Your Dream Team – How to find the best homeownership professionals

This is an article I recently wrote for First Time Homebuyer Magazine.  It appears in the October/November 2006 edition. 

The perfect spot to call your own. Room for your family to grow.  A yard in which your kids can play.  Whatever your dream for your first home may be, the most important thing you can do is to find the best people, your real estate team, who will help make your dream a reality.  The key members of your home buying team include a real estate agent, mortgage lender, attorney and home inspector.  As a first-time homebuyer, what you don’t know can and will hurt you.  So, it’s important to choose your team wisely because these are the people who will educate you, help you make good decisions and protect what will likely be your largest investment. To start your search for your team, first ask your friends, family, coworkers, or anyone you trust for recommendations.  Make sure that the person making the referral has personally used the individual they are recommending and ask lots of questions about their experience.   You should also thoroughly check the experience and background of each member of your team.  Here are some tips for finding them: Real estate agent.  Real estate agents are everywhere it seems.  You see their pictures on for-sale signs and in newspaper advertising.  Before you hire an agent, consider the following: 

• Know whom the agent represents. Real estate agents can work for the seller, the buyer or both.  In order for an agent to represent you in a home purchase, the agent will have you sign a contract.  Without a contract, an agent who shows you homes or greets you at an open house does not work for you – he/she works for the seller. 

Bears Where? Black Bears and Other Wildlife Neighbors in Connecticut

If you’re moving to Connecticut or relocating from one part of the state to another, consider your neighbors.  I don’t only mean the human variety - think about your wild neighbors.  They won’t affect property values but they will impact your lifestyle if you are in an area inhabited or visited by them.

Bears in particular have made a comeback in our state- and they’re not just being spotted in highly rural areas.  In the last year alone, I’ve seen two bears (in Avon in my parents back yard), one coyote, and one fox (both in South Windsor) - this coming from a 33-year Connecticut native who hasn’t ever seen any of these animals up close.

Black Bear Photo: Cheryl Johnson

Personally, I’m happy to see coyotes, bears, fox, and wild turkey (oh, my) but they are wild animals and not everyone may welcome them.  Here are some interesting numbers on bear sightings. 

From October of 2005 to October of 2006, there were almost 2,000 black bear sightings in Connecticut.  Granby, Simsbury and Avon top the list with the most sightings, more than 100 each.  A little more surprising is that West Hartford had more than 20 sightings, Bloomfield had 40 and even Waterbury had 14.  And I’m sure these numbers are vastly under-reported because not everyone, myself included, thinks to call when they’ve seen a bear.  We think of pulling out our camera phone to snap a shot to send it to our friends.

Ten Terms to Include in Your Lease Agreement

From Forbes.com: 

“A lease or rental agreement sets out the rules landlords and tenants agree to follow in their rental relationship. It is a legal contract, as well as an immensely practical document full of crucial business details, such as how long the tenant can occupy the property and the amount of rent due each month. Whether the lease or rental agreement is as short as one page or longer than five, typed or handwritten, it needs to cover the basic terms of the tenancy.”  View the full article at Forbes.com. 

Why You Should Know About Dual Agency in Connecticut

Dual agency exists when a brokerage firm represents both the seller and buyer in the same transaction – the purchase and sale of one property, for example.  Dual agency is akin to one law firm representing both sides in a court case but having two different attorneys handle opposing sides.  Doesn’t make a whole lot of sense, does it?  But dual agency is permitted under real estate law in CT and is commonplace.  Here’s what you should know if you’re buying or selling a house in Connecticut and how dual agency affects you.

Dual agency in practice.  I bought my first house using a traditional real estate agent.  The agent showed my husband and me a house that was listed by another agent in her office.  We put an offer on the property, it was accepted and we closed on the house. 

It was years ago but I don’t recall signing a form or having dual agency explained to me.  I did feel that the agent we worked with was not very helpful to us as buyers; but, I didn’t know enough about real estate or buying real estate to put my finger on it.  It wasn’t until I worked with an exclusive buyer’s agent in the purchase of my next house that I realized what it was.  My first real estate agent wasn’t helpful because she really didn’t work for me. 

A Dual Agent Represents No One.  When I signed a buyer agency agreement, a clause in that contract essentially reserved the agent the right to give me proper disclosures when and if a dual agency situation were to exist.  According to real estate law in Connecticut, a real estate agent does not have to give you that disclosure until a dual agency situation exists.  Dual agency only exists when you’ve signed a contract with a brokerage firm and its agent to represent you as a buyer and you locate a house that is the broker’s listing (the agent works for the broker and all listings belong to the broker). You’re about to put in an offer and that’s when you find out – the brokerage represents the seller and therefore you must sign an “agreement” that you understand the broker can’t do certain things for you any more, a Dual Agency Consent Agreement.

