Should You Sell By Owner To Avoid Having To Disclose Property Defects?

Many people mistakenly believe that Seller’s Disclosure only benefits the buyer, but there is significant benefit to the seller in making disclosure.

But first, let me point out that the fact some people think this way means we have to add it to the list of potential dangers for a buyer who is working directly with an owner.

Did you know Seller’s Disclosure is not a Realtor requirement? It is required by law, whether you are working with a licensed real estate professional or not.

A seller’s disclosure is a legally required statement that discloses important or relevant information to a real property buyer. A seller’s property disclosure form is governed by state and federal laws.

It is easy to understand how the seller’s disclosure can protect the buyer. When the property condition is disclosed, the buyer can make the purchase decision based on the facts, rather than on the hope that everything is great. Or the false hope that all is well, when in reality there is a defect that will become apparent later.

Some sellers don’t want to disclose defects because it could affect the price.

Well, yes. It could, and likely should, affect the price. But it may not prevent an offer; kill the sale at inspection; or worse.

Consider if you were the buyer of a used car, and the odometer had been rolled back (youngsters, just play along like you know what that means).

The value of the car is less than portrayed because of the higher actual miles. If the person who sold you the car hid the fact the mileage was wrong, they committed fraud, and you could take them to court.

The court looks at two main things:

1.)  Was the buyer harmed (in this case, yes)

2.)  Did the seller intentionally commit the fraud?

If the seller was also a victim of odometer fraud, and unknowingly bought the car, and subsequently sold it without knowledge of the fraud, then they would have to take that up with the person they bought it from.

And by “take that up with” I mean, “take them to court”.

If the seller made the buyer aware of the incorrect mileage, the buyer may still have bought the car, and the seller would not have to look forward to attorney and court costs.

That is the benefit of disclosing known defects. Without a required seller’s disclosure, a seller can be held liable.

I always tell my sellers, “Disclosure is lawsuit protection. You cannot be sued for things that you disclose, but you may be sued for things that you conceal.”

Protect yourself and disclose as required by the laws in your state. Laws vary.

Florida law provides that, with some exceptions, you (as a home seller) must disclose any facts or conditions about your property that have a substantial impact on its value or desirability, and that others cannot easily see for themselves (This comes from the court case of  Johnson v. Davis, 480 So.2d 625 (Fla. 1985)). 

I send a bi-weekly, digital newsletter with insights into the real estate market, as well as helpful hints, tips and trends for homeowners. If you would like to receive it, just send me a message with your email and I will add you to the next mailing.

All the Best!

Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Featured in Scene Magazine’s Men on the Scene 2016 issue

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™”

Re/Max Alliance Group

Mobile: 941-306-7384

http://myfloridahomesmls.com/JimSweat (Home Search)

https://jimsweat.wordpress.com/ (Blog)

www.linkedin.com/in/jimsweat (LinkedIn)

A Proven Professional Working for You!

22 Years Experience

Seven Factors Affecting Home Prices – And the Stock Market Wild Card

DOW 40,000 or DOW 8,000 – where does real estate stand?

Many pundits agree the stock market is overvalued based on price to earnings ratios. This is pointing to a market correction. What does that mean for real estate?

What You Really Want to Know When Asking “How’s the Market?”

This generic query masks many deep concerns, questions, hopes and fears.

At the root, folks want to know things like:

Am I going to lose my money? Is this a good time to buy, or should I sell now? Does it make sense to invest more at this time, or should I be taking profits out of the market? Is the current trend likely to continue? Will I regret not increasing my investment in this market? Will I leave money on the table if I sell now?

Essentially, what does the future hold?

“How’s the market?”

Because I am in real estate, this question usually refers to that market. My quick answer right now is the market is strong, inventory is low, and prices are rising with demand.

Before I get into where the real estate market may be heading, let’s talk about the stock market. The DOW breaking 21,000 for the first time ever has made headlines everywhere.

Full Disclosure: I am not a stock broker, and am not making any predictions. This is just a collection of observations and how one market may affect another. My opinions are irrelevant when even the professional market forecasters are so wildly diverse. My purpose here is to expose you to the variety of professional opinions, and to relate that to the real estate market.

Stocks are at an all-time high. For some, that means it is a great time to be investing more because “the trend is your friend”.

Others see record high valuations as a warning that “what goes up, must come down”.

If you do some research, it quickly becomes apparent that there is very little consensus as to where the market is heading. The predictions are all over the map, actually.

Do you want the good news or the bad news first?

Some forecasters are predicting DOW 25,000; 30,000; even 50,000 by 2025.

