Real Estate is totally crazy right now. Multiple offers, offers over asking and inventory shortages are just the tip of the iceberg. With this craze comes issues in the marketplace that every real estate agent needs to know and understand how to navigate. In this episode of Dishin' Dirt I discuss the Top Five issues facing real estate agents in the market today. Not only will you learn the issues but possible solutions too.
In this week's Short Take I discuss the June 30 deadline for renewing your real estate license and of course another episode of Gary's Good News Only! LAST WEEK'S GOT BANNED BY YOUTUBE!
Enjoy and share!!
Disclaimer: The information contained herein is not necessarily the opinions of the SC Real Estate Commission of which Mr. Pickren serves.
Dirt with Gary picker in South Carolina's only podcast dedicated to the real estate agents crowd. Greetings, and welcome back everybody to another episode of edition dirt. You know the only podcast about the real estate agents crap. I am you're often irreverent and very opinionated, but rarely wrong host Gary patron and I am coming to you from Blair Cato in beautiful downtown Columbia, South Carolina, this middle week of June 2021. Well, today, I am a little bit more tan than I was last week, I just spent a week in beautiful disney world with my family. And so you can have to bear with me a little bit today as I try to get back into the swing of this thing. It's not easy, getting back to work after being all for a week and the most magical happy place on Earth. So today's episode is going to be very hot, in fact, as hot as Florida hot because I am going to go over the five hottest topics in real estate today. Now I might as well as this call this the five biggest problems an agent faces today when it comes to pricing our market because these five hot topics are also the Big Five, five biggest topics and biggest problems, I would say in real estate. So I guarantee you this will be 30 minutes well spent on not only knowing the problems, but also knowing solutions, because that's why what I like to do, I like to tell you what the problems are. But I also want to try to give you some good workable solutions on how to handle it. We'll also do a quick case study on renewing your license goes as you know, June 30, which is just coming up around the corner. If your license is to be renewed, you got to have it renewed by June 30. So we're going to talk about that. And we're gonna have another episode of Gary's good news only, which apparently now is dangerous to YouTube because I've apparently been banned on YouTube. Well, I haven't been banned, but my video on Gary's good news only last week, apparently was banned, which kind of was funny at first, but now just kind of angers me. But anyway, Gary's good news is, you know, I started about a year ago, we were doing legal tips, video vlogs, we started doing Gary's good news only as a legal tip video blog as well. And about 5000 people get it through our video blog, if you're not getting good at Blair, Cato, blairc.com, and go the resource tab and you can sign up and start getting those, the other 5000 agents across the country get them as well. And we started doing these legal tips because quite frankly, nobody was or not the legal tip here is good news only. Because frankly, nobody was giving any good news when the COVID virus came out. Everything was doom and gloom. And there was good news out there. But the problem was the media wasn't reporting it. And when they did report it, they would either completely take it out of context, or they would just commit outright falsehoods statements about it. Imagine that your media lied. So and one example of that is with the deaths of COVID. You know, they keep claiming 600,000 people have died. We know those numbers have been largely inflated. When you have people who've died of car accidents, you've had suicides, drug overdose, things of that nature. And now we find out the CDC their own criteria for counting COVID was not you died from COVID. But you died with COVID. So the 600,000 everybody reports it is that's how many COVID deaths we have. And actually, that's not true. It's actually the number of people who died, who actually tested positive within some timeframe of dying. And in fact, Illinois would count you as dying with COVID, if you died within 30 days of a positive test. So you could have tested positive, be asymptomatic, fully recover and then die in a car accident, they would count that as a COVID death. never in the history of the world. Have we ever counted deaths this way. And in fact, if we counted flu deaths this way, you'd be scared to leave your house every year because of the flu, because it's just an outrageous way of counting things. So that's what Gary's good news only was all about was just to point out these things so that you would see the good news only. So anyway, my last week's episode I cited as I always do CDC website stats, I don't make the stats up. I either, quote Fauci, the CDC or politicians and they're all worried, but apparently YouTube thinks that that violates community standard, because apparently you can't call Fauci a liar, even though he's admitted to lying to us for our own good. So apparently, pointing out what Fauci mentioned himself is apparently against community standards, which should scare the hell out of you because I don't know when YouTube became the arbiter of what is standards considering I think cardi B video is on YouTube. So me saying foul, she's a liar is against community standard, but cardi B with her watch song, if you don't know what it is, do not look it up. It's horrific. That's okay. Nevertheless, that YouTube and they suck, as we've always known. So