If It Feels Too Good to Be True…
Victor Hugo once said that caution is the eldest child of wisdom.
Benjamin Franklin said that distrust and caution are the parents of security.
And Glennda Baker says, if you see a red flag, watch out—there’s probably a bull close by. (Can y’all tell I am just back from Spain and am feeling rather fancy about the whole thing?)
Today we are talking about red flags to avoid, whether you’re a buyer, seller, or the agent representing either side.
If I have one piece of all-purpose advice to share, whether it’s about real estate, or life in general, it’s that when you see a red flag, pay attention.
So, let’s get right to it.
THE REALITY OF REAL ESTATE
Flags Exist to Be Noticed, So Notice Them
When you're buying a home, it's important to be aware of potential red flags. These are signs that something may be wrong with the property, or that the seller may not be being entirely honest with you. Or both. Probably both.
Find the skilled real estate agent who will help you avoid these red flags (and if you can’t find one, ask me):
The property has been on the market for a looooong time. The market is slowing down, but there’s still scant inventory. So, if you find a house that’s been camping out on the MLS for big chunks of time, either there's something wrong with the property or that the seller is asking too much for it. Either way, your agent will have a solution.
The seller won’t let you have an inspection. Run. Do you hear me? R-U-N. There aren’t so few properties that you have to subject yourself to a seller with something (expensive) to hide.
The seller is evasive about answering your questions. If the seller is reluctant to be forthcoming about the property, please see the above advice. Maybe wear some sneakers to your showing, just in case.
The property has a history of flooding or other natural disasters. This could be a big ol’ problem, as it could lead to costly repairs or even make the property uninhabitable. (Unless you love not needing to leave home to go canoeing.)
The property has been the subject of a lot of lawsuits. All things being equal, this is not a bed you want to climb into. Multiple suits could be a sign that there are major problems with the property, or that the seller is not a reliable person. Or both. Probably both.
The property has a lot of deferred maintenance. Unless you have money you’d like to just set on fire, deferred maintenance almost always means costly repairs in the near future. Ugly fixtures? No problem. Ugly foundation? I cannot state this enough—RUN.
Have I helped clients buy and sell real estate with any of the above eventualities? Yes, because I’m a skilled broker and your biggest advocate. Since I can’t work with every single one of you, I implore you to do your due diligence with your agent. Investigate further. Dig deeper. Always bring in a real estate inspector and/or attorney to help you.
If all else fails, do not be afraid to walk (or run) away from that deal.
SUGAR & SPICE REAL ESTATE ADVICE
The Butcher of Buckhead
Do I want buyers to get the home inspected to check for potential red flags? Yes. Of course. Am I ever concerned that the inspector himself is a red flag? Yes. Of course.
If the inspector is not willing to provide a written report, that’s a red flag! #GlenndaBaker #RealEstate #AtlantaRealEstate #RealEstateTikTok
ONCE UPON A TIME WITH GLENNDA
How Do You Slay the 800 LB Gorilla?
Let me tell y’all who is never gonna want to sponsor this newsletter. That entity, one of the biggest red flags when it comes to buying or selling real estate, begins with a Z- and ends with an -illow.
People are always asking me, “Glennda, what’s your beef with Zillow?” Well, pull up a seat, because I’m gonna break it down for y’all. My biggest problem with Zillow is that they are a buyer, a seller, and a lender in the market where they're also providing data and forecasting the perception of value. It is in no one’s best interest for them to be all these things, except for Zillow’s own. They are trying to be the cat with all the cream.
They create their “zestimates” (yes, I admit this is a clever term) via their algorithm. The problem—for you, not for them—with their very fancy algorithm is that it works so that when you start to check the value of your home on Zillow, the value of your home mysteriously starts to decline they're looking at you as a seller. Okay? You are the potential seller and they are a buyer. I can assure you if you check the value of your home three to five times in a row on Zillow for a few consecutive days, the value of your home will go down because the Zillow algorithm is assuming that you're thinking about selling. They have wanted to be a buyer for your property (although, less so now after losing $880M, and no, that is not a typo) so their business model has been to maximize their profits, not yours.
One of the many things that’s so onerous about them is how they have buyers, sellers, and agents check the box that says, “I agree to the terms and conditions.” Do you realize that you are agreeing that Zillow can sell your information to a real estate agent and collect a referral fee? I bet not, because you probably didn't read the 382-page terms and conditions of the Zillow agreement. Zillow can and will turn around and sell your information to a real estate agent.
Now, let's say that that same real estate agent is your mother, brother, sister, cousin, or your neighbor. It’s someone you know and would have used anyway. Zillow is then coming out for that real estate agent for a referral fee. What I’m saying is, they want a referral fee even though you had a pre-existing relationship with that real estate agent because she gave birth to you fourscore-and-seven years ago. In that 382-page terms and conditions that you checked, you agreed to allow them to sell your information that they collect to your own damn mama for that referral fee. And if your real estate agent mom checked the terms and conditions box, it means she said she would pay the fee. So, Zillow is getting in the pocket of every consumer and every real estate agent—even your mother’s.
Why does this matter? Why am I calling them a huge, red flag? Because seven out of ten people are already registered on Zillow. Zillow wants to control the market. They want to control the consumer. When in the history of ever has a monopoly been a good idea, except for the monopoly?
As an agent, ask yourself, How am I going to beat them when they have my buyers’ contact information? If you want to fight their power and influence, you, the agents, need to be in control of your buyers. You’re never going to stop buyers from using Zillow as a search engine. But you can establish yourself as the expert in your community. You do that by going deep with your clients, by knowing who they are and what they want. I promise you will be far more effective than some person who’s never even set foot in your town, let alone your seller’s house.
Zillow 's business model was all about finding the gap in the real estate transaction. They filled that gap, they found the pain points in the real estate transaction, and they came in to ease those pain points. That was genius, I have to give them credit for it. That’s why I was originally on their agent advisory board. The real estate transaction and the real estate process was absolutely flawed and cumbersome and difficult. Zillow came in and, for the most part, they have made what appears to be a seamless real estate transaction. But I ascertain that it is flawed because you can't ever trust somebody who's in a cube in Iowa, who’s never been in your home and who has no context about your largest single asset. If that’s not a huge red flag, then I don’t know what is.
I don't care what anybody says; real estate will always be on-site, not just online, and y’all can quote me on this.
Sometimes You’re Your Own Red Flag
The more you chase approval, the more you corrupt authenticity.”