On the other hand, others are predicting DOW 12,000; 10,000; even 6,000 as early as 2018.

Those are the extremes, certainly. And they don’t answer any of the questions folks really want to know when asking about the market.

My research has found there are those in two strongly opposing camps, and others in the middle ground area.

The strategies you would follow if you agreed with one prediction would be devastating if the other scenario actually came into reality. And vice versa.

Bust: the deflationary camp expects the markets to reset downward. Rapidly and painfully downward. DOW 8,000 or less. Gold under $700 per ounce, which would be almost another 50% drop from recent levels, which are almost 40% off of the highs for the precious metal. This scenario states the values of everything will decrease. Real estate would see another tumble similar to the one we had a few years ago during the Great Recession. Cars, food, commodities. Everything would be cheaper, not just stocks.

The strategy for those planning on this scenario is to sell all of your current assets, convert them to cash, and get ready to buy back everything on sale.

Boom: the inflationary camp is just the opposite. The stock market, real estate market, cost of food, gold, everything – continuing to go up. Some in this camp even see rapid increases and possibly hyperinflation similar to that which hit Venezuela, Argentina, and numerous other countries over the last 25 years. Gold prices jumping to $2,500; $5,000 even $10,000 per ounce. Real estate values going through the roof. Prices for everyday expenses rising faster than you can imagine.

The strategy for this scenario is to buy all of the assets you can get your hands on, because cash will be worthless and “things” will have value.

I admit, the two extremes hold no appeal to me. I don’t want to live in a world where gold is worth $10,000 an ounce, almost overnight. Nor does the prospect of going through another Great Recession sound interesting to me. Especially not when there are huge numbers of people who have not had much of a recovery from the last one, and don’t have the resources to weather another storm so soon.

Most of the mainstream projections are a lot milder, and the middle of the road is more appealing to most of us. Even if markets don’t care about what appeals to us.

A few things that many do agree on: Quantitative Easing (opening the spigot and flooding the market with cash) has pushed up the stock market, but has not brought about the economic expansion that was hoped for. That money is pumping up Wall Street, but not enough of that cash is falling into the pockets of the average man or woman on Main Street.

Similarly, zero percent interest rates from the Fed have not spurred the economic activity needed to bring about a strong recovery.

We may see more QE and near zero rates, but neither of these “Solutions” can be utilized for extended periods without significant negative implications.

Where does that leave us?

Quite frankly, hoping that the middle ground wins.

Many pundits agree the stock market is overvalued based on price to earnings ratios. This is pointing to a market correction. Hopefully just a middle of the road correction to cool the jets, not anything drastic.

What does that mean for real estate?

In the past, many of the investors who get out of the stock market prior to a correction have put their money into real estate. Likewise, those who didn’t get out first, pull the cash out when the market is falling and look for some good deals in real estate to park it in. Both of these are bullish for real estate even when the stock market is bearish.

Note: All real estate is local. The real estate market is not national. There can even be significant variances within small geographical areas. Consult a qualified real estate professional in your area before buying or selling.

There are a number of factors favoring real estate right now. And of course, there are some concerns to be addressed.

Leverage. One of the most attractive things about real estate as an investment is the ability to buy it with just a small amount down. Your out of pocket cost can be a fraction of the value. If you want to buy $100,000 worth of stock, you need $100,000. But you can buy $100,000 of real estate with as little as $20,000, $10,000 even $5,000 of your own money. That is significant leverage! If your $100k property increases in value by $5,000, that is a 25% gain if you put $20k down; a 50% gain if you put $10k down; and a whopping 100% gain if you only put $5,000 down!

What if you paid all cash? A 5% gain beats the socks off what you would get with that money sitting in a bank account!

Demand. People are looking to buy real estate and demand is strong. Baby boomers are retiring and buying in areas they have dreamed of their whole lives. The clock is ticking for them. Many put the dream on hold during the recession and now that markets around the country have recovered, they are moving forward with their plans.

Interest rates. Low interest rates are bullish for real estate because it allows folks to leverage a small down payment into a large purchase. This frees up their cash for improvements and other things, like vacations and investments. Interest rates will rise over time, so locking in at lower rates favors those who act quickly.

Favored status. The US government grants owners of real estate tax deductions and privileges that increase the value of owning. 1031 Tax-deferred Exchanges also allow individuals to sell a property, lock in the gain and rather than paying taxes on the gain, roll it into another property and defer the tax indefinitely. There is some talk of changes coming to the 1031 program. Changes may actually spur more real estate activity if owners want to trade their current properties for different ones under the current guidelines. Talk to your CPA about tax savings.

