So You Want to Be a Real Estate Agent?

Michael and Melissa talk about how they got into real estate and compare their own journeys to what they hear from the typical person who thinks they can be an agent because it’s easy.

Unlike attorneys, we don’t get paid as we go.

Unlike police officers who get called to homes knowing they are walking into a dangerous situation, we walk into homes daily and never know if someone could be hiding in a house.

Melissa covers how nothing can be left to chance. Every single aspect of a property sale needs to be hyper-managed to protect the client from exposure to liability. Knowing the contract and addenda, timelines and responsibilities of each party is key. Agents who negotiate for their clients, who don’t understand how email works, part time agents who don’t understand the business, agents who rely on assistants to shepherd things to closing and agents who answer “yes” to a series of questions asking for updates that are due…it can be painful.

These are the absurd realities of daily life for agents - navigating incompetence.

But there’s a darker side as well. The very widely publicized murder of Beverly Carter is often enough to make many agents think twice about their basic business practices. Got a call from a hot online lead on a high priced property? Hooray! But you could be walking into your own death sentence.

Thanks to a video doorbell, another recent event was captured where an agent was pushed to the ground and groped.

Michael recalled a story where he was almost trapped in a house with a very aggressive dog and had to find an escape route, and another situation where an appraiser was almost shot by a homeowner who forgot she was coming to the house that day.

Then Melissa talks about her much too close encounter with murderers while working at a Miami gym, and how the story was made into a movie with Marky Mark and the Rock.

Be a real estate agent and you could end up somewhere murdery! Or just go work at a gym in 1995 Miami.

Why is Your Agent Naked in Your Listing Photos?

Michael and Melissa start by talking about all the real estate agent photo fails. Most, if not all of these fails could be avoided if the agent wasn’t being cheap and taking pictures with their phone. Otherwise, you may end up with a picture of your living room punctuated by a random snap of your agent getting a blowjob. YOUR AGENT SHOULD HIRE A PROFESSIONAL PHOTOGRAPHER. No exceptions.

So, what should happen when you sell your house, and what should your agent be doing or not doing?

Definitely do staging. Some agents cover this cost, many do not in the age of downward pressure on commissions. If you can’t pay for the full staging at least try some virtual staging.

Don’t forget to clean. This is so basic and so many people don’t do it. Microwave, refrigerator, countertops - just pay for a move out clean. It makes all the difference in the world.

If you leaving a gross, gunk covered air conditioning filter it will make both Melissa and Baby Jesus cry. If you can’t change your a/c filter every 30 days you may as well get a skywriter to tell the world that you maintain absolutely nothing in your home. That’s a clue for any agent with half a brain to alert their buyer client that there are most likely going to be major issues with the house. The a/c probably needs to be replaced because of how hard the system has to struggle to work with a clogged filter. If you haven’t bothered to do the bare minimum required of you as a homeowner.

Declutter. Seriously. Get a storage unit and put half of your possessions in there. Oddly when you move, you’ll probably trash half the stuff in storage away anyway. Once you live without it, the importance you attach to the item diminishes greatly.

Photography is everything and getting ready for it is a huge endeavor, but so worth the effort. Photos get people in the door.

As far as brochures, both Michael and Melissa have different perspectives from the norm. No one seems to want the paper anymore. They prefer to view it online. Most brochures are left behind for the landfill. Michael repurposed his brochure into a smaller card that he can drop in the mail.

Both Michael and Melissa are soured on Facebook advertising as their rules tend to change frequently. The magic it formerly had seems to be lost with the addition of severe targeting restrictions. You may have a million dollar home, but you can’t isolate people any longerwho have the income needed to qualify for a million dollar home.

One for the road, courtesy of Scoop Nashville.

Sarah vs. Hat Sarah ~ Renovation Show Redux

Michael and Melissa open up by discussing their own home renovations. Waiting for contractors while hungover, paying contractors for watching their illegally parked truck so it didn’t get a ticket or contractors not staying to finish their work because of unpaid parking tickets, renovations bring all sorts of fun.

