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Archive for the 'Working with your agent' Category

Think your house is a dump? Try living on one.

Wednesday, April 23rd, 2008

I recently heard about an unfortunate situation on Boston’s north shore, in Manchester. You can find more about it at the site of WCVB tv. Here’s what happened: some unfortunate homeowners purchased a house that was most likely built on an old landfill. They tried to sell their house and potential buyers balked at the last minute. After learning why, the owners had their soil tested. Chemicals galore were lurking in their back yard. Lead, arsenic, mercury. Not exactly healthy. The worst part? Mom was weeks away from giving birth.

Who’s responsible? Surely the builders knew what type of land they were building on, right? Maybe they had no idea - could have just been fulfilling a contract. Surely the town knew the history of the land that was to be built upon, right? It turns out they did, and sent lent a letter to the builder ordering them to stop construction. No one followed up, the house was built, and the rest is history.

The family moved out right after learning about what was present in their yard, and hopefully they will raise a healthy baby. What about the person that sold them the house? If they had done their due diligence about the property, they would have found out this information.

Maybe, maybe not, but if the buyers had used an exclusive buyer’s agent, they would have avoided this unfortunate situation. I can’t express enough how important it is to have someone working on your behalf, not someone just trying to sell you a house. Most consumers are still not aware that they could hire someone, for essentially no money, that would work in their best interest. Something to think about if you plan on ever buying a house.

What will your REALTOR® show you?

Tuesday, March 18th, 2008

An interesting article appears in the March 2008 issue of “REALTOR” magazine. This publication is put out by the National Association of Realtors®, and you can find this article online as well. It involves a review of one of the many house hunting shows on TV. On the show, the family’s agents, who happen to be their current landlords, are ‘helping’ them find a new home. The family is approved for a much higher mortgage amount than what they are comfortable spending on a home, yet their agents first show them a property that is in their preapproval range but is way above what they would ideally like to pay. The reviewer of the show, Charmaine Englesman-Robins, correctly notes that this is not the way a professional agent should do business, and she questions their motivations.

Don’t let this happen to you. Look for an Exclusive Buyer Agent that will put in writing their pledge that they will work only in your best interests. Why waste time with an agent who doesn’t listen to your wants and needs. A real EBA acts as a consultant, not a salesperson, and will sit with you to develop a comprehensive home buying strategy, taking into account your particular situation. All too often, potential buyers are suckered in to working with the first person they discuss buying with, and many times they are left unsatisfied and disappointed with searching for a home. Buyers deserve representation and an agent who will work for them, not just show them any house they the agent happen to like.

Presenting offers in a buyers’ market

Wednesday, February 20th, 2008

Dirk Zeller wrote an informative article over at Real Blogging, a real estate industry site. If you get a chance, take a look at what he has to say. Mr. Zeller provided some solid insight regarding the current market and helping avoid conflicts between potential buyers and sellers with homes on the market. Some highlights - talk about every aspect of the offer before presenting the price. It is the hope here that you can find some common ground with the seller ahead of money talk. The next step is to present the offer price, and break down the difference between the offer and the asking price over a period of years so the amount does not appear as large to the sellers. Explain to the sellers that the $15k difference is only a few bucks a day that the sellers would have to pay on their next mortgage over the next ten or fifteen years. Most sellers would think differently about this as opposed to looking at receiving much less than they hoped. In the same way, this opens a path for negotiating between buyer and seller. Explain the same numbers to the buyer and see if there is any common ground that can help the deal get done. As with any offer, you should always explain how your buyers arrived at their offer price. Explain your interpretation of current market conditions, identify comparable properties that have sold recently, etc. This will help justify the offer being presented as legitimate.

This is all well and good, but many list agents (sellers’ agents) do not want you to present offers face-to-face to their seller. Presenting as much as you can about a buyer’s ability to close on the deal, and remember, the worst they can say is ‘no’. There are many different strategies for negotiating, and if you are a potential buyer, you must be sure to ask your agent about negotiating experience, if they have had any negotiation training, etc.

Interesting video… check it out

Wednesday, February 13th, 2008

I came across an interesting video at 1000 Watt Blog . In it, various people talk about how they are not leads. We here at Buyer’s Choice Realty really like the message behind this video. Consumers in general, and especially potential buyers, do not like being treated as just another commission. Our goal of helping everyone who wants to purchase real estate by acting as consultants as opposed to salespeople goes hand-in-hand with this message. If you are currently interviewing real estate agents, please keep this in mind as you talk to them. Are they willing to describe, in detail, and back up in writing, what services they will provide to you and how they will provide them? If not, don’t deal with them. As a consumer, you essentially own your agent after signing an exclusive agreement to work with them, and they are responsible to work in your best interests. Unfortunately, in the REALTOR(r) culture, agents are encouraged to think of themselves and their paychecks ahead of everything else. Yet another reason to work with an Exclusive Buyer Agent (EBA), who will have your best interests at heart and will make every effort to show you every listing that is on the market. Consumers deserve that at least, and they do not deserve to have someone try to ’sell’ them a house.