Millenials. The youngest generation of potential homebuyers actually outnumbers the baby boomers. They should have a significant impact on the value of real estate over the course of their lifetime. However, they are not impacting it as much as could be expected because many are hindered from obtaining mortgages by large student loan debts and jobs that don’t pay as well as the jobs their parents had. When debts go down and pay goes up, they will become a driving force similar to the baby boomers, based on the sheer number of them.

Pent up demand. This comes from the millenials who are stuck living with their parents (or multiple friends) and also from the baby boomers and Gen X-ers whose plans were put on hold. During the recession, not enough new homes were being built to meet the average needed for a growing population, new family creation and replacement of older homes.

Rental Nation. Many who are mentioned above are renters by necessity. Strong rental demand and rising rents are encouraging investors to buy all types of properties and rent them for cash flow.

We know where the market has been, and where it is now. What the future holds is anyone’s guess.

Make decisions based on your personal wants and needs. One major benefit of real estate is that it is tangible. A home has usefulness and value beyond just the price put on it. You can live in it, create cash flow with it, and spend time in it with those you love, whether the value is going up or down.

When is the last time your family spent a cozy evening inside your stock portfolio?

When stocks go down, all there seems to be is pain, unless you were betting against them.

Many folks invest in real estate to diversify their portfolio and as a hedge against inflation, even if they aren’t buying cash flow properties. As the saying goes, “Buy land, they aren’t making any more of it!”

Real estate offers the ability to create memories for a lifetime, and generational wealth. Contact your favorite Realtor to see what opportunities are available to you in today’s market that matches your long-term goals.

I send a bi-weekly, digital newsletter with insights into the real estate market, as well as helpful hints, tips and trends for homeowners. If you would like to receive it, just send me a message with your email and I will add you to the next mailing.

All the Best!

Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Featured in Scene Magazine’s Men on the Scene 2016 issue

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™”

Re/Max Alliance Group

Mobile: 941-306-7384

http://myfloridahomesmls.com/JimSweat (Home Search)

https://jimsweat.wordpress.com/ (Blog)

www.linkedin.com/in/jimsweat (LinkedIn)

A Proven Professional Working for You!

22 Years Experience

 

Jim Sweat featured in Sarasota’s Scene Magazine “Men on the Scene 2016” Issue

 

publisher-quote-motsjulie-milton

 

 

The profiles are arranged alphabetically, so just like in school, I am near the back of the line.

Feel free to share, tag and post if you know anyone who would like an agent with the “protective nature of a guard dog” helping them to get the best price.

Jim Sweat Profile in Scene Magazine click here for the profile link.

 

All the Best!

Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™

 Re/Max  Alliance Group

Mobile: 941-306-7384

http://myfloridahomesmls.com/JimSweat (Home Search)

https://jimsweat.wordpress.com/ (Blog)

www.linkedin.com/in/jimsweat (LinkedIn)

A Proven Professional Working for You!

21 Years Experience

What Goes Up Must Come Down

What goes up must come down.

That is the concern of many as the stock market is in all-time-record territory. Some of the wary are interested in moving a portion of their portfolio into something more stable, like real estate.

Real estate offers the ability to create memories for a lifetime, and generational wealth.

Are concerns about the stock market legitimate? The answer you get will depend on who you ask. Everyone loves a winner, and there is a crowd who is excited to see the stock market setting new highs.

I am not a stock broker, analyst, or even a current investor; seek the advice and counsel of a qualified, licensed securities broker before making any decisions.

Here are some of the concerns of the contrarians:

1.)    Easy money – low interest rates and QE – quantitative easing where the Fed fired up the printing presses and has flooded the markets with cheap, easy money and the potential for longer term damage in the form of inflation and higher interest rates.

Quantitative Easing has had multiple rounds, and the experts are not all in agreement what the long term repercussions will be. The markets can react, or overreact, to concerns.

2.)    Some feel that companies have done too much cutting in pursuit of higher stock values. Everyone can agree that cutting the fat makes perfect sense. Lean and mean profit-making machine.

However, when the cutting continues and core strengths and customer services are cut too much, a company is actually too weak. Removing the muscle and sinew just leaves bone, and bone by itself isn’t very capable. The stock gains seen in over-cutting will be followed by losses as companies falter in the marketplace.

One phenomenon that I have witnessed in past stock market corrections is a move of investors out of the equities markets and into real estate. For a pure investment (where you are not going to use the property personally) real estate can even be purchased in a self-directed IRA for tax advantages.