of course, this one won't go up on YouTube either, because they would probably outright censor me on this one as well. So anyway, and on top of that, you have YouTube has been so wrong on the Johnson and Johnson vaccine, which I have taken that so I'll probably turn orange and have a blood clots at least one COVID but they wouldn't, since they're all information about blood clots on that line later have to remove their censorship because it turned out it was actually true. Same thing with the origins of the virus, they censored all that now all of a sudden, they've had to come back and uncensor it because again, apparently it might be true that it was manmade and not in a from a bat, which everybody recognized was crap in the first place. Anyway, so that's what we got to deal with. But I will press on as we always do. So today we're going to go with our countdown of the 500 topics in real estate, and I am sure each of you will probably have the same ones on your list. If you don't have the same ones, you probably have something very close to it. So we're going to jump in I'm always like to start with two honorable mentions, as I always do. So honorable mention number one is wholesaling. Yes, that continues to be a hot topic in real estate. I have done some research on it. And seeing that a couple of states are actually starting to pass laws and regulations on it. Texas has some new laws and regulations on wholesaling, trying to rein it in. Basically the complaint or wholesaling, as you all know, is that people are trying to sell properties in which they don't own they just have a contract to buy it. And a lot of people believe that they are simply trying to do what a real estate agent does without having a license. So that is a hot topic that I think we'll be hearing a lot about more in the future. Now the other honorable mentioned topic as a first right of refusal, I don't see as many of these but I'm still getting complaints about them. This is where the contract is written on a self enclosed contingency addendum and and the agenda and they're giving the buyer the first right of refusal of another offer comes in. The problem with these are is you're in a hottest market ever. I don't know why you would even take a sell and close contingent contract Anyway, when you get multiple offers. But assuming that's the only offer you have, you don't really have anything because what you're doing is hoping that your buyer sells their house is that are you selling your house? So I'm not sure why it was a really good idea. Anyway, the biggest problem with the writer refusals is a written written so poorly, those is right in there first right of refusal, but they won't say what that means. So when another offer comes in for $20,000 more money, and you say, Okay, I got a better offer, you know, you exercise your right of refusal or not the person Okay, exercise, right refusal at the original price, and you're like, no, I wanted the $20,000 better offer. And so there's a big complaint. So quite frankly, they're very rarely written properly are usually very poorly written. And I think they cause a lot of problems, I just don't think you should be using rights of refusal in the first place. Because typically what will happen is the person will exercise the right of refusal, even though they can't buy a house without their house being sold. And they're still hoping they can sell their house before your contract expires, or they're just going to cancel on the last minute. So I'm not a big fan. So anyway, let's go ahead and start with our countdown. Number five on our list of the hottest topics, our buyer and seller remorse. We're seeing this more and more today, we're at an all time high for cancellations. And I mentioned that the other day to some but I think we're averaging about 25 or 40, some between 25 and 40 cancellations of closings every month, of which, you know, you start looking at the cost of that $260 for title searches that we pay outside companies to do comes up by 40. And that's how much money law firms are losing if they're unable to collect that money from the client. That's why lawyers want to try to get paid for all that cancelled title work because it starts adding up I think, you know, adds up the cost of two employees. But nevertheless, buyer's remorse. Why is it happening? I think it's happening because buyers are getting in bidding wars and they're paying more than they wanted to they're paying over price per house paying over appraisal. And I think they're starting to have a little bit of remorse on the seller side. Why is it happening? I think people are finding better offers and so they want to sell it to you because they know they get a better offer. They just hold it off for another week. They're also finding that they can't find somewhere to go live. They put their house on the market thinking it would take a couple of weeks. It takes a couple of hours. And now they have nowhere to go. And so now they want to back out. What is the resolution for this? Well, the reality of the legal legalities is we always talk about the legalities is that these people unless they have reason to cancel under a due diligence provision, or a financial contingency or appraisal contingency, they would be in default shows for backing out unless they have reason to enter the contract. But the reality of it is is it's very expensive and time consuming to sue somebody for the fall. So when your buyer walks away and defaults, the basic recourse for a seller is going to be to retain the earnest money, which means you need to get more on his money taking $500 or $1,000 on a $400,000 cell is not sufficient artists money, we need to start asking for earnest money. If you're a