Brian R Kelly

Category: For Buyers

  • Smart Chattanooga Home Buyers Purchase Boundary Surveys

    Smart Chattanooga home buyers purchase boundary surveys. Surveys are great tools. They are great representations of “real property”. What is a real property or boundary survey? It is a legal document…here is a definition from LegalMatch.com. I am not a surveyor. So I am not qualified to speak to the merits of different types. I do know that some lenders require a “mortgage” survey or I have heard it called a “windshield” survey. That type of survey does not require corner markers. It’s primary function is to protect the lender and insure that an improvement actually does exist on the land that is being conveyed.

    The buyers that I have the most professional respect for always purchase a boundary survey that requires markers. The most savvy have the title insurance exception for surveys removed. A couple of stories to help explain:

    Early in my sales career, I sold an older home on Signal Mountain to a developer/builder. The home was for his personal use and not development. It was a turn of the century model and perhaps just over an acre of land. The home had traded about 5 or 6 times. He made a condition of the purchase and inspection a full boundary survey with markers. This was somewhat new to me and I asked him why. He said there are so many easements, variances, closed roadbeds, etc. that he ALAWYS purchased a boundary survey prior to closing. This was not a lender requirement. When the survey was done it showed the driveway of the neighboring property actually ran over the lot line 20 to 30 feet. The driveway was not asphalt or concrete but pea gravel. It turned out the previous owner allowed access across the property so they could save a tree. The agreement was never made in writing. When we went to closing, the survey was presented with language to the affect of “This survey is for the Benefit of Acme Title Underwriter, Acme2 Title Company, Acme 3 Lender and Dave Developer.” This way the title insurance policy will cover you in case of a boundary dispute. **(Important Note: Always ask the closer or closing attorney what are the “Exceptions” on your Title Insurance policy).

    Another example of wise survey use was in a new subdivision. A concrete driveway was shown on a boundary survey drawing to encroach 3 feet onto the adjacent lot. The loan could not be made on the property until this was corrected. The correction was made through a boundary line agreement by both owners and the “line” was moved instead of the concrete driveway. The outcome would have been different if the adjacent owner wanted more big money for the 3 feet. The not so “minor” issue in this case was no sale would happen until problem resolved.

    TVA or Tennessee Valley Authority has many power lines running through the Chattanooga Valley. The high voltage lines have restrictive easements deep into property lines. You may not be able to get a permit to build a deck or the addition to your home because of these power easements. Surveys should also show buried easements such as gas and sewer lines. It would be a sad day if your man cave garage would have to come down because you find out it sits on a utility easement that needs repair.

    Country farm land, city slicker lot. (fences, pools, buildings, utilities, closed road beds, easements) Smart Chattanooga home buyers purchase boundary surveys.

  • Young Home Buyers Are Wise

    Young home buyers are wise. I am encouraged about our future because I have worked with young people buying homes. All three couples that I worked with are hard working and using good common sense. They are looking at the following things:

    1. Their budget and not going “house poor”
    2. Deals – 2 bought foreclosures, 1 bought an estate sale
    3. Fix-up – All three were willing to jump in and repair
    4. Location – Each purchased in areas close for commute and good potential future equity growth
    5. Asked for help from friends, family and pros

    The first young newlywed couple set up a long term rental situation with their parents. The parents purchased a HUD foreclosure and the adult children helped make repairs and set up a lease purchase plan between them.

    The second couple purchased an estate sale. The house was cosmetically challenged because a lifetime smoker stained the sheetrock walls with cigarette smoke. They jumped in and worked on the house before they moved in. Yet, another wise move. I will never forget the first home that Dee and I purchased in Franklin, TN. We put the bed under the dining room chandelier because I was “working” on the hardwood floors in the bedrooms. “Piece of cake”, “It’ll be done in a week” For the next few months I woke up in the morning and hit my head on the glass pieces of the dining room fixture. Dee would glare from under the covers each time.

    The third couple purchased a one level ranch that was smaller than most all the rest in the neighborhood. They had the luxury of having a parent who is a professional handyman. They actually moved some doors and walls to make good floor plan changes. I am looking forward to seeing what they have accomplished.

