I read with interest this article published in the New York Times today.

With many of us (particularly in the Northeast) getting our heads wrapped around the foreclosure issue, this article appears timely- not only is it essential, when dealing with clients in the foreclosure process, for us to get all documentation up front, but it would also appear that establishing the legality of the foreclosure is another issue altogether. Hope for some sellers, with more time to sell?

It just doesn't get more challenging, does it?

At least there appears to be a judge willing to do the right thing- what a breath of fresh air for NY.

I haven't owned a home since my last one sold a few years ago. Me, personally.

Before that, I'd owned three, refi'd a few times, sold at a profit (albeit, small) and just decided to wait in NY. If the right one came along, I'd look, but to date, have only been tempted by one. And, I would have gladly overpaid (a little) for it.

As soon as my creditors discovered (I'M ASSUMING) that I was house payment NOT poor, an offer now and then for credit would trickle in, offering a transfer balance/interest-fee, blah, blah, with a great rate as the final advertised and pre-approved amount. As a relative conservative with respect to credit in good times, I did occasionally open them, but mostly not.

Then, it simply wasn't part of my lifestyle- I had enough to live comfortably within my means.

FAST FORWARD THREE YEARS (2007)- NOW, the preapproved cards are merciless in their volume, and REALLY overcrowding my paper shredder. The thing is, these aren't "little" credit amounts offered. What a difference in "offers" over the past two years. Maybe I have a minor "ding" on my credit, but it was there two years ago. Things haven't changed as quickly as the INCREASED amounts offered, if at all , but the accompanying interest rates have.

EXAMPLE: I went to the Gap, and found a sale beyond sales (OK- GapKids). Upon hitting the register with a truckload of sale baby things, the person at the register told me that if I got a Gap Card, on TOP of the current savings, I'd get an additional 10% off (in my head, that's $15.00- one of the baby outfits is now "free").

Except, I didn't receive a "GAP" store credit card- in my haste to get the additional discount as well as the baby closer to her bottle, it was sign-and-go. What I received, as read later in the agreement, was that I would also be tossed into the VISA pile.  A limit that would prove impossible to spend in it's "generosity" at the Gap, but...can be used anywhere! At 20%!

That occurred at retail store- MY ERROR.

Now, one would surmise that if a lending institution is going to send something pre-approved IN THE MAIL, the accompanying interest rate would be really good- if not, who's going to take it? THOSE were the credit offers that I received a few years ago- the trickling credit offers.

With the fresh assault, the rates are HUGE. Were each to be accepted at the credit amount offered, I could probably pay "CASH" for a nice McMansion that's been stripped. To its foundation (I'm in NY).

It's just interesting to me that the banks are aggressively seeking to up-chuck credit offers to those of us that, without it, would have a MUCH better opportunity at buying a house in its absence. You know- US, THE POTENTIAL HOME BUYERS. Being a real estate agent irrespective.

 

 

I don't think that she cares that the socks match the hat.

Bob Sullivan from MSNBC's Red Tape Chronicles posted this today. We thought it was valuable enough to show it to you here, at least the opening paragraph. Click here to read his entire post over at the Red Tape Chronicles.

"Traditionally, buying a home has been "free," at least with regard to real estate agents. Sellers pay steep commissions -- usually around 6 percent – which are split with the shoppers’ agent. That allows home buyers to focus their energy on hunting for hidden fees from their mortgage provider."

To home sellers and buyers on the North Fork of Long Island: Please click here to read the entire article.

While I had heard of vague "administrative fees" becoming common, it was something that seemed minor relative to the rest of certain real estate issues that occur on Long Island, in addition to an ever changing market.

Deciding, as a broker, to add fees that (if they are explained as competently as the agency disclosure often is...NOT...you will likely view this inserted creative "fee" at closing) is unacceptable, whether in a slow market or not.

Not because there are certain administrative tasks associated with a real estate transaction, but because fees charged to consumers is for the purpose of a completed transaction. Isn't that what "commission" is supposed to cover?

Hopefully, awareness of what we concur is a sneaky and unacceptable "fee" (what- paying a real estate agent along with an attorney isn't enough for Long Island consumers??) will eliminate it. Awareness is everything, and administrative fees coming from a real estate broker/owner are completely ridiculous. Opinion, of course...