Properties can be used personally on occasion and still garner tax advantages (talk to your CPA) and some folks just like the idea that real estate is tangible. You can see it, touch it, even walk through it, sleep in it and enjoy it with friends and family.

When is the last time your family spent a cozy evening inside your stock portfolio?

Vacation-area second homes are another popular investment for money that folks pull out of stocks and decide to enjoy while it appreciates. Heck, even if the market stumbles again, you can still use the property as intended.

Again, real estate offers the ability to create memories for a lifetime, and generational wealth. Contact your favorite Realtor to see what opportunities are available to you in today’s market that match your long-term goals.

All the Best!

Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™

 

Re/Max  Alliance Group

Mobile: 941-306-7384

http://myfloridahomesmls.com/JimSweat (Home Search)

https://jimsweat.wordpress.com/ (Blog)

www.linkedin.com/in/jimsweat (LinkedIn)

A Proven Professional Working for You!

21 Years Experience

 

What Are Others Saying About Jim Sweat?

“When selling a home with strong sentimental attachments, located over a thousand miles away, having confidence in your Realtor is critical. You earned my confidence through your commitment… and followed through to a very satisfactory completion.”                                                                                                           ~Karen K., Venice, Florida

“Jim not only understands the market conditions and the various neighborhoods he works in but he also understands people. He goes above and beyond to provide superior service by insuring that clients have all the information they need to make informed decisions. Jim treats you like you are important to him, not just another prospect or file to work.”

                                                                                      ~Troy Connor, Port Charlotte, Florida

“Jim brings a variety of excellent qualities to the table in every aspect of his profession. Knowledge, dedication, experience, honesty and professionalism are but a few. The most important quality Jim gives his clients is his time, which these days, is a precious commodity. From a business partner perspective, it is always a pleasure to work with Jim and his clients, knowing that we will have a smooth transaction due to his expertise and hands-on approach. Knowing how he conducts his business, I would certainly hire him personally and refer him to family and friends.”        ~Suzie Scheetz, Sarasota, Florida

“Jim Sweat is an excellent agent. He put his best effort into finding us a home that matched our criteria and showed great patience while we made our decision in choosing our dream house. He helped us through the process of negotiations and home inspections and made the experience painless and satisfactory for all concerned parties with his expertise.”                                                                             ~John M. Venice, Florida

“Jim Sweat is willing to help you find the right home for you according to your specifications. He is always professional and honest. I would, and have, recommended him to many friends and family. Jim has helped them also.”

                                                                                   ~Sue & Allan A. Port Charlotte, Florida

“We think your greatest strength is your patience. You practiced that well with us although at times we may have been a little difficult.  Also, we have to mention your perseverance and determination to find us the house of our dreams in our price range.  We were very happy with your expertise and knowledge of the area, as well as helping us notice the good points in the homes we were touring as well as their shortcomings.”                                                                                                           ~John & Toni Venice, Florida

“We don’t care where you move to, you are our Realtor in Florida!” “I put my full trust in Jim.”                                                                                 ~S. Ahonen, Stevensville, Michigan

“Jim Sweat was fabulous to work with and He did an awesome job with the clients I referred to him. They are very happy with his service and I am confident that any referral that I send to him, will receive top notch customer service.”

                                                                                ~Domenique Lombardo, Orlando, Florida

 “This man has talent–he listens intently to the need–takes the time to research in depth and then watch out because Jim is results oriented! A pleasure to know and an unforgettable business associate.”                  ~Mary Kay Sverid, St. Joseph, Michigan

 “Working with Jim was an absolute pleasure. We had a very difficult sale with a foreclosure. Jim’s years of experience were a blessing, as he knew exactly how to maneuver through all the involved paperwork. His knowledge, connections and professionalism helped us understand the complicated process. If it wasn’t for Jim’s expertise, I’m sure we might have lost our adorable retirement home. Thank you very much Jim!!”                                                                               ~Ken & Mary Jeanne, Florida   

 “Jim Sweat has high customer satisfaction ratings because he takes real estate very seriously. He puts forth the time and effort to constantly improve. Jim attained his numerous designations because of his commitment to his clients and his profession. He seeks to find out what makes sense for his clients and carefully guides them along the path to their goals. I know that his customer care is a priority because I have been married to him for his entire real estate career!”                         ~Marci Sweat, Sarasota, Florida 

 “Jim Sweat should be your top pick for a real estate agent in the Sarasota area. He always has some great comments and answers on Trulia.”