    I am encouraged that our young people are making good decisions. I am happy to serve them and give them some pointers from my perspective as Realtor. After all, they may be calling me soon and asking for help in selling their house. I want them in the best possible position to gain from their investment. I am glad that young home buyers are wise.

  • Chattanooga Real Estate Reflects National Trends

    Chattanooga real estate reflects national trends. Chattanooga is like many mid-western tertiary markets. We do not see the big booms or the steep falls that coastal or some primary markets tend to experience. Chattanooga is a mirror of the national economy. Chattanooga home sales under $100,000 fell in 2013. The national first time home owner market is down. Chattanooga home sales over $200,000 is up. The U.S. luxury home market is doing well. I noticed late summer Chattanooga home sales slowing. Two weeks later I am reading a National Association of Realtors report that U.S. sales are slowing.

    Real estate franchises reflect the same. I grew up in a real estate family. My Dad was an agent in the 70s. Both of my parents are brokers and have owned a company since the early 80s. I have observed closely the real estate franchises of Century 21, Better Homes and Gardens, GMAC, and Prudential. Keller Williams is a brokerage model that has been on the rise nationally over the last 5 years. It has been that way in Chattanooga as well. Real estate may be “local”, but overall national trends seem to play out in Chattanooga.

    Another trend I see is independent real estate firms sprouting. They are growing alongside the wave of technology changes. As I drive down the road I notice more Facebook business window ads. Creative entrepreneurs are serving customers with less overhead. Technology is allowing them to be more direct.

    The change in trends reflects a shift in how we “package” and “market” trust. As an example, the franchise Better Homes and Gardens conveys a message of trust because of its well established magazine and cookbook. Keller Williams (is not a well known household name brand) but it packages bits of ownership to its member agents. It is a way of conveying “trust” to its teammates. I believe technology changes are a result of people demanding more honest and trustworthy personal interaction. Brokerage firms will follow because agents and customers demand it. People are creating new forces to mold the real estate business. The Scenic City is not immune. Chattanooga real estate reflects national trends.

  • Real Estate Brokerage Model Will Change To Accommodate Trust and Service

    Real Estate Brokerage Model Will Change To Accommodate Trust and Service
    Real Estate Brokerage Must Deliver Service and Trust
    Real estate brokerage model will change to accommodate trust and service. Serving home buyers and sellers with trustworthy service will be a generous business for years to come. How Realtors and brokerage firms get paid will most likely change. Change is being driven by the human need for honest communication and is being facilitated by technology. Here are four observations to make the point.

    One: Ebay and AirBnB. Models that are built on trust. They work because of stamps or stars of trust conveyed by stories of other people.

    Two: Google took inventory of all real property and Zillow Make Me Move is a system that is begging for trust. Ebay and AirBnB proved their models. I hear grown Realtors calling Zillow and Trulia the porn sites of real estate. What? Give me a break – what that tells me is that they are gaining traction and weak agents are becoming fearful. Do not even come back with poor data integrity, etc. (Granted…buyers miss some deals because Zillow updates run slower than MLS) The services still provide value.

    Three: Real estate brokerages can charge much less money if everything they did was compensated. 40-50% of all listings, energy , advertising is wasted on properties where the seller does not have sufficient motivation or ability to sell for the market demand. Sellers would sell “if” they get their price (to buy the next place or simply pay off the lender) Home shoppers not buyers: real estate agents may spend lots of time and gas showing houses to someone that does not “have to” buy a home. There is room for creative agreements with sellers and buyers and their brokerage firms if motivation and non-payment risks are reduced.

    Four: Social Media will push Brokerages to adapt “systems” because buyers and sellers will “connect” more frequently. (Pushing on the door of reducing the costs of finding the “Willing” party) Which will demand a service of transaction liability coordinator. Some title companies may niche and grow what some will see as a growing FSBO (For Sale By Owners) market. On the brokerage side, I can see a DIY brick and mortar model where the seller and buyer pay for a menu of services complementing Zillow. (Similar to local Ebay stores that handle the sale of an item for you for a fee). Agency law, fiduciary responsibility, and liability insurance will need to cover the scope of services rendered.