Sticking it to homeowners

I’ve heard rumblings about the Metropolitan District Commission’s need to make upgrades to its outdated water and sewer system.  I’m not naive enough to think that as a homeowner in the area served by the MDC, I wouldn’t have to pay something.  But when I read this morning’s Hartford Courant, http://www.courant.com/news/local/hc-mdcmess1021.artoct21,0,7618382.story?coll=hc-headlines-home, I almost fell out of my chair – the project is expected to cost $1.6 Billion over the next decade.  Yes, that’s $1.6 Billion.

I agree that something needs to be done but if we’re starting at $1.6 Billion, this project in the hands of spoiled bureaucrats will surely swell far above the projected costs.  Connecticut is not known for efficiently handling and spending taxpayers money and ensuring we get what we pay for (I can think of a few recent examples – UCONN’s building program, Route 84).

In addition, the MDC is proposing that paying for the project be tied to property taxes.  According to the article:

Under the property tax method, for example, an average household in Hartford would pay $319 by 2016, while a West Hartford family would pay $771, MDC estimates show.

But the burden would shift if MDC water customers ended up subsidizing the project. In that case, a Hartford family in 2016 would pay $468, while a West Hartford household would pay $697.

Add this cost to already burdensome property taxes and homeowners throughout the MDC’s service area are clearly being hit where it hurts – our already shrinking wallets.  And it won’t just be homeowners – renters will pay too because no landlord will absorb this increase. 

The issue will be put to referendum in the member towns without voters knowing the full story – there are several other ideas on the table regarding how to fund this massive project.  Stay tuned for more details.

Tenant Screening – Find and Keep the Best

One of the biggest concerns new or prospective landlords have about purchasing investment property is about finding paying, responsible tenants.  Knock on wood, in my more than 5 years as a landlord, I have been able to find good tenants and have never faced an eviction.  Maybe I’ve been lucky but I think avoiding eviction is all in screening tenants and keeping the tenants you have satisfied.  Here are some things I do:

Check, check and check again.  Surprisingly, many landlords don’t do credit & background checks.  I always do.  And if the tenants don’t have that kind of history due to age or newness to the area, I always have at least one co-signer who gets the full check.  Everyone who will be living at the apartment must pass the check.  And, it doesn’t cost me a penny.  I tell prospective tenants that they pay for the check themselves and it’s a non-refundable fee.  I find that this statement alone chases off people who may be a problem down the road.

Set Rent Higher Than Market.  The first time I advertised an apartment for rent, I nervously set the rent price a little below market value.   I received more than 50 calls and was impressed with myself because I felt that I had the pick of the litter.  Only after sifting through all the calls did I discern that only very few of the callers actually qualified.  I later told a mortgage lender I know and long-time landlord about my experience and he told me that my rent was too low.  If I raised the rent just a bit, I’d weed out the low-price shoppers.  I only want people who want to live in nice, well-maintained home.

Next time I had a vacancy, I set the rent at $50-100 more/month than other apartments in the area.  I received far fewer calls but almost all the people I pre-screened on the phone were qualified and almost all showed up on-time at an open house I held for the apartment. 

Make Prospective Tenants Pass First Test. I hold an open house and when people call to see the apartment, I give them the date and time of the open-house.  If they come, they’re likely qualified and very motivated. – that’s my first test.  If they don’t come, I’ve got 5 or so other people coming at the same time and I will rent the apartment that day.  I will not agree to show the apartment outside of that time. Period. 

When you have existing tenants, it’s an inconvenience to them to have you in and out of their apartment. If a caller balks at this, I just tell them that if they rented from me, I will be just as respectful to them.  If they can’t make it at that time, they’re not motivated and they’re probably not that interested anyway.

Allow Pets.  Most landlords will think I’m crazy but I like pets in my properties.  I think it makes my property stand out from the crowd, makes me money and I’m helping people who often have trouble finding a place to live.  Plus, I think having a pet shows you’re stable, responsible and flexible – all qualities of a good tenant.

I don’t allow just anyone with pets.  I make prospective tenants go through a lot of trouble and if the tenant is willing to make the effort, it shows me that they are worth the extra effort on my part. For dogs, I require that they be licensed, have a certificate or affidavit from a reputable trainer that the dog knows basic commands, is friendly and well-treated, have a letter from a vet, be spayed or neutered and have all their vaccinations.  Each year, I ask tenants for an updated list of vaccinations and their license.  

For cats, I require a letter from a vet, a list of vaccinations and a spay/neuter cerificate.  I also do not allow more than two animals per apartment, regardless of type. For all of this, I charge a non-refundable pet fee of $300 per pet.  This goes to pay for things like damage to the lawn, wear and tear on flooring and woodwork and any inconvenience I have to endure if the neighbors complain. And I also have to meet the pets before I’ll accept.  I want to see that they’re well-loved and friendly – this also says a lot about the prospective tenants.

