Connecticut Real Estate Blog - Real Real Estate in CT

I am a real estate buyer’s agent, also known as an exclusive buyer’s agent.  But, I never really like the term “exclusive buyer’s agent.” I know that’s what I am but I wish it didn’t sound so expensive.

I come from a working class town and went to an “exclusive” private girls school.  I have friends who live in “exclusive” communities and who belong to “exclusive” country clubs.  To me, the word exclusive has some negative connotations like, “if you have to ask how much it is, you can’t afford it,”or  ”we don’t want your kind here,” etc.  

I don’t see other professionals marketing themselves with what I see can be a negative term - for example, “Exclusive Family Law Attorney.”  That sounds like an attorney who only handles multi-million dollar family estates. 

No, attorneys, engineers and accountants have practice areas, as do most real estate agents.  The difference is that many real estate agents don’t want to admit that they specialize for fear of losing business. 

As an exclusive buyer’s agent, I work with all types of clients - with the exception of real estate sellers and sellers and buyers of commercial real estate.   I have first-time buyers, condo buyers, land buyers, investment property buyers, relocation buyers, buyers who have a house to sell, etc.  My practice area would be residential real estate buyers…period. 

There is nothing exclusive or expensive about being a buyer’s agent.  Every real estate buyer who buys a property listed in the Multiple Listing Service pays a buyer agent commission - whether or not they are actually represented by an agent they hired.  It generally costs the same to have an agent truthfully advise a buyer on fair market value, condition and terms as it does to have a listing agent sell the buyer a property.

So why don’t I just call myself a Real Estate Buyer’s Agent?  I do.  But the challenge is to differentiate myself from all the other agents out there who call themselves buyer’s agents when they’re really listing agents who take on buyers as clients until they get enough listings to keep them busy.   Most consumers just don;t know enough to know the difference between a buyer agent poseur and a real buyer’s agent.

This is an article I wrote for First-time Homebuyer Magazine a while back, with some updated statistics from the 2006 Profile of Home Buyers and Sellers from the National Association of Realtors.

According to two studies from Harvard University’s Joint Center for Housing Studies and the National Association of Realtors, one of the fastest growing groups of home buyers is single women. The number of single women buying homes has increased from 14%of all home buyers in 1995 to 22% in 2006. Meanwhile, the largest segment of home owners, married couples, has been shrinking.

More single women are buying homes simply because they can– college graduation rates, workforce participation, and earning power are at all-time highs. In addition, general demographics are changing – there are just more unmarried women than ever before. And when women do marry, they are doing so later in life. Single women no longer see marriage as a precursor to home ownership and are more likely to want the responsibility that comes with home ownership than are single men.

Some other statistics that are worth mentioning - Single mothers make up almost 30% of all unmarried women buyers. And more single minority women are buying homes than married minorities.

While home ownership is more accessible to single women, there are still challenges to women home buyers including finding affordable housing and discriminatory lending practices.

Due to lower average incomes, almost three-quarters of single women buy homes under $200,000. With the median home price in Connecticut at $255,000 in 2006, it’s clear that single women in our state face a lack of affordable housing. The Harvard study shows that single women are more likely than other groups to purchase condominiums, which are often a more affordable housing option than single family homes. Condominiums also offer some features more likely to attract single women buyers such as a sense of community, gated or secured access, and access to social activities such as a fitness center.

In addition to affordable housing access, single women buyers also face lending discrimination. The Consumer Federation of America released a study in December of 2006 showing that women were more likely than men to be put into higher-cost subprime mortgages, regardless of their credit and income when compared to men in the same market.

Sources:

“Buying for Themselves: An Analysis of Unmarried Female Home Buyers,” Harvard University’s Joint Center for Housing Studies

2006 National Association of Realtors Profile of Home Buyers and Sellers

“Women are Prime Targets for Subprime Lending,” Consumer Federation of America

This is Part Two of the ninth post in a series of twelve on buying a home.  Click here for the other posts in this series.

In my previous post, I detailed everything that goes into an offer and most of what is included in a real estate purchase and sales agreement. But if you’re like most buyers, you want to go straight to the meat - the offer price and terms.  

I’ve posted on creating an offer and offer strategies before so I’ll refer you to my two earlier posts which contain ideas for gathering information on your purchase so you can make a good decision on price and terms. 

Let’s Make a Deal Part 1 

In Part 2 of Lets Make a Deal, I also gave you some ideas on how to position your offer, whether it’s a buyer’s or seller’s market. 

Let’s Make a Deal Part 2

The goal of any offer should be to get the seller to agree to your terms, or at least get their attention so they’ll negotiate with you.  Lowball offers have their place and can work - but be realistic.  If all the homes in the area you’re looking at are selling for $300,000, it’s pretty unlikely that a seller will take $150,000 just because it’s all you can afford and the market is softening. 

Here are the numbers that have been recently released by the Greater Hartford Association of Realtors for single-family residential properties.   There are some interesting things about these statistics:

1. Pending sales year-to-date and in February are up, but so is inventory (number of houses on the market.)
2. Closed sales is also higher than it was last year at this time.
3. Median and average prices are still higher than where they were last year.
4. Homes are taking longer and longer to sell -a little more than 3 months now on average.

Add all this up and my interpretation is that sellers are willing to let their homes sit on the market in order to get their price.   This is probably due to the fact that many people selling have a decent amount of equity in their homes.  It will be interesting to see if this continues if the pool of buyers shrinks due to the tightening of lending guidelines. 

