real estate agents http://www.wisebread.com/taxonomy/term/820/all en-US How to Choose a Real Estate Agent http://www.wisebread.com/how-to-choose-a-real-estate-agent <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-choose-a-real-estate-agent" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bigstock_Realtor_Giving_Key_To_Couple_3256228-2.jpg" alt="Realtor giving key to couple" title="Realtor giving key to couple" class="imagecache imagecache-250w" width="250" height="138" /></a> </div> </div> </div> <p>Buying or selling a home is one of the biggest financial transactions you will ever make, and it&rsquo;s important to have a real estate agent who can give you a true idea of your options, explain the details of the transaction to you, and help to navigate any potential problems. But how do you choose a real estate agent? How do you avoid the untrustworthy agents and find someone who is professional and has your best interest at heart? (See also:&nbsp;<span style="text-decoration: underline;"> </span><a href="http://www.wisebread.com/when-should-you-fire-your-real-estate-agent">When Should You&nbsp;Fire Your Real Estate Agent?</a>)</p> <h3>1. Have High Expectations</h3> <p>If your expectations for a real estate agent are simply someone to chauffeur you to houses and unlock the doors, or someone who will just list your house for you, your expectations are too low, and they will be self-fulfilling. Think of a realtor as a professional, not a salesperson, and hold them to the same expectations that you would hold any other professional, such as a CPA, an attorney, or a doctor.&nbsp; This is the person who will be advising you on how to spend a huge chunk of money. The agent should be able to educate you on your options and help you to understand the consequences of whatever choices you decide to make.</p> <h3>2. Look for Certain Qualities</h3> <p>In the current market, there are few easy deals to be had in real estate. Many transactions, especially complicated ones such as short sales, require someone with the skills and expertise to navigate all of the potential problems. Whether your real estate agent has the right skills may affect whether or not you are able to buy or sell a home at all. <a href="http://markusandheidi.com/">Markus Brown</a>, a real estate agent in Orange County, says these are the top qualities you should look for in a real estate agent:</p> <ul> <li>Organization skills and detailed knowledge of the stacks of paperwork and legal issues that are involved<br /> &nbsp;</li> <li>Negotiation skills &mdash; someone who can deal efficiently with problems as they come up, who has good people skills when dealing with opposing agents<br /> &nbsp;</li> <li>For sellers, a marketing strategy and experience marketing homes<br /> &nbsp;</li> <li>Excellent communication skills &mdash; someone who can explain things to you in terms that you understand, empowering you to make the right decisions</li> </ul> <h3>3. Interview Your&nbsp;Potential Agent</h3> <p>Brown says, &ldquo;Sellers usually interview agents, since they are paying them, but buyers often don&rsquo;t think of interviewing agents, to their detriment.&rdquo; Whether you are buying or selling, take the time to interview at least three real estate agents. You can meet real estate agents through referrals from family and friends, or you can find them at open houses. It&rsquo;s a good idea to visit an open house and talk with a real estate agent face-to-face before requesting an interview. If an agent isn&rsquo;t interested in being interviewed, find someone else.</p> <p>Be careful about working with family or friends who are real estate agents. Buying or <a href="http://www.wisebread.com/big-mistakes-you-can-make-when-selling-your-home">selling a house</a> is possibly the biggest financial transaction of your life, and you deserve to work with the best person for the job. Family obligations should have no place in this business transaction, and if a deal goes sour, it may cause awkwardness and heartache in the end.</p> <p>When interviewing a real estate agent, Brown suggests the following questions:</p> <p><strong>How long have you been in the business?</strong></p> <p>This is the agent&rsquo;s opportunity to explain how they gained the skills for the job. How an agent answers this question can provide insight into the way they think and work. Agents who use this question to brag about how amazing they are instead of how they helped buyers and sellers accomplish their goals might be the sort of people who talk more than they listen &mdash; a bad sign. Remember, just because someone has been in the business forever doesn&rsquo;t mean they&rsquo;re the right person for the job; sometimes someone with less experience can be just as knowledgeable and may have other skills that will be valuable.