All Forum Posts by: Russell Holmes

@Tracy Selfridge I like that question too!

One of the things I enjoy the most that has also continued to impress me is how incredibly helpful everyone in the industry is, in general.

When I started out, I had a lot to learn and assumed Realtors in general would be stodgy and closed off.  Not sure why I had that assumption, but it can't be further from the truth.  Of course my broker was helpful, but I also received assistance from veteran agents (sometimes on the other side of a transaction making suggestions), lenders, title companies, attorneys, etc. I sent a low-ball offer in on one house that was my buyer's max pre-approval.  List agent called and talked with me about things and eventually referred a lender who got the preapproval up to an agreeable amount and the deal closed. I've now closed a few more with that lender, shared cups of coffee that lead to 90 minute conversations, etc.  And he was a referral of the list agent I somewhat low-balled.   It's almost as if the fact that we can't get 'kick backs' in the form of cash back and forth, everyone uses value as the currency. It takes two realtors for nearly every deal, so they are competition and colleagues at the same time. Give value where you can, receive it back constantly.  It's never ceased to amaze me how welcoming and helpful most people in this industry are.

I also enjoy the connections made with clients, investors, and colleagues. I have had those 'waste of time' tire kickers that we all do when learning how to weed them out, but I've had countless others that are a true joy to work with. I learn things from them and through the hunt for property, they learn from me.  I get to know the nuances of their kids in tow for each showing, start to recognize things they will like or not like on properties, etc.   Sure they might take a few months and 20+ houses, multiple offers, etc to finally close, but they are appreciative and respectful of time and a true pleasure to work with. Night and day from the entitled tire kickers, haha.  I haven't been doing this long enough for much repeat business yet, but I've formed some great relationships with many who are keeping me posted on preparations for their next deal later this year or early next.  There are some things that are fun to blow off steam about to others in the industry, but overall I love this career and wish I had made the switch sooner!

@Kyle Curtin I feel you there!  I'm working on it and I'll call/answer when I need to and when I can, but I MUCH prefer texts and emails.  I'm often multitasking on emails and research, driving to see or show properties, etc. so it's tough to be available to drop everything for a 5-30min phone call that I didn't previously schedule.   I feel like a text or email allows both sides to respond with thought out responses at a time that works.  It seems like every time I need to call someone I'm leaving a message that they return later.  I miss the calls that are important due to being tied up with something else and end up calling them back shortly. Phone tag is so much less efficient than text/email in my opinion.  The calls I get at 'good times' to answer are like yesterday's call on a listing:

"Hello, I'm calling about your listing at 123 Main Street.  I see on Zillow it says an estimated payment of $1038 or $199k sale price.  Does that mean that it's rent to own for $1038/mo?"  ($1000/mo in my market will not rent you a $200k 3/2 house)

"No, that is an estimated mortgage payment. It is zillow's way of advertising for their mortgage partners based on assumed down payment, interest, etc.  There's a link there you can click to see how they get that number.  That's your mortgage if you buy this house with their assumed terms.  My seller is only selling this home, not renting.  If it was for rent, market rent would be $1500-1600"

"Oh that's way too much, do you know of any homes like this that rent for $1000?"

"No, no I do not"

*click*

Such a productive use of my time, haha.

@Stephanie Simmons You're welcome! 

It's been a couple of days, were you able to get any response from the buyer?

I wish it was a little more difficult to become a Realtor and/or there was more mandatory training on how things actually work in practice beyond the basics of laws and ethics.  FL pre-licensing is mainly what not to do, nothing really regarding how to be a decent competent agent. I've only been at this for two years, but I have come upon some incredibly questionable "Realtors". When I was new, if I didn't know something I'd ask someone who did to be sure I didn't screw it up.  So many folks don't seem to get that concept....at all.  For example:

- Yes, you need to include an EMD on your buyer's offer....yes EVEN if your buyer is using a 0% down lending product. My seller isn't going to pull it off market for free.

- No, my seller is not an A-hole for keeping your buyer's EMD, you literally missed closing and completely ignored our offers to extend with additional EMD. Please re-read the contract that all parties have signed, it explains all of this and what happens in the event of buyer default, I promise.... Yes, missing closing counts as buyer default.... yes I'm sure...

-Yes, I can see that the county records says your listing is 1100sf and 1 bathroom, so your 'permitted' 1500sf living space and 2 bathrooms with a janky enclosed porch and broken shower constructed by your cousin Vinny is BS. Did you not review the county records on your own listing?!? You know appraisers look at county records right?

- Yes, I do actually expect a response to my email and phone call within 24 hours regarding urgent contract matters

- No I'm not an A-hole for escalating to your broker when you ghost me on important matters. 

- No, we cannot extend inspection period because your favorite inspector is booked.

I could go on.  Most of these have been from folks that have supposedly been 'doing this a long time'. Yeah, ok then.

Oh also weekends, I'd like to know what weekends are like to normal W2 folks.  Haha.