buyer, more earnest money you put down clearly shows a makes your offer better in a multiple offer situation. If you're a seller, you know you're in the driver's seat. Now you have multiple offers. So would you not want to get as much earnest money down anyway, when you have multiple offers, ask for more honors money, in addition to additional consideration for the purchase price. So that is something you'll need to be looking at is getting additional earnest money because that's truly the recourse the seller is going to have. The reason that's the case is typically your damages are if a seller has to relist the house, then they can sue for the difference in which they ultimately sell the house by using normal and standard operations of trying to sell the house. But the problem is they can probably put the house back on the market and get the same price if not more. So most of their damages are not going to be there truly is going to be the earnest money is going to be the recourse when a seller backs out the buyers recourse is basically they can sue them for specific performance but of course that takes a lot of time and a lot of money. So they're calling really wants to house they can they can do that. And when you do that you typically follow what's called a Liz pendens, which basically is a lien against the property that says, hey, we're in a lawsuit in this property is at the heart of it, so the property can't be sold until that list pendens is taken care of, but at least stop the seller from selling the house to somebody else. The buyer believes that they're just trying to back out the sale to somebody else. This would prevent them from doing so. But that's number five, buyer and seller remorse is certainly a hot topic. When you do have a client, a buyer or a seller walk from the closing, you should contact the closing attorney or an attorney to see what the recourse would be in those situations, but do understand it is very expensive to follow all suits and it does take a lot of times. Which brings us to number four, earnest money is a fourth hottest topic in the market right now. As you all know, most agents are no longer holding earnest money. as busy as you guys are right now. You're not getting the earnest money down to the closing attorney in time, I'm seeing a lot of cancellations where artists monies are never delivered to the closing attorney, that becomes a problem for you. Because when you're submitting a contract saying that you have earnest money, and the earnest money never gets sent down to the closing attorney who's holding it, and the contract dfts in a default manner, then what you're looking at is you're looking at a buyer who's never paid money in the seller who's entitled to is going to be looking to the real estate agent for that money. And after edit tell agents in the past over this year when they haven't gotten the money, you might as well just write the check because if you don't and agreements as far as I think that you're going to be looking at some plasma there. It's not a good idea. We lazy owners money make sure the artists money is getting to the attorney is a violation. If you say you have the earnest money and not to have it that is a violation. Make sure your contracts clear I know the ccra contract you can state in there that the earnest money deliver with the contract is zero and earnest money will be delivered at a later time. So look at that with the state contract as well. And you should you be using that form of earnest money is additional earnest money and not money deliver the contract unless you have the earnest money in your hand. The other thing that you can do to make artists my a lot easier is of course use Blair Cato for your closings. Because we have this really cool app called zakum. That is z OCC AL real estate agents can download that from your Play Store on your cell phone in about 20 seconds, you can get it set up with a password and email address. And then it works just like your auto deposit for your bank, you can auto deposit the earnest money check into our account immediately. And so what you would do is when you meet with your client and get the contract signed, go ahead and get the check signed in written. And then you can take a picture of the check through the zakum app and go ahead and deposit in the Blair Cato account and then hand the check back to them. And so you would already have the earnest money in possession and have a deposit and so you would meet your requirements earnest money. The answer for number four is don't get too busy and not pay attention to whether the earnest money is being sent. If you're worried about it, put it down as additional earnest money with zero earnest money being sent with a contract and use Blair Cato for your closing. So you can use risako map so that earnest money can be deposited immediately. Alright, now moving on to number three. The third hottest topic in real estate right now is multiple offers. And then quite frankly, that could be number one. All of these can be in different orders. I just put it number three, multiple offers not necessarily a problem. It's a good thing. If you're a seller, it's a bad thing if you're a buyer, because you may be getting into a bidding war and overpaying. But the thing that you need to understand what multiple offers is you must present all offers promptly. I have done a podcast on this and I've done multiple legal tips on this. But I continue to get emails sent to me from agents saying Look what this agent just told me that they weren't submitting offers until five o'clock on Friday. You can't do that under state law you must present all offers promptly, promptly does not mean holding it for three or four days. It