    [** Learning moment for agent compensation: The local Chattanooga MLS reports that there has been 5,144 homes sold year to date with total volume of $872,600,261. Multiply that number by 5% or 6% and you get roughly $34-$53 Million dollars of commissions. Divide that by 1,500 real estate agents and they average $35,000 each. Multiply $35,000 by 70% split that is nearly $25,000 a piece gross before gas, taxes, advertising , healthcare, etc. Agents are paid 1099 not W-2. You can see the model is pretty efficient, especially when a high percentage of activity is NEVER compensated. Imagine your boss walking in on payroll day and saying let’s roll the dice to see if you are worthy of being paid today!]

    The bottom line is that technology is changing how we serve people in real estate. I used my smart phone to check the level of a door jam, shine a light into a crawl space, check a HUD for closing, and text a message to another customer (All during one home showing). My buyers are calling me with information from Zillow, and Trulia on their phones. They are demanding a response. Please understand, that I am NOT predicting that smart phones will replace real estate agents. Nor, I am predicting a sharp reduction in the “cost” of sale of your home. Ebay does not seem to be making large dents in retail malls, and AirBnb has not toppled Marriott.

    Home buyers and sellers will pay for great service and trust. People will demand it. They may actually pay more than a “typical” commission to sort out all the “noise”. Tech is changing real estate; therefore, the real estate brokerage model will change to accommodate trust and service.

  • What Are Home Buyers In Chattanooga TN Looking For?

    What Are Home Buyers In Chattanooga TN Looking For?
    Chattanooga TN Home Buyers
    What are home buyers in Chattanooga TN looking for? Home shoppers I am serving have unique stories. There are similar themes across the board. The buyer clients are looking for the following:

    1. Saving time – less commute, more family time
    2. Preserve capital – Conservative purchase, not “house poor”
    3. Newer and updated – (One exception category)

    Saving Time – Several clients bought to cut the drive time. The primary motivation is not to cut the car gas bill. It was to have more time at home. Patterns of school and work shift with age. Time is the most precious commodity to many. Amenities and square footage are starting to diminish. Location to work, and community amenities is gaining momentum. One North Shore is a perfect example of this.

    Preserving Capital – Chattanooga real estate from 1990-2006 (for the most part) performed a steady 3%-4% value increase year to year. The last 7 years proved that is not always the case. Real estate buyers want a “good deal”. Even young buyers are being careful not to max out their loan capability. My experience is that Chattanooga home buyers are thinking about paying loans quicker and paying more cash down. Several buyers paid all cash for smaller homes to be debt free.

    Newer and Updated – Strong buyers want to purchase new or already updated decors. The one exception to this is younger purchasers. I served three first time home buyers that purchased distressed properties and spent significant sweat equity and remodel money. All three bought to live as owners. All three bought well under retail value and made wise purchases.

    My experience and market analysis shows that if you are a patient Chattanooga, TN home buyer, then you can do well, especially if you are looking at $325,000 and above.

    If you are a Chattanooga, TN house seller, in a property older than 6-8 years old, please consider paint, carpet and a few cosmetic upgrades. You will be much better positioned for today’s buyer.

    What are home buyers in Chattanooga TN looking for? My buyers are looking to save time, money and weekends free of home makeovers.

  • People Connection Drives Real Estate Technology Change

    People Connection Drives Real Estate Technology Change
    Palm Pilot Wind Chime
    People connection drives real estate technology change. The devices are faster, brighter, and upgrades rain down faster than a summer shower. All the rain is washing into creeks of social media, tablets, smartphones, and laptops. The river of technology is wide and moving pretty quickly. All of the waters of tech flow straight into the open mouths of people insatiable in their thirst to connect. The demand to tell their story, connect with their tribe, family, loved ones, and express themselves in visual art, music, words, and dance.

    The picture of the Palm Pilot reminded me of a cool tool that I used to own. A creative artist is using an old Palm Pilot as a wind chime. I took the picture for the benefit of a friend that actually has a working Palm Pilot. In her defense she uses it as a device to open Supra Lock Boxes for her real estate business. Real estate is all about people and properties. The Palm Pilot held an amazing amount of people and could sync your email contacts with your database. A portable private phone book. I loved my ability to carry thousands of people with me. (metaphorically of course)

    Fast forward to 2013. I showed a home this afternoon. Parents are walking around holding an iPhone and Face Time showing their daughter the view. Giving a limited experience to their loved one who was 2 states away. Connection..

