In this time where so many homeowners are turning to renting their homes, I have come to the conclusion that us agents need to better educate our Homeowners, who are basically becoming a 'commercial' client versus a residential client. There are differences and I am going to do my best to 'get the word out', primarily in how commissions are earned, which like residential there is no set commission and is always negotiable. However, in the commercial world the coop agent doesn't only receive compensation for year 1 of the lease but ALL subsequent lease years, and renewals in the future. I will not fill out a Rental Listing Agreement without making certain commission amounts are paid for EVERY year of an executed lease, not only to me as the listing agent but to the COOP agent as well. The amount of these commissions is of course negotiable, but considering the amount of work STILL required to service rental customers/clients, coupled with the fact that the homeowner is really an investor now, where their personal tax liabilities change, etc., they should probably hire an accountant to make certain they can claim everything available, including commissions paid. This is the cost of doing business or maybe they can try and find a tenant on their own and worry about credit reports, background checks, etc.
Additionally, as time and knowledge are most certainly the best thing we can offer our clients, I have been amazed at the conditions of the homes I tour that are up for lease (which are also for sale). Homes that are not SS or foreclosures. Yet the condition of these homes is truly pathetic from very worn carpet, walls in need of painting, stress cracks in ceilings, nailpops, old appliances, windows that have lost their seal, old washers/dryers, decks so filthy you leave footprints walking back inside, excessive weeds in the yard, I could go on, we have all seen them this year. If the owner is not going to make even basic improvements to make the house 'right', the monthly rental price better be adjusted properly, or they better be willing to negotiate the price cause that house is going to sit like a turtle on a stump on a hot day!
Do homeowners really think that JUST because renters are moving in they deserve a crappy house? Do they not realize that listing their house is almost as much work as a regular sale listing for 'pitance' in return. I've had several rental clients whose income is near or above 6-figures but due to many transfer's, they don't want to buy. Can you blame them? ALL renters, whatever income want freshly painted houses with CLEAN or newer carpet, and newer appliances, etc.
I sincerely hope that our clients will begin to listen when it comes to their rental homes. Owners must understand that this is more of a commercial real estate matter now, and our time is worth more then 'average going rates' that for some reason aren't so negotiable as they are. And this isn't just a matter for listing agents but coop agents as well, who want to show nice homes to their client's, homes that are deserving of the rental list price being advertised online.
Wednesday, September 22, 2010
Top real estate experts are predicting that a 'shadow inventory' will be revealed in the 4th qtr of this year with 80% of the inventory in CA, NV, AZ & FL. What is a shadow inventory? REO-bank owned properties that have NOT yet been listed. This will be a market with highly motivated sellers and bring buyers out of their bunkers!