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Los Angeles is a Small Town...

26 July 2013

 
 
 

I am always amazed how everyone is connected in some way to each other.

The following article looks at why you need to avoid discussing the buying or selling of a property with everyone you know because you don’t know who they might know–don’t forget… “six degrees of separation.”

Keeping information to yourself during a real estate transaction is very important if you’re looking to get the best possible deal.  It’s crucially important during the escrow period since both buyers and sellers are usually feeling stressed and may be sensitive about the impeding sale. Once the escrow is closed, however, you can freely discuss the sale... enjoy the article..

Real Estate Miranda Warning:  Zip Your Lip
Los Angeles Times
June 13, 2013
By: Lew Sichelman

"Anything you say can and will be used against you in a court of law." — Miranda warning given by police to criminal suspects.

Sellers talk too much. And when they do, they often talk themselves out of a lot of money. So, sellers: Keep your mouth shut and allow your agent to serve as your mouthpiece.

It's not that you are trying to hide something from would-be buyers. With today's disclosure laws, everything materially wrong with a home is going to be revealed to the other side anyway. If it's not, you're asking for trouble.

At the same time, though, if you ramble on with a prospect or even his agent, chances are you will give up some information that the other side can use to gain a negotiating advantage.

Say you are about to close on your new house and need the money from the old one. Or your daughter is about to have a baby and you want to be out before the blessed event. Or maybe you are flexible on your price.

Make any of those things known in what you think of as passing conversation, and you've just reduced your chances that a buyer will come in with a strong offer.

"It's amazing how much of a disadvantage sellers can put themselves in," said Christine Donovan of Donovan Group in Costa Mesa, posting on the real estate website ActiveRain.

The topic comes up often in the ActiveRain chat rooms, and the gist is usually that agents must read some of their sellers their real estate Miranda rights before every showing.

Most agents working with buyers love it when sellers strike up a conversation with their clients. Pretty soon, they establish a bond — maybe they went to the same college, or they have the same number of children. And then, before you know it, the seller wants the "nice young couple" to have the house.

That's when the classified information dam breaks. The seller will disclose the lowest price they're willing to take, or that they are getting a divorce and have to move right away. Often, everything and anything a buyer can use to his advantage in determining what to offer can come spilling out.

Some sellers don't stop there. They also might divulge that they hate the neighborhood or the schools, or that the neighbor's kids are annoying. If that's the case, what makes anyone think someone else would want to live there?

The message should be clear: Take a vow of silence, even with other real estate agents. After all, speaking with them is just like speaking to the buyer. "Being silent is the best negotiation skill one can have," Mike Yeo of 3:16 Team Realty in Frisco, Texas, advised in one ActiveRain discussion. "Just shut up!"

Some buyers' agents are slick. They try to engage the seller in innocent conversation. It might seem like idle chatter, but the good ones have ways to get information out of sellers — information that only the seller's agent should have.

Leave Home

This is why agents recommend that sellers leave the home when it is being shown. That way, there's no chance of something slipping out that shouldn't. If you can't leave, gather the family in front of the TV and don't move. Acknowledge the visitors' presence, but otherwise be quiet.

Besides the possibility of showing your hand, Jennifer Fivelsdal of Jfive Realty in Rhinebeck, N.Y., commented recently, any interaction makes it hard for the buyer to focus on the home's features — making you less likely to get an offer.

  Barbara Allen

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