    Last night we were eating dinner and someone remembered the cartoon dog character named Smedley. Some could not recall the character. My daughter had no frame of reference. Smartphone to the rescue. A few seconds later we were all watching a clip from Chilly Willy on Youtube. ( I would not necessarily recommend taking the time to watch it. Muttley has a better dog laugh)… We connected a memory and brought a story from the past into the present connecting generational stories.

    If you are on Facebook, how many “friends” have you connected with that you have not seen in years. Perhaps decades! Connection… We crave it, we need it. We simply need to encourage, reach out, tell stories, laugh, cry and inspire.

    Real estate needs connection. It demands it. We can share the experience of looking at a new home. We watch videos, listen to stories and read the words.

    Real property has a place. The axiom is Location, Location, Location. So true. People have connection. The real estate business is about connection, connection, connection.

    People connection drives real estate technology change.

  • Smart Phones Are Changing What Real Estate Agents Do

    Smart Phones Are Changing What Real Estate Agents Do
    Smart Phones Changing Real Estate Business
    Smart phones are changing what real estate agents do. What do real estate agents do? I hear and read about the comparisons of how technology will change real estate like it did with travel industry. I cannot see the future, but I do know that what I do as a Realtor in 2013 is different than what I did in 1995. Last decade, real estate agents, doctors and other “important” people had pagers. Remember those? Large belt buckled black with text and you could send messages to each other at lightning speed. Prior to pagers it was cell phones. Before cell phones it was car radio phones. I remember my parents installing a thermal paper printer with electronic message capability. We could print out the days “hot sheet” with the device.

    Does that mean that real estate is an early adopter of technology? Yes. Does it change what agents do? Yes… to a degree. Let me tell you a story.

    Early in my real estate career, my Dad taught me the phrase “See the people”. People are the real estate business. Real property and technology are merely along for the ride.

    The relationships we have with others and the trust we build is the real estate business… period. My observation about people in 2013 is that we “trust” our smart phone more than humans. After I finish this blog post I will go to my bedroom and place my iPhone on my bed stand. (Where is your phone now?) Sometimes I check to make sure that Dee is charging hers overnight. Why? Because I want to connect with my wife during the day tomorrow. I check the weather, the ball game score, use my flash light to see in crawl spaces, bubble level on crooked floors, … on and on it goes. Regardless of all the apps we use. I have a relationship with this tool and it is a constant companion. If I want to talk with my daughter most of the time I am connecting through her device. When she asks me about going on a walk or traveling, I ask her to take her phone. Life360 will at the minimum give me the device location.

    We have a relationship with our technology and it can tell stories with sound, and video that far surpasses the ability of fax and pager. The literal “gatekeeper” to a person is this device. Real estate agents will learn how to connect with customers through this personal technology, because the real estate brokerage business is All about relationships. The relationship with our smartphone forces us to change how we relate to others.

    Smart Phones Are Changing What Real Estate Agents Do.

  • Chattanooga TN Home Sales Require Full Seller Disclosure

    Chattanooga TN Home Sales Require Full Seller Disclosure
    Picture of First Page of TN Home Disclosure
    Chattanooga TN home sales require full seller disclosure. Full disclosure of defects and known problems is Tennessee law and applies to anyone selling residential property. This became law April 8, 1998. An outline provided by the state is located at this link. Most laws have exceptions. One of the most commonly used exceptions to this law is a absentee owner or builder. The spirit of the law is that you must have been living in the dwelling recently to be able to disclose “known” issues.

    This law helps keep sellers more honest in their dealings, but there are gray areas that cause pain. One of the gray areas pertains to repairs of problems. Technically, you do not need to list a defect if you repaired the issue. The problem becomes when the “repaired” problem not listed on the disclosure becomes a problem after the sale. Common issues in Chattanooga area are wet basements, and faulty septic systems. Owners may have the problems supposedly repaired in good faith. The new buyer finds out a year later that the issue has returned. Tempers may flare over perceived deception and cover up.

    The best way to avoid problems is to disclose the repairs and provide receipts of the work done to correct problems. That way the seller is not only fully disclosing the issue but also providing contact information about the contractor providing services. This advice was given to me from an attorney who represents clients regarding waste water problems.

    Ask your Realtor about exceptions to the disclosure. If you are exempt it is best to sign a document explaining how and why you are exempt from providing full disclosure. The spirit of the law is to protect consumers purchasing and selling a home.

