Archive for the ‘Buying’ Category

real-estate-dual-agency-buyers-and-sellers“So what will it cost us to secure your services?”  One of the top questions that I receive.  The answer may vary depending on the services you request.  For the purposes of this 3 part series, I will let you in on Renter’s Agent, Buyer’s Agent, and Seller’s Agent pay.  According to the 2013 National Association of Realtors Member Profile, “In 2012, the typical agent had 12 residential transaction sides – up from the previous year when the typical agent had 10 transaction sides.”  Traditionally, the real estate industry is completely commission based.  Most of the time, a Realtor works under the supervision of a broker unless they are a broker themselves.  In that case the broker may have their own company or work with a large, well known company like Keller Williams for example.  There is also the option for a Realtor to work on a team within a larger company.  All of these folks require payment.  So realistically, on one real estate transaction, there is the potential for the commission to be split 6 different ways before it is all said and done.  Let’s take a look at the Buyer’s Agent…

The Buyer’s Agent.  This agent does not cost the buyer a dime in this area.  As I talk about in 6 Reasons NOT to Call the Realtor on the Sign, my services to you as a Buyer Representative are practically free.  The commission percentage is agreed upon between the seller and the selling agent.  Generally, the selling agent will agree to split that commission with the buying agent, so you my friend, are off the hook!  All of my expert assistance, with no money down!

There will be a Buyer Representation Agreement.  A Buyer Representation Agreement details my duties to you as your agent, yours to me as a buyer, and that we mutually agree to work with each other.  I agree to work as your representative, and you agree to be represented by me.  It also specifies things like the length of time that the contract is good for, what type of home you are searching for, and the sources used for the search.  According to the Tennessee Association of Realtors® (TAR) Consumer Guide to Agency Law in Tennessee, “Once you have signed a Buyer Representation Agreement, this contract obligates your agent to be your loyal advocate and to promote your best interests above all others in the negotiation and closing of a successful purchase.”

This part is important to us Realtors, and I think you will be able to see why.  I’ve only had it happen once, but it still stings.  A potential buyer contacted me months before their anticipated arrival.  There were some specifics that they required in a home.  I searched, and searched, sifting through listing after listing (hundreds!) to find the right ones to show them.  Hours of my time before they ever arrived.  I answered their questions, blocked my time for them in preparation for their arrival, and was completely dedicated to easing their transition.  To make a long story short, they didn’t want to sign my Buyer Representation Agreement when they arrived, even though I agreed to write in the special stipulations that I would let them out of it if they so desired.  For three days, I searched for homes, arranged showings, and took them to see houses.  We drove from one end of Clarksville to another, and I held other clients off out of loyalty to the time I had blocked for them.  On the fourth day, after arranging another evening of house hunting, they stood me up.  Property transactions are noted in our Multiple Listing Service (MLS), and are ultimately public information.  It wasn’t long before I discovered that they had bought the very first home that I showed them.  Hours, and hours of my time wasted.

But moving forward, how is a Buyer’s Agent paid?  We find the home you love, and go under contract.  On the MLS sheet, the compensation amount is listed.  This is a percentage that is split between the Seller’s Agent and the Buyer’s Agent.  Then, as I spoke of above, this is split with the agent’s broker, and may even be split with the agent’s team if they are on one.

Here is an example:

The price of the home is $100,000.  The commission is 6%; 3% to the Seller’s Agent, and 3% to the Buyer’s Agent.  The brokerage split is 70/30.  The royalties to the company are 5%.  And then the split to the team is 40%.  The paychecks may look like this;  $900 to the brokerage, $150 to the company, and $780 to the team.  That potentially leaves $1170 to the Buyer’s Agent before taxes.

Buyer’s Agent Expenses. So dang, those agents make a lot of money, right?  Hold your horses!  On top of our split, we have all of these additional expenses and then some:

  • Various taxes
  • Office fees
  • Office supplies
  • Realtracs subscriber fees
  • Advertising (signs, websites, business cards, etc)
  • Clarksville Assocation of Realtors dues
  • Tennessee Association of Realtors dues
  • National Association of Realtors dues
  • Dues for other professional organizations we may belong to
  • Closing gifts to our buyers
  • Electronics (computers, cameras, etc)
  • Phone bills
  • Vehicle maintenance
  • And the worst of all… GAS (sometimes multiple times per week)!

