Tag: realtor

Posted on

Five Reasons I Would Hate to Be a Custom Home Builder (And You Would Too)

Let me start by saying this: custom home builders are saints. They deserve medals, parades, and a lifetime supply of coffee or whiskey or whatever they want. Why? Because their job is like trying to build a house of cards… in a hurricane… while a group of opinionated people stand behind them yelling, “Can it be blue instead?”

And just maybe it’s because our family investment company is in the throes of new construction and permitting, and building, and listing said construction, and all the things that’s making me feel so passionate about NOT wanting to be a custom builder.

First things first. We are spec home builders. That means we come up with the designs, build the house, list it AFTER completion and sell it.  This, in and of itself, is hard work.

HOWEVER! Compare it with:

A custom home saint builder builds a house according to the owner’s design or even a design the builder provides with various options and finishes. The homeowner and builder work closely together to complete the project. 

When I say “closely,” think Glenn Close close in Fatal Attraction. 

So yeah, let me give you five reasons why I would rather wrestle an angry alligator while blindfolded than take on that job.

1. Your Boss is Johanna/Chip Gains (or thinks so, at least)

When you’re a custom home builder, you’re not just working for clients—you’re working for Alan, the amateur architect who used the free version of Home Dezign.com this weekend and thinks they’re now ready to pull permits. Along with Alan, you’ll also be working for Pam, the Pinterest consultant who has boards full of ideas, none of which will fit in their budget but is convinced it can be done. 

Buckle up for a never-ending parade of questionable ideas from people who just binge-watched three episodes of HGTV.

1.5 Your Boss is NOT Your Friend

It all starts well and good. They’ve seen your work, your designs. They’ve stroked your ego and said over and over again how “easy” they will be to work with. <Red flags start waving; you hear sirens blaring from somewhere>

Don’t be surprised when, halfway through the project, you’ve been labeled as public enemy number 1, and your professionalism, your integrity, and whether or not you might be color blind are all up for discussion and debate. 

2. Deadlines Are DOA

In custom home building, the timeline is like Bigfoot—everyone talks about it, but no one’s actually seen it. Clients want everything done yesterday, but then they suddenly need “a week to decide”  on the hardwood floors they picked out a month ago. Or the paint color that looks too warm now. Or is it too cold?

The deadline is gone. It’s crying in the corner with your sanity. Actually not sure you really had either of those things. 

3. Weather Schmeather

Rain? Snow? Tornado? It doesn’t matter—Mother Nature doesn’t care about your construction schedule.

Imagine this: You’re trying to pour concrete for a foundation. Suddenly, it rains so hard you wonder if you should add an ark to the design. But hey, the client just texted to ask if they can “move the master bedroom to the other side of the house.” Because, of course, that’s the real emergency.

4. You’ll Become a Counselor

Being a custom home builder isn’t just about homes; it’s about people. And people are… complicated.

You’ll mediate arguments between spouses about backsplash colors. You’ll calm clients when their dream countertop is back-ordered. You’ll explain (again) why they can’t install a fire pit inside their walk-in closet.

By the end of the project, you’re not just a builder—you’re their life coach, marriage counselor, and part-time babysitter.

5. Budget Woes

Clients start with a budget. Then they see shiny things. Suddenly, that budget is about as relevant as a flip phone.

Client: “We want to add a sauna, a marble fountain, and heated floors in every room. Is that possible for, like, $1,000 extra?” Builder: “Sure, if by $1,000 extra, you mean $50,000 extra.” (They always mean $1,000 extra.)

I get it. Building a home, especially your personal home, is a huge undertaking. Not just financially but emotionally and physically. It’s stressful, to put it mildly.  I know because we’re currently building our own personal home.

And I’d make any builder who had to work with me question their sanity. Luckily it’s just the Hubs and he’s stuck with me.

So, call me a coward, but we’ll just be sticking to spec home builds. 

To all the custom home builders out there, I salute you. May your coffee stay hot, your clients stay reasonable, and your deadlines… well, good luck with that one.

Posted on

“Home Sweet Affordable Home”: Tackling the Housing Challenge in Northwest Arkansas

Affordable housing is the cry of just about any major metropolis or fast-growing area in the United States. We left Austin almost two years ago, largely because the cost of real estate, remodeling, and building had become unsustainable, at least for us.  Affordable housing was simply a buzzword that the city liked to throw around council meetings to make themselves feel good while continuing their high regulations process, which caused the price of real estate to continue to rise. Oh, the irony.

