Let’s puncture a couple of real estate myths today, shall we …
Myth #1: I’ll get a better deal working directly with the listing agent
There’s one obvious flaw with this train of thought – the listing agent doesn’t work for you, he or she works for the seller and is pledged to work in the sellers best interest. That best interest rarely translated into making sure the buyer gets a better deal.
Every now and then these can intersect; some agents offer a discount off the seller’s commission should there not be another agent to whom a co-broke must be paid, but more times than not, that discount goes back into the sellers’ proceeds, not into reduced costs for the buyers.
As a listing agent, I absolutely want these homes to sell and if someone calls me on a listing, I’m not going to hang up on them. But I pick up the phone as the fiduciary of the seller, which means outside of “fair dealings” as described by the NAR Code of Ethics, I don’t owe a buyer calling me on one of my listings a thing.
Myth #2: I’ll get a better deal working with a FSBO because they’re not paying an agent
This one is a semi-corollary to the first one. The idea in a buyer’s mind in this scenario generally is that they’re smarter than the seller and therefore are going to work a great deal on a property on that basis alone. Set aside the idea that maybe the seller is going it alone on the sale because the price they want doesn’t reflect the going market, or that the seller may have bought and sold enough times they don’t much need the use of an agent. Some buyers think they’ve hit the lottery.
Not so much.
There’s a couple I worked with for several years. I even wrote an offer for them in February that was accepted; they cancelled a couple of days later because of some family circumstances, or so I was told.
Turns out, a couple of months later, they bought a FSBO across the street from the house they had been under contract to purchase. And, as I look at the tax records and I look at the comps and I consider the property I listed and sold literally around the block and on the golf course, these buyers overpaid badly for their new home.
Premiums attached to golf course lots vary from one neighborhood to the next but, virtually universally, a golf-course lot in a golf course community is worth more than a non-golf course lot. It’s just the way it is.
These folks, eschewing the services of an experience real estate agent, bought this non-golf course property for the price of a place on the course. Off the top of my head, that’s at least 10 percent more than they should have paid. Oh, and they paid cash to boot. So they’re out of pocket $20,000 that should be sitting in their bank account, and would be in their bank account if only they’d used the services of a buyers agent … in this case, me.
You may be saying “he’s pleading sour grapes.” And that’s a fair assessment, as I’m a bit stung at the moment. But it doesn’t change the reality of what the place really was worth and what these folks paid without knowing any better.
And that brings me to my point, in a remarkably roundabout fashion.
We in the real estate profession often talk about the value of using a real estate professional. Time and time again, agents will make the right-hearted, wrong-headed argument that we simply need to make the consumer see the value in working one of us.
For many members of the public, that’s just not going to happen. Not because there is no value in working with an experienced agent, but because there are many, many people who have no interest in the value and, not caring whether there is or isn’t any, simply choose not to acknowledge that there is value.
Take the poor soul whose agent called me the other day asking what a boilerplate field created by check box in the Arizona Regional MLS meant. His agent can’t read an MLS listing sheet, essentially the most basic act in this business outside of opening a door, and he’s using her to purchase a place.
(It’s better than that. The buyer managed to convince his agent that “Seller Disc Avail” actually meant Seller Discount Available, not Seller Disclosures. Because, really, what seller isn’t advertising off the top that there are discounts off the list price available for those clever enough to figure out the abbreviation.
So many people run into terrible agents, they assume all are the same. It’s a shame, really. But it’s also something, unfortunately, that I or my colleagues who do know what they’re doing can’t change unless the public first determines they care enough to learn the truth.
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For those looking to purchase, and who just may think I do more than open doors for a living, here are some homes in El Mirage you can check out. The home at the top? That’s my new listing in El Mirage, so there’s a theme here.
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