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Most incompetent attorney in town?

A couple years ago we had an interesting transaction in the office.

The buyer was from out of state and she was a little confused about the purchasing process and instead of listening to us she was taking the advice of her accountant back in New Jersey. Unfortunately real estate is a local business, and her New Jersey friend was giving her really dumb advice.

To make matters worse, when she decided on the home she wanted to purchase here in Ann Arbor, she used an attorney that was getting senile.

So here is the general story on the attorney:

1. He held up having the buyer sign a negotiated agreement for 4 days because he wanted the buyer's middle initial added and he wanted condominium spelled out where it was abbreviated "condo".

2. He wanted me to add a radon test contingency to the contract even though he was told it was a 2nd story unit. 

3. He told the buyer and me that I should draw a floor plan of the condo for the inspector so he would know where the rooms were. (This was a 1,200 sq. ft., 2 bedroom condo. I would hope that an inspector could find the rooms.)

4. He had the buyer send a $10,000 earnest money deposit to the listing office, telling the buyer to make the check out to the listing office, even though the contract had our office holding the funds.

5. He did a couple of other things that  would have really embarrassed the buyer if she had known about them, and the listing agent thought he was quite creepy.

In the end the buyer was able to close and move into her condo so things turned out OK. 

I shutter to think what kind of legal fees the poor buyer paid, and both the listing agent and I thought about filling a complaint with the local bar association, but since the attorney wasn't actually working for either of us, we didn't have standing to file a complaint.

The learning point here is: Use a local real estate attorney when you buy your home!




How and When to Bid Low on a Home - Wall Street Journal

Important Wall Street Journal article by Amy Hoak on negotiation in today's real estate market. The full article is available at the link above:


".....Pat O'Heron was able to negotiate a steep discount with a seller who relocated for a job, in a neighborhood in Ann Arbor, Mich., that had two year's worth of inventory on the market.

Mr. O'Heron says before he even made an offer, the asking price had already dropped by about $80,000. He eventually bought the home for $270,400, with about $11,000 in other credits. The price ended up being $115,000 below the initial asking price.

Mr. O'Heron was able to take advantage of a market in which buyers decidedly hold the upper hand, with its excessive for-sale inventory due, in large part, to job losses in the area.

But even though housing is in a slump in many parts of the U.S., those tactics won't work in markets that remain healthy. And there's always an inherent danger in going too low. A low offer could insult the seller to the point that they'll refuse to counter, Realtors say. And the seller could easily make the assumption that the buyer isn't committed to making a deal.

"When you're making the offer," says Jon Boyd, Mr. O'Heron's agent and president of the National Association of Exclusive Buyer Agents, "if you justify that offer with outside data, then it's much less likely to be perceived as being an insult or [the buyer] not as serious."

Here are three guidelines on how -- and when -- to make an aggressive bid:

1. Learn how motivated the seller is to make a deal.

Certain sellers are going to be more willing than others to negotiate a low offer -- and there are several giveaways that might indicate more leeway on price.

For instance, if the sellers have already purchased another home and that sale has closed, they're likely to be more willing to make a deal, says Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists in Long Beach, Calif.

If the property has been on the market for a long time, sellers will be interested in entertaining any offers, he adds.

Mr. Gaylord says he talks to the seller's agent to get as many details as possible about how motivated the seller is.

Overall local market conditions also play a role. The housing market in which Mr. O'Heron bought, for example, was sluggish. The home he purchased had been on the market for about a year.

Because of the job relocation, the seller needed to move and wasn't in the position to take the home off the market until conditions were more favorable, Mr. O'Heron says.

2. Make your case with hard facts.

When putting together an aggressive offer for a client, Mr. Boyd doesn't just hand the seller a purchase agreement with the price the buyer is willing to pay -- he creates a cover letter explaining exactly where that number came from.

In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area, he says.

"If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall," Mr. Boyd says. "If we see two years' worth of inventory, we should be buying 5%, potentially 10% less than what houses have sold for in the past year in the neighborhood."

Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Mr. Gaylord says. That way, they can detail what they like about the house but express their fear of future dropping values.

3. Prepare for the possibility of rejection or negotiation.

Ultimately, a real-estate agent working on behalf of a buyer needs to honor and facilitate the offer that the buyer wishes to make -- even if it seems to be too low.

Mr. Gaylord warns buyers making very low offers that the seller might refuse to negotiate. On a "super aggressive offer," Mr. Boyd says he might tell a client "there's a one in five chance there will be a positive response."

Still, there's that potential for a seller to make a counteroffer, especially if there haven't been many other bids.

Danielle Kennedy, a real-estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as "a sign of interest."

It "begins the dialogue regarding the purchase of your house," she says.

Not all hope is lost even if a seller doesn't bite immediately.

Sometimes after time elapses, the seller comes around and decides to negotiate, Mr. Boyd says. New information -- such as the sale of a comparable home at a lower price -- also can nudge a seller to give an aggressive offer a second look and open the negotiation process."

Thanks Amy, Great article!



News article to share with sellers during negotiation

Area foreclosures have jumped about 90% last year, and some economists predict there will be more this year.

This is critical information to include in your negotiations if you make an offer on a home this next month.

Especcially if your seller is out of the area.

Contact us if you are interested in other important negotiating tools when you buy a home. (Most of which you will never hear about from designated/dual type buyer agents.)

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MLive hits one million visitor mark

Local news site has become the major force in news for the Ann Arbor area. It is actually the home of eight daily newspapers including the Ann Arbor News.

So, as the newspapers shrink as a source for news, has become the local source.

Congratulations MLive!


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