Real Estate Advice | Real Estate Articles & Blog – Don Dunning

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Sellers: Your agent could land you in court

By Don Dunning | May 19, 2013

Earlier this year, I counseled buyers and sellers against contracts without contingencies in an article called “Contingency-free Contracts Can Be Dangerous”. Several weeks later I read an article by a licensee that advocated what I had warned against, but did not mention the substantial risks involved with these practices.

This led me to consider a different approach — to appeal directly to sellers and help them see how their agent can get them into really hot water.

Today’s seller’s market is creating future victims: An Insider’s Look at Multiple Offers

By Don Dunning | April 5, 2013

“Common sense is the most fairly distributed thing in the world, for each one thinks he is so well-endowed with it that even those who are hardest to satisfy in all other matters are not in the habit of desiring more of it than they already have.”
– Rene Descartes

It is no secret that a shortage of inventory, combined with historically low interest rates, has led to a market where, in certain areas and price ranges, multiple offers are the norm. Recently, I wrote about the dangers of contracts without contingencies.

There are few areas of real estate where buyers need outstanding representation more than in the handling of multiple offers. Sadly, some buyers are working with licensees who lack the knowledge, caring, or both to protect them from paying more than necessary.

Contingency-free contracts can be dangerous

By Don Dunning | March 9, 2013

“It’s like deja-vu, all over again.”
– Yogi Berra

Unbalanced markets lead to unbalanced behavior that buyers often later regret. Today, extremely low inventory combined with record-low interest rates have buyers scrambling to be one of a horde vying to buy a home or condo.

The rules change when a substantial number of buyers compete for one property. This could result in five offers or over 25, depending on many factors. The compelling question for buyers is, “How can I get this home?” The answer, in my experience, can sometimes be detrimental to a buyer’s financial and emotional health.

Remember old truths in the new year

By Don Dunning | January 25, 2013

“Ignorance more frequently begets confidence than does knowledge.”
– Charles Darwin

Dunning-Kruger Effect

The “Dunning-Kruger Effect” is a simple, yet brilliant notion, but not because my name is attached to it (I am not related to David Dunning, who was one of the Cornell researchers behind this concept). It states that people tend to overestimate their competence and underestimate their incompetence in various areas.

Another way of saying this is that many folks don’t know what they don’t know and they think they know more than they really do. This is the definition of ignorance.

There are fundamental aspects of the real estate business that were not understood by buyers and sellers when I began over 33 years ago. They continue to be disregarded today. Ignoring these basics can be a costly mistake.

Formula for listing – good for sellers?

By Don Dunning | August 10, 2012

Sellers often ask my advice on what work needs to be done to prepare a house for sale. In certain cases, they had spoken with other agents and were uncomfortable with suggestions which seemed to benefit the agent more than the seller.

Some agents fall into a pattern of how they approach sellers and what they recommend to get the home sold. The agent’s advice tends to be similar for all sellers, despite differences in the properties and/or the sellers’ needs. This one-size-fits-all approach is often not best for the seller. Sadly, the average seller rarely takes the time to investigate what a listing agent should be doing for him.

Beware of dogs in homes

By Don Dunning | June 30, 2012

It is estimated that 39 percent of U.S. households own 78 million dogs. Or, as dog lovers like my wife and I understand, the dogs own us. In spite of all the joy these creatures bring, they can cause damage in a home. Most folks recognize this.

Sometimes, however, what we think we know takes on an entirely different dimension. That was the case with a woman who bought a lovely East Bay home over a year ago, but has yet to move in.

Electronic signatures: Convenience with concerns

By Don Dunning | May 18, 2012

Digital signatures have been legally authorized for over ten years, but rarely used in real estate because of resistance from California banks; however, they are becoming increasingly common.

What is gained in expediency and convenience needs to be balanced by the potential risks of buyers and sellers “speed-signing” without fully understanding the real estate documents they are approving.

Berkeley seller applauds hourly real estate consulting

By Don Dunning | April 13, 2012

Last week, a woman who had just closed escrow on her Berkeley home posted the following online: “As I was selling directly to my tenants and we had already negotiated the price, I needed someone to handle paperwork and explain the process to me.” She knew that, typically, real estate agents charge a percentage of the purchase price for their services. In her situation, this did not make financial sense and she called me to help her on an hourly basis.

Over the years, I have written about why this arrangement is logical in specific instances. I have also commented about how slow the real estate industry has been to fill this obvious need to help buyers and sellers in a more cost-effective way. That continues to be true.

Buyers and sellers need analysis of research

By Don Dunning | December 11, 2011

Referred by my former clients, I recently received a call from a prospective seller who bought her home in the last seller’s market with another Realtor. This seller feels her agent did not provide important information for her to consider prior to making the offer on her house. Among the missing input was a way for her, as a buyer, to place the purchase price into perspective relative to previous “hot” markets and what happens when the market cools down.

Before I go further, I suspect some readers might be thinking, “With hindsight, it is easy for someone to look back and criticize another agent for not knowing the future.” My response is that no one should expect real estate licensees to be clairvoyant, but using experience from past markets for the benefit of clients is something that differentiates top agents from the rest.

Approach distressed properties with caution

By Don Dunning | September 18, 2011

I admit it – in over 30 years as a real estate broker, I have never represented either a buyer or seller in a transaction involving a “distressed property,” i.e., an REO (real estate owned by banks) or a short sale. The reason is simple: dealing with banks under these circumstances can be worse than water-boarding torture. Some sellers may have no choice other than to succumb to this process; buyers in the Oakland/Berkeley market almost always have, in my opinion, better options.

The folks who usually benefit most from foreclosures are the small cadre of professional investors who seem to live on the courthouse steps. They pay all cash, get a seriously discounted price, and have the greatest margin for error. Non-professional buyers, who venture into short sales and/or REOs, however, tend to be unaware of how big a risk they are taking. Instead of getting a bargain, you might end up with more grief than you ever imagined.

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