</p> <p><strong>Can you describe the process, from start to finish, of buying or selling a house?&nbsp; </strong></p> <p>How well does the agent <a href="http://www.wisebread.com/25-ways-to-communicate-better-today">explain things</a> to you? Do you have a clear picture of the process, and do you feel empowered rather than belittled? Never work with an agent who talks down to you.</p> <p><strong>Can you describe how you treat the offer process? How do you submit my offer to the seller? (Or, if you are the seller </strong><strong>&mdash;</strong><strong> how do you assess potential offers?</strong></p> <p>Does the agent present offers in person? Do they try to meet with the listing agent to establish a good rapport? How will the agent discuss potential offers with you, and what strategies do they have for responding to offers?</p> <h3>4. Look for Red Flags</h3> <p>At the end of the day, you have to decide whether you feel comfortable working with a particular real estate agent. If something about them feels untrustworthy, go with your gut and look for someone else (there are plenty of agents out there). Be especially wary of working with the following:</p> <ul> <li>Agents who talk more than they listen, or talk about themselves more than they listen to you.<br /> &nbsp;</li> <li>Agents who are part-time &mdash; either they can&rsquo;t cut it in the real estate world and have to hold on to a day job, or they won&rsquo;t have the detailed knowledge and expertise of someone who makes it their primary business.<br /> &nbsp;</li> <li>Agents who are desperate for your business. If they are trying too hard to gain you as a client, chances are they will not give you objective advice. An agent who wants to close the deal too much may pressure you into something you aren&rsquo;t happy with.</li> </ul> <p><em>Have you had a good experience with a real estate agent? What qualities made that agent successful?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/camilla-cheung">Camilla Cheung</a> of <a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Is Buying a Foreclosed Home Ever a Good Idea?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Why you can&#039;t trust a real estate agent.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/23-hidden-costs-of-buying-an-old-house">23 Hidden Costs of Buying an Old House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house hiring professionals real estate agents Thu, 26 Jan 2012 11:24:13 +0000 Camilla Cheung 876945 at http://www.wisebread.com Big Mistakes You Can Make When Selling Your Home http://www.wisebread.com/big-mistakes-you-can-make-when-selling-your-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/big-mistakes-you-can-make-when-selling-your-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bigstock_Home_Sale_1148189.jpg" alt="Couple selling their home" title="Couple selling their home" class="imagecache imagecache-250w" width="250" height="139" /></a> </div> </div> </div> <p>My husband and I were recently in the market for a home, and we spent several weeks viewing condos and houses. In our dealings with sellers and their agents, we began to notice certain common mistakes that put us off considering the purchase of these homes. Buyers can be &ldquo;scared off&rdquo; by unprofessionalism on the part of the listing agent, cosmetic problems in the home, and other pitfalls.</p> <p>I spoke to <a href="http://markusandheidi.com/">Markus Brown</a>, a real estate agent in Orange County, California, about the top mistakes that sellers make when trying to sell their homes. If you are considering putting your home on the market, be sure to avoid these home-selling blunders. (See also:&nbsp;<a href="http://www.wisebread.com/five-tips-to-sell-any-home-fast">5 Tips to&nbsp;Sell Any Home Fast</a>)</p> <h3>1. Not Interviewing Multiple Agents</h3> <p>Brown explains, &ldquo;The sad truth is that many people will spend more time researching what point-and-shoot camera to buy than the agent they choose to help them sell a home worth hundreds of thousands of dollars.&rdquo; Your choice in a real estate agent can have an enormous impact on your ability to sell your home. Don&rsquo;t go with the first face you see on a billboard at the bus stop. Make your wants and goals clear to potential agents and judge whether they are competent or not. While what goes into interviewing and choosing an agent merits another article in itself, meeting several potential agents can help you to make your decision.