HOW MUCH IS TOO MUCH?

How much is too much? As agents we always go above and beyond. My partner and I live in a neighborhood one hour north of Atlanta. We have each lived there for 12 years and have been #1 for resales the past four years. Here is our scenario: We have a listing in our neighborhood. Our sellers had lost one contract and were anxious to sell. Homes sell here but at a slower pace. My partner receives a call from an individual who lives in Atlanta. She has one family member who lives in our neighborhood and has another family member who is moving to Atlanta from out of state. She saw our listing on the internet and thought it would be a good fit. My partner showed this individual the home a few times. Eventually the prospective buyer came in to see the home. Overall my partner was the only one who ever showed any of the family members the home. Enter the buyer’s agent. During the looking phase the individual Atlanta said that she had an agent who was going to assist her family member who was going to buy the home. Here is where it got interesting. This agent never showed his client the home. When we eventually asked him to show the home he said he did not have a lock box key, does commercial real estate, and had a bad back. Not only did he not show the home, he was not present for the inspection, appraiser, and the final walk through. He asked my partner to meet the above individuals. When it came to contracts, the buyer’s agent did not have access to residential contracts. Matter of fact my partner had to fill out parts of the purchase and sale agreemet, disclosures, amendments, and counteroffers. My partner did everything. Then there was the commission. Throughout the process the buyer’s agent claimed he was entitled to his commission. At the same time we had the following information for this listing: “If we show your buyer our listing, you receive 1%”. He did not see this because he did not access to our listing services FMLS and GAMLS. After conferring with our broker we put together a smaller commission for the buyer’s agent. Needless to say that did not go over well. At the closing the buyer’s agent used some new adjectives to describe my partner, broker, and myself. Eventually we settled the commission. So how do you handle this? We had a seller who needed to sell and we had made commitment to do this. We had a buyer, first time homebuyer, who did not know the proper protocol when it comes to working with an agent. How much is too much?

Atlanta Area Real Estate Summary

I was recently able to attend a real estate class highlighting national and local real estate trends. This is our commitment to stay as informed as possible about our industry and how it affects our clients. Our Atlanta area buyers and sellers • Have been on the sidelines • Have been shifting from higher end consumer stores to outlets • Have a consumer confidence, according to surveys, double of 2009 levels but approximately 60% of 2007 levels (national level) • Have seen an increase of 68,400 jobs in Georgia January 2012 vs. January 2011 • Are part of one of the top 25 US job growth markets in the country • Unemployment in the Georgia Mountain Region is 8.3%. Specifically 10.1% in Dawson, 8.2% in Forsyth, 10.1% in White, 9.25% in Hall, 9.2% in Gwinnett, and 10.8% in Lumpkin • Unemployment in the Atlanta Region is 9.3%. This includes Cobb, Fayette, and Rockdale Counties • Median income (2010) in Forsyth County is $95,906, Dawson $58,766, Lumpkin $46,360, White County $42,487, Hall County $56,240 and $81,904 in Gwinnett National Home Sales • 11973 homes sell every day. Of those, 8501 receive a mortgage • 25% of home sales are distressed property sales. This compares with 35% in January 2012 • Months inventory of homes for sale have gone from approximately 9 months to approximately 6.5 months, June 2012 vs. June 2011 • 30 year fixed mortgage rates started at 4.75% in January 2011. Today they are averaging between 3.75% and 4% • California is #1 for amount of homeowners who have negative equity in their homes • Total homes sales 4Q 2011 were approximately 4,300,000 units vs. 4,600,000 units in 4Q 2012 • The highest foreclosure inventory are in Nevada, Hawaii, Florida, Illinois,NY,NJ,and Maine • Florida, 11.9%, has the most foreclosures in process • NY and NJ have the most months of shadow inventory. (shadow inventory are houses owned by HUD, banks and other organizations) Atlanta area home market • Atlanta metro area is comprised of 28 counties including Dawson, Hall, and Forsyth • 65% of the growth in the last 20 years has been north of the Atlanta airport, 35% to the south • Home inventory is shrinking. In the Atlanta metro area there were approximately 42,000 homes for sale in 2010, 25,000 homes in 2011, and 22,000 homes available in 2012! • Median home price (2010) was $230,598 for Forsyth, $134,000 for Gwinnett, $124,500 for Lumpkin, $119,500 for White, $125,000 for Hall, and $156,775 for Cherokee • There are 795 new home subdivisions in the 22 county area • 48% of the building permits in the 22 county areas were for Gwinnett and Forsyth County. In the last 12 months Forsyth has had more building permits than Gwinnett. • There are 285,000 developed lots in the Atlanta area waiting for a house! • 45% of the builders in the Atlanta area are national builders a very large increase • In 2000-2007 land represented 25-43% of the total cost of a new home. That percentage will drop to 18-22% • 70% of all 2011 sales were homes priced under $149K • In the 2011 the lowest number of sales were in the $250K to $750K range! Summary The home sales in our area are a direct reflection of the above statistics. The majority of our transactions for 2012 took place in Forsyth, Gwinnett, and Fulton Counties. One home was under contract in 2 days, one in 6 days, and one in under 30 days! Pockets of Dawson County, especially the Chestatee golf/Lake Lanier community, continue to sell but at lower prices. Counties to the north of Dawson are receiving lower amounts of traffic and are under pricing pressure. This pricing pressure is a result of their median income, unemployment rate, and the high amount of second home properties available for sale. We have not seen pricing go any lower for homes. However they continue to “bump” along with no large price appreciation. Resale homes in Forsyth and North Fulton, priced well, are selling quickly near full asking price. Multiple full price offers have also happened in these areas in resale and foreclosure properties. We are telling our buyers that the conditions are not going to get any better. Interest rates are ridiculously low but cannot stay this way forever. Property prices are not going any lower and the inventory is shrinking. This is the time to buy!