Photo: sxc

 

 

 

Your Local North Fork Real Estate Blog

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Authored by: Laurie Mindnich
July 3rd, 2008

As buyer agency becomes more common in New York, myths and misunderstandings abound.

A consumer misunderstanding involves seller perception. While the term "buyers agent" might strike fear in the heart of a seller accustomed to both parties working with a buyer on behalf of the seller, it's actually clarification for both parties in the transaction that tends to afford the process an ethical and smooth conclusion.

Working on behalf of a buyer does not eliminate required "fairness to the seller" intrinsic to all transactions.

The idea is NOT to create issues for the seller, or offers without merit. Rather, it is to clearly define the parameters of a fair price, fair terms, and in all likelihood, required pricing commensurate with value that will ultimately be determined by an appraiser.

Another myth that appears to be perpetuated by some Realtors on Long Island is that a buyer agency contract is required in order for a buyer to obtain representation. Realtors on Long Island tend to concern themselves with a "liability" issue which, so far, I'm simply not seeing as an issue at all. It is no different than liability present when Realtors represent (with fiduciary) a seller.

Confused, many agents feel that a contract guarantees THE BROKER payment, eliminating the possibility of a buyer locating a property after a Realtor has presented properties to a buyer. Indeed, it is from our view a "hostage" situation.

Our philosophy is that if we haven't established the necessary trust between ourselves and a buyer, we haven't established the right to compensation. While some might consider this perception risky, we have found that buyers with loyalty earned by us are more than willing to keep us as their agent, irrespective of the possibility of a property located without our involvement (i.e., open house, fsbo , etc.).

In the event that a buyer does locate and consummate a transaction despite our involvement, we are inclined to look to ourselves for the problem- surely, had we operated with an acceptable level of integrity and trust, we would be included in the transaction.

Another problem with a signed agreement from the buyer (outside of the NYDOS disclosure) is that there are many Long Island Realtors that  either counsel sellers to discourage buyer agency compensation (but include, in the price of the house, a fee to be paid to an agent that brings a buyer, representing the seller), or don't alert sellers that this compensation is not included in their listing agreement.

For this reason, holding a buyer hostage via a contract that may well require payment out of the pocket of the buyer is a violation of the fundamental practice of buyer agency on Long Island, and the accompanying fiduciary incumbent upon the Realtor- causing an unnecessary expense is a violation of fiduciary, and therefore unacceptable.

If we can't convey to the listing agent and seller that payment is to come out of the proceeds included in the price of the house via a fee that OUR BUYER is paying in the price of the house, we aren't doing our job. Period.

Until listing agents reduce their fee to include ONLY the listing "side" (typically, a total seller fee is 6%, with 3% going to the buyer's agent) it is incumbent upon all of those seeking to represent buyers to comprehend FIDUCIARY to the buyer through a full understanding of what the buyer is paying in the price of the house for representation.

It is of concern to imagine that a buyer's agent would require payment from a buyer, knowing that the fee for the buyer is IN THE PRICE OF THE PROPERTY, AS WELL.

Long Island is tricky. Were it like most areas that are full of  Realtors accustomed to buyer agency as the only way to conduct real estate, there would be no concern that a buyer would be compensating their agent once through the listing fee in the house, and again out of pocket to the agent. It simply isn't a problem in many areas, as ALL listings fully anticipate, and offer payment to, a buyer's agent in the MLS system.

Until this is true in New York, and specifically on Long Island, it is dicey, and unacceptable to demand a contract from a buyer seeking representation.

We don't do things the way that Long Island "does things", because it has been far too confusing, in our opinion, for BOTH parties in the transaction. The resultant disdain that most consumers have toward the real estate industry in general on Long Island is a result of confusion.

Working to become an integral part of a fair transaction does not seem an unreasonable request on the part of consumers. Hey, it has to start somewhere.

If you are seeking a property on the North Fork of Long Island, or would like a review of our consumer friendly rates to list your home with the utmost care, please contact us. We are happy to answer any questions that you may have. Our goal is your goal- a transaction that is clear, defined, and puts integrity ahead of self-gain.

photos: iStockPhoto