(Sorry for the alignment issues - formatting is not my specialty.)

Year-to-Date Single Family Residential

                                          2007                                2006                              % Change

New Listings                  2,932                            2,851                               +2.92

Pending Sales                1,780                             1,651                               +7.81

Closed Sales                  1,281                             1,271                              + 0.79

Avg. Sales Price           $294,832                      $287,470                         +2.56

Med. Sales Price        $253,000                        $250,000                        + 1.20

Avg. Days on Market        71                                       61                            +16.39 

February 2007 Single Family Residential

                                          2007                                2006                              % Change

New Listings                 1,305                                  1,402                               -6.92

Pending Sales                909                                  904                                  +0.55

Closed Sales                  607                                    578                                  +5.02

Avg. Sales Price           $293,917                      $277,658                              +5.86

Med. Sales Price          $250,000                     $244,450                             +2.27

Avg. Days on Market        75                                     62                                  +20.97

Inventory                         4,975                              4,228                                +17.67

This is the ninth post in a series of twelve on buying a home.  Click here for the other posts in this series.

Helping buyers make and negotiate an offer is one of the most important tasks of the real estate buyer’s agent.  Before I get into the strategies of making an offer and negotiating, which I’ll have to cover in a second post because of length, buyers should completely understand the terms that go into an offer.  It is wise to review the real estate contract with an attorney either before making an offer or making the offer contingent upon an attorney’s review, so buyers understand their rights and responsibilities fully.

**Please note that in most of Connecticut, a real estate agent will fill out a “Purchase and Sales Agreement” with the buyers in order to make the offer and the seller can sign it directly(or negotiate or reject it).  In Fairfield County, a binder is submitted as an offer by the buyer and his/her agent and an attorney actually writes the Purchases and Sales Agreement once the price and terms have been agreed to. 

What Goes Into the Offer?

In most of Connecticut, the offer a buyer submits becomes the actual contract (or, Purchase and Sales Agreement) if the terms are agreed to by the seller.  The offer includes:

• Names and addresses of the two parties - buyer and seller 
• Address and sometimes a legal description of the property
• Fixtures and personal property - many agencies include a separate document with a list of what’s included/excluded and it becomes part of the contract once the buyer and seller sign it
• Sale price
• Deposit amounts and dates - Amount of earnest money deposit accompanying the offer and how it’s to be returned to you if the offer is rejected — or kept as damages if you later back out for no good reason
• Mortgage type, amount and mortgage contingency-the date by which a buyer must obtain mortgage commitment from lender
• Closing date - when the sale will occur 
• Seller’s promise to provide clear title
• Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller - in CT, it’s according to the custom of the Bar Association in that County
• Provisions about who will pay inspections including home, well, septic and pest and dates by which inspections must be completed and notice of unsatisfactory inspections given to seller
• A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing and that the property be in “broom clean condition”
• Property disclosures - buyers must be provided with and sign a copy of the seller’s property disclosure report, including mold and lead paint forms

Your offer may also include:

• A period of time in which the seller has to accept or reject the offer - for example, 72 hours
• A period of time in which the buyer may have their attorney review and approve, also 72 hours
• Riders - condominium, septic, well, sale of buyer’s property (Hubbard Clause)
• Seller concessions such as buyer’s closing costs

Major Contingencies

A contingency is an event that must take place in order for a buyer to purchase a property.  The most important ones are:

• Mortgage  - a buyer must obtain financing (in the form of a mortgage commitment) in order to purchase property
• Home Inspection - a buyer must provide the seller notice of an unsatisfactory home inspection by a certain date in order for buyer to terminate contract with seller

Other Items That Accompany the Offer

Earnest Money Your offer must also include earnest money or a deposit.  This can be made with a check which goes to the listing broker who holds the money in escrow.  Generally, the check is only deposited once the seller has accepted the offer.  A second deposit in CT is customary but this deposit is made by a cashier’s or certified check within 7-10 days of contract acceptance.

Pre-Approval Letter  I always include the buyer’s pre-approval letter from the bank with the amount of the offer - never the full amount the buyer is approved for. 

Personal Letter In a strong seller’s market, a personal letter from the buyer can make one buyer stand out from a crowd of other buyers.  In a buyer’s market, this letter is generally not neccessary.

The Department of Housing and Urban Development just issued its fourth quarter US Housing Market Conditions Report for 2006.  I paid the most attention to their regional report, which echoed some of the things I’ve been hearing.  Here are some excerpts from the report:

Jobs and Unemployment

The service-providing sectors have added 13,600 new jobs in Connecticut.  And, Connecticut continues to show the most improvement in reducing unemployment; its rate fell from an average of 4.9 percent in 2005 to 4.3 percent in 2006.

Home Sales

I hate realtor photos.  Before I became an agent, I had fun laughing at bad realtor photos in the paper.  Bad Glamour Shots.  Agents on the phone.  Agents who dressed terribly.  The photos never made we want to work with any agent.   If anything, I turned and ran away.  And I never thought one day, I would become a real estate agent and that I, too, would have my picture taken.

But, I gave in.  Several people commented to me that I needed a picture on this blog.  And I also write for First-time Homebuyer Magazine and hope to write for some additional publications.  It was time for a photo.  So, you can now meet my picture, which will greet you every time you come to this blog.