A question was asked on Trulia earlier today that stated a desire to not use a buyer agent so as to save 3%. Now, aside from the mistaken presumption that all buyer agents are paid 3%, the questioner inadvertently brings up a point that all purchasers should understand:

You don’t bring a knife to a gunfight.

My answer began as follows:

The notion that you are spending an additional 3% if you use a buyer agent is inaccurate. The listing agent already has a contractual commission arrangement with the seller, and they will not cut it in almost all cases just to make the deal work for you. Moreover, you are not represented in the largest transaction of your life. A good buyer agent will save you more than 3%.

Some people think themselves as skilled and savvy enough to deal with the seller’s advocate without assistance. Most of them are sadly mistaken. They’ll get Uncle Lou or someone they don’t know out of the yellow pages to do their home inspection. They’ll hire the cheapest lawyer. The transaction can get stalled at the 11th hour because they didn’t know that there was no Certificate of Occupancy for the finished basement or extra bathroom. They lock their rate too early and end up paying an expensive extension fee (this is especially sad when the fee is unnecessary- if rates have gone down they’ll benefit from the common worst-case-scenario policy from a prudent rate float). They get to closing and find out the property taxes are $2000 higher than advertised. They get left out in the cold a week before closing by a sham Internet mortgage deal. The list goes on, and I’ve seen it all.  

Skills alone won’t make MLS data and comparable sales materialize. Negotiating on a home is unlike any other transaction. If you treat it like a car, PC or ebay you are tempting fate. There may be some lame listing agents, no doubt. But I know agents that, if given the chance to sell their own listing to an unrepresented buyer, will smack them about the head and face & call them Shirley and have the buyer think they just got a foot rub. It has nothing to do with deceit. It has everything to do with knowing the things at the deep end of the pool. This is the biggest transaction of your life and there is no need for machismo. USE A PROFESSIONAL with references, a track record, and local knowledge.  

Now, I haven’t shared the question with you yet. It was as follows:

Can someone send me the details on how to buy a home without hiring a buyers agent? a format of offer letter

Folks, if this is your starting point you need a buyer agent. This guy won’t save 3%.

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J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE confidentially & at no obligationat http://jphilip.listingbook.com.

J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.

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J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE, confidentially & at no obligation at http://jphilip.listingbook.com. 

J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.

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J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE confidentially & at no obligationat http://jphilip.listingbook.com.

J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.

Unless otherwise indicated, all data in this post is from the Westchester-Putnam Multiple Listing Service.

There are 3,454 single family homes actively for sale in Westchester County. Of those, 148 are disclosing either a short sale or foreclosure proceeding in process. This is about 4.3% of the available single family home inventory.

The actual number is probably far higher than that. That is because on many homes the listing agent has not disclosed, either knowingly or unknowingly, that the house is upside down or delinquent. Also, there are hundreds of overpriced listings which would be short sales if the price were lowered to market value. In other words, there are lots of $450,000 homes listed for $550,000 because the mortgage balance is $500,000.  

The average number of days on market for an active listing is 135 days right now, and the median asking price is $775,000. In January of 2009, the median sales price was only $550,000 in Westchester. There is a $225,000 disparity between median asking price and median sales price. According to Realist, the public data conduit for the WPMLS, only 105 homes sold in January of 2009 compared to 393 the same month in 2008.  Homes are still very overpriced.

People can ask for whatever price they want; what they get is another story. Too many people are upside down and don’t even know it. You can’t price your house based on what you want or need to pay off the mortgage, the bills, or recoup expenses. You can only get what people are willing to pay. Too often, that is not enough to satisfy the mortgage balance.

More people need to realize that if they need to sell and they have no equity,  the only way out is a short sale.

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J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE confidentially & at no obligationat http://jphilip.listingbook.com.

J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.

Here in New York attorneys are an integral part of the transaction process. The following occurred this past Monday on a home I listed where an old deal resurfaced from when the home was listed with a prior agent.

I got a call from the attorney’s office of the purchaser of my listing. I was told told that if I could deliver copies of some papers needed that they would give me their deposit check for my client’s attorney to deposit. Due to the fact that this was a transaction that had been canceled by each party once and subsequently reinstated, we would then be able to close as soon as the check cleared. Naturally, I stopped what I was doing and headed straight for White Plains. Trump and Iacocca could wait.

Upon meeting the buyer’s attorney I was pleased to meet a paralegal who struck me as being on her game without being arrogant (a rarity) and a lawyer who was quite down to Earth and eager to make the deal happen after months of drama (another rarity). Since this was the first time we met, I was encouraged that this wasn’t a bait and switch, since real estate agents are cheaper than couriers.