Speaking of irony, after leaving Austin, we ended up in the most expensive area of Arkansas…NWA. 

While we love it here, we realized Bentonville and the surrounding areas have their own housing issues. Affordable housing and the ability, as a builder, to offer it is a huge issue. Because I’m up to my eyeballs in construction and maybe because I’ve had four cups of coffee this morning, I’ve got many ideas, but for the sake of time, let’s start with three. 

First, addressing the affordable housing shortage in Bentonville and the surrounding area isn’t a simple, one-and-done solution. It will require a multifaceted approach involving policy reforms, public-private partnerships, and community engagement. 

Buckle up, city folks because the first thing that needs to happen is: 

1. Implementing Policy and Zoning Reforms

Expedited Approval Processes. Ya’ll are killing us with your ever-evolving approval and permitting processes (I’m looking at you, Bella Vista). By streamlining the development approval process you can help us builders reduce construction timelines and costs, which can then be passed on to the public.

I’m not the only one saying this. In November of 2021, the city of Bentonville created a Housing Affordability Workgroup specifically to review housing needs, availability, and affordability in Bentonville. While city review groups normally give me a tic under my left eye, this one has some good ideas, specifically by recommending creating expedited processes for small-scale developments and affordable housing projects that meet specific criteria. 

Like I said, settle down wielding your permitting power, city people. 

2. Fostering Public-Private Partnerships

Collaborative Developments: An affordable housing community was created in collaboration with Excellerate Housing, Bentonville Schools, Benton County, Mercy, Walton Family Foundation, and Arvest Bank. McAuley Place exemplifies successful collaborations aimed at increasing affordable housing. This 160-unit development, located near the Bentonville Community Center, includes single-family cottages and multifamily units designated for local educators and staff. 

We need more of these.

Financial Incentives: Offering tax incentives, grants, or subsidies to developers who include affordable units in their projects can stimulate the construction of such housing. The federal Low-Income Housing Tax Credit (LIHTC) program, utilized in developments like McAuley Place, is a model for leveraging financial tools to support affordable housing. 

And finally, for today, 

3. Engaging the Community and Stakeholders

Housing Affordability Workgroup: Established by the Bentonville City Council, this group conducts reviews of housing needs, availability, and affordability and provides recommendations to the city. Their efforts have led to the development of Project ARROW, a targeted approach to increasing affordable housing supply through education and collaboration.

Educational Campaigns: Raising awareness about the benefits of affordable housing and involving residents in planning processes can build community support and reduce opposition to new developments.

By furthering the above ideas, we can improve the affordable housing situation in NWA or at least begin to move it forward. 

While I don’t have a crystal ball, all signs point to the fact that interest rates will drop sometime this year, and the housing market will heat up. 

Let’s prepare and be ready.

Posted on

NAR Changes: Are They Good or Sucky?

It’s been six days since the new NAR ruling took place, and you’d think the sky had fallen on brokerages everywhere. To a certain extent, it feels that way. Especially in light of all the misleading media and sudden real estate gurus. First, to recap. Here’s the new rules in a nutshell:

1. Buyers are now required to sign a contract with an agent before the agent can show them any properties. This is not exactly a brand new requirement, as most states (and any agent worth his salt) have already adhered to this. However, it is now mandated for all agents who are members of the National Association of Realtors (NAR)—a group that includes a substantial 1.5 million agents across the U.S.

2. Commission changes – Prior to the settlement, NAR members who listed properties would offer shared commissions through local multiple listing services (MLSs)—the platforms where most homes are listed. Typically, sellers paid around 6% of the home’s sale price, with 3% going to their own agent and 3% to the buyer’s agent.

Now, MLSs are no longer allowed to display these offers of compensation. While sellers and their agents can still negotiate and agree to pay a buyer’s agent fee, this must be done separately from the MLS. As a result, there may be situations where sellers won’t contribute to the buyer’s agent fee, placing the full responsibility on the buyer. Buyers will then need to either cover their agent’s fee out of pocket or handle the transaction independently without an agent.