</p> <p>Good agents are worth their fees and are confident of their value. Be wary of anyone who isn&rsquo;t willing to spend time with you and explain the details behind selling your home. Ask the agent for referrals from other clients, and be well-informed yourself so that you know the right questions to ask.</p> <h3>2. Not Preparing Your Home for Showings</h3> <p>Your home should be in perfect repair and spotlessly clean for every single showing. Buyers don&rsquo;t know (or care) whether your home was clean yesterday, or whether you had a bad morning. What matters is what they see when they walk through the door. We&rsquo;ve been in homes where the owners didn&rsquo;t bother to clean up the cereal boxes or breakfast dishes, and in one home, a member of the family was actually still <em>in bed</em> when we entered the bedroom. Needless to say, we left in a hurry.</p> <p>Your home should be decluttered, and to a certain extent, depersonalized. That means taking down the walls of family photos, cleaning up piles of junk mail, and removing the kids&rsquo; art from the fridge. Potential buyers should be able to visualize themselves and their belongings in the home.</p> <p>Brown advises sellers that it is worthwhile to fix some of the little things around your home. Chipping paint, missing grout, broken outlet covers, scuffs in the paint &mdash; these are all cheap fixes but if not addressed, will send the impression that the home &ldquo;needs work&rdquo; and will deter potential buyers.</p> <p>Sellers should not be present for showings, so after letting buyers in, go outside while they are viewing your home. Having the occupant of the house at home prevents buyers from talking freely and from exploring every inch of the space. It creates an awkward situation where buyers want to leave quickly.</p> <h3>3. Not Preparing Yourself Emotionally</h3> <p>Sellers are understandably emotionally attached to their homes and often feel that their homes are special. They may feel discouraged when they receive low-ball offers or when a home takes a long time to sell. Being realistic about the market and focusing on your end goal will help to combat some of this pessimism.</p> <h3>4. Not Being Available for Showings</h3> <p>We&rsquo;ve contacted sellers who were unwilling to work around our schedule. Sometimes the seller needed to run errands or go shopping and was not available to prepare the home for showing or to let us into the property. Buyers won&rsquo;t coddle you while trying to coordinate their schedules with their agents as well as with you; they&rsquo;ll simply move on to the next house. Showings by appointment only should be avoided, as they create the need to coordinate more people&rsquo;s schedules.</p> <h3>5. Inadequate Marketing</h3> <p>According to Brown, &ldquo;Photographs of your home are the core of your home&rsquo;s marketing exposure.&rdquo; Your photos create the first, and sometimes most lasting, impression of your home, so make sure they&rsquo;re good. In one horror story we&rsquo;ve heard, someone actually posted a listing with the masking tape outline of a body on the floor clearly visible in the photo.</p> <p>Photographs taken by a professional photographer are cheap (around $100) and are absolutely worth it when you consider the value of your property. On your online listing, your agent should upload as many pictures as the listing allows. In addition, make sure your agent has a reciprocal agreement with other agents in the area, allowing other agents to bring buyers to view your home. If your area has an MLS (Multiple Listing Service), make sure the listing information on the MLS also gets listed on <a href="http://www.zillow.com/">Zillow</a>, <a href="http://www.redfin.com/home">Redfin</a>, and other real estate websites.</p> <h3>6. Unrealistic Pricing</h3> <p>Price your home too high, and many buyers won&rsquo;t even see it when they search real estate listings. For instance, my husband and I searched for homes under a certain price range (let&rsquo;s say, $300,000). Any homes listed for $309,000 didn&rsquo;t even show up on our search. Homes at $299,999 did.</p> <p>Sellers who have an emotional attachment to their homes may price their homes too high because they perceive them as being better than comparable homes on the market. You need to look at your home objectively and realize that buyers are comparing your home to even the lowest-priced <a href="http://www.wisebread.com/how-foreclosure-deed-in-lieu-and-short-sale-affect-credit-scores">short sale properties</a> in your neighborhood.</p> <h3>7. Lack of a Focused Objective</h3> <p>When you&rsquo;re selling your home, you should focus on why you want to sell your house. What is your objective? Do you need to sell your home so that you can retire, <a href="http://www.wisebread.com/25-signs-that-youve-been-at-the-same-job-too-long">change careers</a>, or otherwise move on with your life?