Bonuses.  I will let you in on one last little secret.  Everything in real estate is negotiable.  Sometimes if a particular listing has been on the market for a long time, or if the seller is motivated to get the home sold quickly, they may include a bonus to the Buyer’s Agent.  These bonuses can range from hundreds of dollars to thousands (even tens of thousands) of dollars, and it is not something that you as the buyer are usually aware of.  Though any payment amounts are noted on the final HUD that you will receive before closing.  The seller and listing agent can also agree to pay a higher commission percentage as an incentive to the agent.  Keeping that in mind, if you have an agent who is passionate about the families they help, and not particularly money driven, they may opt to forgo the additional bonus or lower their commission amount to get you the deal that you want.  Not tooting my own horn, but I have done this for my clients.  I have let a few bonuses go to get my buyers the most and there are a few other like-minded agents out there.  Disclosure is the best practice in my opinion, and I do not try to keep those sorts of things concealed.  After all, realtors can offer their opinions, but we cannot make you buy a particular home.

Be sure to read Realtor Pay Exposed (Part 1 of 3): The Renter’s Agent and Realtor Pay Exposed: The Seller’s Agent (Part 3 of 3)

Does that break it down for you?  Questions?  Concerns?

If you have questions or need real estate assistance in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who does, call me today at (931) 436-6765 or submit your information below.

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2014.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

227 Fox Crossing a

Fox Crossing
Piper Construction

44 Lintwood Heights a

Lintwood Heights

44 Lintwood Heights b

Lintwood Heights

Sugartree

Sugartree

Sugartree

Sugartree

Meadowbrook

Meadowbrook

Meadowbrook

Meadowbrook

78 Whitetail a

Whitetail Ridge

78 Whitetail b

Whitetail Ridge

147 Fox Crossing

Fox Crossing
Piper Construction

147 Fox Crossing b

Fox Crossing

209 Fox Crossing a

Fox Crossing
Morgan & Sons

209 Fox Crossing b

Fox Crossing

229 Senator a

Capitol Hill

229 Senator b

Capitol Hill

231 Raintree a

Minglewood Acres

231 Raintree b

Minglewood Acres

253 Harold a

Twin Rivers

253 Harold b

Twin Rivers

254 Fox Crossing a

Fox Crossing
Burkett Homes

254 Fox Crossing b

Fox Crossing

261 Fox Crossing a

Fox Crossing
Grant Construction

261 Fox Crossing b

Fox Crossing

435 Fox Crossing a

Fox Crossing
Hutcheson

435 Fox Crossing b

Fox Crossing

1021 Waterford a

Arbour Greene

Arbour Greene

Arbour Greene

  
Monroe Estates

Monroe Estates

3141 Little Grove b

Monroe Estates

Over the years as a military family, we have moved numerous times.  We have rented apartments and duplexes, lived on post, and owned homes.  We have converted our primary homes into rentals, taking us from militaHome-Happy-Home-1-size-3ry homeowners to investors, and we have managed them personally, making us landlords.  I have been the general manager of a large hotel, worked for military housing, and have since become a licensed real estate agent.  So I got to thinking, (watch out!  It can be dangerous when I get to thinking… ha!), based on all of our personal experience, and experience with all the people I have been in contact with over the years, are homeowners happier?  What I found surprising is that there have been some actual studies done and data collected with the same question in mind.

If we go back to a previous blog post of mine, Which Realtor is Right For You?, I speak of Maslow’s Hierarchy of Needs.  The foundation of the pyramid includes physiological requirements like breathing, food, water, sleep and shelter.  The pyramid theorizes that the next level of human needs include bodily safety, health, and the security of property.  Having a place to call home is one of the most important motivators of human behavior.  So why do we decorate our homes for holidays?  Why do we mow our lawns and maintain our landscaping?  Why do we clean and tidy our homes before we have visitors?  Why do we often ask new acquaintances where they are from originally?  It is plausible to think that it is because we identify ourselves with the place that we call home.  Our home is an extension of who we are; an important display of our personality and identity.

In 2013, Fannie Mae conducted a National Housing Survey (click to see the survey results in their entirety).  Renters and homeowners rated their experiences on the following scale:  very positive, somewhat positive, somewhat negative, and very negative.  There was a significant disparity in the results.  71% of homeowners rated their experience as very positive, while only 34% of renters felt the same way.  For renters ages 18-34, 57% would actually prefer owning a home, only 13% prefer renting, and about 30% have a mixed preference.  Interesting!

According to the survey, the top reasons to rent were:

  • Living within a budget (57%)
  • Less stress (52%)
  • Best decision given the current economic climate (50%)

On the other hand, the top reasons given for owning were:

  • Control over living space (84%)
  • Privacy and security (80%)
  • A good place for family and to raise children (78%)
  • Best investment plan (78%)
  • A nicer home (71%)
  • Building wealth (70%)
  • Saving for retirement (69%)
  • Being engaged in the community (64%)

According to the National Association of Realtors Survey of Home Buyers and Sellers, the top motivator for buying a home was simply the desire to own, closely followed by the desire for a larger home, a job related move, change in family situation, and affordability of owning versus renting.