                                                                                   ~Carmen Brodeur, Scottsdale, Arizona     

“Jim Sweat provides a fresh look at real estate. His observations are on target and his blog comments provoke answers to questions overlooked or just plain forgotten by both consumers and even professionals. His logic, if applied to purchase or selling your home, may be of a greater value than you could have ever imagined.”                                                                                                                                 ~Gabriel Palotas, Florida

“Whether you are buying or selling, Jim and Marci are the kind of Realtors who won’t give up until you are satisfied. Plus, they’re just nice people to work with. Now that we’re settled in South Haven, we consider them friends. If we ever put our house up for sale, we wouldn’t trust it to anyone else.”     ~Larry and Linda Barnhart Chicago/South Haven

“Jim and Marci were so helpful in the home buying process. They kept us informed on what was happening in South Haven until we were ready to purchase a home. They helped us find the perfect get-away. They really listened to us when we told them what we wanted in our home. As homes came on the market they let us know and our place is perfect! Thank you!”                                                                        ~M.P., Chicago, IL

 “You should always look for someone with the heart of a teacher, not the heart of a salesman.”

~Dave Ramsey, Financial Author

All the Best!

Jim Sweat, ABR, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™

American Realty

Mobile: 941-306-7384

http://myfloridahomesmls.com/JimSweat (Home Search)

https://jimsweat.wordpress.com/ (Blog)

www.linkedin.com/in/jimsweat (LinkedIn)

A Proven Professional Working for You!

21 Years Experience

Psst… Can You Keep A Secret?

This week, a client called me and asked, “I am going to have a new neighbor, are you working with them?”

I confirmed that I am, without saying who we were talking about. He let me know a mutual friend had told him, and sent him the address. They will be about eight blocks apart when both closings take place this month.

Last month, a couple that I was showing homes to found out that some of their closest friends are also looking for a new home right now. They were initially surprised that I hadn’t told either couple that the other was in the market.

I just chuckled and replied, “It isn’t my news to tell. You should have the privilege of letting your friends know, when you feel the time is right. You were both actually looking at homes with me on the same day!”

Last year I assisted family members in their purchase of a home. They initially expressed concern that other family members would find out before they were ready to make the announcement. I reminded them of when their parents (and in-laws) purchased years ago from me, and no one knew until the deal was done and the news came from the buyer directly.

I will admit it can be a little tricky keeping a secret from other family members. It would be so easy to say something in passing. But it would not be professional.

Marci and I have worked for years knowing confidential information about folks, and it was always understood it would remain confidential.

Many people say they don’t want to do business with friends or family. Often times, they really just don’t want their blabby friends telling everyone their personal business.

Should you do business with friends and family? I cover that question in more detail in my upcoming book Real Estate CSI: Controversy, Secrets, Insight. A Real Estate Agent Exposes Dangers and Dirty Tricks that Cost You Money.

One of the important considerations is: can your friends or family keep their mouth shut?

All the Best!

Jim Sweat, ABR, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™

American Realty

Mobile: 941-306-7384

http://myfloridahomesmls.com/JimSweat (Home Search)

https://jimsweat.wordpress.com/ (Blog)

www.linkedin.com/in/jimsweat (LinkedIn)

A Proven Professional Working for You!

21 Years Experience

 

All-Time Record-Breaking Home Sales in Sarasota & Manatee Counties

Real estate experts predict that more existing homes will sell in Manatee and Sarasota counties in 2015 than during any other year in history.

And that is in a market with low inventory levels!

On a pace that the president of the Realtor Association of Sarasota and Manatee calls “historic,” Sarasota County is expected to exceed an all-time high of 11,550 home sales by year-end. In Manatee County, sales need only average 360 per month in November and December to break an 8,004-sales record set in 2013. Nearly twice that number sold in October.

By the end of October, the pace of sales had dropped only modestly during the autumn selling season, which is historically viewed as being “slow.” At the same time, median prices are near a five-year peak and homes are typically staying on the market a little over a month before selling.

Excerpted from article  published November 30, 2015. Written by Matt Johnson, Bradenton Herald business reporter.

Strong demand is pushing prices up substantially. That trajectory may slow as more sellers put their homes on the market, but with the number of homes for sale at or near a half-decade low, some buyers are jumping in while properties are still available where they want them at the prices they want to pay.

Housing inventory has been well below the six-month level of supply that defines equilibrium between buyers or sellers.

In October, the supply was between 3.5 and 3.9 months across the single family and condo markets in the two counties.

Higher prices, low inventory and rising interest rates may temper the sales pace next year, but all indications are the all time sales record will be broken this year.