First, the gloom and doom, I-need-a-drink, the sky is falling, sucky stuff: 

~ Many first-time homebuyers will not have extra cash to pay a buyer’s agent. They will either end up unrepresented or try to jump through hoops with their lenders to see if they can increase the sales price and then have the concessions/money to pay their agent at closing. Unrepresented buyers could potentially be taken advantage of, and some lenders won’t allow a buyer to include money for a buyer’s concession. 

~ Some agents will knowingly or ignorantly be guilty of steering their buyers towards properties that will offer a buyer agent compensation.

~ Some boneheaded listing agents will pressure their sellers to offer x amount to a buyer’s agent.

~ Buyer’s agents might end up working for free.

~ Sellers will lose money.

While the above may happen, there are some positives in the sky-falling free-for-all the real estate world currently feels like.

~ All prospective buyers must now sign some sort of agency agreement to even tour a home. This protects the agent who is showing complete strangers an empty house and clearly spells out the details of the client relationship with the buyer.

~ If done correctly, this arrangement should provide transparency to the buyer about their possible financial responsibility.

~ Crappy real estate agents will be weeded out. Harsh, I know, but there are a lot of those, which is why we’re in that situation.

So to my real estate colleagues, buck up, little campers, it’s just an acorn, not the sky that’s falling. Let’s tackle this new challenge head-on holding on to our ethics, our sanity, and our whiskey bottles.

Posted on

Real Estate Drama: NAR’s Big Settlement Fiasco – Fact vs. Fiction

If you are a real estate agent, buyer, seller, investor, casual perusaler (ok, not a real word) of real estate, or just haven’t had your head under a rock these few months, you’ve seen the big news regarding NAR (National Association of Realtors). Last March, NAR announced that they had reached a settlement agreement to resolve litigation brought by home sellers related to broker commissions. Once that story broke, the media had a field day with misinformation. Agents everywhere began profusely sweating and drinking heavily.  So, facts first:

1. NAR is required to pay out $418 million over the next four years.

2. NAR agreed to create a new MLS rule prohibiting compensation offers on the MLS (Multiple Listing Service). 

3. NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written agreements with their buyers before the buyer tours a home.

When the news came out, media outlets everywhere began distributing disinformation. Yahoo, NBC, and Joe Biden himself all had something to say, and what they said was largely untrue. 

It was falsely reported that prior to the settlement, real estate commissions were a required and fixed amount of 6%, with 3% going to the listing agent and the additional 3% to the buyer’s agent. Further reporting insinuated that the commissions were legally mandated and set by the National Association of Realtors, the government, or even the Grand Poobah of Greedy Real Estate Professionals Everywhere—whoever that is. 

The truth is that commissions have always been negotiable, not required. Sure, 6% became the industry standard, but it was not the industry requirement. There are many flat-fee agents, brokerages that offer discount services, and even brokerages that specialize in 1% listings.

It has always been well within a home seller’s (or buyer’s) rights to negotiate commission. 

The real problem is crappy agents, specifically listing agents, who do not do a good job of communicating details to their clients. Essential things like how much listing their house is going to cost and the fact that while a listing brokerage may have a standard fee that they charge, those fees are not some mandated amount that can not be negotiated. 

As an agent, disclosure and accounting are part of our fiduciary duties. So, instead of holding those agents responsible for neglecting their fiduciary duties, what was once a pretty transparent process has now been convoluted. 

How? I’m so glad you asked. Let’s compare the new process to the old. Grab yourself another cup of coffee (or a shot of whiskey), and stick with me.

1. Listing process/listing agreement. 

Pre-NAR ruling: When listing a property with a brokerage, you must sign a listing agreement that discloses all the deets and allows that brokerage to sell your property. One of its most important parts is disclosing how that brokerage gets paid. Previously, and depending on your state, that information was a paragraph that included a place for total commission collected at closing and then a place that discloses how that commission might be split between buyers and sellers agents. Again, commissions have, and always have been, negotiable. However, it was typically expected that the seller’s agent would pay the buyer’s agent for bringing a buyer. 

Post NAR ruling: 

Truthfully, we don’t know yet how commissions will be addressed. I believe there will be a place for the listing commission and perhaps another place for the seller to offer a buyer’s agent commission.

Or not.

I assume there will be because the settlement does not say that the seller can’t offer the buyer’s agent a commission. Moreover, the suggested verbiage currently being discussed is about as clear as the congressional budget. 