Bad experiences are widespread with contractors in home renovations, even great contractors will sometimes go south and then you find yourself back on the market looking for a new contractor.

In the spirit of renovations, Michael and Melissa watched Episode 2 of Season 17 of House Hunters Renovations!

We meet Sarah and her sister-in-law, Hat Sarah. Sarah’s mom is the best part of the show with the side-comments. Sarah wants to leave her 1 bedroom and spend up to $900,000 for a house and mama says, “Did you know your sister was rich?”

The search begins! First house has a turret and is ugly as all hell. Second house has paint colors that Sarah doesn’t like - like that even matters. While Sarah and Hat Sarah are bickering about house #2 the real estate agent Jerry mentions another home he wants to show them. Did poor Jerry shave for this event? The third house has a package waiting in the driveway. In Jerry’s pants.

Once we get by Jerry’s package, and discuss other online packages we know of, ukulele’s and mandolins, we see the inside of the house. Sarah doesn’t like the asymmetrical fireplace. She also doesn’t like the brown fireplace. But she picks this house and even pays $35,000 over list price.

They bring in an interior designer. Michael feels the giant scarf she used as the focal point of her outfit equated to her not doing very much business. There are meltdowns over tile and backsplash installations. There are meltdowns over possible leaks near electricity (“Oh let’s shut off the electric”) and then Hat Sarah laughs in Sarah’s face and tells her to stop talking to her friends for advice.

Mama shows up and she’s fake-scraping wall paper off the wall of the tiny bathroom with Sarah. She tells a gem of a story where her father-in-law changed his wallpaper every year but never took the old down, so the room kept getting smaller and smaller.

Then they shove a stove into the brick wall, Mama tries to set the contractor up with Sarah and they pick the ugliest honeycomb design for the tiny bathroom. Papa shows up at the end to remark about how much money Sarah spent on the house renovation.

Michael gave Sarah a 9 out of 10 on the annoying scale, and Melissa gave her a 4 out of 10.

The update on last week’s home inspection from hell is that the sellers will be giving a closing cost credit and Melissa’s clients decided to buy the house.

Name That Poop! It's Time for the Home Inspection

Melissa opens up the show by discussing the worst home inspection ever. Going in they knew from property disclosures that the roof, central air, furnace and water heater were all well past their life expectancy. What they learned on inspection was that the vinyl siding had been repaired within an inch of its life and wasn’t even attached to the house very well, raccoons were living (and pooping) in the attic and rats were living in the crawl space. The sellers of this house were willing to work with Melissa’s clients and it worked out for all parties.

Michael discusses an inspection he experienced with a house that was allegedly renovated. It was really more of the lipstick on a pig variety renovation - the fixtures were pretty but the usual shortcuts on electric and roofing were made. And then there was mold! As if that wasn’t bad enough, the buried oil tank was rusting its way through the ground. The sellers of this home were unwilling to do anything and Michael’s clients walked away.

Home Inspections Contingencies can carry the right to negotiate or the right to cancel only depending on the jurisdiction. It’s usually not in a seller’s best interests though to let a property go back to the market because once it’s been off the market then goes back on, it signals to others that there was a problem on the home inspection.

Both Melissa and Michael feel that a home inspector with a construction background is key. It’s important to find a home inspector who is through and knowledgeable, but you don’t want someone who is going to scare the hell out of you as a buyer either. There is a way to deliver the information that is easier for buyers to digest because all issues sound “scary.”

The other tools the inspectors use are important as well. Moisture meters are key because they help the inspector see issues behind walls that they couldn’t see just by looking with their naked eye. Inspectors can only inspect what they can see and buyers sign a disclaimer that they will only report what they can see. Even on new construction, it’s important to bring an inspector in.

Should I hire a Home Inspector if I’m Buying a Brand New Home From a Builder?

