We did not truly understand the implications of our decision to purchase this way until we decided to sell the home. After the transaction was closed, we contacted the agent to tell him we had moved. What transpired next was one unsettling conversation. He asked us how much we had bought the home for and when we told him, he calmly offered to send us the comparables for the area. Ouch...we had bought approximately $10,000 above what many homes in the area were selling for. But of course...our home was much nicer.
When we sold the home 4 years later, we found out that a nicely decorated home doesn't negate the Location Factor. A lack of knowledge can be expensive. We didn't make a lot of money out of the home, but did sell it to an elderly gentleman who wanted to live close to his rental property investments.
So, what did I learn from this experience? I learned to never say "I told You so" when clients make poor choices. (At least, I try real hard not to.) I understand that they're only doing the best they know how. We were so naive and unschooled in the implications of making this type of a financial decision. To his credit, the broker simply kept in touch with us from time to time over the years. Remarkably, I ended up working for him many years later. I think he earned his commission...
I also learned how important professional representation is. The reality in a real estate transaction is that each party aims to WIN. It's called Self Interest. This is why real estate agents must clearly TELL you whose interest they are representing in the transaction. It's refered to as Fudiciary Duty.
The Seller was much older and wiser. We were eager to be pleasant and ready for a home. That's a potential recipe for a disaster if you're an unrepresented buyer. Looking back, things could have turned out much worse than they did. We were fortunate. All in all it proved to be a good place to start as first time home buyers and we met some nice neighbors. It also afforded us rental income which enabled our move to our next home.
The Question is: Would I make the same decision today? Absolutely NOT. Today, I understand that a good agent would have done the following:
Helped me understand the neighborhood values.
I would have been provided with a comprehensive market analysis.
I would have been given counsel about issues which were addressed by a certified home inspector.
My contract would probably have asked the seller to contribute towards costs.
And, I would have been advised to offer market value rather than giving away future equity.
A good agent would have looked after my interest when I was too enamored to be adequately observant.
This experience has been a Gift to me. I am not irritated when clients want to look at homes being sold by unrepresented Sellers aka FSBO's. I remember where I was a short time ago and how much I really needed someone to help me through the process. I make sure my clients KNOW that I can help them buy a home even if it is not listed on the MLS system. I tell them that I am comfortable negotiating on their behalf.
And then I explain to them WHY what I do can help protect their investment. I start with the List above. Most of the time, our clients purchase homes listed with real estate agents. But when they don't, I can rest assured that they have been well served because they were assisted by the services of a good agent.
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A great 2 parter, Lola. Aside from paying over market vlaue, you were very lucky!