Now we are getting to the good stuff!  Did you know that there was a study on the social benefits of homeownership?  Yeah, me neither until my pondering got the best of me and I found some incredibly interesting data.  As stated in the 2012 Social Benefits of Homeownership and Stable Housing, homeowners move less frequently.  Now, being a military family, I immediately thought to myself, “We don’t really have control over how often we move.”  But yet, we do.  How many military families have you known stationed at one installation for several years who move every time their lease is up or a deployment rolls around?  I can think of a few.  We’ve done it a few times ourselves.  We’ve gone from on post housing, then moved closer to family during a deployment, then back to on post housing again.  Would we have done the same if we had been more invested in our residence?  Likewise I have worked with families who have gone from on post, to rentals off post, and back to post housing again all within a few short months.  The bottom line is, the research shows, homeowners move less frequently, they are more invested in their neighborhoods, and they tend to build more long term friendships.

Additionally, there is the belief that crime rates may be lower in neighborhoods where the residents are predominantly homeowners.  If you think about it, it makes total sense.  Homeowners who may move less frequently, are more invested in their neighborhoods, who have formed longer lasting friendships may be more likely to notice someone who doesn’t belong.  They may be more likely to look out for the homes in the vicinity and report something that doesn’t look right.  They may also communicate more regularly with neighbors and develop formal or informal neighborhood patrols and watches.

Homeowners also tend to give more back to their communities as far as volunteering, church involvement, and through participation in community organizations.  Just a little side note… Have you ever been having a crappy day and then randomly decided to do something nice for someone?  Maybe you paid for the person behind you in line at Starbucks, or told a stranger that you love her outfit.  It makes you feel better, right?!  If we put positivity out into the world, that tends to be what we attract back into our lives.  I had not even begun to think of the effect that owning a home has on parents that might then in turn effect their children.

As I read through the Social Benefits of Homeownership and Stable Housing, I was pretty astounded by the findings.  What typically happens with children when you move frequently?  They tend to change schools more often.  Makes sense, right?  Data has shown that frequent school changes can have negative impacts on children and families.  Because homeowners tend to move less frequently, their children tend to change schools less often as well.  For younger children this has been shown to mean fewer behavioral problems, and higher scores in math and reading.  For older children, the effects can be life-LONG and life-changing.  They tend to have higher graduation rates and they have lower teenage pregnancy rates!  Ultimately the numbers show that if you own your home, your children are more likely to own their homes as well.

So you may be thinking, “well there is no way we could afford to own a home on one income”.  That is a self-limiting belief.  You may be surprised by what you are eligible for.  What may surprise you even more are the benefits of homeownership to low-income families.  The families living at or below the poverty line who became recent homeowners tend to report a higher level of perceived control over their lives which ultimately lead to higher life satisfaction, and higher self-esteem.  Homeownership was directly correlated with higher educational achievements, higher earnings, and lower welfare dependence rates.  Is it all some strange coincidence?  I don’t think so.

The results were not limited to the United States.  Based on findings in the UK by the Office of National Statistics Survey, 80% of folks who owned their homes reported a medium to high level of satisfaction, while 68% of renters reported the same.  Canada reports one of the highest rates of homeownership worldwide with 70% of their citizens being homeowners.  The Canada Mortgage and Housing Corp. (CMHC), worked with Habitat for Humanity on a study that corresponded with the United States’ Social Benefits of Homeownership and Stable Housing study and reported that 86% of the respondents said their lives had improved since owning their homes.  Among many things, they reported improved health, increased happiness with work and school, and 58% said their finances were better.

Healthy Happy HomeNow I do believe the numbers don’t lie, but don’t get upset, I’m not saying their aren’t happy renters too.  Some of us have the ability to make the most of any circumstance that comes our way.  I simply leave you with my ponderings… Is it possible that homeownership can contribute to happiness?

If you have questions or need real estate assistance in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who does, call me today at (931) 436-6765 or submit your information below.

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

So you are ON FIRE!  You have decided to look into purchasing a home, and you are ready to get the ball rolling… like, yesterday!  Hopefully you have already read Tell me how this “buying a home” thing works?  A Guide, and now you are ready to read on for why NOT to stop, drop, and roll with the first lender!

