Hiring the right agent can make a huge difference. Especially when it comes to making big decisions such as in real estate. The right agent will spend the time with you explaining and sharing market value, trends, pros and cons and advice the client accordingly. You as the client make the final decision on taking that advice or not. It is very important to take the information seriously and consider it when selling or buying a property. Pricing a property incorrectly may cost a homeowner thousands of dollars and a very long time on the market which will scare away buyers or cause low offers.
The main problem most realtors deal with is not the inability to present or quickly sell a client’s property, but the need to explain that market value is not dictated by the homeowners or agents. It is dictated by market activity, meaning the price a buyer and seller agree upon and is based on the comparable properties to the subject one. Last sales can change the market in one neighborhood or area completely. New construction, location, buyer trends, condition of property or even a nearby structure or business can directly affect the current of market value. These are some of the factors of many, that a professional agent will be looking out for.
Unfortunately, the experience of the free real estate market, has had non-professionals make one mistake after another to the point where it spoils the image of colleagues in the eyes of these homeowners and buyers.
I’m not mistaken, if I say that at least 60% of the work on any transaction with a potential client is about establishing trust. And that is why, meeting the agent, preferably in the office, and taking the time to discuss important items is crucial to your success. When a client wants to hurry and just look or list a property without discussing details or considering the agent’s advice, a recipe for disaster is written.
Here are a few stories to read:
Story #1 The HVAC nightmare
Jack and Lisa found the home of their dreams, after looking at enough homes, they decided to make an offer. Everything went well, agent presented an offer and the details were negotiated and accepted. The inspector report came back which looked as if everything was working just fine. The agent pointed out that although it passed inspection and in working condition at the time; the HVAC system was very old and it could stop working or cause costly issues in the future. She advised them to purchase a warranty that would cover this very expensive item if anything were to happen and save them thousands of dollars. Jack did not want to spend that cost and continued without the warranty. The couple was so happy to move after the closing, planning all the things they want to do with it, buying furniture and shopping for tools. Little did they know, on that 4th of July week, exactly a week after they moved in the HVAC system stopped working. They could not reach anyone to help them. The soonest available was 10 days out. They had to rent a place and spend over five thousand dollars to get a new system.
Don’t be like Jack and Lisa. Ask your agent and always listen to their advice. Sometimes, a little cost upfront can save you so much.
Story#2 Still homeless
Larry and Carol are buying a home. They finally found it, it was beautiful, with all the bells and whistles, lush landscaping and priced very well. All the information was provided to them including all comparable properties and an approximate price range it would most likely to sell for. Carol wanted a good deal so she decides to make an offer that is tens of thousands of dollars below the recommended range. The agent explained market value and the fact that it is not only useless but also offensive and would cause the seller to not want to work with them. The agent continued explaining that putting a ridiculous offer that is not even close to the actual market range could cost them the house of their dreams. Carol decided to continue with that offer. Once the offer was presented, three days went by without an answer. Other offers came in for the seller. The seller did not even want to look at their offer and the home was sold at over asking. Carol and Larry did not even get the chance to submit a highest and best as other buyers. The seller simply did not feel it was a serious offer.Always look at market value and understand that to make a deal work, it has to look fair and good enough for both parties to want to move forward till the completion of the transaction. The homeowner and buyer both need to be satisfied and feel they were fairly treated.
Story #3 The market does not side with the stubborn
John needed to sell his home and move to a new location. Close to family and friends. while planning his budget, he though he will need to net a certain amount of cash to be able to move. The property was on the market with multiple agents and the for sale by owner route off and on. He met with an agent who explained market value and let him know that though buyers are looking and ready to buy, the pricing was not in place, the home was not ready to be put on the market and the fact that it has been on the market for so long does scare away buyers.
John thought since everyone else says the market is going up, then he must be able to get that much for his home. He listed his home on the market as is. The agent tried to explain that no amount of marketing would help bring a buyer with a high price. The competition was strong, new builds vs a 23 year old home. Open floor plans with all the bells and whistles stayed on the market for months. John finally got an offer that was a lot less than he was asking however, it was a fair price for his property according to the market. John refused that offer and refused to lower the price. The agent had a few interested but educated buyers. They knew what the home was worth, they also knew the seller has had it on the market for years. Homes in the neighborhood started selling at a much lower price. Meanwhile, John is not reducing his price and the buyers have moved on to other properties and maybe even other areas. John finally asks his agent to reduce the price. Unfortunately, it was too little too late, by the time John realized the price should have been reduced, more homes were selling for less and buyers were looking for similar deals. If not a deal, then a new construction or more luxurious home.
Even with the price drop that could have helped months ago when buyers were interested and ready, now it is not good enough. John had to drop the price even more and lost over thirty thousand dollars and years of torture.
Understand, an agent would not tell you to drop the price of your property because they have hidden intentions. Agents are paid a commission of the sales price. It only makes sense that they would do their best to get you the homeowner the best value possible and many times we break even after spending the hefty costs of preparing the listing, marketing and paying off many fees. Listen to your agent and have an open mind when you look at the facts and numbers. These can not be changed, they are there to guide buyers and sellers and both will be provided with them. Denying the fact as as silly as going to the pharmacist and trying to convince them that the flu can be cured by eating glue…. Just don’t do it. If the numbers aren’t right, you may want to consider other options, such as waiting for the market or maybe setting your property as a rental and moving on with your life. There is always a solution, maybe not the perfect but always a fair and logical one.
Lastly, only a specialist with experience in real estate can competently and quickly form a chain of “alternatives”. A realtor, on the basis of their considerable work experience, will know what to do in any given situation and what your options are.
People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things. Steve Jobs – 1997