</p> <p>Too often, Brown says, sellers get so focused on the price of their homes that they forget about their ultimate goals. For example, if a perfect buyer comes along with a pre-approved loan and offers a few thousand dollars under the asking price, often sellers will get so caught up with trying to get their asking price that they don't consider the offer. Because they are so focused on those few thousand dollars, they are unable to achieve their goals, and they continue to be unhappy in their situations. Ultimately, when you&rsquo;re selling your home, you need to know what you want, and why, to move forward to achieve that goal.</p> <p><em>Have you sold (or bought) a home recently? What tips would you give to people who want to sell their home?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/camilla-cheung">Camilla Cheung</a> of <a href="http://www.wisebread.com/big-mistakes-you-can-make-when-selling-your-home">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-home-renovations-that-could-hurt-your-homes-value">5 Home Renovations That Could Hurt Your Home&#039;s Value</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Why you can&#039;t trust a real estate agent.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-agents-do-we-really-need-them">Real Estate Agents: Do We Really Need Them?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-common-apartment-hunting-mistakes-to-avoid">9 Common Apartment Hunting Mistakes to Avoid</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing Mistakes real estate agents selling home Mon, 14 Nov 2011 09:36:38 +0000 Camilla Cheung 775182 at http://www.wisebread.com Real Estate Agents: Do We Really Need Them? http://www.wisebread.com/real-estate-agents-do-we-really-need-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/real-estate-agents-do-we-really-need-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/248457195_401b45774c_z.jpg" alt="for sale" title="for sale" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>M and I have been looking to buy our first place for just under two years now. Then our real-estate agent <a href="http://www.thewriterscoin.com/2009/10/12/i-hate-my-real-estate-agent/">insulted my wife</a> and we decided to put the search on hold (besides, we <a href="http://www.wisebread.com/buying-a-home-without-a-20-down-payment">need to save more money</a>).</p> <p>The incident with our agent, along with the whole search process, got me thinking about why we even need these people to &quot;represent us&quot; when we buy and sell homes. With all the tools available online and the prevalence of social-media sites that allow everyone to share what they know, all the information you could possible want is available to you if you just do a little digging.</p> <p>I understand the argument that a real-estate agent can get all this information for you &mdash; that's his/her job. But why wouldn't you be willing to do the research yourself when you're about to make the biggest purchase of your life? It's almost like going through a travel agent &mdash; does anyone do this anymore? Typically, you can find a better price by just going online and booking the trip yourself. No need to go through a middle man. (See also: <a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a>)</p> <h2>For Example</h2> <p>Let's say I want to buy a house in a <a href="http://www.wisebread.com/how-to-get-into-a-good-school-district-for-less">certain neighborhood</a>. I could use <a href="http://www.wisebread.com/redfin-the-greatest-real-estate-website-ever">Redfin</a> to get all the basic details about the property, and even stuff like recent price drops. That's everything you'd find on an MLA listing. If I want to see what the facade of the building is, I'd use <a href="http://maps.google.com/help/maps/streetview/">Google's Streetview</a> function.</p> <p>Still not convinced? Do what M and I did &mdash; we hopped on our bikes and rode around for ourselves. Sure, it was research, but it was also fun. And like I said, this is a big deal, so why wouldn't you put in some work yourself? After all, it's your money and it's going to be your house.</p> <p>What else would you need an agent for? To tell you that the building across the street is owned by a guy names Stan who is &quot;great&quot; and will never build up to block your great view? Is that worth thousands of dollars in commissions? Not to me it isn't.</p> <p>Just like Yelp can give me tons of feedback about a restaurant, I can get just as much feedback about a neighborhood or an area by doing a little research online. It's all out there, you just have to find it.</p> <h2>What About Viewing Places?