2. MLS (Mulitple Service Listing rules)

Pre-NAR ruling: Listing agents would list the amount the seller was willing to offer the cooperating broker to bring a buyer. It was typically between 1% and 3%, depending on the NEGOTIATED amount.

Post NAR ruling: Seller agents are now prohibited from disclosing any amount of commission that might be offered to cooperating brokerages on the MLS. That line item will be removed from the listing input completely. 

3. Written buyer agreement.

Pre-NAR ruling: I can’t speak for every agent but I ALWAYS required buyers to sign one of these. A written buyer agreement clarifies the difference between being a customer versus a client and lays out the agent’s and client’s responsibilities. It enables the agent to receive commission and, depending on your state, gives the agent exclusivity with that buyer. Meaning the buyer must use the aforementioned agent to buy a house. Most importantly, at least for me, was protection. If a buyer signs that agreement, it means I have personal information, probably a pre-qual letter from a lender, their driver’s license, and the peace of mind that they’re probably not a serial killer trying to lure me to an abandoned house and murder me.

Post NAR ruling: This is now a requirement for agents working with buyers….which….again…I thought was already a thing. However, the new agreements will include a place for the buyers to check if they are willing to pay their agent’s commission out of pocket if the listing agent doesn’t pay it.

This has led to multiple media outlets, who have no actual idea how this works apparently, to claim the ruling is a win for home sellers and will drive down housing prices as real estate commissions are expected to fall 25-50% 

HAHAHAHAHAHAHA!!!

Right. 

I’d like to see some agents convince their sellers to lower their list price by $10,000-$20,000 or more in some cases since they’re not paying a buyer’s agent. Not gonna happen. 

This ruling and the subsequent garbage analysis being tossed around are doing nothing but confusing people, hurting sellers, and marginalizing certain buyers. 

Think I sound dramatic? Lemme tell you why. First, sellers who believe it will help them financially not to offer a buyer agent a commission will do nothing other than limit their buyer pool. First-time homebuyers, who make up more than 50% of the market, will be disadvantaged. Most have saved up for a down payment, closing costs, and inspection fees. They don’t have the extra $10,000 plus to pay an agent. So those buyers probably aren’t going to come through Mr. Seller’s doors. The house may sit longer on the market, requiring multiple price drops and leaving the seller with less money than if he just offered compensation to the buyer’s agent.

Some first-time homebuyers will also have fewer choices if they don’t have extra money to pay a buyer’s agent and have instructed their agent only to show them properties offering a buyer’s agent commission. Other buyers will lose out on properties in competitive markets. Yet other buyers may find themselves trying to navigate the process on their own, and becoming unfairly taken advantage of.

How many lawsuits will come out of this? 

I’m not a betting woman, but I might take this one. 

Unfortunately, I believe we will see an increase in significant issues in areas that have been unproblematic for years. This NAR ruling forces good agents to walk a very thin tightrope in providing our clients with the fiduciary duties they are sworn to perform as members of the National Association of Realtors.

Stay tuned for some fallout. 

Meanwhile, I intend to continue giving each client my very best.

Just with a little more paperwork and a lot more coffee.

Posted on

Five Sure-Fire Ways to Make Sure it Sells!

Alright, alright, alright (channeling my Texas roots and inner Matt McConaughey)! It’s January, and you know what that means?? I mean, besides renewing my coffee club membership? It’s almost selling season! Spring is almost here. At least that’s what I keep telling myself as we burrow down over here in Bentonville in preparation for the Artic Blast of 2024 and negative temps. Brrr…

But I digress. So, without further ado!

  1. Hire An Awesome Agent!
AWESOME AGENT HERE!

Ahem….this is where you call or email me if you’re in the NWA area…..seriously though, wherever you’re at, you need a great agent. Now, I can hear you already, “I can sell my house myself.” “This is the digital age.” I don’t need to pay someone 6%”. Time out. Lemme take a quick little aside and give you just a couple of reasons it pays to have an agent on your side

Expertise – We know our market. The top reason most houses do not sell promptly is pricing! An expert agent will nail the price and have you moving down the road.

Network and Resources-  We know people. People who may want to buy your house or bring someone who wants to buy your house.

Legal and Contractual Expertise– Real estate agents are not attorneys, but we know a thing or two (or a million) about real estate contracts. A good agent will explain all the deets to you.