Home builders often bring in subcontractors to build their homes. There’s no telling what a construction worker may or may not have done. Melissa worked for a new home builder where the contractors were bringing in workers who weren’t even legal to work in the U.S., so obviously they weren’t licensed. Reputable builders will employ the same workers and they may even be employees of the builder which is a much better scenario. These employees will have more reason to ensure their work is correct.

All houses have problems and some are worth walking away over and some are not. It’s important to have your real estate agent walk you through this process and to hire the best inspector available.

When Flipping Flops

Michael and Melissa open up this podcast’s topic by talking about horrible motel stories. Bedbugs, roaches and mold lead right into the topic of the week - crappy accommodations.

Clients often ask, “How can I spot a bad flip?” Buyers think that they won’t be able to spot a poorly renovated house. After viewing enough homes it is definitely possible that the eye becomes more discerning. Melissa and Michael offer several tips of what to pay attention to.

There’s the obvious of checking online for permits. But even small details should be precise. Good contractors hire a good crew and keep them employed as opposed to picking up day laborers in the parking lot of a home improvement store. Regular crews work hard to ensure they won’t lose their steady paycheck. Day laborers? Not so much.

Michael talks about a flip where the contractor threw all the old appliances into a creek on the property, probably hoping they would float away and become someone else’s problem, and where the utility room was spray painted all one color, appliances included.

A quick list of things to look out for:

  • Is the house dirty?

  • Is the crown molding crooked? How about the backsplash?

  • Did they skip out on putting in a washer dryer (since it’s not required,) or are they trying to pass off old or unmatched appliances?

  • Are the door locks installed upside down?

  • Did they flip the refrigerator doors to face into the kitchen or leave them at their factory standard?

  • Is there landscaping?

If there are visible issues in the home that show neglect or shoddy workmanship, what could be lurking behind the walls?

Michael says another clue is when they try to cut a third bedroom out of what is already a tiny bedroom. Melissa says a major corner that almost every sloppy developer cuts from their budget is the roof.

The duo then discuss real estate mailers they receive in the mail and how inefficient and wasteful these are. Melissa received a real estate postcard mailing of houses that sold in her neighborhood, with a picture of her house on it. From 5 years ago. That was a shock!

The theme of the week? You learned it in elementary school. Check your work, people. Always check your work.

Oh Condos, We Love You

People either understand condos or they don’t. If you lived in a single family house that’s not in an HOA/planned community for your entire life, congratulations! You’re one of the lucky few! The idea of living in a community that has rules and regulations about what you can and cannot do is probably outrageous to people who haven’t lived in this setup. They don’t understand this type of homeownership and why anyone would voluntarily subject themselves to it. But many cities and more densely populated areas lend themselves well to condo developments because land is expensive. It’s “cheaper to build up than out.”

Condos have governing documents that a seller needs to provide once you have a ratified contract. Getting this package is required by law in most if not all jurisdictions, and you have a specific period of time in which to review. In Washington DC, you have 3 business days to review condo documents. In Maryland you have 7 calendar days and in Virginia you have 3 calendar days.

What should you do with this package of documents? If you answered “use them to hold up the corner of my broken bed,” I’m sorry, but you are incorrect. Read through them to ensure that there aren’t any restrictions on how you want to use your home. Do you have three dogs and the condo only allows two? Do you plan to raise chickens so you can have fresh eggs for breakfast every morning and the condo doesn’t allow livestock? (Pretty much all condos don’t allow livestock.) Do you plan to rent your condo on Airbnb and the condo has a minimum rental lease term such as 6 months or a year?

The documents are often boilerplate, but the main hot buttons for buyers usually are the following:

  1. Does the condo have enough money to pay for any large expenditures?

  2. Pet rules - are they allowed, how many, are there breed restrictions?

  3. Rental rules - are rentals allowed, do they need to be approved by board, what rules apply, what is the minimum lease term allowed?

  4. Know what amenities are in the community and if any fees are associated with their use.

When you live in close quarters with others, be prepared that what others do in their homes next door or upstairs/downstairs from you will affect you as well. Definitely do not cancel your homeowner’s insurance if you pay off your mortgage. You could be one bullet away from a bitter ex taking out a toilet tank and flooding your living room.

