DEAR BOB: I am a real estate broker and am curious why you keep insisting home sellers interview three agents prior to listing a home for sale. Since all agents have access to the same MLS (multiple listing service), www.Realtor.com, and most agents have their own Web sites, why do you recommend interviewing three agents? Why not six or nine or even 18? What do you think sellers will learn by interviewing three agents? Any licensed agent can sell a house. We all have the same tools at our disposal and we are all highly trained. –Valarie B.
DEAR VALARIE: The reason smart home sellers should interview at least three successful local agents is to compare their evaluations of the home and their estimated market value for it.
Purchase Bob Bruss reports online.
Contrary to your statement that all real estate agents are “highly trained,” some agents are incompetent and dishonest, or both. You’ve probably never encountered such agents.
By comparing three (or more) agents, home sellers are not likely to be misled by one agent who estimates too high or too low a market value.
Three is usually a sufficient number of agents to interview so sellers can compare each agent’s CMA (comparative market analysis) to see if he or she is using the same recent comparable home sales prices to justify a reasonable market value.
Also, sellers should phone each agent’s references of previous sellers to ask, “Were you in any way unhappy with your listing agent and would you sell another home with the same agent?”
FORFEITED BUYER’S DEPOSIT NOT TAX DEDUCTIBLE
DEAR BOB: My sister entered into a pre-construction condo contract in February 2006. She paid the 5 percent required down payment. The condo will be finished in May or June 2007. Now she doesn’t want to buy it because her employer is downsizing and her job might be lost. This would have been her first real estate purchase. Can she deduct her forfeited 5 percent deposit? –Cristina T.
DEAR CRISTINA: No. Because your sister is not already a real estate investor, she is not entitled to deduct the forfeited deposit as an “ordinary and necessary” business expense. For more details, she should consult her tax adviser.
REJECTING FORECLOSURE PROPERTY DUE TO WATER LEAK IS JUSTIFIED
DEAR BOB: We bid on a bank-foreclosed house. Our bid was accepted. As specified in our purchase contract, we had the house promptly inspected. We found huge water-damage issues that we would need $25,000 to repair. The bank did not respond for five days. Then they asked us to collect repair estimates. During that process, we decided we did not want the house. We feel like the bank should refund our good faith deposit because they did not accept our $25,000 repair counteroffer in a timely way and we did not accept the house after the inspection. What are our rights? –Allison R.
DEAR ALLISON: If you rejected the house because of the inspection results, you are entitled to a full refund of your good faith earnest money deposit. If the foreclosing bank gives you any hassle about the refund, don’t hesitate to take the bank to the local Small Claims Court. For more details, please consult a local real estate attorney.
The new Robert Bruss special report, “Everything You Need to Know About the Pros and Cons of Reverse Mortgages for Senior Citizen Homeowners,” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).