doesn't mean holding it till tomorrow afternoon. When you get your offer you must promptly present it you know what the word promptly means and do it. Now that doesn't mean that your client has to respond to it. If you have multiple offers coming in and you present those offers, your seller can say Hey, I'll respond to all of them at five o'clock on Friday after we have a top have time to sit down and really discuss them. That's fine. But do not put in MLS and do not put in emails that we will not present offers until a certain time you will present offers when you receive them and you will present them on whatever contract form they come in. You cannot put an MLS that we will only present on state contractor will only present on ccra contract, you must present all offers as received promptly no if ands or buts about it. The other issue with multiple offers that agents tend to misunderstand is there is no law that requires you to disclose the fact that you have multiple offers. In fact, the law has exact opposite. You have a duty of confidentiality to your seller, so you may not disclose that you have multiple offers to anyone. Unless you've been approved by yourself or you've been given permission. Your seller may decide that they do not want other parties that are that they have multiple offers and they just want to work one and then maybe work another one. Well on the other hand, they may decide they want to get the parties into a bidding war and to notify them that they have multiple offers. They also might want to notify multiple offers. For good might not want to tell the price range, or they might want to tell the price range. All of this is driven by your seller and not by you, the real estate agent does not make these decisions when you make decisions for your client is when you get sued. So make sure that you disclose it to yourselves, you have multiple offers, that they have the right to decide whether they disclose it to any of the buyers, and they decide how it is disclosed if it's disclosed at all. And that is the third hottest topic in real estate today. Now moving on to number two escalation clauses, hate them can't stand them. So first, what is an escalation clause and escalation clauses you make an offer, that is going to be x amount of dollars over the highest offer. So basically, you've opened up your clients wallet and said, whatever best offer you get my clients willing to pay this amount over. Now, you really have no way of knowing if any of these offers that the seller gets are true offers or bonafide offers or what the terms are. So they could literally get a friend or a family member to extend them a bogus offer and use that against you. But remember, price is not the only factor in offer. So it may be a terrible offer that just has a high price on it. But they're willing to use that to get your number up. So let's say there's an offer of $300,000. But it doesn't close for six months is contingent on selling a house and moving to Colombia off of a job that they get transferred. Oh, there's so many contingencies on it, that it's really not even a great offer, maybe a selling close offer. But that's the number. And so you said you're going to pay over the highest number. So we're not comparing apples to apples and oranges to oranges, we're actually comparing things that really aren't even that close. Because Oh offers aren't just simply that claim that I'll close in X amount of days. And this will be the number there's no contingency. So you're making an offer based on $1 on a contract that might be worth a whole lot less, it might be an offer that the client or the seller would not even consider taking in the first place. That's not really a smart way to buy a house. Secondly, the problem you have with these is that once you tell the seller your wallets open, the only other way to stop that from being infinity is to put a cap on it. But once you tell them what the cap is, you've told them what your best dollar is. So if I say I'll pay you $5,000 over the best offer up to 300 grand, I just told the seller my highest number 300 grand Why would a seller not just counter you at $300,000? Why would they say okay, well, I got an offer for 275. So your offers to it, you know, I counter back and say You said you'd pay 300 grand, so it's $300,000. The other problem with this is it doesn't really even matter if the property's not going to appraise when people were making these escalation clauses because people were paying over appraised value for the house and are paying over ask price. So let's say the house is listed at 300 grand and our best my best offer is 500,000 over your best offer. And that's somehow puts us at 350. If a house doesn't appraise What does it matter if the contract is contingent on appraisal, because all we're going to do is be arguing again when the house doesn't appraise as the price so you really haven't gotten a better offer. If you're going to accept an escalation clause, which I wouldn't, I would definitely put in there that that house is no longer contingent on appraisal, because if you allow an appraisal gives them the way out. So I just don't think what we're doing today, these things are in the best interest of the buyer, because you're opening the wallet, you're not really putting a list a limit on it, if you do put a limit on it, you're telling the seller what the price is. And if you're a buyer, it doesn't really matter if these appraisals come in, they're not gonna come in the price what these houses are. So we're just gonna be negotiating, negotiating it later. escalation clauses are the second hottest topic and also a big problem in the market today. Now, that moves us to number one, the number one