Home Buyers Choose your Agent Wisely
Its bad enough that you have to to watch the guy behind the counter of your favorite fast food joint make your food just to confirm the use of gloves or worse, that they don’t accidentally flip your burger onto the floor just to dust it off and place it back on the flat top, (not that Ive ever done that as a kid or anything). Here’s a little nugget of wisdom if I may… always be nice to the guy when speaking into the little speaker when you are going through a drive-through. Just saying. In real estate, agents, much like children are capable of doing some things that leave you with that look… you know that look right? Mouth wide open, eyes forward in a total blank stare, blinkless. The same look you had when your teenager thought it was a good idea to make grilled cheese in the toaster.
It’s hard to know what happens in the background of life when you are not looking out for it, which brings me to my next blog. A short list of some of the things that agents do that are not always in the best interest of the seller or home buyer. “The heck you say…you mean to tell me that there are people in this world hell bent on being crappy, even in a family focused business like real estate”? Yes, the heck I do say.
Number One. The listing agent will tell a buyer’s agent that there are other buyers interested in the same property or they have other offers being decided on when in fact, they have no offers and nobody interested.
Why do agents do this? Well mainly because they want to increase the anxiousness with you, the buyer, which may push you to make an offer or in some cases, offer more money for the house than the asking price. This will get them a buyer in escrow quickly and possibly even a little extra cash in the agent and sellers pocket. Watch out for the 7 day contingency for inspection which is sure to follow this crappy tactic. This is where they, with the help of your agent, get you to agree that you will get only 7 days in which to have the house inspected etcetera. Who the hell knows any inspector in Los Angeles worth a crap that is not booked a week out all the time? So what, now you’re forced to use a crappy inspector who will give you just that… 20 pages of nothing. So, when you run out of TP… you’ll at least have 20 spare pages of paper to use.
Number Two. Your buyer’s agent shows only their own listings, or in-house listings, favorable to their buyers.
There are agents who would love nothing more than to double end the transaction. So in order to accomplish this, they must sell you a house which they have listed. Additionally, the agent may show mostly their office listings in order to try their best to only work with an individual within their office, or pocket listings that are not even on the MLS yet. Buyers, be cautions of these tactics because if anything, it limits your choices for other properties. Buying a house is not like buying a car. You can’t trade it in after a year with a couple thousand bucks to offset the depreciation and get another brand new car. Buying a house takes time and there is much research to perform. Both with the house through inspections of all types, checking out the neighbors, visiting the neighborhood at various times throughout the day and night, taking the drive from the prospective house to your place of work to see how the traffic is, etcetera. This topic is a great Segway into the number 3.
Number Three. An agent represents both the buyer and seller in the same real estate transaction.
The buyer’s agent and the selling agent should never ever be one in the same. Most agents would love nothing in this world more than to double end a deal and double their commission. IMO, there is no way an agent can ethically represent a seller who is trying to get the most from their buyer and buyer trying to get the most from a seller. Avoid this at all costs.
Number Four. Your agent does not show homes with lower-than-typical commissions offered by listing agent.
Oh yeah… this actually happens. Do not think for a second that commissions are not important or do not matter when the agent is showing you houses. Okay… how come they don’t show you FSBOs or houses that are for sale by owner? Answer is Duh… because there is no money or little money in it for them. So its also no coincidence that they will pull properties to show you which have a respectable commission offered. Do they care about you enough to forego a few extra bucks to see you happy? HAHA, right. I’d say honestly, that most agents are guilty of passing over properties which have a low commission to the buyers agent. Their retort: “But we work sooooo hard opening and closing doors… $20,000 isn’t nearly enough“. And there you have it.
Number Five. Buyer’s agent does not show clients homes listed by certain brokerage companies based on reputation or past experiences.
If there was ever a need for one of those safe zones we see on TV, you know the ones on college campuses across America with the playdough and teddy bears and such… Because these people have had their feelings hurt by another of their species or have “heard” through their gossip channels as only a true yenta can, that they’re the focus of negative conversation, these agents may become disgruntled and rather than show you a house which may fit all of your criteria that’s listed by their nemesis, they’ll pass it by and show you another that has a commission bonus, higher priced, a higher commission or just easier to close.
Number Six. Sell it
at the highest price possible… NO, sell it now!
You the seller want to get the maximum amount from your house right? And you’re certain, based on that awesome sales pitch presented to you by your agent…, the sort of pitch that would make even the most seasoned used car salesperson teary eyed, and prior to latching yourself to the cart of that agent you have this warm n fuzzy feeling that they want the same for you right? HAHA, wrong. Let me break it down for those of you who think because you and your agent perhaps shared a heartfelt moment or two, that because their kids share the same school as your kids, that they have the same hair dresser, that they are out for your best interest and will protect your investment at any cost.