Zelda__Stop__Drop__and_Roll__by_Gabi_hime

©2005-2013 ~Gabi-hime

All mortgage lenders are not created equally.  You deserve a second, third, or fourth, fifth, and sixth opinion when it comes to a major investment like a home loan.  Just because the bank is larger does not mean you will get the best interest rates, and sometimes there are additional fees that you may not be aware of.  Furthermore, your loan will be sold once it closes and nobody needs your approval to do it.  There are very few mortgage companies who keep their loans in house.  So do you feel like you have banked with USAA since you had a bank account and that you are being loyal to the company?  They will sell your home loan.  You have everything in your whole life with Navy Federal?  They will sell your home loan.  Your best friend’s sister-in-law, Sally Sue, works at Bank of America, and can hook you up?  They will sell your home loan.  This usually happens immediately after the closing and can happen multiple times over the life of your loan.   Here are a few things you need to know when it comes time to mortgage shop:

  • Having your credit run does effect your credit score.  However, what you may not have been told is that you are allowed to shop for mortgage, auto, and student loan rates.  Your credit can be run as many times as needed and lumped under one inquiry for mortgage, auto, or student loans as long as you complete your search within 30 days.   The theory here is that if you apply for multiple sources of revolving debt, you will likely be approved.  Versus if you apply for multiple mortgages, you will only receive one approval.  Therefore the revolving debt impacts your credit more significantly.  Do NOT stop, drop, and roll with the first lender! 
  • You can shop as many mortgage lenders as you would like, but you should do it within a limited time frame.  Ideally, consider mortgage shopping for 14 days, though you are protected with inquiries made within the 30 days before scoring.  Do NOT stop, drop, and roll with the first lender!   
  • Checking your own credit score will not hurt your credit.  It is a fallacy to assume that checking your own credit report should be done sparingly.  To prevent identity theft, or mistakes on your report you should check it at least once a year if not more.  Under the Fair and Accurate Credit Transactions Act (FACTA), you can check your report for free once a year.  However, there may be a small fee to receive your actual score.  That is where a lender can be useful to you.  However, do NOT stop, drop, and roll with the first lender.
  • You have no obligation to go with a mortgage lender that you have spoken with.  It may seem like you have given them access to everything you own, including your first born child, but do not let that dissuade you from shopping for mortgages.  You are not bound to a particular lender because they have run your credit and told you what you qualify for.  Even once you are into the buying process with your Realtor, you can still switch mortgage lenders.  You may even be under contract and preparing to close, but you can still switch!  One more reason you should NOT stop, drop, and roll with the first lender you speak to. 

One more point I feel compelled to add since many of my readers have the ability to use VA home loans:

  • There is no minimum credit requirement that is set by the VA!  The individual lender determines the credit score they are willing to accept.  The VA does not fund your loan, they simply guarantee a portion of it.  There are mortgage lenders out there that are willing to work with a bit riskier of a credit history.  It all depends on the individual circumstances, but this is THE BIGGEST myth I hear on a daily basis.  Once again, the VA does not fund your loan or have a minimum credit requirement.  Read for yourself, right here from the Veteran’s Benefits Administration Home Loan Guaranty Factsheet.  You can speak with your Realtor (preferably yours truly… ME!) who will typically have the scoop on a lender who may be able to help you if you have a trickier credit situation.  But you do NOT have to stop, drop, and roll with the first lender your speak with while giving up on your dream of owning a home.

As I speak of in Tell me how this “buying a home” thing works?  A Guide, you should be able to communicate easily with your Realtor.  The same holds true for your mortgage lender.  You should be able to get in contact with them easily.  They should return your phone calls, emails, and answer your questions.  The benefit to using a local lender is you will likely have their cell phone number and email address and can easily contact them on the weekends and evenings.  They work for you, and let’s face it, many home contracts go through on the weekends and evenings.  Your Realtor works for you, and so should your lender.

So did you learn something today?  How many mortgage myths have you been subject to?  Don’t assume that your Realtor knows it all either since after all, mortgage lending is not our area of expertise.  I see misinformation sent every day to consumers by Realtors who do not understand mortgage lending.  Hopefully I taught you Realtors reading a thing or two as well!  Most importantly, be an informed consumer!  Do not leave an office or end a phone call without understanding what you have been told.  You are not a burden, and you should not be treated as such.  If you get the feeling you are, then take your business elsewhere.  Informed consumers stimulate the housing market, and in turn stimulate our economy.  This FDIC Mortgage Shopping Worksheet may assist you when shopping for the best loan option for your family.  Happy home hunting!

If you are seeking real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area or know anyone who is, call today or submit your information below.