    The form is several pages in length and covers many areas of your property. Every residential property in Tennessee is covered. Chattanooga TN Home Sales Require Full Seller Disclosure.

  • Recent Home Sales Prices Tell Small Part Of Success Story

    recent home sales prices tell small part success story
    Getting To Sold Is Often Journey

    Recent home sales prices tell small part of success story. The tale of a home sale can be one with adversity. The challenge is often finding the correct marketing price. Sometimes the story includes marketing, sometimes staging or perhaps condition. For the purpose of this article we will focus on pricing. List price or “asking price” is a large part of a good Realtor’s job. Like the experts on Antiques Roadshow a good real estate agent knows the latest “sold” prices, and has seen a good bit of competition. Unlike the Roadshow, your agent most likely has a relationship with you. This is good but it also can cloud judgement a bit.

    I was surprised when I looked at 12 sold listings that recently sold in an upscale neighborhood for Chattanooga, TN. What I found was that 50% of the sold homes had been listed with at least 2 different companies at consecutive time periods. My focus is most always on the final sales price and the days on market for that listing period. I had never considered the marketing period prior to the one that was successful. Many of the “first time” efforts lasted longer than the second time.

    This finding does play a part in the article I wrote about many homes not selling. So that means that some of the homes that scored in the did not sell category eventually do.

    What is interesting is what this means for traditional reported numbers. Realtor organizations like to promote all the good things about the housing market. One statistic mentioned is the List Price to Sales Price ratio. Generally this is calculated on the list price last quoted and the sales price as a percentage. So if a house is originally listed for $120,000 and reduced to $100,000 and sells for $97,000 then the List Price to Sales Price ratio is 97%.

    In my study what I found was that the last listing price to sales price ratio was 95%. The original list price to sales price ratio was 91%. But the surprising fact was that HALF of all the sold listings started out with a previous listing and a marketing price of 82% of the final sales price!

    That is a story you will not hear published in Realtor trade publications. Of course you do have to dig a bit because Realtors will leave the second listing off the market until the Days on Market counter resets.

    The moral of this story depends on if you are a buyer or seller.

    If you are a buyer, make an offer on that home that seems priced too high! Especially if the listing has some time on it. There are investors that make a good living on this strategy with bank foreclosures.

    If you are a seller. Then consider market feedback. If you are getting showings consistently but no offers, your price is most likely too high. (Perhaps condition, staging, etc will make a difference). If you are not getting any showings at all then your price may be really high and also you need to check the marketing.

    Happy Home Selling and Buying! and remember that Recent Home Sales Prices Tell Small Part Of Success Story.

  • Chattanooga Home Sales Strong Volunteer Site to Hunter Road 2013

    Chattanooga Home Sales strong Volunteer Site to Hunter Road 2013Chattanooga home sales strong Volunteer Site to Hunter Road 2013. This Chattanooga Realtor loves looking at recently sold home numbers. Over 8 homes sell each month in this area and currently there are only 39 homes for sale. This is a relatively small physical area compared to some of the other MLS divisions. Popular neighborhoods include Hamilton on Hunter, Flagstone, Hunter Village, Hunter Glen, Magnolia Creek, Crooked Creek, and Twin Oaks.

    Most of the area is zoned for Wallace A Smith Elementary, Hunter Middle and Central High School. The MLS area named (Volunteer Site to Hunter Road) is mostly in Ooltewah zip code of 37363.

    The average price home sold for $164,259 in the last year. With no consideration for year built the sold homes average $83 per foot. Hamilton on Hunter is the largest of the neighborhoods.

    Jobs at Volkswagen and Amazon are a huge reason for this area’s success. Modest homes in the meat of the Chattanooga market create a great home selling market.

    Of all the Chattanooga MLS areas, the Volunteer Site to Hunter Road area has the lowest months of inventory currently. A close second is Red Bank. I find that interesting, because Red Bank recently experienced a recent washout of commercial property values.

    Chattanooga Home sales are fun to watch. If you considering a home purchase close to Volunteer Site to Hunter Road then do not blink if you find a decent match. This is the closest thing to a seller’s market in Hamilton County, TN. Chattanooga home sales strong Volunteer Site to Hunter Road 2013.