Can we use more than one agent to look at homes?

Dave,

We are in the midst of the home buying process—which has been really exciting! Our question for you is about “proper buyer behavior”. We have an agent who we really love and has been so helpful throughout the process. Last week she left town for a week and while she was gone we were still driving around town looking at homes. We found one we wanted to see—called the agent on the sign and had him show us the home. At the end of the showing he asked if we wanted him to set us up on an online home search. We told him we didn’t need another search because we had one through our agent. He got really stern all of a sudden and told us that we should only be looking at homes with our agent and not leading other agents to believe they’d get our business.

This was so confusing to us! That perspective never crossed our minds! Is it not okay to have different agents show us their homes? Should we only see homes with our agent? Thank you in advance for helping us!

Janey & Mike, Grand Junction

---

Janey and Mike,

You accidentally and unknowingly stumbled onto one of the real estate professions “hot button” issues, where agents are concerned, and that is why the agent got stern with you. As you pointed out in your question, you guys are excited and the process of looking for your new home is fun! You are really only focused on finding your new home which is hard to do when your agent has left town and not provided you a plan on how to access homes while she was on vacation. Life is tricky, with lots of moving parts, but you never know when the perfect house is going to come along and the good ones go fast!

There are many ways to look at this, but ultimately your agent should have made a plan with you about who would show you property while she was gone. I can see this unfold in my mind.  You guys saw a house that looked like it might be “the one”. You called the agent who had the home listed and asked him to show you the home, as you don’t want to miss the perfect home because your realtor is on vaca. He was eager to make that happen and accommodate your wishes because he thought he could potentially work with you as a buyer and asked you very few, if any questions, other than what time would work and he was excited to show it to you?  Your only concern was to see the home so you set up a time to meet him. Since nobody explained to you how things work, because your agent was only focused on her vacation and not how it would impact your home search while she was gone, you had no way to know that you were crossing any lines you should not cross. 

Ugh…communication is hard. It is clear from his reaction that he ASSUMED you did NOT have an agent, but failed to directly ask you if you were working with another agent before agreeing to show you the home. If he had not assumed and had asked you the question about your agent then my guess is your experience would have been completely different. You would have still seen the house, however your relationship with him would have been defined before you ever met and he would have had no unspoken expectation of “picking you up” as a buyer which led to his “stern” response to setting you up on a search. I hope this all makes sense.  Assumptions and unasked questions are the two biggest culprits of communication breakdown and conflict!

“One of the unwritten rules in real estate is that you, as the buyer, should only look at homes with the agent you plan on using to help you purchase your home. But how are you to know this “unwritten” rule?”

One of the unwritten rules in real estate is that you, as the buyer, should only look at homes with the agent you plan on using to help you purchase your home. But how are you to know this “unwritten” rule? Frankly, your agent should have explained this to you and arranged for one of her colleagues to show you property in her absence. My assumption is she was probably only focused on her vacation and not how the vacation might impact your house hunting!

Funny how even the simplest things can become cumbersome and confusing. There is a small life lesson in your question about assumptions and unasked questions! Best of luck and I hope the perfect home is just around the corner!

Dave Kimbrough
The Kimbrough Team

Have a question? Ask Dave!

Are we in a buyers' or sellers' market?

Dave,

We’ve heard that the market is hot for sellers right now and that enticed us to start thinking about selling our home…but we’ve also heard that there’s a shortage of inventory—probably why the market is so hot for sellers right now.

Is this truly how our market is right now? If it is, that makes it a little bit of a double edged sword for us. Should we sell and make great money off the equity we have in our home? But if we do, will we be able to find another house that we like if there’s such low inventory? What do you recommend in a market that’s like ours is now?

Donna and Frank, Grand Junction

---

Donna and Frank,

Great question! Our market is the tale of two markets…those properties under $300,000 and those properties priced over $300,000 (particularly those properties priced over $400,000). First let’s look at the absorption rates we currently have in the market. You may ask, what are absorption rates? Well, the absorption rate is the number of months it would take to sell all the currently listed homes in the market. This is where we get months of inventory and that number is important as it helps provide a clearer picture of just how much inventory is available in any given price range and theoretically will allow you to better predict future trends in pricing and sales activity. I have heard it said that a healthy market is somewhere between 3 and 6 months of inventory! Less than 3 months of inventory lends itself to being a seller’s market where the supply is short and the demand is high. More than 6 months of inventory would mean you are entering a buyer’s market, meaning more inventory than there is demand and the buyer theoretically holds the upper hand in negotiating power.