Given the attorney’s desire for expedience, she thought it wise for me to take the check straight to the bank so we could close Friday. We got my client’s attorney on the speaker phone to clear it with her. She was unenthusiastic abut me depositing anything in her account, which I suppose is understandable.

As I watched the buyer’s attorney speak with our lawyer, I witnessed her bury her face in her hands as the conversation deteriorated from an exploration of how to close this sale into a primer on banking in the year 2009. Our lawyer asked what bank the check was drawn on, presumably to ensure it wasn’t an out of state check. “Wachovia!” she squealed. “They take forever to clear.” It became evident in the ensuing, frustrating conversation that this lady was confused between depositing a check from a certain bank and depositing a check to a certain bank. Rather than jump in the deep end of her dementia pool, we agreed to close the next Tuesday the 17th rather than the coming Friday the 13th.

Oh, and one last thing, she said. The closing couldn’t be too late into the afternoon hours. “I have bridge Tuesday.”

Choose your attorney carefully, folks. These are the people who watch your back in the largest transactions of your life.

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J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE confidentially & at no obligationat http://jphilip.listingbook.com.

J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.

I write this as a fiercely proud broker owner of an independent firm. My company, my good name, my actual name. This thing is my baby. It is what I make it.

We have an automated system (Centralized Showings) for appointments and feedback. It works very very well. Of course, if a seller is not quick to confirm an appointment, no system can prevent that. Here is the feedback after a showing that came from an agent from a very prominent firm yesterday:

CSS system sucks

This is, of course, read by my seller client online.

This is, of course, not feedback.

This is, of course, an incredibly unprofessional communication no matter how you slice it.

My client, a week-old listing, needed to be talked off the ledge this morning after reading that, because it made them doubt hiring me among many other things that bubbled to the surface when this clown decided to work out his baggage on me.

Upon occasion, I do run into a licensee who is nasty or arrogant. Most of the time, they seem to work for a larger company. They often wear their company like a badge, as if it makes them better than a piddly independent (or so they think) like myself. If you know me, you don’t think I’m a pipsqueak. If you are unfamiliar with me, you might see me as a good dog to kick.

I’m the wrong dog to kick. I forwarded the email to the chairman of the firm, whom I have communicated with cordially before. I told him he needs to know what is occurring in the trenches with his agents and that I expect more from one of his team. I added that the last thing an agent should do is cause a problem between a colleague and their client. True to my expectations, he responded quickly.

Agents who are this small minded don’t make their firm great, they siphon off their firms reputation to obscure their own shortcomings. That company thrives in spite of, not because of, agents like this one. Not everyone can run their own shop, or wants the headaches. I respect your reasons for working where you do. But it is how you conduct yourself, not what colors you wear, that makes your reputation. If you work at a large company, you need to understand that at one time it was small firm, built by the dreams, blood, sweat and tears of the original owners. You benefit from that, as I hope people do in the future when my company is older and bigger.

We are all tempted to vent when we get frustrated in the field. I’ll bet 25% of my active rain points are member’s only posts where I empty my guts to keep my sanity. But there is a way of doing this that is acceptable and there are things that are not acceptable at all. If you are tempted to vent, ask yourself if it is something that will make your company a more well regarded firm, or if it undermines your firm. Once you get your answer, then you’ll know whether or not to click on “send.” 

I still recall the instructor from my original 1996 license course admonishing our class that agents never give legal, accounting, or any other advice that is beyond the scope of our duty. We were even coached to repeat the phrase “I cannot give you legal advice.” Wise words.

In New York, the real estate transaction involves many professionals: agents, lawyers, title company, appraiser, home inspector, lender, loan officer, and so forth. While we do not operate in individual vacuums and there is some cross pollination of duties (I might provide an appraiser with comparable sale information, for example), by and large everyone plays their position. When one professional tries to wear that hat of another, it is an invitation for problems.

On a recent home inspection, my agent reported to me that the inspector advised the buyer that the presence of electrical fuses instead of a circuit breaker panel could cause problems with the mortgage lender. I have sold real estate for 13 years and originated mortgages for another 7; I have never heard of this. I asked Tom Ginis, one of the managers at Residential Home Funding if he had ever heard such a thing or if he was aware of any underwriting guideline to this effect. He had no idea where the claim could come from. He also wondered aloud why a home inspector would make such a foray into underwriting.

