Rhonda Duffy

It has been talked about in the industry that agents should be on salary and not on commission. This salary for agents would be paid by the brokerages and then the brokerages would be forced to hire better people and train them. In other words, the brokerages would carry the risk of someone else's actions, they would pay taxes on this person and they would spend thousands of dollars training these folks in hopes that these people who work outside the office, in their own homes and cars, would actually have the ability of self-motivating themselves and perform under any circumstance just because they are on salary.

I feel that this is too much risk for the brokerage. The risk is two-fold. The buyer and seller's motives are not clear to the upper management and the real estate contracts are based on time, not really on payment from the buyer and seller, and the agents can get too loose in their thinking and not be motivated to work at all.

Back to the real estate agreements. If all of the contracts between the consumer and the brokerage was based on payment up-front, then the model of salaried agents makes sense. Then the brokerage is only responsible for advertising to get such and that is a similar model to other retail businesses.

But the bigger issue is the attitude and ongoing skill set of an agent that works in a business where buyers and sellers are fickle. It is easy to get sucked into the media and buyer and seller thinking and be in a fog that no one around the agent recognizes. And, the skill set needed to take a buyer from A to Z in the transaction is often missing a few letters.

So, the model that makes the most sense to me is one where the agent is an independent contractor and is on a 6-month quota. The quota is based on how much money they make the brokerage. Some brokerages have elected to have the agent pay a desk fee instead. This too is quota but is run a different way. The brokerage is not worried about the business that the agent is doing; they are worried only about collecting their monthly fee.

The quota paid based on transactions and revenue to the brokerage is best though when you are a lead-producing machine. How many buyers are being sold is important to know when the brokerage is spending money to advertise.

Buying a home "As Is" simply means that there are no warranties or disclosures to be made from the seller to the buyer. This is strict buyer beware and is legal in most states including Georgia. This "As Is" status would be used by banks, investors and HUD. However, buying a home "As Is" does mean that you can not have the home inspected by as many different types of inspectors that you want to make a clear, educated decision. This is what the Georgia Association of Realtors Purchase and Sale Agreement states about "As Is".

B. Property Sold "As Is." All parties agree that Property is being sold "as is," with all faults including but not limited to damage from termites and other wood destroying organisms and lead-based paint and lead-based paint hazards. Seller shall have no obligation to make any repairs or replacements to Property.

The Inspection Process in the Purchase and Sale Agreement is stated as:

A. Right of Buyer to Inspect Property: Buyer and/or Buyer's representatives shall have the right to enter Property at Buyer's expense and at reasonable times (including immediately prior to closing) to inspect, examine, test and survey Property. Seller shall cause all utility services and any pool, hot tub and similar items to be operational so that Buyer may complete all inspections under this Agreement. Buyer agrees to hold Seller and all Brokers harmless from all claims, injuries, and damages arising out of or related to the
exercise of these rights.

And, please note that you must inspect the neighborhood as well so that you don't have regret later after the purchase. This is what the Purchase and Sale Agreement states about the buyer's duty to inspect the neighborhood.

B. Duty of Buyer to Inspect Neighborhood: Buyer acknowledges that: (1) in every neighborhood there are conditions which different buyers may find objectionable and (2) Buyer has had the full opportunity to become acquainted with all existing neighborhood conditions (and proposed changes thereto) which could affect the Property including without limitation land-fills, quarries, high-voltage power lines, cemeteries, airports, prisons, stadiums, odor and/or noise producing land uses, crime, schools serving the Property, political jurisdictional maps and land use and transportation maps and plans. It shall be Buyer's sole duty to become familiar with neighborhood conditions of concern to Buyer. If Buyer is concerned about the possibility of a registered sex offender residing in a neighborhood in which Buyer is interested, Buyer should review the Georgia Violent Sex Offender Registry available on the Georgia Bureau of Investigation Website at www.state.ga.us/gbi/disclaim.html.

Okay, so what should you do if the house you are buying has vacant land around it? Should you just say, great, no one lives here so we have more privacy? No, you should not is the answer. This land could be a potential problem for you in the future and you need to know what is going on before you buy so that you can make an educated guess on whether your property value is going to go up or down in the future when you attempt to sell your property.