As of October 1, 2017 properties priced between $100,000 and $300,000 had 3 – 3.5 months of inventory, thus putting us in a very brisk market that is starting to really favor sellers. For properties priced between $300,000 and $500,000 we have 5.5 – 7 months of inventory, thus entering that area typically favoring the buyer. Note that there is not much in between! All that being said, we have a very brisk lower end of the market, a softening middle range and a “cushy” soft upper end (homes priced over $500k) where we have somewhere between 10 and 20 months of inventory. All that being said, overall the market is as solid as we have had since 2008 and we are no doubt going to see the strongest sales figures, across all parameters, we have seen in nearly 10 years! It has been amazing and we should all be very thankful to have 2009-2012 well in the rear view mirror! 2017 has been an incredible year for housing and I fully expect 2018 to continue this trend, albeit maybe with a little more pressure on the gas in the lower end price ranges.

“You are most likely correct about the “double edged sword”, because when you sell and buy in the same market everything is relative! This means that if your home has gone up 10%, then so has the home you are likely to replace it with.”

You are most likely correct about the “double edged sword”, because when you sell and buy in the same market everything is relative! This means that if your home has gone up 10%, then so has the home you are likely to replace it with. The exception to this in our market is when you are making a significant move up, let’s say from $350,000 to $550,000. If you are making that kind of move up, sometimes you can make up a little ground as the lower priced home appreciation has outpaced the upper end for quite some time. Low inventory is an issue and the good ones generally sell quickly. If you are pondering a move you need to focus on being flexible, as perfect timing can prove as elusive as a Sasquatch sighting! Be prepared to sell and then rent or have somewhere to burn a little time in between properties if the timing does not work out perfect. You might consider looking at new construction, as this provides you the ability to plan as you attempt to “time” the events of selling and buying!

I find, time and time again, selling and buying are a lot like life! It will be what you make of it!  Everything might not work out perfect, but really what does? Jumping a few hurdles is generally a good thing and it makes you appreciate the smooth times even more! Go ahead and jump in feet first, the water is only really cold for the first few seconds!

Dave Kimbrough
The Kimbrough Team

Have a question? Ask Dave!

Are there ethical parameters to who can enter into a contract?

Grand Junction Real Estate Advice

Dave

 About a year ago, a family member began suffering with, which luckily turned out to be short-term, a mental breakdown. During that episode, my family member reconnected with an old friend who happened to work in real estate. In a manic episode, a listed piece of real estate was put under contract by my family member with a real estate agent. Because of the breakdown, my family member lost their job and had to forfeit their deposit.

When I called the Realtor and asked about getting the deposit back, I was told he was not the listing agent and would not be able to return the earnest money. I questioned the Realtor about his relationship with my family member and he told me they were "friends" and had known each other for years. When I asked him if he knew there was mental illness interfering with his "friend’s" ability to make good decisions at the time he wrote the contract, he assured me he was. My question—is there some sort of ethical expectation in real estate that would question the decision to write a contract with a person who is obviously not of sound mind?

Thank you,

 Linda, Grand Junction

---

Linda,

Wow, this is complicated! The question of ethics is a real one, if they were “knowledgeable” about the mental breakdown and still allowed them to enter into a contract. There is a lot that is open to interpretation in your question, like the fact that he was “obviously not of sound mind”. What may be obvious to one, may not be obvious to another. Mental capacity should be evaluated by professionals who are trained to make such determinations. There have been a couple of instances over the past 10 years where we have had questions about a person’s mental capacity and we have found a way to discuss it with family members, of the party in question, but had to proceed with care. Let’s cover the basics.

“Contracts are enforceable against anyone having legal capacity, but some persons are deemed by law as either incapable of contracting or having some limited capacity to contract.”

Contracts are enforceable against anyone having legal capacity, but some persons are deemed by law as either incapable of contracting or having some limited capacity to contract. In the instances of limited capacity, the contract can be voided if the individual goes before the court to void the contract. As long as the person of limited capacity allows the contract to exist, the contract may not be voided. An example of a person with limited capability would be someone who is illiterate or one who has diminished mental capacity. Any person declared to be mentally incompetent is deemed incapable of contracting. Any agreement of purchase or sale entered into by such a person is voidable.

