSBO website. Visibility for your house will result in more views by prospective clients and less need to respond to a slow sales cycle by dropping your price. In Tulsa, our company also has a full color magazine and weekly television show in addition to all of the newspaper and internet advertising that is available for every client on our list. And the homeowner doesn't pay for any of this up front or in addition to the sales commission. It's included in the listing agreement signed between the homeowner and the listing agent.

Finally, there is the issue of security. In this day and age there's no getting around it. Opening your house up to strangers is a security risk. FSBO listings are at a greater risk because they don't know who is entering their house under the guise of being a buyer when their true motives may be less than honorable. Real Estate professionals understand this and use every tool at their disposal to reduce that risk, from high security lock boxes and pre-screening to accompanying and recording every home visit of every one of their client buyers. Let’s face it. Letting strangers into your home entails risk. Real Estate professionals do everything we can to reduce that risk as much as possible.

Here’s a bonus reason. FSBO properties can take longer to sell. In Tulsa ninety percent of the properties sold here are sold through the Real Estate system. An additional 5% are properties that started out as FSBO and ended up going with a Realtor after having no luck on their own. FSBO properties in this market have at best a 1-in-4 chance of selling if they sell at all.

These are a few of the more apparent reasons why a Real Estate professional is the better idea. But there are many others that are just as important that I didn’t mention here. If you need to sell your house call me and we’ll talk about it. My number is 918-809-5199. I look forward to talking with you.

South Tulsa 918-392-0900 | Mid Town Tulsa 918-392-9900 | Broken Arrow 918-259-0000 | Owasso 918-392-9990

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