We hear Michael coo about the houses he showed an out of town client and the 70’s relics he saw. Melissa bitches about a listing agent that didn’t check on house repairs and only offered $100 in compensation. We learn that you can get engaged over a bottle of Jack, that Breezewood, Pennsylvania may be in the middle of nowhere but it is is an adorable little town and that chain smokers with oxygen tanks can absolutely explode.

Everyone's Favorite, HOA's!

Michael and Melissa discuss Homeowner’s Associations, also known as HOA’s. An HOA is a planned community where the property owners own their home in “fee simple” - meaning, they own the ground underneath them. What’s the difference between a home in an HOA and a condo association? In HOA’s, the owner owns the whole structure from ground to roof. They are responsible for fixing the roof, maintaining the yard, dealing with any basement leaks or foundation issues.

This is different from a condo association (to be discussed on the next podcast) where you are only responsible for the walls and everything inside of them, known as “walls-in.” The roof, foundation and grounds are considered common elements maintained by the condo association.

What should you look for in HOA Documents when you are under contract to purchase in a community governed by an HOA? It’s important to review that there is nothing in conflict with how you plan to use your home. Do you have several pets and the community has a limit? Do you plan to run a business out of your home which the documents may not allow? Do you want Harold and his purple crayon to color your house and purple isn’t allowed.

In Virginia, the buyer has 3 calendar days to review HOA Documents. In DC it is 3 business days, and Maryland has is five calendar days. In DC if it is brand new construction, the buyer has 15 days to review.

The package has to be complete and up to date when it is delivered, and the time frames do not start counting down until the buyer has a complete package. In most HOA’s, the management company also has an extra step called “inspection.” They walk through the outside of the property prior to sale to ensure there are no violations - broken windows, missing shingles, a toilet planter in the yard. These have to be corrected by the seller prior to sale.

Melissa shares stories about her Delaware community’s lack of understand of the Yahoo message board. The reply button is no one’s friend on some message boards because it goes back to the entire community. And we learn that an entire community can misunderstand a turn of phrase, “fat dumb and happy.”

Michael then becomes Old Man Withers as he goes on his rant about his experience with HOA’s and admits he practically incited a riot at his current HOA meeting about a very controversial topic: Sod.

Melissa takes us back to Yahoo Groups in Delaware where disaster awaits. It was a reply-heard-round-the-world. The sender believed she was replying only to her friend but her comment went back to the whole community and everyone learned one woman’s husband was hitting on the other wives in the community.

One may wonder why HOA’s exist at all? This is what the Jurisdictions (county/town/city) require of land developers who submit plans to develop property. This is a way for the governmental powers that be to make sure that the HOA will maintain the roads and they won’t become the responsibility of the town or county to handle.

We also learn how Michael’s Irish Roman Catholic Family violated a scarecrow, setting a whole #metoo movement into play and Melissa’s family’s inability to keep hermit crabs alive.

When Bad Appraisals Happen to Good Contracts

What is an appraisal and when does it happen? What’s the assessed value and are either of those the same as the market value?

Nope. Appraised value, assessed value, and market value are three different numbers for the same house.

Assessed value is what the town or county jurisdiction feels your home is worth and they use it to form the calculation of property taxes. This typically trails the market value and that’s what you want. You don’t want to pay taxes off an inflated value, so having this trail the market value is best.

Market value is what someone will pay for the house - basically what would it sell for on the open market. As a buyer, this is going to be in line with your contract price. It’s the price you as the buyer agree to pay for the home.

Appraised value is what an appraiser (who is hired by the bank that is providing the mortgage loan) deems the house is worth. This may be more than market value or less depending on what the sales of comparable homes in the neighborhood are. They use a variety of factors to calculate this value.