First off, lets remove the misconception that its all about how the sales price = more in commission for the agent and they want to sell your house sooo bad for another 5 grand. Okay, this is true to a certain extent, however, the small amount of extra cash they stand to make from the 5G’s is not worth the time they’ll spend just waiting to get the bad boy closed and in the books. The longer a property sits, the worse it looks to other agents (not to leave out the fact that the longer it sits the greater the chance that you’ll get a low ball offer based solely on the amount of time listed). And if you do get it into escrow and are unfortunate enough to get a crappy inspection report, that’s just going to drive down your price even more. In this respect, the agents are not stupid.
Number Six point 5. The agent slowly and unsuspectingly decreasing your sales price.
So you’re saying that an agent will take a listing for a high price knowing it won’t sell just to get the listing and opportunity to talk the seller down to a price where they know the house will move from stagnant to sold? How does this happen you ask? Well, let’s check it out…
Day One. So you narrowed your choices of agents who you’d like to see
screw I mean help you sell your house. You have a meeting with a prospective agent who tells you how awesome your house is and how it is sure to sell in the first 2 hours on the market, so you strike a deal. He in his head already has an idea of comps and knows what the house is likely to sell for fast based on its (genuine) condition. Did I say fast? Oops…
Week One. So your house has been listed for a week now and you’ve had some showings and a few who are interested but the agent is just slightly concerned because his (unconfirmed) feedback tells him that the house is too dark, poorly laid out and close to a school. Your agent reluctantly explains his/her concerns to you but assures you that theres no need to fret because they’re on your side and besides, forget those idiots, what do they know? You have the nicest house on the market.
Week Two. Two weeks later and there are not as many buyers parading through the house as before and your brilliant agents drops a hint that sounds something like…” maybe we need to add a small skylite to lighten the room, paint, carpet and remove some of the furniture to make it seem less cluttered, what do you think”? So at this point your agent is casting little tiny subliminal hints of doubt that the house they felt was so beautiful and thus quick to sell may not be all it was promised. And because that 2 hours is not 2 weeks, you start to doubt too. Plus, you need to move soon because the job transfer relocation is coming fast.
Week Three. Boom, you got an offer, it was a little less than you wanted but hey, its an offer none-the-less. So you took the crappy offer and now its time for the inspection. All you can hope here is that agents work their magic and push their list on the buyer and the inspector is a newbie or better, inept. But as it turns out he’s not in fact he’s damn thorough and tears your house apart. So now you have this crappy laundry list of issues which the buyer is pushing back with and using as leverage to ask even more money off the price for your place. No worries though… its all part of the plan.
Week four. So after the inspection request for repair came in and after you removed your jaw from the floor, and told them to F…, get lost, your agent starts to speak in a slow and stuttering voice, “hinting” around that perhaps we (as if its their money) should consider dropping the price to accommodate the necessary repairs and provide relief for the next potential buyers who will almost certainly use the previous inspection report for negotiations. They’ll have this report because as many agents like to hide previous reports from new buyers, your agent will “offer” it up (as they should, ethically), or even drive it to their house and hand deliver it to the next buyer as he/she is hell bent on dropping the price to a price which is sure to sell quickly (where they initially felt it would sell), unfortunately as illustrated here, the process in and of itself is time consuming, but pays off nevertheless.
Exactly how does it pay off again? Well, if the agent approached you and said you need to list the house for $20,000 less than you originally wanted but coincidentally where they actually wanted it (but kept it to themselves), you would have scoffed and booted him on his/her way back to Starbucks. But by allowing the agent to have the scenario play itself out like this, they still get the listing and the commission. Sure its a crappy sales tactic… but it works.
Number Seven. Open house agents can get your offer accepted.
You see the open house signs and follow the bread crumbs to the house for sale in the neighborhood you love. You’ve been working with an agent for months but their no harm in taking a look at this house since it’s being held open, right? You step inside and the nice agent in their asks you to sign in for their records as per the seller’s request. (Yeah right) They walk you through the house asking how long have you been house searching, are you pre-qualified for a loan. Oh yeah, are you working with an agent already? Meanwhile this house is everything you’ve been looking for, from the first floor master bedroom to the grassy side yard and don’t forget the price. Right where you need it. So you’ll give your agent a call and have him prepare an offer. “Oh wait” the agent calls to you, “did you know if you write an offer with me, I can get it accepted for you?” Hmmm, now should you take a chance in writing your offer with the agent you’ve been working with for months and risk not getting the house, or should you write it with this agent who claims they can get your offer accepted? How about that for a total crappy crap move?