Make it a nice home. When I bought the property, it needed work.  It was the ugliest house and most run down on the street.  Its condition warranted the low rents the former owner was charging.  When I purchased it, I did so to live there.  I spent about $10,000 on redoing the interiors – total redo of a bathroom (down to sub-floor and studs) in one unit and new kitchen cabinets and appliances in another unit.  I also put down new flooring in one kitchen, ripped out 7 layers of flooring in the other, and spruced up the common stairwell.  Everything was painted, I cleaned up the landscaping outside, re-painted the exterior and eventually re-built the back porch.  All of those things show potential tenants and current tenants that I care about my property.  I’m also there frequently to do a little work or to just take a look around. 

Fresh Paint.  I don’t mind painting and am pretty good at it.  So, whenever I have new tenants, I offer to paint the unit for them.  And I don’t paint the apartment white!  I use colors that are neutral and each room is painted to complement all the other rooms - they make the apartments feel like home and stand out from others on the market.  Whenever I show prospective tenants the apartments, people love the paint. 

Treat Tenants Like Customers, Not Second-class Citizens.  I used to be a renter so I know what it’s like to be ignored by your landlord.  (My former landlord wouldn’t fix a bathroom light that shocked me every time I went to turn it on.)  When my tenants call, I try to be as responsive as possible.  If they feel like I’m on top of it, they’re usually pretty reasonable.  I’m flexible when I can be and am respectful of the fact that they have keys to my house! 

I will send little welcome gifts to my tenants when they move in, along with a note reminding them about my address, rent due date and amount due.  When I send out renewal leases, I always include a note thanking my tenants for renewing the lease and for being a good tenant.

Put it in writing. I’ve learned the hard way that if something isn’t spelled out in the lease, it’s up for negotiation.  Over the years, I’ve rewritten my lease based on my experiences with the previous tenants.  I go over this lease with the tenants after I’ve accepted the deposit and am flexible over revisions if it’s warranted. 

Trouble selling? Your listing may not be attracting buyers or their agents.

As a buyer’s agent, I am constantly amazed and quite frankly, disappointed, in the information found in the average listing available through the multiple listing service.  Whether intentional or not, agents leave out vital information – information that is crucial when I’m making a decision about whether or not to show a property.  If you currently have a house on the market and it’s not selling or being shown, ask your agent for a copy of the listing as it appears in your local MLS.  You should do this anyway after your agent takes the listing.

Here are some things agents frequently leave out:

Photo(s).  Seems obvious but many agents leave out photos.  If there is a photo, there will be only one and it won’t be a good one.  The Coop MLS (Hartford, New Haven, Middlesex, New Haven ,Litchfield & Tolland counties) mandates at least one photo but your agent can enter as many as ten photos.  The photos should show your home in its best light but also true light. 

Accurate description.  Some listings describe a house as it is and others describe it in a way to sell it.  One listing I showed recently claimed to be in “move-in” condition.  Maybe my definition of move-in is different from the norm but if my buyer has to scrape the grease off the kitchen cabinets, replace the counter-tops because there are cigarette burns, spray bleach on the bathroom ceilings and repaint every surface in the house, then that really doesn’t qualify as move-in.

Room dimensions & location.   Without dimensions, I can’t point a client toward or away from a property.  Some clients have furniture they’re buying a house to fit.  In this case, a house that shows out large rooms will be a plus.  Other clients want a bedroom on the first floor for a guest room, in-law or master bedroom.  Too many listings leave out this information.

Important details.  Omitting details like special assessments due in a condo complex, one bathroom missing a toilet, or the fact that the roof has just been replaced.  Depending on the buyer, these can be positives or negatives.  For example, a special assessment due in an aging condo complex for a roof may alleviate fears of the unknown for a buyer and signal that the property is well-maintained.  Or, the assessment may just be beyond the reach of a buyer and it’s better for them to know this in advance. 

Poor or no showing instructions.   I recently made an appointment to show a condo in a gated community.  When I made the appointment to view the property with my client, the listing office said nothing about the gate being locked during the day.  I arrived and after finding it locked, I called the management company, then the listing office and then finally the listing agent to get a code.  She responded that all I needed to do was wait for someone to drive in or out of the community and then pull in.  When I complained to her that she should have been clear with her instructions in the listing, she responded that no one else had called before.  Seeing as how this agent never followed up to see how my showing went, I seriously doubt that she would have any idea whether agents had actually shown the property.

With a growing number of active listings on the market, sellers need to make every attempt to make showings easy, pleasant, and worth the drive.  The better and more detailed your listing is, the more agents will show the property and the more exposure your home will get.