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

In 1943, Abraham Maslow developed a psychological theory of basic human needs.  The foundation of the pyramid includes physiological requirements which among others include breathing, food, water, sleep and shelter.  The pyramid theorizes that the next level of human needs include bodily safety, health, and the security of property.  Having a place to call home is one of the most important motivators of human behavior and it is equally important to find the right person to guide you through the process.  Read on for tips to find the Realtor that is right for you!

Maslow

Word of mouth (or keyboard) is the best advertisement!  Ask your friends and family first.  Sometimes that is more difficult if you are being relocated to an area that is new and unfamiliar.  As a fellow military family, we have been in that situation more than a few times.  That is when social media can be your best friend.  Utilize Facebook and different public forums.  At Fort Campbell alone there are several different active Facebook pages to include PCSing ~ Relocating to Fort Campbell, KY ~ Clarksville, TN and Fort Campbell Wives Page.  Ask around!  Then once you get names of a couple of Realtors, ask if they have a couple of clients that wouldn’t mind speaking with you about their buying experience.  According to The 2012 National Association of Realtors® Profile of Home Buyers and Sellers, “buyers most commonly choose an agent based on a referral, with trustworthiness and reputation being the most important factors.”

Visibility in the marketplace matters!  While you are getting recommendations and speaking to clients, check the Realtor’s visibility.  One of the fastest ways to do that is to run a Google search.  For example, search “Ariel Anderson” and see what comes up.  Try “Ariel Anderson Realtor” or “Ariel Anderson real estate”.  If you don’t get any results, that is no bueno and a good sign that the Realtor is not well-established in the community.  On the opposite end of the spectrum, if the Realtor is all over every billboard, shopping cart, and magazine that you see, chances are that you will be working with more than one person, or likely even a team.  Typically when working with a larger organization or team, you may have several different hands on documents, there may be longer waits for return phone calls, and that “home town” feeling might be missing.  Be cautious if someone entices you to use their services and then sends you on to another person, who may send you on to another.  You need to know who is on your side, and that you will not be lost in the shuffle.

What exactly do you do for a living?  Another good way to tell if a Realtor is right for you is to find out if they practice real estate full-time in this area.  According to the latest update, the Clarksville Association of Realtors has 703 active Realtors registered.  Not all of them practice full-time, and some of them may not even be in the area.  You want to make sure that whoever you are working with takes your quest for a home as seriously as you do.  They need to be directly involved in local real estate, knowledgeable of the area, and familiar with homes currently on the market.  If the Realtor is spread to thin and constantly distracted by other duties, you may not get the time and diligence needed.

You may also want to be sure that you aren’t being used as a referral.  There are some Realtors who make a living off of collecting referral fees.  They may tell you they are familiar with the area and have a lot of contacts that may be able to assist you.  They will get your personal information (name, phone number, email, etc), send it to a Realtor or team who is actually based locally, and then behind the scenes they collect a percentage of the commission that the Realtor they referred you to makes when you close on a home even when they did not personally do any work on the deal.  Make sure that the Realtor represents themselves honestly from the start, that the individual you speak to is here, and that they are willing to meet with you personally versus passing you off to someone else while collecting a fee.

Communication is key.  As I speak of in Tell me how this “buying a home” thing works?  A Guide

Make sure you feel like you can communicate with easily and that you are working with someone who will answer your phone calls, or return them at least.  Can you ask questions without being rushed?  Do they answer your questions or give you vague replies?  You want to make sure the individual is enthusiastic about their work and is confident with the process.  They need to be willing to explain things over and over again without getting frustrated, until you understand completely.

Do not drive around or search online, find a pretty home, and call the number on the sign.  The agent on the sign is the listing agent and works on behalf of the seller.  You see, with any real estate transaction, there are two sides; the selling side, and the buying side.  You want to find someone to represent you and your best interests!  There will be an Exclusive Buyer’s Representation Agreement which says that you agree to work with your realtor for a certain, mutually agreed upon, amount of time.  If you decide you do not like your realtor, once you have signed this agreement… if you go out and do the deal on your own… you may still be responsible for paying your realtor a commission, even if you did all the work on the side.  Make sure it is a good fit before you sign.  Read the fine print and remember that everything is negotiable until it is in writing!

Check your gut.  What does your instinct tell you?  Before signing a Buyer’s Representation Agreement, ask if the Realtor can show you a couple of homes.  Pay attention to the feelings that you get now so that you aren’t stuck in a binding agreement later with someone who is just isn’t a good fit.  As reported by The 2012 National Association of Realtors® Profile of Home Buyers and Sellers, “Two out of thee buyers interviewed only one agent.  Eighty-nine percent of buyers are likely to use the same agent again or recommend to others.”  My personal recommendation is that you speak with a couple, unless you come across me first, and then look no further… You’ve found a Realtor on your side!