Appraisals are problematic for many reasons but they are a required hurdle to clear for anyone getting a mortgage to buy a home. The result of most appraisal reports will state that the value is at the contract price and they won’t attempt to show more value even if it’s there. It’s rare that they miss the number and here’s where the whole system is flawed. Appraisers know the number they are trying to hit. They have a copy of the contract when they are doing the property appraisal. It’s sort of like cheating but for some reason, it is allowed.

Appraisers have zero incentive to miss the contract price - if they consistently miss their numbers the bank won’t hire them anymore. The entire system seems to be a bit of a sham.

Michael and Melissa stress the importance for a listing agent to meet an appraiser at the property. The listing agent should be prepared to show the comparable sales to ensure the appraiser isn’t going to pull bad comps and miss the number. Definitely do not leave this to chance.

Melissa hits the road with dilated pupils, scaring drivers all over the DC area, amasses an entire collection of hermit crabs who commit suicide and Michael calls her a shit magnet. Michael finally closes some long term clients who wrote many offers and they give him a bottle of wine from Spain!

Where's the Fucking Lockbox!?!

Michael and Melissa share the real reasons Michael’s hair fell out and Melissa’s is gray - it’s because they spend too much time managing nonsense with agents on the other side of the transaction.

Starting with access issues - sometimes houses have lockboxes that require a combination that the agent didn’t provide, or the lockbox can’t be located in the case of many condo buildings.

Rentals are a whole other animal. Melissa tried to make appointments for 6 different rental condos and 5 of the listing agents didn’t respond at all. The following day, showing day, Melissa circled back to follow up again with the agents to find out why they didn’t respond and if the property can be shown. One agent had no idea what was going on in her life and another agent said his listing was rented already. When Melissa told him to change the status from “active” to “pending,” he said, “Well they haven’t moved in yet.” This isn’t how it works. When a potential tenant sees that property as “active” they believe it is fully available. As it should be. Forehead slaps all around.

Rentals are often used as training ground for new agents. Unfortunately, the clients suffer from the incompetence of being mishandled with the hands of incompetence.

Michael, who is highly allergic to mold, showed a house with floor to ceiling mold. He called the listing agent to ask why they wouldn’t have warned people of the mold in the house or offered a mask at the front door. Some people have no home-training!

Verbal negotiations sometimes make sense when time is of the essence and it’s important to get a contract ratified quickly. But it will backfire if an agent on the other side is not playing fair or misunderstands what was decided in the conversation. Then there are two frustrated clients to deal with.

Along the lines of fair play, Michael explains how sometimes agents set deadlines for offers and accept something before the deadline. You can hear his frustration of a showing being canceled at the last minute. Melissa attempted to console him by telling about the times she has gone to show houses that have contracts and the listing agent doesn’t bother to extend the courtesy of a call.

Melissa has a Coconut Roll addiction, broke her wedding band (while loading the coconut rolls in her car) and humanely saved a mouse. Michael is already “renovating” and upgrading his brand new house and discusses the things that need to be done. As summer winds up, Melissa is squeezing in a vacation, Michael is going for a hike and planning an event for clients at a winery.

When Bad Houses Happen to Good People

Michael and Melissa share stories today about the crazy things they see in Washington DC, Northern Virginia and Maryland houses on their tours with buyer clients.

Melissa opens by recalling a showing in Capitol Hill where the stairs to the basement were not attached to the wall of the house. While she and her clients felt like they were in a scene from Silence of the Lambs, the owners of the home were upstairs cooking a tray of sausages.

Michael tells a story about what a house filled with floor to ceiling mold entails. They had to wear face masks, and they were greeted by a refrigerator on its side on the counter - but good news! There was an indoor pool…kind of. The basement was filled with a foot of black water. Michael then discusses how to winterize a house and how important it is to hire a plumber.

Back to Melissa with a story of a house where someone living there had shut off the water and was using the water delivery jugs as their toilet. Michael tops it with his story of stumbling into a possible sex dungeon in the attic space of a home he was showing to a client.

Then there’s the saga of listing a condo upstairs from where a very high profile DC crime occurred and was covered by many news sources. While Melissa was trying to sell it for her clients, pictures of the building kept appearing on the front page of the Washington Post with updates on case.

