CUT OUT THE BUYERS AGENT – OR NOT…
I saw this tweet a few days ago from Nick Huber – whose Twitter account I typically enjoy.
Here is the link to the full thread.
When I read the tweet, I thought… “good gravy; what universe does he live in?”
OUR MARKETING DIRECTOR BID 15% OVER ASKING
On Monday, our Marketing Director (Lindsey) blogged about her Homebuying Hell and what she had to go through in her entry-level market.
Every offer she made was at least 15% over the list price and she was still losing out. So, a mere 2% premium would have been laughable.
This is the case in almost all of the markets in which we are currently lending.
Mr. Huber (above) made a $370,000 offer in Athens, Georgia, and he says the market is “red hot,” but it must be a heck of a lot softer than the markets we work in.
We get the majority of our business from buyers agents, so I will stipulate that this blog may come across as a bit obsequious (aka “ass-kissy” 😊).
But, I have just seen too many instances where buyers agents are all but essential.
Lindsey worked with the best of the best, and without her agent’s assistance, Lindsey would never have found her dream home.
This is because her agent knew the market inside and out; understood the potential financing and appraisal issues extremely well; and personally knew most of the listing agents.
Lindsey’s agent used her know-how and connections to not only find viable homes but to also figure out how much to bid and how much was too much in light of financing and appraisal constraints.
DOES GOING STRAIGHT TO LISTING AGENTS WORK IN SOFT MARKETS?
I shared Mr. Huber’s tweet with a highly experienced agent who represents both buyers and sellers, and his first comment was that buyers would be wise to remember that listing agents represent the seller and are thus incentivized to capture the highest price possible.
Buyers also often benefit more than they realize from having an independent and experienced agent negotiate on their behalf – not only in regard to price but also with respect to repairs and terms.
Hence, even in softer markets, it would appear to me that buyers are better off represented by an experienced buyers agent. BUT – I am not in real estate and welcome feedback.
BUYERS AGENTS GOING THE EXTRA MILE
One more reason I have become even more “pro-buyers agent” recently is because of my own experiences, as my wife Heejin has bought multiple homes over the past year in several markets outside of our home market.
In all of the cases, the buyers agents more than earned their commissions by finding and showing us multiple homes, by understanding the myriad market nuances about which we were clueless, by negotiating for repairs that we would have missed entirely, by telling us exactly how much to bid without overpaying, by providing numerous contractor and service provider references (invaluable), by explaining HOA nuances, by helping us with rental market analyses, and much else.
One of the agents even went by one of our homes numerous times after close of escrow to check on contractors, to take in our trash cans, to bring in packages, and to just make sure everything was OK.
That agent earned a full commission on a high-end Scottsdale, AZ home – and I still think he was underpaid.
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