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Had an offer come in on a property I had listed. It was an okay offer, but below my seller's bottom line. In talking with the other Realtor, I learned that she had arrived at the offer price by doing her comps like she always does them.
Her formula was simple...comp the neighborhood and then go 1/2 mile out.
The only problem with this formula is that, in this location it doesn't work. That's because the house is located in a rural area. The neighborhood is one street. There was only 1 house that came close to be comparable and even it wasn't a true comp. Within 1/2 mile, the agent found nothing else to work with.
Here in our part of the world, we have learned that you have to look for your comps within the entire school district, within the entire county or both. Sometimes you end up pulling comparable properties from 10 miles away. This is okay because our area easily covers twice that distance for our rural homes. In all fairness, we also have city neighborhoods where you pull comps from just within that neighborhood or from within like neighborhoods.
What the agent had been doing was using her comp formula for houses in Tulsa. In that setting you have nicely laid out neighborhoods with lots of comparables close by.
So I visited with her and discussed how we do comps "up here." She admitted that she doesn't work this area and that she wouldn't have thought to do a broader, bigger area.
Did my education of her make her go back and redo the comps and change the offer? Nope. The buyers offer was what they thought the property was worth and they stayed with the original offer. However, we were able to negotiate the offer and put together an acceptable contract to both parties.
I think there are a couple of important points here...
1)I could have turned into the education "jerk." You know this person. He or she knows more than you do about the given situation and they lecture you on the proper procedure and what you did wrong. They can go on and on and on making you feel about an inch tall. Bosses do this. Supervisors do this. Lot's of people do this. Some Realtors excel in it. I don't know about you, but these kind's of people drive me crazy!
For me, that's a violation of the golden rule. I refuse to treat others that way. All this really does is to inflate someone's own inflated ego. Instead, I try to help others see my point of view. They may not always agree, but we typically part being friends. And why wouldn't we? We're working together for a good, successful outcome. And further, we have usually had a healthy, constructive discussion instead of a difficult one.
2)You've got to know how to work different areas of your own town sometimes. Real Estate is not a static, cookie cutter process that you apply from area to area. There can be different criteria for finding value for different towns, cities and states. Knowing these things is important. Learning them sometimes happens in the midst of the deal. Learning them and being able to apply them and still represent your client is something your Real Estate professional has been trained to do for your benefit.
3)Negotiating offers and submitting offers requires more skill and negotiation today than it did back in 2007. That's because of the economy. There are buyers who think they can rape the seller in making their offer. But many sellers have rightfully declared, "I'm NOT giving away my house. I want a fair offer!" Even buyers who make decent offers are making lower offers than they would have made before the economy and market changed. That's because we are still in a buyer's market. Sellers do not control the market pricing nearly as much as they did when the buying frenzy was in high gear.
This is why making a decent offer and negotiating it to contract can be tricky. Your real estate professional has first hand knowledge of this process because this is what we do everyday.
Is it a good time to buy a house. Absolutely!
But be careful...you don't want to make a mistake and have your offer returned to you with the word REJECTED written on it in big ugly letters!
Click here to check out my Greater Tulsa and Owassowebsite. The premier greater Tulsa and Owasso, OK homes local informational website for your real estate needs. I also have a great blog filled with tons of information regarding Owasso Homes.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.