</h2> <p>Here's how <a href="http://www.wisebread.com/low-cost-ways-to-dress-your-house-for-a-quick-sale">viewings</a> typically went for us: we found listings on Redfin or other real-estate sites and sent them to our agent. He called the agents on the other end and scheduled (his assistant scheduled them, actually) viewings one after the other so we could go see four or five places in one night. Awesome!</p> <p>But it was still us sending him new listings that we were interested in. <em>We</em> were doing the work, he was doing the &quot;scheduling.&quot; Then one day we were out and about and I saw a For Sale sign (these become like catnip after a while) in a nice neighborhood. I really wanted to check the place out so I just called up the phone number on the sign and left a message. The agent called me back the next day and said she could show us the place the very next day.</p> <p><strong>No agent, no fuss.</strong></p> <p>Why would I go through an agent when I could just do this myself?</p> <h2>I Know, I Know</h2> <p>I know that I'm probably a little bitter right now because of the recent incident I had with our agent. I know that having someone with experience help you out with what is a huge deal can be very helpful. But are they really worth the thousands of dollars they get for basically doing the busywork that you or I or anyone could do?</p> <p>All because we're afraid to do it ourselves?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carlos-portocarrero">Carlos Portocarrero</a> of <a href="http://www.wisebread.com/real-estate-agents-do-we-really-need-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Why you can&#039;t trust a real estate agent.</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/big-mistakes-you-can-make-when-selling-your-home">Big Mistakes You Can Make When Selling Your Home</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">How to Choose a Real Estate Agent</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-a-first-time-home-buyer-needs-to-buy-a-house">Everything a First-Time Home Buyer Needs to Buy a House</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing real estate agents Mon, 19 Oct 2009 16:42:19 +0000 Carlos Portocarrero 3727 at http://www.wisebread.com Why you can't trust a real estate agent. http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/313291_for_sale_sign-1.jpg" alt="Sell" title="Sell" width="300" height="200" /></p> <p>Surely a real estate agent would want to get you the very best price for your home. After all, they earn commission. The more they sell it for, the more they make, right? Well, the popular book <a href="http://www.freakonomics.com/blog/">Freakonomics</a> , which I&#39;m reading and devouring right now, proves this is not the case.</p> <p>Now, I&#39;m not saying all real estate agents are doing this, neither are the book&#39;s authors Steven D. Levitt and Stephen J. Dubner. But it does cast a huge shadow of doubt over the entire real estate industry. Judge for yourselves.</p> <p><strong>Here&#39;s the game, and how it&#39;s played.</strong><br />It&#39;s all based on incentives...what&#39;s in it for you, what&#39;s in it for them. And it also plays on your fears. Fears that you don&#39;t know how to sell your home, that it will be on the market for years and that, of course, you won&#39;t get the best price. So, you call a real estate agent and use their huge knowledge of the market to sell your home quickly, easily and for the very best possible price. </p> <p>And that&#39;s the sticking point. </p> <div>Due to the way commission is structured, it&#39;s not in the real estate agent&#39;s best interests to get you the best price for you home. Let me repeat that...it is not their priority to get you the most money for your house.</div> <div> </div> <div> </div> <div>No, they want a good price, but they want a quick sale. It is far more profitable to get you to take the first reasonable offer that comes along, than wait another week or two and get $310,000 instead of $300,000.</div> <div> </div> <div> </div> <div><strong>The incentive problem. </strong></div> <div>Let&#39;s looks at that more closely. At first it seems well worth the wait. Two weeks for $10k. For you, it is good. Of that $10k you get around $9400. The other $600, that&#39;s the 6% commission fee, gets split 3 ways. Half goes to the buyer&#39;s agent. Then the real estate agent gets $150 and her firm gets the other $150. </div> <div> </div> <div>$150? For all that time and extra work? Not so great now, and you know, I&#39;d feel the same way.</div> <div> </div> <div> </div> <div><strong>Just look at the numbers. It&#39;s simple math.<br /></strong></div> <ul> <li>Sell the house now for $300k, make $18k commission and get <strong>$4500</strong> cold hard cash.