One more word to the wise;  Older and in the system longer does not necessarily mean better.  Sure experience is important!  They need to know the ropes, and understand the market.  But you also want someone who is eager, enthusiastic, and up to date with the market.  They need to be up to speed with the latest technology, social media, and community in general.  How cool is to find a realtor that utilizes text messaging, or Facebook?  Yeahhhhh, come on out of the stone ages!!

In conclusion, and back to Maslow’s hierarchy of needs, buying a home and the people you choose to work with can affect many of your basic needs at some point along the way.  At the upper part of the pyramid you will see a need for friendship (love/belonging), respect by others (esteem), and problem-solving (self-actualization).  A great Realtor will not only help you with the most basic of needs, finding a safe shelter, but will also be a friend, will respect your choices and desires, all while helping you to problem solve through the process with your best interests at heart.

Pick Me!So if you are seeking real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area, pick me, pick me!  Call today or submit your information below so I can be your own personal Buyer Representative!

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

Honey Stop the Car!

You just arrived at Fort Campbell and are driving around neighborhoods looking for homes.  Or maybe you have been living on post and you have just decided that you might want to look into buying.  You come across a beautiful house that looks like everything you might want, except there is one little problem… You can’t get in to see it.  Not to worry, there is a Realtor® and contact number right on the for sale sign in the front yard.  You can just call them to let you in, right?  A few things to consider about that…

The FOR SALE sign.  It has a name and a number of a Realtor®.  Who do you think that Realtor represents?  You and everyone else who happens to drive by and call?  Or the person who is trying to sell the home that has the for sale sign in the front yard?

Let’s start with a few definitions from the Tennessee Association of Realtors® (TAR) form F1(b), Working With a Real Estate Professional.  In the state of Tennessee, there are a couple of different agency types; designated agent, dual agent, and facilitator will be our focus.

Facilitator/Transaction Broker.    The Licensee is not working as an agent for either party in this consumer’s prospective transaction. A Facilitator may advise either or both of the parties to a transaction but cannot be considered a representative or advocate of either party. “Transaction Broker” may be used synonymously with, or in lieu of, “Facilitator” as used in any disclosures, forms or agreements. [By law, any licensee or company who has not entered into a written agency agreement with either party in the transaction is considered a Facilitator or Transaction Broker until such time as an agency agreement is established.]

Agent for the seller. The Licensee’s company is working as an agent for the property seller and owes primary loyalty to the seller. Even if the Licensee is working with a prospective buyer to locate property for sale, rent, or lease, the Licensee and his/her company are legally bound to work in the best interests of any property owners whose property is shown to this prospective buyer. An agency relationship of this type cannot, by law, be established without a written agency agreement.

Agent for the buyer. The Licensee’s company is working as an agent for the prospective buyer, owes primary loyalty to the buyer, and will work as an advocate for the best interests of the buyer. An agency relationship of this type cannot, by law, be established without a written buyer agency agreement.

Disclosed Dual Agent (for both parties). Refers to a situation in which the Licensee has agreements to provide services as an agent to more than one party in a specific transaction and in which the interests of such parties are adverse. This agency status may only be employed upon full disclosure to each party and with each party’s informed consent.

 Designated Agent for the Seller. The individual Licensee that has been assigned by his/her Managing Broker and is working as an agent for the Seller or property owner in this consumer’s prospective transaction, to the exclusion of all other licensees in his/her company. Even if someone else in the Licensee’s company represents a possible buyer for this Seller’s property, the Designated Agent for the Seller will continue to work as an advocate for the best interests of the Seller or property owner. An agency relationship of this type cannot, by law, be established without a written agency agreement.

Designated Agent for the Buyer. The individual Licensee that has been assigned by his/her Managing Broker and is working as an agent for the Buyer in this consumer’s prospective transaction, to the exclusion of all other licensees in his/her company. Even if someone else in the Licensee’s company represents a seller in whose property the Buyer is interested, the Designated Agent for the Buyer will continue to work as an advocate for the best interests of the Buyer. An agency relationship of this type cannot, by law, be established without a written agency agreement.

So is your TN real estate agent your loyal advocate?  By legal definition, not until you have both signed a Buyer Representation Agreement.  According to the Tennessee Association of Realtors® (TAR) Consumer Guide to Agency Law in Tennesee, “Once you have signed a Buyer Representation Agreement, this contract obligates your agent to be your loyal advocate and to promote your best interests above all others in the negotiation and closing of a successful purchase.”  As reported in the 2012 National Association of Realtors® (NAR) Survey of Home Buyers and Sellers, “59 percent of buyers working with real estate professionals had a buyer representative arrangement.”