hot topic, which I are seeing a lot more of our love letters, I also hate. And I think they are a huge risk for a fair housing claim. And I don't believe you should be doing and in fact, if I think if I was a seller, I would not accept them. And if I was a buyer, I would not let my buyer's agent I would not let my buyer submit them. I do recognize that sometimes it can be advantageous. So let's say for instance, there's a old house it was built in the 1800s. And the homeowner has restored it and they're really scared about selling it to somebody who's going to maybe tear it down for development. I can see where a letter be written saying, you know, we are history buffs. We love this house. We love this dollhouse we're planning on doing more renovations and keeping this house in is Granger whatever, and that might assuage some of the concerns of the seller. But that's not what most of these love letters are. They're basically about who we are as a people. And while we want to buy your house and while we'd be a good fit for your neighborhood. And as I've mentioned before, I'd never even heard of love letters until a few years ago when a client told me about him in Seattle. And I asked them about him and he said, Well, they would submit these letters about who they are why they wanted to buy your house. And I said well, why did you care? Why don't you just take your best offer? He says because I want to make sure a good person bought the house. I'm like, what's your definition of a good person? What is the right person? Is it based on race, religion, national origin color? What is it what is a good person? You've got to be careful with that because once you start doing that, it certainly opens you up for all kinds of claims for fair housing. And this is what the real estate commission in North Carolina says issues go read these three paragraphs. If you're the listing agent you should educate yourselves about the pitfalls of love letters. This type of letter opens them up to criticism and possibly to civil liability. And they should not look at such letters even if they are sent directly the seller from the buyer seller should only be considering offers based on the objective criteria prices and terms. Your firm may have a policy against the use of such letters. If so, let your client know that if they received such a letter with an offer, you will not pass it on to them. The National Association realtor recommends that no such letter be accepted as part of the MLS listing document the reason your clients choose or reject H offer. second paragraph if you are a buyer agent, your firm may also have a policy against the use of such love letters. never recommend that a buyer prepare a love letter for the seller and tell the buyer to send such a letter directly to the seller, let your buyer know the market is hot, and they should make their highest and best offer. If they want to be successful prepare them for the fact and extremely competitive market, they will likely lose a number of properties before they find the house that meets is meant to be theirs. The key here is to protect your clients from possible harm by removing the temptation to go with a contract simply because photographs or letters tug at their heart instead have them choose the best offer on the table. Love may be blonde, but unconscious bias is real and sees clearly keep your clients and yourself safe from a potential fair housing issue. I don't think I can say it any better. I think they nailed that on the head. So make sure that you're not doing these love letters or not accepting these love letters, you're taking an extreme risk, putting your client in risk and putting yourself at risk for lawsuits. So those are our top five hot hot topics in the real estate market today. And now we move over to Gary Keller was almost June 30. And you know what that means, if your license expires in 2021, you have to get it renewed prior to the end of this month, June 30. That means you have to have completed all 10 of your continuing education hours with for those hours being your mandatory core hours. You also have to be fingerprinted. And there's been a lot of discussions about that. So I'm not going to get into that today. But you also have to make sure that you do a couple other things. By the way on the fingerprints. No, you cannot use another agency. It doesn't matter that you've been fingerprinted for a concealed weapon or an FBI check or whatever background check, you have to do it for the real estate commission that do not share information enter department. But the other thing you have to make sure you understand is you have to go on lawn and renew your license. You have to pay the renewal fee and you have to submit by hitting the button. Okay, make sure you do all of those you go to LLR website, there's a little button right there it says renew your license. It is super simple. Five minutes and you're done. But I have had a client that hit the submit button her internet timed out on her somehow she lost connection. She went about her business and did not know that her license had not been renewed. Now if you do not renew your license by January 1, your license is considered lapse. And you're not supposed to be practicing real estate at all. And you can fall agreements be filed against you for that. after January 1 your license is actually cancelled. And you may not perform any type of real estate license work at all. And in order to get your license back after is cancelled. The only remedy you have is to go sit for the test again. After you sit through all 80 hours of pre licensing classes I've had that happened to a client by accident she thought she had submitted the button the button timed her out