July 28, 2010

AGENT COOPERATION

 

Q. I made an offer on a home $50k less than the asking, but rather than negotiate the price the seller rejected my offer. I now have an offer on another home, and I offered $45k less than asking. My agent says it will probably be rejected as well. If I don?t offer low, how do I know what the seller will really take? D.L. Rio Vista A. There are two kinds of real estate markets, sellers markets and buyers markets. A buyers market is easily evidenced by a glut of home listings, and sales moving slowly. During this type of market, sellers are readily eager to negotiate for a sale. A buyer can offer low, ask for carpet and paint, a new roof, or whatever else you can think of the seller throwing in to make the deal happen. In the early 90?s, there was an east bay developer that threw a car in with each home!

In Rio Vista today, we are experiencing a very evident buyer?s market. There are an average number of listings, but not all in one price range. The spread is pretty even across the board from low to high prices, and the rate of sale is slow, averaging 103 days on market. Homes priced under $200k are moving the fastest, and if an offer doesn?t meet buyer expectations, they just move on to the next home.

When a seller lists their home, their agent does a comparative market analysis of recent sales and the active market to assess competitive homes in the same price range. A house price is not picked out of a hat, it comes from research. Once a buyer commits to that home, it has to appraise for the sales price. If the home is outrageously overpriced, the appraisal will correct the price.

Any offer received by a seller should be considered, I?m surprised an offer would be flatly rejected. At the least, a counter offer should be presented to offer some flex in the price to explore if an agreement can be reached. In this market, all offers should be considered: actually, just getting an offer is a blessing with all the competition for buyers.

If your agent is negative about your approach to buying, perhaps he/she is not a strong negotiator, and feels uncomfortable representing less than the asking price. Perhaps you should interview another agent, someone with different skill sets more compatible to your needs.

Q. I?ve been working with an Antioch agent to find a home in Rio Vista. When I asked a local agent to show me a listing, they refused to show the home since I was working with this other agent. I was honest enough to tell them that if I liked the home, I would tell my agent so she could write up the offer. Since the local agent was also the listing agent, shouldn?t some courtesy be extended? R.N. Rio Vista

A. You may not be aware of this, but Real Estate agents only get paid when they sell something. Is there courtesy in the industry? Of course there is; within limits of good sense. My question to you is why your agent can?t drive 20 minutes to show you this home herself? An agent does have a responsibility to guide you in the purchase, to assist you in the evaluation of the condition and value of the home, and I don?t know how she can properly disclose or assist if she has never even seen the home.

Because of our appeal and lower prices, Rio Vista continues to attract a lot of bay area buyers. Typically, bay area agents do not belong to the local MLS, so they don?t have access to pertinent information such as: what is for sale, how to show it, what the comparable sales would be, knowledge of neighborhoods, soil conditions, and I could go on and on. How do they get around this? They have customers contact a local agent for showings, then when that customer is ready to buy, they write up the offer. And the local agent, what do they get for their time and effort? Nothing.

The normal process would be for an out of area agent to refer their customer to a local agent if it is not their marketing area. Then, if their customer decides to buy, they would receive a referral fee from that local agent (usually 25% of the selling agent?s commission). So why wouldn?t an out of area agent do this referral? Greed, they want it all. Typically this type of agent is an underachiever, is barely making a living,

looks in your couch for loose change, and they have a bad mannered ugly dog.

A career agent doesn?t have time to run all over the state to make sales; they become experts in their own marketing community which usually becomes the city they live in. In large cities, an agent might specialize in one neighborhood. Knowing this, how effective can they be by traveling all over to make sales? The time and travel expense makes them like an ?ambulance chasing attorney?, not becoming a career expert, but just chasing deals.

Toss them aside and go with the local agent.

 

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