They discuss how houses have many secrets. They can be haunted, harbor squatters who run out the back door when you enter and how it can be downright dangerous to enter people’s homes - especially if they pull a gun on you.

Michael learns there is a Wawa just a few blocks from the office and that you can’t buy x-rated magazines at a Sheetz, and Melissa learns that the bottles filled with yellow liquid on the sides of the roads are NOT filled with lemonade. People pee in them and then toss them from their car. She also reconsiders her carefree approach to opening doors in houses after Michael tells enough stories of what he has found behind closed doors.

It's Always About the Money

They survived one podcast and are back for week 2!

Michael and Melissa banter back and forth about writing contracts, placing corgis from the rescue Melissa founded, East Coast Corgi Rescue, into their forever homes, zen gardens, bonsai trees and why a gay man would ask three straight women for home decor advice.

The lender often makes or breaks a deal and there are many reasons why. Some lenders may not be responsive at night or on weekends. Since real estate is practically 24/7, and since houses are seen and offers are written most often at night or on weekends when the buyer isn’t working, it’s important that a loan officer has the work ethic to be responsive at all times.

The timeframe for closing is also important. Lenders who aren’t familiar with the pace of the Washington DC market may think 60 days is a good closing date but sellers and listing agents in DC, Maryland and Northern Virginia expect a lender to be able to close in 30 days.

Relationships with underwriters is also important. If underwriters are in the same office as the loan officer, they often have a relationship based on respect, and they help each other to get the loan finished. Michael and Melissa explain that when underwriters are in another location and the loan officer has to submit a file and has no idea which underwriter they will end up with, it’s the same as taking your car to 10 mechanics. You can end up with 10 different answers. Every time the underwriter picks up the file, they will ask for more things which can delay the process and irritate the buyer.

Appraisal turnaround time is another hot issue. Some lenders know their pool of appraisers well and know that they won’t miss a deadline. Others hire from a regional pool and an appraiser may come from far away, not understand the market well or be brand new. And these are the appraisers who can stand between a buyer getting their dream home or not.

Then there’s an exciting lightening round of questions for Michael to answer on the fly, nods to both the Golden Girls and Family Guy, when contractors pretend to fix home inspection items and a 24 year old air conditioning unit.

Why Is It Called 7 Dollar Listing?

Michael Sheridan and Melissa Terzis both work as Real Estate Agents in the Washington DC market. They talk about their background and what makes them think they are qualified to have a podcast about real estate.

Melissa worked for a land developer almost 20 years ago in suburban Maryland and then went on to work for a couple different national New Home Builders before getting her real estate license. Michael bought a fixer-upper at 19 years old and the renovation experience planted the seed in his brain about helping people to buy their own homes.

Why is this podcast named 7 Dollar Listing? It’s a partial nod to the Million Dollar Real Estate Shows of TV. While showcasing that kind of Real Estate Agent life makes for good television, it is definitely not the norm. The stories of things that happen to everyday agents working in the trenches can be just as entertaining.

The Summer 2019 State of the Washington, DC Real Estate Market continues to be strong. The announcement of Amazon coming to Arlington, Virginia has resulted in an entirely different sub-market of DC Real Estate. Investors from all over the country flooded their attentions on the newest real estate darling, Crystal City in Arlington.

To be clear, Crystal City was never a real estate darling. It has been known as a place of high rises with dated condos that didn’t sell very quickly. Now these condos are flying off the market in anticipation of the mothership’s arrival. If anything comes up in Alexandria and Arlington on a client’s search, it’s necessary to go out right away or the property will be gone within a day or two.

Michael and Melissa believe that the entire area will see the boost in real estate values as those working for Amazon will not necessarily want to live right next to where they spend their work week. Places like Fairfax, Burke, and McLean will also be great places for Amazon employees to live.

Michael closes by telling a story about an agent who held the lockbox key hostage and pretended to be the listing agent.