her license lapse and then became cancelled and she had to sit through the entire testing. Not only the testing, but the classes and the testing to get her license back not something you want to do. If you don't let your What if you let your license get lapse or expire. Your broker could also get in trouble for failure to supervise. So it is very important that you make sure you get your license renewed and you get it renewed on time and make sure that you follow through and make sure that button is actually clicked. Alright. So now log in Gary's good news only one quick housing news before we move into COVID housing wire a broad swath of housing industry is calling for the vitamin stration to lead the Center of Disease Control with CDC eviction ban last month in his letter 12 industry groups including the National Association of Realtors in the Mortgage Bankers Association is urging the Biden ministration to allow the CDC to limit on evictions to expire. I think if that happens that would hopefully help them the market because some of these houses might be able to be put on the market and that could help some of our housing shortage. Alright, and COVID new Coronavirus. All Time Low. Point 6% of emergency visits now are with COVID diagnosis point 6%. Not even 1%. That's from code that's from CDC, on website from the Cleveland Clinic which is one of your better medical clinics out there for research. sciences no longer in doubt. Those who have previous infections are no less protected from COVID-19 than those who were vaccinated according to a large study by Cleveland Clinic Wonder they wonder if algae and others have been lying. They said they actually know better. This is really a big issue here. Because what they're saying now is if you've been vaccinated or you have COVID-19, you're equally protected. If you had COVID-19. And the vaccine, you're doubly protected. So we're probably closer to a 75% or 80% of our population having immunity from this thing. So that's good news. Dr. Lee Anna, when on CNN, this is another example how they just keep getting it wrong. She states This is outrageous. She just said this this week, anyone 12 or over should get vaccinated now because they are at a high risk of contracting COVID-19 and dying from COVID-19 I personally don't think I'm at a higher risk of catching it or dying from particularly dying from it. This simply is not true and how we know this is not true. And it's complete exaggeration on behalf of media to try to get you to clickbait them. Tracy Hogue h o eg who's a medical doctor and a PhD. She calculated the child's risk of dying COVID, using US per weekly stats on mortality. And so far 371 children have supposedly died from COVID. And she uses this times about the prevalence of last week's numbers. And this is the number she comes up with this is the math ready for 0.0? zeros zeros zeros 02 percent or two in 100 million. So the question is, do you consider that a high risk of anything I don't stop with your jet exaggerations, and I think people would listen and actually go get vaccines. I'm vaccinated, but his exaggerations aren't helping anything. People just realize their laws. CDC website shows that 314 people aged zero to 17 have died. Over half to a third of those have died of what normally died from the flu annually. That's about half or a third. And remember these 314 didn't die from COVID. They died with COVID. From what I understand from this listening to a podcast on it is that almost every one of these 315 had tremendous health issues. Alright, as of 6am 375 million vaccine doses have been distributed, 309 million have been administered, or 82% of the vaccines have been administered. Additionally, 174 million people have received at least one dose of the vaccine 144 million have been fully vaccinated. That means 52.4% of the US population and receive at least one dose 43.4% have been fully vaccinated. South Carolina, almost 4 million vaccines have been administered, heard the number almost 85% of senior citizens are heard the number of other day have been administered the dose. Finally, as I move into our weekly stats, let me ask you this. If I told you today that cancer cases were down 94.4% in this country, I think most people would say we've won the war on cancer. But some reason we won't call this war on COVID overweight, I don't know what number we have to get to before they finally just say it's done. We are down 94.4% on COVID cases. This is despite all the fear mongering about variants and includes all the fearmongering by CDC zonedirector winsky, when she said she was going off script, and she has grave concerns and fear for the future now of course and she said that cases only down 70%. So again, she didn't know what she was talking about. This lady has completely changed her whole tune from the beginning of time when she first became CDC director to now let's look at the cases. The current seven day average daily case is 13,009 97 is a decrease of 6% from last week, and it is down 94.4% from the peak of January 10 94.4%. We're now at three 5.6% cases left. seven day average of positivity cases on a 1.8% of all people who are testing for COVID are testing positive seven day average of cases for hospitalizations down 12.8% and deaths down 1.9%. We're now averaging only 340 deaths of COVID. Again, that's with COVID not from COVID. So you don't even know if that numbers. Again, the numbers are trending in the right way. And that is Gary's good news. Well, thanks everybody for listening again this week. I got another great topic next week coming up. And I hope everybody will continue to listen like us, share us and subscribe. And we hope you have a good weekend and we'll see you next week.