The problems that can arise from this sort of thing are numerous. First, in our marketplace inspections are done before contracts are signed. After a spirited negotiation on price and terms, this can muddy up the waters. Now our buyer, who is putting down a substantial amount on a conventional loan, has a new worry. If the reason were legitimate, fine. But no professional I have asked (myself included) agrees with this guy. We now have to devote time and energy to reassuring the buyer and researching mortgage underwriting to prove that she won’t have a problem getting approved. This is to say nothing of the fact that I have closed two recent FHA transactions on homes with fuses.

I have since heard that he sells insurance and moonlights as a home inspector. Now he’s underwriting loans in in basements. How silly! We should all play our position. Otherwise, the domino effect adversely affects both clients and colleagues. Buyers: Don’t work with part time professionals one of the biggest transactions in your life.

Dear REALTOR.com,

I tried to think of a diplomatic to say this, but I’ll just cut to the chase.

You suck.

Not just because I have to pay you $3,000+ per year while providing you with my content.

Not just because you telemarket the living crap out of me for banner ads.

Not just because as a home search tool you are inferior to any basic broker IDX search.

Not just because no matter how many times you revamp you are still a clanky, slow -to-load page even though I pay through the nose for a commercial grade FiOS connection which loads movies faster than 1 lousy photo on your site.

No, you mainly suck because it has been a month and you still haven’t fixed, or explained why you can’t fix, the web statistics I pay dearly for and my 40+ listing clients expect.

I can’t tell you how degrading it is to endure all of it. Telling my clients that I have a “trouble ticket” opened doesn’t quite cut it. Maybe you don’t understand that some people list their homes with me expecting this stuff to work. Maybe you don’t understand that many of our clients are freaking out as it is and this contributes to, rather than helps solve, the problems of those who PAY YOUR BILLS. It has been a month and this still isn’t fixed. And this is a public post because the public needs to know the frustration that I and my colleagues have with you.

If you were surgeon, the patient would have died.

If you were an airline pilot, the plane would have crashed.

As my late brother used to say, compact your fecal matter. Seriously.

I have worked in a ton of jobs in my life- bartender, deli counter, dishwasher, landscaping, telemarketing, and even pizza delivery. Each task in some way prepared me for Life. I want my children to be even better-prepared than I was for this adulthood thing, and the following are, I feel, some “must have” jobs that I want my kids to experience as they grow into responsible adults.

1. Some sort of manual labor-landscaping, roofing, or construction. The significance of this will be to teach them that all work is honorable, good work, and what it is like to work around real people. There is no pretense in the trades. Moreover, nothing says “stay in school” like a sore back, a nasty hammer blister, or a sunny 100 degree day applying hot tar to a roof.
2. A gratuity-based job like waiting tables or bartending. Working for tips brings out the inner entrepreneur and teaches a person what customer service is about. Some of those lessons hurt-like getting stiffed with no tip from a difficult, nasty patron. Overall, however, the lesson that you’ll earn more if you hustle and deliver the goods to an increasingly demanding public is as valuable as a college semester in my mind. Plus, they feed you!
3. Work in a real estate office. I don’t have any expectations that my children will follow me into real estate, although I am working to build something for them if they choose. However, even if they work in an office over the summer, that would show them what it means to deal with clients, the public, and professional colleagues. I want them to know what goes into this, which, to any licensee reading this knows, is a great deal. I also want them to know their old man wasn’t sipping cognac at a mahogany desk all those hours.
4. Something they love with no pay. An internship or volunteer position in a field they might love, be it art, medicine, dog grooming or teaching assistant would certainly help them decide if they really want to be in that field. If you love it pro bono, it will never be work when they pay you.

While I certainly was powerfully influenced by family, professors and coaches, I was equally enriched growing up by a butcher while working counter at his deli a block away from Sing Sing Prison in high school. You can’t be a prima donna and survive a line of grumpy prison guards at 11pm waiting for their hoagies.

Real estate brokerage is an ecelctic mixture of field work and desk work. We inhabit no ivory tower. I believe those of us who succeed in this work aren’t far removed from other work which teach life’s most basic lessons: work hard. Hustle. Fill the need. Listen. Don’t take yourself too seriously. I did all of the different jobs I write about when I was younger, and it makes me a better broker, a better husband and father, and, I hope, a better man.

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J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE at http://jphilip.listingbook.com. This Agent-Style MLS search is nothing short of incredible and is far more comprehensive than home searches on typical sites. Registration is free, confidential & at no obligation.

J. Philip Faranda ranks among New York’s premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil’s short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.