If you are buying or selling a house or condo, Brendan J. Cunningham’s new book “Tricks of the Trade” offers insights of a 22-year real estate broker, sales manager and trainer who has sold more than $1 billion of real estate. He also hosts a weekly real estate talk show.
When I began reading this unusual home-buying and -selling book, I expected to learn most of the insider secrets of an experienced residential sales broker. I wasn’t disappointed in that regard.
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However, the more I read, the more I realized this book is filled with “uneven advice.” As an experienced long-time realty broker, I recognized Cunningham’s excellent suggestions, such as telling home sellers who are thinking of selling without any agent to instead list on an “exclusive agency” listing.
Few realty agents tell home sellers about exclusive agency listings. But Cunningham does. Instead of using a customary exclusive right to sell listing, he explains an exclusive agency listing means the listing agent earns a sales commission if he or any other licensed agent obtains an acceptable buyer.
However, if an exclusive agency home seller finds a buyer on their own, no sales commission is owed. Exclusive agency listings can be placed in the local Multiple Listing Service, and even at www.realtor.com, to benefit home sellers and the listing agent.
However, some of Cunningham’s advice and information is downright wrong and could be very costly to any reader who follows it. Unfortunately, these errors cast doubt on the rest of the book.
The author’s most shocking mistake says, “Under code 1054 of the IRS tax regulations, all of the capital gains on a primary residence can be deferred indefinitely provided the house you are buying exceeds the taxable base on the house you are selling. Currently, you have two years to roll over your equity together with your appreciation and whatever gain may have been realized from the sale.” That’s wrong.
The truth is Internal Revenue Code 1054 is about stock in the Federal National Mortgage Association and has nothing to do with home sales.
Apparently, Cunningham has never heard of Internal Revenue Code 121 (enacted by Congress in 1997), which allows principal residence sellers up to $250,000 tax-free capital gains (up to $500,000 for a married couple filing jointly) if they owned and lived in their homes any two of the five years before sale. There is no need to buy a replacement residence.
Overlooking this gross error, and other less important mistakes, the book is filled with lots of sage advice based on the author’s residential sales experiences. His chapter about open houses is one of the best because it reveals the listing agent’s two primary motivations: (1) sell the house and (2) meet prospective home buyers and sellers for future business. Most home sellers don’t understand this important concept.
Cunningham sells homes in the Buffalo, N.Y., vicinity. As a result, he explains home sales procedures used in his area, such as having one attorney represent the buyer and another attorney represent the seller. Readers should be aware this quaint old-fashioned procedure is not routine in most of the nation.
Chapter topics include “The Tie That Binds: The Real Estate Contract”; “Salespeople, Brokers, Agents, and the Whole Cast of Characters”; “When to Buy, When to Sell”; “FSBO or Not FSBO”; “Buying and Selling Success Guaranteed”; “Open House Secrets”; “The Negotiators”; “Picking the Right Agent”; “The Home Inspection”; “Buying with Nothing Down: It Can Be Done” and “Customs, Laws and Protocol.”
Perhaps I am too harsh on this first-time author’s book. It contains plenty of good advice from an experienced real estate broker. But it also contains considerable wrong information.
Readers should take the information with a proverbial “grain of salt.” The author means well. But readers should check and re-check before relying on advice in this book. On my scale of one to 10, this book with a great title, rates a disappointing five.
“Tricks of the Trade,” by Brendan J. Cunningham (Adams Media, Avon, MA), 2004, $11.95, 195 pages; Available in stock or by special order at local bookstores, public libraries and www.amazon.com.
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