</li> <li>Or, wait for two weeks or more, do a lot more hard work, sell for $310,000, and get <strong>$4650 </strong>cash.</li> </ul> <div>It&#39;s clearly not worth the wait, when you could sell early and start work on another commission. This is the problem. Big incentive for you, tiny incentive for the expert. And the experts have many tricks up their sleeves to ensure a quick sale and easy ride. </div> <div> </div> <div> </div> <div><span style="font-weight: bold" class="Apple-style-span">The code words used in Real Estate ads.</span></div> <div>There are good words, and bad words. Most of the time, you can make an educated guess. </div> <div> </div> <div>Consider these terms when selling a home. Five are good, five bad. Could you tell which?</div> <blockquote><div>• fantastic <br />• <em>granite</em> <br />• spacious<br />• <em>state-of-the-art </em><br />• ! <br />•<em> Corian</em><br />• charming <br />• <em>maple</em><br />• great neighborhood <br />• <em>gourmet </em></div> </blockquote> <div>Well, here&#39;s the answer. The words in italics are good. Why? Because they say something positive and definite about the house. You may or may not like granite, but there&#39;s no denying the implication of rich and aspirational. The same goes for corian, maple, state-of-the-art and gourmet. Whatever you feel, you cannot deny the meaning.</div> <div> </div> <div> </div> <div>Now look at the other words. Spacious? What does that mean? Is it impractical, badly laid out, cold, roomy, who knows? Charming is just as banal and ambiguous. And as a writer, I know that using anything like fantastic or ! means you have nothing of substance to say. When a house is fantastic, you don&#39;t have to say so....it sells itself. And great neighborhood basically means it&#39;s not the best house on the block.</div> <div> </div> <div> </div> <div>When you know how to read the code, and it&#39;s not difficult to figure out, you know what the agent is trying to do. Through the use of this language, they&#39;re saying &quot;this house isn&#39;t so hot...maybe you should make a lowball bid, it may just get accepted.&quot; And when a bid does come in that&#39;s lower than you&#39;d like, hey guess what, you should take it. After all, that nicer home across the way hasn&#39;t sold yet and it&#39;s been on the market for months.</div> <div> </div> <div> </div> <div><strong>What happens when a real estate agent sells her own house? </strong></div> <div>That&#39;s when the data get&#39;s even more interesting. She&#39;ll use descriptive words that mean something. Terms like &quot;move-in-condition&quot; and &quot;granite&quot; will be on there. Ambiguous phrases like &quot;immaculate&quot; and &quot;wonderful!&quot; will not. </div> <div> </div> <div>Studies performed by Levitt and colleague Chad Syverson also proved that real estate agents hold out for more money when they sell their own homes. Of the 100,000 home sales they looked at, real estate agents kept their homes on the market for 10 extra days and made 3.7% more money. </div> <div> </div> <div> </div> <div><strong>So, what next? </strong></div> <div>The Internet is your friend. Information that used to be at the disposal of the experts is now readily available. Do some homework. See what is selling, for how much and where. And don&#39;t let the real estate agent pressure you into taking a lower bid because the market is &quot;just in a terrible state right now.&quot; As sure as night follows day, the same agent will tell a buyer &quot;pay more, the market is really moving.&quot; </div> <div> </div> <div>It&#39;s truly a cat and mouse game. </div> <div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-not-buy-something-just-because-you-can-afford-it">Do not buy something just because you can afford it</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-the-banks-were-fleeced-a-primer-to-mortgage-fraud">How the Banks Were Fleeced -- A Primer to Mortgage Fraud</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/could-your-city-go-bankrupt">Could Your City Go Bankrupt?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8000-housing-tax-credit-can-now-be-turned-into-cash-at-closing-according-to-fha">$8000 housing tax credit can now be turned into cash at closing according to FHA</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/more-tax-credits-coming-for-homebuyers">More Tax Credits Coming for Homebuyers?