To avoid buyer's remorse when you buy a home or a condo, you need to know what is your responsibility. Georgia is a buyer beware state which means that you have to make sure that you know what you are buying. This is done before the Purchase and Sale Agreement is negotiated as well as during the due diligence period. As a measure to be clear, the Georgia Association of Realtor's Purchase and Sale Agreement is very clear that it is the buyer's responsibility to check out the neighborhood as they have added a paragraph to the Agreement that the buyers must sign in agreement that it is their responsibility. The paragraph reads:

Duty of Buyer to Inspect Neighborhood: Buyer acknowledges that: (1) in every neighborhood there are conditions which different buyers may find objectionable and (2) Buyer has had the full opportunity to become acquainted with all existing neighborhood conditions (and proposed changes thereto) which could affect the Property including without limitation land-fills, quarries, high-voltage power lines, cemeteries, airports, prisons, stadiums, odor and/or noise producing land uses, crime, schools serving the Property, political jurisdictional maps and land use and transportation maps and plans. It shall be Buyer's sole duty to become familiar with neighborhood conditions of concern to Buyer. If Buyer is concerned about the possibility of a registered sex offender residing in a neighborhood in which Buyer is interested, Buyer should review the Georgia Violent Sex Offender Registry available on the Georgia Bureau of Investigation Website at www.state.ga.us/gbi/disclaim.html

Another website you can check is http://www.felonspy.com/search.html

One of our clients did not follow the recommendation in the Purchase and Sale Agreement and they found shortly after they moved in that a convicted sex offender lived across the street. Not only did this make them upset in the fact that they felt their daughters were not safe, it presented a real issue for them when they sold their home because although they did not have to disclose this issue to the new buyer per the Seller's Disclosure, they felt that they had an ethical responsibility to report this to the new buyer, thus hurting their negotiation power.

So protect your sanity and equity as you move into a neighborhood. It is important to make sure that you have done your due diligence and this can start with websites, talking to neighbors and reviewing maps which are all very simple processes. Don't forfeit your rights and have buyer's remorse later.

Listen up Home Buyers!

First lets start with why you should talk to the neighbors before you buy a home. Neighbors, although they may attempt to not be nosey, you can bet that most of them know everything that you need to know about the home you are looking at as well as the neighborhood. One time in my own neighborhood, although I did not know the people that lived there, I noticed that there were people at the house one day with hazmat masks and suits on for over one week unloading and cleaning the house. Had the new buyers asked anyone in the neighborhood about the house, they would have had more ammunition in negotiation after they knew this information.

We have also had the FBI do a stakeout on a neighbor's house and arrest the occupants for counterfeiting. We have had two suicides in the homes and a guy arrested for child porn. All of these things have happened in a quiet suburbia neighborhood of only 58 homes in the 600K and above price range on a private golf course. Who would have thought? Well that is why unsuspecting buyers have continued to purchase in our little haven without knowledge until they go to the neighborhood party on various occasions and they learn that the previous owner in the home failed to tell them that the basement flooded and was left unoccupied for a year or so, so that it caused major mold problems so bad that a recovery team had to come in. Would you like to know this before you make a 600K investment?

So here is the gameplan on talking to the neighbors...

Once you have decided on the home that you want to purchase, make sure that you visit the neighbors to get all of the scoop. Ask any question that comes to your mind, but here are some serious questions to ask.

Go to at least 3 neighbors and do not make an offer until you talk to at least 3 to get the scoop.

1. How is the neighborhood association; strict, crazy or what?
2. Are there any assessments coming in the future?
3. How is the construction on the homes in the neighborhood?
4. Is there any crime in the neighborhood?
5. Is the neighborhood social?
6. How are the amenities?
7. Why are the neighbors (house you are looking at) moving?
8. Have they had any trouble with their house that you know of?
9. Is there anything that would prevent you from buying your own home again?
10. And anything else you want to know.

Additional Tips and Advice for Buying a Home