@Marco Morkous as long as those agents are in multiple markets and not overlapping, I see no problem with it at all. I'd be open with them all and possibly even ask for referrals for agents in those other markets. I'm in the Orlando area and get out of state investors reaching out often who have chosen Central Florida but don't know exactly which market. I have several I work with for deals in my area who have other agents to help them in Lakeland, St. Pete, Tampa, Jacksonville, etc. All good markets too I hear, but hours from me. Not my areas of expertise.

If you find an agent who claims to cover the whole state themselves, they are likely brand new. I could legally represent a client in Tampa or St. Pete, but it's 2+ hours from me and I'm perfectly content to cover my area well and let someone else who lives there cover that area.

Using multiple agents in one market will result in none of them caring to make you a priority. But multiple spread one each in different markets are fine. I don't require buyers agency agreements, but some Realtors do and some states require them. If so, just ask them to specify their own market so you aren't stepping on toes for another in another market.

I know my market well, but if a client I work with lives a multi state flight away and finds a deal in another FL market that I don't know, it's pretty unprofessional for me to somehow want to represent them on that deal in a market I am licensed for but do not know like my local market. I'd be open with all that you are shopping multiple markets, but that's a far more acceptable strategy than multiple agents in one market.

@Stephanie Simmons that does sound like the contract is over. In the future, I'd suggest telling those kinds of buyers to simply wait and submit the offer when ready.  He's basically wasted your time off market without any real gain to you or him. In the transaction I mentioned where the buyers missed closing, our backup offer was at first contingent on sale.  My seller liked the numbers and terms, but realized if he canceled with the current buyers and took the contingent on sale offer, a failed closing for that buyer could mean he killed both potential buyers chances.  Instead, we gave the current buyers more time 'in limbo' and told the backup to close and come back to the table.  Her closing was 10 day out and pretty solid. In those 10 days, the defaulted buyers made no progress but were still under contract since nobody had canceled.  When the backup buyer closed, she re-submitted the offer without a contingent on sale clause.  We canceled on the defaulted buyers and accepted the backup a few minutes later.  The property went from pending to active to pending in a matter of 5 minutes, but it was the legally correct way to do things while protecting the interests of my seller.

In my previous experience with unresponsive agents, I checked, double checked, and triple checked with my broker and the state legal hotline on this point to be sure I wasn't misstating anything when things got ugly (this is my experience, I'm not an attorney so please verify):

You may cancel a contract unilaterally (at least in Florida), meaning you can sign a cancellation and release, send it to the buyer, and put the property back on the market or accept another offer after sending the cancellation out. Either party can cancel by sending a cancellation and release without the other party signing. Of course your broker might have more strict rules you must follow, but legally speaking cancelling does not require both parties to sign. Cancelling is a separate issue from release of EMD.

The actual release of EMD is another story from whether or not it goes back on market. Even in the event of buyer default by missing closing, the As-Is contract only says "the seller MAY keep EMD as liquidated damages" it doesn't say 'must' or 'will' or anything legally black and white. Seller could decide they want to sue or arbitrate for damages beyond EMD, and taking the EMD as liquidated damages ends all further litigation for more.  I had buyers who very clearly missed closing, failed to communicate, and defaulted on the contract, yet we still needed their signature on the cancellation and release for EMD to go to my seller.

If you talked to an attorney, there's likely some legal gray area or legal precedent somewhere if you really wanted to be a pain, so releasing of EMD always has to have full acknowledgment by all parties before it gets wired anywhere. Title companies will not release EMD without agreement by both parties on what happens. This saves them from future litigation and it prevents you from suing to perform later.

So even if you send him a cancellation and release stating the EMD goes to buyer and put the property back on the market, title won't Release EMD to him unless he also signs the Cancellation and Release. You also typically cannot close with a new buyer while there's an active 'dispute' over EMD...although I've heard it is technically possible if you start fresh with a new title company, keeping the disputed escrow at the first...a huge pain since you'll likely owe that first title company for any preliminary title and lien work done. My seller had to threaten aggressive legal action against the non-responsive buyers stating he could sue them for far more than their EMD before they finally signed the release to let him have it and close with the final buyers. In your case, you seem to agree your buyer is due the EMD since that states the contract becomes invalid and it's more a question of whether you can list it active again, so I can't see him having an issue signing the cancellation and release soon. Even if he's delayed on signing the cancellation and release, you should still be in the clear to put it back on the market. I went through this twice on one listing, and both times I was in the clear to put the listing back to active status before having full agreement on cancellation and release. But I OK'd it with my broker and the legal hotline first just to be sure.

He might refuse to sign the release if he plans to put in another offer with the same EMD, but in that case the EMD would simply sit in limbo at the title office while you can still work with any other offers. It would be a jerk move on the buyer's part to leave the EMD dispute active, but it could potentially happen. Still shouldn't hold the property off market in that case but could become an issue as you approach closing. Arbitration costs money on both sides and is very rarely worthwhile when the duties of both sides are pretty clear based on contract.