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing freakonomics home sales incentives money real estate real estate agents Thu, 05 Apr 2007 22:53:56 +0000 Paul Michael 462 at http://www.wisebread.com The cost of a free ride - why not to use a buyer's agent http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/realestate.jpg" alt="real estate sale" title="real estate sale" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Recently, my wife and I were house shopping and we decided to make an offer on a condo. It was advertised for $345,000, but we thought we could get a better deal by contacting the seller's agent first. It wasn't the first time we tried this trick &mdash; we had previously bought our house in Fresno with only one real estate agent, and it worked out great. So we threw out a low-ball offer of $325,000 and, to our surprise, the seller's agent was very eager to work with us. He negotiated on our behalf with the seller, and basically came back and said that if we could raise our offer to $327,000, we could have the deal. There was a pending offer of $335,000, but if we wanted it at $327,000, he would convince the seller to give it to us. Why would the seller's agent go so far for us? Why would he bend over backwards to try to make the deal happen, when we were offering a lower price? Was this a breach of his fiduciary duty?</p> <!--break--><!--break--><p>It's called dual agency. That means the seller's agent can represent you (the buyer), and your adversary (the seller). It's completely nonsensical, but, so long as this system exists, you might as well use it.</p> <p>There is a 6% commission in a real estate broker contract that is split 50/50 if two real estate agents are involved (buyer and seller's agents). If only the seller's agent is involved (that is, he or she finds the buyer and represents the seller), then such an agent gets 100% of the 6% pot. In my case, if the condo was sold for $335,000 in a two-agent deal, the seller would receive $314,900 in cash (after 6% reduction for commission) afterwards and the seller's agent would pocket $10,050 in cash (3% of sales price). However, if the condo was sold for $327,000 in a one-agent deal and the seller's agent was smart enough to reduce his or her commission (say, to 3.5%) to make the deal happen, everyone wins. The seller would receive $315,555 cash (after a 3.5% reduction for commission), the seller's agent would receive $11,445 cash (3.5% of sales price), and the buyers would receive an $8000 discount on the house.</p> <p>If you haven't figured out the trick by now, I'm trying to say that you should call the seller's agent when looking at a house.&nbsp;To recap, here are the reasons why you should use only the seller's agent:</p> <h2>1. Reduce Commissions</h2> <p>They can reduce their commissions from 6% to 3% and still have it worth their while to do the deal with you. A 3% reduction in their commission represents thousands in savings!</p> <h2>2. They'll Persuade on Your Behalf</h2> <p>There is a huge incentive for the seller's agent to persuade the seller that you are the right person to close and that your offer is the best (sellers don't always look at the highest offer, they also care about which buyer is actually going to close the deal).</p> <h2>3. No Buyer's Agent Pressure</h2> <p>Buyer's agents are especially evil, not because of their moral character, but because of the incentive system. They don't make money unless you actually get your offer accepted. So there is incredible pressure on them to persuade you to overbid in you offer. If you overbid, there is a greater chance that your offer will be accepted. You don't need that kind of pressure when committing yourself to the most expensive purchase of your life.</p> <h2>4. Seller's Inside Info</h2> <p>The seller's agent actually has a lot of useful information that is helpful in the home-buying process. They know if the seller is motivated, whether other offers are pending, what complaints have been made about the house by other potential buyers, etc. Since the seller's agent also becomes your agent in the deal, they have a duty to advise you (and possibly even reveal this juicy info to you). However, if you use a buyer's agent, you have absolutely no access to the good information.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ken-rick">Ken Rick</a> of <a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-choose-a-real-estate-agent">How to Choose a Real Estate Agent</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Is Buying a Foreclosed Home Ever a Good Idea?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-cant-trust-a-real-estate-agent">Why you can&#039;t trust a real estate agent.</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-get-into-a-good-school-district-for-less">How to Get Into a Good School District for Less</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing buying a house dual agency real estate agents seller's buyer's agent Sat, 03 Feb 2007 04:12:44 +0000 Ken Rick 249 at http://www.wisebread.com