Now you may be wondering, “What exactly is a Buyer Representation Agreement”?  In simple terms, a Buyer Representation Agreement details my duties to you as your agent, yours to me as a buyer, and that we mutually agree to work with each other.  I agree to work as your representative, and you agree to be represented by me.  It also specifies things like the length of time that the contract is good for, what type of home you are searching for, and the sources used for the search.  You can view the entire document here: EXCLUSIVE BUYER REPRESENTATION AGREEMENT (Designated Agency)

Now that we got the contractual stuff out of the way, onto the nitty gritty.

6 reasons NOT to call the Realtor® on the sign:

1.  Buying a home is an emotional process.  It ranks right up there with getting married, and having a baby.  As an agent for you as the buyer, I can offer an unemotional perspective.  I can guide you to statistics regarding the trends in the market, the schools, and different parts of town, especially if you are not familiar with the area.  I can give you ideas of things to consider in the long term and help you decide things like Tennessee vs Kentucky.

2.  My services to you as a Buyer Representative are practically free.  The commission percentage is agreed upon between the seller and the selling agent.  Generally, the selling agent will agree to split that commission with the buying agent, so you my friend, are off the hook!  All of my expert assistance, with no money down!

3.  All of those Realtors® that you have called from the signs in the yard of the homes you want to see will probably bug you endlessly until you buy a home from them or enter into an exclusive agreement with another Realtor® and tell them to BUG OFF!

4.  There is an extremely HIGH probability that the Realtor® on the sign represents the seller and their best interests first and foremost.  Of course they want you to buy that home from them, and then they don’t have to split the commission!  So are you going to rely on that seller’s agent for advice and guidance?  There are circumstances when dual agency is appropriate, but I assure you that you will be fully aware of those details if you work with me, and our business relationship will be disclosed in writing.

5.  You may feel like you are “in the spotlight” and enter into an agreement that you are not able to get out of without doing your homework first.  Ask around, search the internet, and choose from the 703 Realtors® registered with the Clarksville Association of Realtors® to find the one who is best for you.  You don’t have to choose the first one you come into contact with… UNLESS it is me, because you’ll love me and you won’t want to work with anyone else!

6.  Finally, and most importantly, you are always supposed to call me first!  (Haha, that was funny)  But seriously, call me and I will go above and beyond for you because I love what I do, and I represent my buyers loyally – (931) 436-6765.  Not only am I am licensed Realtor®, but on a personal level, I’ve been there!  I’ve made Permanent Change of Station (PCS) moves three times with my family.  I’ve flown into areas that I have never before seen in my life and didn’t know a soul.  We’ve bought three homes and have gone from Military Homeowner to Investor.  I can show you any home listed on the Multiple Listing Service (MLS), not just the homes that are listed with my company.  I will be like your own personal assistant, saving you time, helping you to navigate the housing market, drawing up paperwork, and negotiating on your behalf.  Isn’t it better to have one go-to person that can show you any property and answer any questions, versus having to track down a million different Realtors® from a million different companies (ok, maybe not a million), and try to keep them all straight?

In closing, when we speak of the Buyer Representation Agreement, I offer a rare option.  If you decide you just don’t like me, and you are ready to break up with me, even though I might go home and cry a little, as long as you give me a chance to make it right, if we still can’t resolve the problem, I will release you from our agreement and refer you to another Realtor® who fits you better.  This is unheard of.  Most Realtors® will keep you tied to the agreement for however many months you signed for.  And watch out for that carry-over clause.  You may be stuck even longer.  But the way I look at it is, if it’s not working, it isn’t good for me or for you to be forced to continue working together.  I am confident that I can help you with whatever your real estate goals are, you will love me, and we will all live happily ever after!  THE END.

So if you are seeking real estate in the Clarksville, Tennessee or Fort Campbell, Kentucky area, you have found a Realtor® on your side!  Call me today or submit your information below so I can be your own personal Buyer Representative!

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.

As if your preferred team determines your state of residence… HA!  But being that time of year, I couldn’t resist:

KY vs TN Pic

Ok, time to get serious!  Clarksville, Tennessee borders Kentucky to the south.  Fort Campbell, Kentucky and Oak Grove, Kentucky border Tennessee to the north.  So another of the top questions I receive; where is the best place to purchase a home?  And which is right for your family?  It took some statistical digging, but as a Realtor I can offer you personal insight along with some important data, that may aid in your decision making.

The most common concern that I hear voiced by the families I work with is that Tennessee has a higher sales tax. That is true.  Tennessee has a 9.5% sales tax, while Kentucky has a 6% sales tax, so we are talking about a 3.5% difference.  If you buy something that costs $10.00, in Tennessee your sales tax will be 95 cents, and in Kentucky it will be 60 cents.  However, Tennessee has no income tax, while Kentucky does tax income.