It sounds like the contract could have been voided, if your family member was either declared to be mentally incompetent or in limited capacity at the time he signed the contract.  However, if he was of limited capacity, he would have to petition the court to void the contract. As devil’s advocate, one question still remains, was he competent at the time he signed the contract? The water gets muddier at every turn. I think that there is an ethical expectation for everyone, regardless of the business type, to be aware and try to identify those who should not be entering into a contract. In this case, there is enough “gray area” that I can’t make a firm ethical verdict, but if the real estate agent “had actual knowledge” of the breakdown, then I can say there should have been some significant due diligence and legal consultation performed prior to executing any contract.

I am thankful that he only lost his earnest money and at least he did not close on the property and left holding a much more devastating financial burden. In cases like these, we refer our people to a knowledgeable and reputable local attorney for consult. Contacting an attorney to evaluate a legal minefield like this one is advised. Thanks for your question and all the best to your family.

Dave Kimbrough
The Kimbrough Team

Have a Question? Ask Dave!

Do open houses really work to sell homes?

Grand Junction Real Estate Advice

Dave,

Do open houses really benefit sellers? Our home has been on the market for a few months and we’ve had four open houses per our realtor’s advice and still no offer! We understand that we should be as accommodating as possible if we want to get our home sold, but it’s a lot of work planning a day away from home with our three young children so an open house can happen.

Our realtor says each open house has had a lot of traffic, but just no luck on an offer! We’re starting to wonder if open houses really work to sell homes or they’re just a way for neighbors to come check out our home and compare it to theirs!

Brittany, Grand Junction

---

Brittany,

The age old real estate question, do open houses really work? I hear this question at virtually every appointment I go on and this is what I believe to be true about open houses. I can reiterate what you already experienced, statistically they are not effective at selling houses. A number somewhere in the vicinity of 2% of homes sold are sold as a result of an open house. If you are one of the 2% they are awesome, but if your one of the 98% they are far less awesome and quickly become very disappointing! In my opinion 2% is far too low to make it a staple of any “true” marketing plan. I understand having an open house every once in a while, however they certainly should NOT be the backbone of any marketing plan that you should take serious or think will prove very effective.

“I do not believe the open house is a necessary tool. For selling homes, a solid and consistent marketing plan is far more efficient and far more productive than having you displaced every Sunday afternoon.”

I do not believe the open house is a necessary tool. For selling homes, a solid and consistent marketing plan is far more efficient and far more productive than having you displaced every Sunday afternoon so your agent can look busy and meet new clients. With the proliferation of the internet and the amount of information at our finger tips the usefulness of the traditional open house is not what it used to be. I would not worry one bit about missing out on the Sunday open house. I am not saying it will not work, just saying that it will not work very often. Hope this helps.

Dave Kimbrough
The Kimbrough Team

Have a Question? Ask Dave!

Is it awkward to use an agent to help us buy a home, but not to sell our current home?

Grand Junction Real Estate Advice

Dave,

My wife and I are getting ready to put our home on the market, but we’re considering not using an agent. We actually have two different sets of friends who have expressed interest in buying our home once it’s up for sale.

Finding a new home is a different story though. We’d love to hire an agent to help us as we believe they’ll add a great deal of value to our home search/buying experience. Is it weird or rude to hire an agent to help us by a home, but not use them to list/sell our home? Thanks in advance for helping us avoid an awkward situation!

Grant & Molly, Grand Junction

---

Grant & Molly,

As long as you are up front with the agent you choose, I think you will avoid any awkwardness at all. It is not unusual to not use an agent if you already have potential buyers who are interested in your home. When you approach an agent about working with you to find your new home, just let them know what your situation is and I am confident they will understand and be supportive in any way they can. If your agent does not understand or makes it awkward at all, find another agent.

“I have always found if you are up front and honest about your situation or what it is you need, you will most likely avoid most awkward situations.”

What you might find is that if neither of your prospective buyers actually come to fruition, you might need some help in getting your home marketed and sold after all. Keeping this in mind, I would recommend you evaluate agents knowing that there is a chance you will need them to not only help you find a new home, but potentially also help you facilitate the sale of your existing one...if your current prospects flame out. I have always found if you are up front and honest about your situation or what it is you need, you will most likely avoid most awkward situations. Things get awkward when people make assumptions and don’t communicate, in this case you will be eliminating assumptions by being very up front in directly communicating your needs. Best of luck and hopefully your friends come through!

Dave Kimbrough
The Kimbrough Team

Have a Question? Ask Dave!