Friday, November 15, 2013
10 More Questions
Do agents try to influence higher price for greater commission? - Not likely ever true. There seems to be a belief that agents, buyer's and seller's, want a higher price in order to get a greater commission. The math proves this one wrong. Even if either or both agents were able to influence a price up by $10,000, each agent's check would increase by a couple of hundred dollars in most cases. Not worth the risk of losing a deal for a couple of Benjamins.
Don't both agents work for the seller? - Absolutely not. The seller pays all the commission to their broker in most cases who shares part of it with the selling broker. Even so, as a buyer's agent, I am working solely for my buyer's best interest. The only exception to this would be when the buyer's agent is also the listing agent or when the listing is within the same brokerage as the buyer's agent. This is a persuasive argument for not using a buyer's agent from a company with a lot of listings in the market the buyer has targeted. A buyer's agent showing one of her company's listings is prohibited by law from advocated on behalf of the buyer. She must remain neutral, honest and fair. I, as a buyer's agent from another company, am not so restrained. In fact, I am bound to fight for my client and to use all fair means to get the best possible deal. Remember that when thinking about contacting a listing agent directly. It is rarely in a buyer's best interest to deal directly with the listing agent even if that agent is willing to concede part of the commission. See the next question.
Can't buyers get a better deal by dealing with the listing agent? - Not usually. As I explained above, the listing agent can't advocate for the buyer. While she may agree to shave off a percentage point for getting both sides of the deal she is prohibited from telling you, for instance, that your offer is $10,000 more than the seller countered my client last month in his failed attempt to buy the house. Think I'd let you make that too-high offer? Not.
Do agents not show buyers all listings? - sometimes. With the public able to view all listings on the internet, a buyer is able to do her own research and to find attractive listings that appear to match her criteria. When her agent doesn't include one that she has found on her own she becomes suspicious that her agent is either slack or deliberately excluding listings. Both may be true. The most likely reason a listing is excluded is that the agent has seen the listing and is aware that the MLS photos are misleading and the property is not what it appears to be online. It's amazing how many of the beautiful ocean view photos in our local listings are not the view from the unit. I get scores of inquiries about amazingly low prices on units with gorgeous open ocean views. What is usually the case is that the view in the listing was shot by Spiderwoman listing agent hanging off the side balcony shooting 90 degrees to the side with a zoom lens to exclude the huge timeshare building next door. As an active market participant here, I know that but to a prospective buyer in Fresno viewing it on awesomecondos.com, it looks like a steal for $199,000.
Then there are all those already sold or under-contract listings that still show up as "for sale" on the big real estate websites. There's a reason those websites are slow to remove a sold listing. It's called advertising revenue. Do your searching at BrevardMLS.com. It's the only site you can trust to always be up to date.
Do agents show only (or favor) their own company's listings? - It's very unlikely that an agent in our market would show only her company's listings considering the very low inventory right now but I can certainly see an agent favoring her company's listings. Brokers sometimes offer additional incentives for selling an in-house listing.
Do listing agents try to get sellers to sell too cheap? - Possibly. A hungry or lazy listing agent might encourage a seller to list too low or to accept a too-low offer in the interest of getting a quicker check. More often than not, an offer the seller thinks is too-low is right in the fair market value range. A good agent will always encourage a seller to accept a fair offer even if the seller thinks it's too low. Sellers almost always expect to get more than their property is worth.
Won't "For Sale By Owners" net more money than sellers using a listing agent? - Sometimes, but for reasons one might not expect. A FSBO will not be paying a listing commission although they sometimes are willing to pay a buyer's broker. What is definite is that they are not planning on giving the commission savings to the buyer. They didn't forgo the convenience of having a listing agent in order to give a buyer a better deal. No, sir. The intention is to pocket more money. That same mentality is why so many FSBOs are overpriced. Match those sellers with a buyer enamored with the idea of buying without a Realtor and you have a recipe for an above fair value sale. Buyers, do your homework. It's not about the commission. It's about the final price.
If a seller cancels a listing, do they pay a fee? - Sometimes but usually they shouldn't. A listing that requires expensive marketing and effort should carry some sort of cancellation fee to recoup expenses in the event that a seller prematurely ends the listing. Most listings should not carry a cancellation fee. A seller who doesn't like her listing broker should be able in most cases to cancel the listing with no penalty. This is not a popular opinion in the business but it is mine. Make sure you know if your listing contains a cancellation fee before you sign.
Are real estate websites a good way to find an agent? - Sorry, no. Agent reviews on all of the big online real estate sites are suspect. They are predominately and suspiciously positive. Beyond the reviews, any agent can throw money at these sites and establish a big presence. Big online presence does not guarantee competence or performance. This is doubly true for an agent's own website. If you're looking for an agent to represent you as a buyer or to list your property, talk to a few. Lacking a recommendation from someone you know, your gut perception is your best tool for selecting an agent to represent you. A little skepticism will serve well. We're not all crooks regardless of public perception.
Charlie don't surf. We really think he should. __The Clash