NAEBA press release

Friday, February 8th, 2008

The National Association of Exclusive Buyer Agents has released comments regarding the case that has found the national spotlight in which a couple sued their agent. You can read more about the case at MSNBC. Please read the press release below and feel free to comment with your thoughts.

BUYER AGENT ORGANIZATION COMMENTS ON UMMEL HOME BUYING CASE

The case of Marty and Vernon Ummel suing their real estate agent has increased media interest in the home buying process. The National Association of Exclusive Buyer Agents (NAEBA) suggests that this case be an important reminder to homebuyers that they need to be fully aware of their agent’s motivations and allegiances. Not all real estate agents will have the buyer’s best interest at heart. NAEBA recommends that buyers ask these four important questions before entering into a relationship with a real estate agent:

1. Will they discuss and evaluate the properties you view together and compare each property shown with your ideal property?

2. Before preparing an offer to purchase, will the real estate agent inform you about any defects or problems he/she has observed or in any way discovered.

3. Before preparing an offer on your behalf, will the real estate agent prepare a comparative market analysis, including explanations and documentation, to determine the market value of your potential purchase?

4. Finally, ask the agent to sign a contract that sets out explicitly the fact that they are working for you exclusively.

“Under the common law of agency, a buyer’s agent should always provide and discuss relevant valuation information with a buyer client,” said Barry Nystedt, President of NAEBA. “This certainly includes comparable sales data. However, many state real estate associations have worked to get legislation passed that distorts the buyer agent relationship to limit the liability of the real estate companies. Buyers need to understand who they are hiring and under what terms.”

“If the Ummel’s complaints are found to be true, then their “buyer agent” clearly breached his duties under common law,” continued Nystedt. “But, not knowing more of the specifics of the relationship and how the events unfolded, it is difficult to draw other conclusions at this time. If a buyer chooses to use agent representation such as the hybrid dual buyer agents currently being promoted by a national real estate trade associations, then buyers must be very careful to understand the level of service that the brokerage/agent is offering.”

The National Association of Exclusive Buyer Agents was founded in 1995 to help consumers become educated homebuyers. NAEBA is a nonprofit organization whose purpose is to be the “champions of real estate buyers’ rights and representation.” NAEBA offers industry standard certifications, ongoing education, client referral services, technology and information sharing. The NAEBA Code of Ethics pledges undivided loyalty to real estate buyers only. More information about NAEBA can be found at www.naeba.org.

How much should you offer?

Wednesday, August 29th, 2007

A few years ago when the average time to sell a house was shorter than the current 9 months, a much different type of valuation and expected sales price was in place. One could normally expect to pay about $100k over the assessed value when purchasing a given property in Massachusetts. My, how times have changed.

In today’s buyer’s market where there is a glut of homes for sale and not enough qualified buyers to buy them, sellers feel rather lucky when they get $10k over assessed in many towns. Indeed, many homes today are listed at under assessed value in the hopes of a quick sale. Of course, in places like popular seaside towns and some affluent areas of Boston and its immediate suburbs, the market stresses that everyone else feels are not as evident. Though, the vast majority of sellers are forced to continue to drop their asking price if they want to have any chance of attracting a buyer.

A parallel of the not-so-recent shift from seller’s to buyer’s market has been the change in bidding/offering strategy for buyers. No more than three years ago buyers would be laughed out of the building if they offered much less than 95% of the asking, or list, price. It was typical to see many full-priced offers during a time when interest rates were extremely low and buyers’ appetites for space and luxury were bigger than their pockets. Agents would commonly recommend that their buyers offer 96-98% of the list price if they wanted to come across to the seller as legitimate.

Today? Not so much. It is becoming more and more common for buyers to offer only 90% of the list price with their initial offer. To see how much pricing and bidding has changed, let’s look at some hypothetical numbers. In 2003, a seller prices their home at $300,000. Depending on their location, quality of home, etc. etc., a buyer would offer anywhere from $285,000 at the low end (95%) to $294,000 (98%), and in many cases, full asking price of $300k. That same seller in the same neighborhood with the same house could expect, and should expect offers ranging from $270,000 (90%) to $282,000 (94%). That may not seem like much of a difference, but imagine if it were your home on the market and you received $25,000 less than if you had sold three or four years ago. Also take into consideration the fact that $300k is on the low end of home prices in this expensive state of Massachusetts.

All in all, it’s a great time to buy in many areas, and sellers are increasingly negotiating with “lowball” bidders who they would have completely ignored just a short time ago.


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