Time and Effort: A really wise old dude once said, “Two are better than one, Because they have a good reward for their labor.” Ecclesiastes 4:9 While you may be knowledgeable and capable, it’s great to have someone on your side to help with the heavy lifting. Both furniture and all the other home-selling tasks, from coordinating showings to negotiating offers.

Ok…back to our list.

2. Spruce Up Your Curb Appeal!

The exterior of your house is the first thing potential buyers will see. Ensure it looks appealing by maintaining the lawn, cleaning the driveway, and adding colorful plants.

3. Repair:

Look around your home with a critical eye. Are there any repairs you’ve been putting off? Leaky faucets, chipped paint, or squeaky doors are all easy and affordable fixes. You might also consider springing for a pre-inspection. More on that in another post. 

4. Declutter and Depersonalize!  

Clear out any clutter and personal items to help potential buyers envision themselves living in the space. Consider renting a storage unit if necessary.

5. Professional Photography and Staging! Don’t skimp out on this! High-quality photos and professional staging can make a significant difference in attracting buyers. Consider hiring a professional to showcase your home in the best light.

By implementing these tips, you can increase the chances of selling your house quickly during the peak selling season. Call me today to grab coffee and talk about getting your home sold during this upcoming selling season.

Posted on

The #1 Secret Your Real Estate Agent Wants You to Know

Have you ever bought or sold real estate? If you have, you know what it’s like to sweat through the offer, inspection, appraisal, and negotiation process. You either made it through to the end with success or a whiskey caffeine addiction and a twitch under your left eye. Or all of that.

Maybe it was easy-peasy thanks to a fabulous agent who made it look like a walk in the park, and you know nothing about said agent’s new nicotine addiction. 

But here’s the deal. Even if you had an award-winning, go-getting, nerves-of-steel-even-after-6-cups-of-coffee agent who makes it all look like sunshine….it’s not. Real estate, albeit enjoyable, is challenging. You’re dealing with human beings and their emotions centering around the most significant purchase they will ever make, dealing with some of the most important decisions they will ever make. Throw in any number of other extenuating circumstances, like:

  • Foreclosure
  • Divorce
  • Death

Just to name a few…..

And you have a recipe for a high-pressure, trauma-inducing, therapy-necessitating event. 

Having just anybody represent you is not a great plan. But even if you have the best possible agent beside you, you need to know something. It’s actually the number one secret that every agent wants you to know.

Ready?

Real estate agents do not own a crystal ball. 

Shocking, I know, but the fact remains that we can give you the very best updated market statistics. A detailed comparative market analysis, including showing you the average days on the market for properties in your area. We can send you spreadsheets, videos, and data with exhaustive information regarding interest rates, potential buyers, and marketing scenarios, but at the end of the day….

We’re just really educated guessers. The most experienced agent can give you all the information, list, and market your home perfectly, and it might not sell right away. Although real estate is all about numbers, list price, days on the market, interest rates, and potential buyers through the door, ultimately, it’s also about people. People who have emotions, life changes, and changing desires. 

As an agent, anxious sellers often ask me how long I think it will take for their house to sell. And with all the confidence of a 4-year-old in a Batman shirt, I cite the current market statistics and pray for the best. 

And I consider myself a good agent. 

So I guess what I’m trying to say is be realistic and don’t assume your agent has psychic skills, a crystal ball, or practices witchcraft. 

However, there are ways you can help mitigate some of the unknown. First, listen to your agent. Even without black magic, a good agent (like me!) can guide you through the process.

Remember, homes require three things to successfully sell. Price, marketing, and condition are the most important criteria. Listen to your agent’s advice about these three points. If you do, I can almost guarantee your house will be sold, and you’ll be on your way to new pastures. 

Second, give yourself and your agent grace. Selling (or buying) is a process, often with factors out of your control as well as your agents’. 

And finally, practice patience! We know that you want and need your property sold. No one wants it to happen for you more than your agent. It can be a difficult and emotional journey, but patience is the best trait to bring with you for the trip. 

As a final aside, going through a challenge with someone can often bring you closer. Facing obstacles together allows individuals to rely on one another, offer support, and work towards a common goal. In the process, connections can grow stronger, and what once started as a challenging situation can lead to developing a meaningful friendship. So, embrace challenges with an open mind, as they may bring you the gift of a good friend as well as a fabulous agent. 

Now I’m off to eBay to see if they have crystal balls for sale.