@Stephanie Simmons I think it depends on the wording of that contingency you mention on the other property contract since it sounds like that was a one off type thing.  

As far as inspection, financing, appraisal, and other 'standard' contingencies go on the FARBAR As-Is contract, saying or doing nothing IS a response in itself, and inaction results in moving forward with the contract as if there was no issue.  The inspection contingency period is the buyer's ability to exit, but it doesn't mean they have to. Once contingencies pass, EMD 'goes hard' and becomes nonrefundable. For sake of being ethical, I'd stand by your offer of what you'll do to correct their issues assuming you made that offer by email, but you might not legally have to (I'm not an attorney, so double check that....I always try to keep my word even if not bound by law to do so). However, if they come back and wish to cancel after inspection period is over and release EMD to buyer, tell them to pound sand and refer to the contract and the calendar.

I recently dealt with a buyers agent who just did not understand the binding nature of the contract terms, despite my best efforts to explain it including the specific line and item numbers from the contract. He and his buyers didn't raise issue with inspection, appraisal, or financing despite me repeatedly asking and encouraging communication, yet closing date came and passed while they failed to close. We canceled with his buyers and went with a backup offer, closed in 19 days contract to close, my seller keeping the previous buyer's EMD as liquidated damages. The previous buyer's agent got pissed and tried to insinuate that my seller was a bad person for doing so, but it is quite literally right in the contract what happens if a buyer defaults. We even made offers of extending closing with additional EMD which we got no response to. I've learned that just because someone holds a Real Estate License, it does not mean they fully understand contracts.

I recommend calling the FL Realtors Legal Hotline for any specific legal questions...they were a huge help in navigating the dealings with this incompetent agent I had the pleasure of working with.  BP won't let me post the number here, but google "Florida Realtors Legal Hotline" and you'll find the number.  It's a free service for all Florida Realtors and connects you directly to an attorney you can ask anything to.  If your extra addendum is worded oddly, it may be best to run it by them to see their thoughts.

If your issue were just with the inspection, them not saying anything and letting the inspection contingency lapse means they can no longer exit based on inspection period. There may be financing or appraisal contingencies left for additional exits, but inspection is over and done with. However, depending on the wording of the 'extra' contingency on the other property contract there may be issue there. If it specifically states that no action results in the ending of the contract on your property, it could in fact be the end. I'd run it by your broker and/or the legal helpline to be sure. If it is worded that way, I'd avoid accepting something similar in the future. It's always best to let the buyer's agent bear the burden of action to exit a contract rather than it defaulting to an exit. I always try to encourage communication with buyers agents in advance of contingencies ending, but sometimes they simply fail to respond in a timely manner and the benefit of keeping EMD for buyer default should rest on the seller in those cases.

@Precious Thompson I had a buyer ready and able to buy as soon as I got my license...I was actually holding him up since it took a little bit to get 'on-boarded' to my brokerage and the MLS in order to actually do anything official. We then hunted for deals and offered on 8-10 properties over the next several months as I took on more buyers and a listing. My first closing wasn't until 9 months later, although I will admit I was part time to start. Full time I likely could have closed one within 3-6 months.

I think the only feasible way you'd close a deal in the first 30 days is if you jump onto a team and they hand you a buyer that's already been pre-qualified and seen several properties with other team members.  You might get lucky and show them 'the one' they decide to offer on on day one and close 30-40 days later, but that's probably a 1 in 10,000 chance.  I've closed a few in less than 30 days contract-to-close (after months of showings), but in general it's about 40 days with financing and normal contingencies plus they almost never want to buy the first they see.  Have a distressed listing lined up and priced well and you might get a cash/quick closing offer on it.  

There's a lot to learn in those first few months, so I wouldn't suggest a goal of closing in the first 30 days.  Being part time to start (I had another business I ran) I gave myself a year to get things going and was thrilled to close two in month 9 and 10.  This business takes time to get up and going as an independent agent.

@Ashley Jaynes welcome to BP from a fellow Central Floridian!  What part of Central Florida are you looking to invest in and/or move to for the house hack?  

Having property management and renovation experience will put you in a great position to find an excellent house hack and to screen/manage roommates. 

@Mike Rosback you're correct, EXP and most other national 'big name' brokerages don't allow wholesaling. Buy it first and close again later and it's not a problem. Assigning of contracts like most wholesalers do adds a lot of liability for big name brokerages since nothing is on the MLS and much of it rests on the ethics of the agent, far too much to monitor for the big names. There are plenty of small flat rate brokerages that allow assignments and it's legal (with a license) by FL law. EXP's wording is along the lines of Realtors not playing 'middleman' in a transaction that isn't listed on the MLS. They want all listings to go on the MLS and then if the agent is a transaction broker representing both sides there are clear cut guidelines.