Wednesday, August 22, 2012

Listing Agent Friend or Foe ?

I often reference Buyer Brokers in my blogs it is time for me to write a very specific blog about it.  I happen to quite often sell my own listings but my advice to anyone who is just beginning their search is to take the time and find a broker to work for you specifically.  

Listing agent friend or foe is something that I am always asked, and it really does depend on the broker.  I have been the listing and selling agent on quite a few of my own listings, but I am very upfront and honest about what that means.  In the end there will be no way to know which you have gotten friend or foe until it is too late, once you place an offer with a listing agent there is no going back to change it. 

Look at it this way, why would you pay someone who you only likely met once for finding a house you found on your own? If that isn't enough reason for you than take a look at some of the other reasons you should hire yourself a broker! 

There are a few very specific reason why you should hire your own buyer broker.  
  • Your Paying For It - In every real estate transaction their is a Listing Agent & Selling Agent, the commission for both of these agents is decided when the home is listed.  Obviously the listing agent is just that, and will collect their share of the commission no matter who sells it.  The selling agent should be your Buyer Broker, but if you don't hire one than the listing agent now becomes selling agent as well and collects the commission for both.  
  • Your Own Expert - Unless your a real estate agent, their is certain information you will not be able to obtain.  This is information you will need and want to know before you even place an offer on any home ! When putting in an offer you want to be fully informed.  How long has it been on the market ? How many owners has it had in the past 10 years ? Is it overpriced or action priced ?                                                                                                                                
  • Someone To Do The Work - Ask anyone who has bought a home the hardest most time consuming part is finding the house.  There are so many homes on the market that those late nights looking thru MLS and Trulia you may get what I call "Click Finger" it is where you are scrolling thru so many homes you begin to overlook the new ones because your just clicking away.   An agent who is working for you will be looking for you, this way when a listing comes onto the market that fits what your looking for they will reach out to you, and email you the listing which guarantees you will not miss out on anything. 
  • Your Middle Man - Your own broker means you can openly speak your mind about a home, and get an unbiased opinion.  The listing broker wants to sell that listing, which means he is of course biased to his own listing.  Sometimes when you walk into a house you may know right away it is NOT for you, your own agent can be the middle man to get you out of the home quickly but politely with no awkward moments! 
  • Your Middle Man -  What about those houses that don't have any pictures online.  You don't particularly like going into these houses blind.  Guess what your own broker will either A. Be able to preview you them for you or B. Get the agent to send over pictures for you to see.  
  • Your Representative - You will still attend open houses when you have a buyers broker, more than likely they will be holding their own open houses so they will be unable to accompany you. The old saying "Have your people, call my people" can be a great benefit.  A buyers broker will prevent you from getting calls from all of those listings agents trying to sell you on their own listings.  Just leave your agents card with them, and they will contact your agent directly ! 
The steps to finding your broker are quite simple, you call or request information online from local buyer brokers in your area.  I would recommend finding someone who is familiar with your area, and that you mesh well with.  When you meet with them it is you interviewing them, ask them the questions that are important to you, remember you don't need to pick the first one who comes in to meet you.  Here are a few tips on choosing your broker. 

  • How many buyers are they currently working with ? 
  • How often do they take their buyers out to look at homes ? 
  • Do they send you listings, what tools do they have to help you in their search ? 
  • How many mortgage companies are they familiar with, as well as what kind of financing are the familiar with ? 
  • How quickly did they answer your request for information ? 
  • What kind of follow up did they do after your appointment with them ? 
The process of buying a house can be long and stressful. My best advice would be to make your life a bit easier and find yourself a buyers broker before you begin seriously looking.  You are paying for a buyers broker when you purchase your new house so why wouldn't you use one? 

Now I am going to give you some examples of where having a buyer broker on your side is important.  

Example #1
Seller Joanne has her home listed for $375,000 Buyer Marie is interested in purchasing the home.  Seller Joanne Listing Agent agrees to take a offer from  Buyer Marie as long as she signs the disclosure explaining that it is his listing. He mentions it has had quite a few showings and is expecting other offers he insists that the home is worth the full $375,000.  Buyer Marie budget tops out at $360,000 but does not want to lose the house so she puts in her highest and best offer to get the home.  

Now your probably asking what is the problem with that ? Well, no where in that did anyone look out for the buyers best interests.  Now lets look at how that would happen if their was a buyers broker involved.  

Marie's Buyer Broker Rich checks to see how long the home has been on the market, it has been there for almost a year with no price adjustments.  Broker Rich runs the comparable sales of homes in the area and finds they are not worth a $375,000 asking price it is much closer to the $350,000 mark.  He meets with Marie and they come up with a reasonable first offer, and after a bit of negotiating and sharing of the comparable homes Marie is able to get the home for $349,000 ! 

Now does this happen all of the time NO, but it is the risk you take whenever you buy a home but don't have your own broker.  Now money isn't everything but lets look at another example, this having to do with functionality & safety.  

Example #2
Buyer Marie finds a wonderful home and Seller Joannes home has been on the market and is happy to have an offer.   Sellers Joannes Broker is the only agent involved, and takes the offer and gets the home into contract.  He explains the Seller Joanne has filled out the Property Disclosure pamphlet so there is no real need for a home inspection, and the market is moving quickly in that area.  Buyer Marie does not want to waste anytime this is the perfect house, and opts to skip the home inspection.

Buyer Marie places her fair offer and closes getting the home for a reasonable price.  After moving in she finds that the renovations that had been done over the years were not quite up to standards.  Although the Central Air was properly installed the electrical was never upgraded to handle the CAC and the other appliances in the house.   Luckily Marie finds this issue and upgrades the electric to be able to handle the CAC and the appliances.  While upgrading the electric she finds that not all of the outlets are up to code, and there was a non-GFI outlet in both bathrooms as well as the kitchen, which posed a fire hazard.  After about $15,000 in electrical work Marie is finally able to use her CAC and all of her outlets safely and without issue.  

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