Kentucky collects income taxes from its residents at the following rates:

  • 2 percent on the first $3,000 of taxable income.
  • 3 percent on taxable income between $3,001 and $4,000.
  • 4 percent on taxable income between $4,001 and $5,000.
  • 5 percent on taxable income between $5,001 and $8,000.
  • 5.8 percent on taxable income between $8,001 and $75,000.
  • 6 percent on taxable income of $75,001 and above.

http://revenue.ky.gov/

Property tax is another factor to consider.  Property tax rates in Oak Grove, Kentucky are less than Clarksville, Tennessee tax rates with an average of $754 per year in Oak Gove, and $1298 per year in Clarksville according to city-data.com.  It is important to understand that some of this discrepancy can be attributed to lower property values.  According to the Middle Tennessee Multiple Listing Service (MLS), so far the average sale price for Clarksville is $163,335 and the average for Oak Grove is $111,663.  The prices of homes are lower in Oak Grove, which may initially seem advantageous, but over the long term property values rise at a much slower rate.  This can be especially detrimental to a military family who may need to sell their home within a few years due to permanent change of station orders.  Which brings me to the next point… foreclosures.

Sales prices in Oak Grove may be negatively impacted by the high number of foreclosures in the area.  As of the end of August 2013, 4.78% of Christian County homes listed on the MLS were foreclosures (6.83% if we include foreclosed homes under contract currently).  Montgomery County has a significantly lower foreclosure rate at 2.99%.  As I browsed the listings for one Oak Grove neighborhood alone, 7 out of the 12 listings were foreclosures!  Foreclosures bring down home values, they harm the economy on a larger scale, and they create significant cost for local governments.  It is estimated that 2/3 of local government revenue comes from property taxes.  When foreclosures are rampant, property values decrease, which causes a loss in revenue for the local government.  Over time, this creates a need to increase property taxes, sales taxes, and income taxes to cover the deficit.  Foreclosures also create drops in consumer purchases as well as investments, both of which are directly correlated with job loss and rates of unemployment.  When people lose their jobs and become unemployed, they are at a higher risk of foreclosure… Can you see the vicious cycle created?  Bottom line is… foreclosures are bad!  They are bad for you as an individual consumer, as a homeowner, and have a negative effect on the economy as a whole.

Read more on that here:  We All Pay a Price For the Foreclosure Crisis

Some other economic characteristics that may eventually or currently effect property values:

  • Median age of the population is 28 years in Clarksville, versus 24 years in Oak Grove
  • Median yearly income for Clarksville residents is $42,237 and Oak Grove residents is $31,221
  • 59% of the Oak Grove population are renters, while 42% of the Clarksville population rent their homes
  • Oak Grove rate of unemployment is approximately 11.5% while Clarksville is 8.1%
  • There are more jobs and industry in Clarksville than in Oak Grove
  • Drive time may or may not be less in Oak Grove versus Clarksville
  • More store and restaurant selections available in Clarksville versus Oak Grove
  • Clarksville is closer to a major city (Nashville) than Oak Grove

Finally, from a personal perspective, consider the following:  Kentucky is in the top 5 in the country for highest car insurance rates, so be sure to check with your individual insurance provider for details on how living in Kentucky versus Tennessee may effect your vehicle coverage and costs.  Be sure to check with the local DMV for information regarding vehicle registration in Clarksville versus Oak Grove.  I called them myself and got a straight forward flat-fee from the Clarksville office, but the Oak Grove office was based on the make, model, and year of the vehicle… An Ad Valorem Tax I believe is what they called it.  I had one homeowner tell me he could registers 3 vehicles and a boat in TN cheaper than he could register one of his vehicles in KY!  I encourage you to investigate what your individual vehicles may cost you in registration by living on the KY side.

Additionally, I frequently hear that utility costs are higher in Kentucky than on the Tennessee side.  You can view a chart of the different utility companies as well as their connection fees and deposits required here (courtesy of the Fort Campbell, Kentucky official website):  Utility Providers 

So what works best for you and yours?  Are you a Kentucky kind of family?  Or look forward to calling Tennessee your home?  Be sure to comment with any additional questions or points to consider, and you could be featured in an upcoming blog!

If you are in or heading to the Clarksville, Tennessee or Fort Campbell, Kentucky area, enter your information below to explore your real estate options today!

© Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com, 2013.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Ariel Anderson and https://buyorsellclarksvilletennesseehomes.wordpress.com with appropriate and specific direction to the original content.