Special offer

Buyers -- Do You Need a Buyer's Agent?

By
Real Estate Agent with RE/MAX Showcase Homes

I am assisting my nephew in buying a home in Ann Arbor.  Since I am primarily in Oakland and Wayne Counties, I wouldn't ordinarily do this and refer him to Missy Caulk.  However, I am sure he knows the area(s) he wants to live in after having been a student at U of M for four years.  He just got married in June and accepted a full time position with the University of Michigan as Systems Administrator Intermediate for the LSA Instructional Support Services Dept.  I don't know what that means - but I am very proud of him!  So, he and his wife have decided it may be a good time to buy a home.  I agree - particularly in Ann Arbor - I love that city. 

I have sharing privleges with the Ann Arbor MLS - he knows the area - and it's not farther to show him homes in Ann Arbor as showing homes in Oxford or Macomb Twp. (where I have closed deals).  So, they have been going to open houses and doing some searching on their own as they get their financing in order.  They found one they LOVED and sent me an e-mail to find out more.

Come to find out, there was less than one week left in the redemption period on that home.  It went to sheriff's sale March 13 and the bank purchased it back for around $151,000 - and the asking is $179,900 and had just been lowered by $20,000.  I looked up the mortgage records and they owe about $167,000 on the home.  Now the MLS listing said nothing about needing "third party approval" and the agent said nothing to them about this either.  So, my nephew was very surprised to find this out.  I called the agent to confirm all this and he said that their has been some interest and he told the other party that he had to have an offer by this Thursday (knowing he was losing the listing).  In my opinion, the asking price is too high, nothing is going to get accepted by a bank in that short of time and the agent will be losing the listing after the redemption period runs out.  My nephew was very greatful for this additional info that the "listing agent" did not supply.  I have been finding many buyers that think they will get a deal when they go directly to the listing agent.  First time buyer's in particular don't know they are not represented - the listing agent always represents the seller.

I am pretty sure that he will get the home for significantly less when it goes back on the market as a foreclosure--and the offer won't get tied up the way it would have in a short sale - particularly so close to the seller losing all rights to the home.  I have worked with buyers offering on short sales and it took us about 4 months and they finally moved on.  I told them to keep lookiing but got in the habit of checking all the public records on each one to see the financial stability of the seller.  If someone can wait, short sales are a good way to get more home for your money.

I work with a lot of first time buyers and love educating them on the process.  As a first time buyer, you pay nothing (except a small administrative fee to the broker) and get someone to represent your interest.  If you are a first time buyer, imagine this:  Why would the listing agent want to do a CMA so that you can offer less than what the seller is asking or coach you in asking for closing costs--which diminishes the money in the pocket for the seller.  Then there is the inspection, where your agent is always present to see if there are any major defaults in the home as a final negotiation for repairs or price reduction for the seller.

While we, as realtors, love to represent both parties and I have done so in the past - and fairly - I can see where it can be a significant conflict as in this scenario. 

Royal Oak Realtor selling Real Estate in Southeastern Michigan.  TishHouse sells Houses - selling Oakland County Real Estate with RE/MAX Showcase Homes in Birmingham, Michigan.  See what my clients have to say about my extraordinary customer service

Comments (5)

Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Cathy if you need any help with comps, just let me know.

Sep 10, 2008 02:44 PM
Cathy Tishhouse
RE/MAX Showcase Homes - Royal Oak, MI
Royal Oak Real Estate

Thanks Missy - you are the best!  I appreciate your offer as I really want o do the best job for my nephew and it is fund spending time with him and his wife as we choose a home.  He has to wait for a couple of pay stubs with his new job to finalize his approval and then we move forward.

Sep 11, 2008 01:29 AM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Sometimes the buyer needs us to make sure all the paperwork and local laws are totally understood.  I just helped my neice in the same way.

Sep 11, 2008 01:33 AM
Mary Strang
Viroqua, WI

Cathy, This is certain a great example of why buyers should have a buyer's agent. There are a lot of similar properties on the market where the seller is having financial trouble and needs more it may be worth.  The only issue on finding a home like the one you mentioned, is waiting for it to clear foreclosure and the REO wait... could be months.

Sep 11, 2008 01:39 AM
Cathy Tishhouse
RE/MAX Showcase Homes - Royal Oak, MI
Royal Oak Real Estate

William:  My nephew is so happy that I am helping him - sent me the nicest e-mail.  It can be daunting to buy your first home so he knows I will check everything - I have the same concern and service for all my clients - but they don't all know me like he does.

Mary:  I warned him that it will take a MINIMUM of one month - probably more.  It actually works for him as he just started his new job and needs a few pay stubs for his final approval - he actually really wanted to buy in about 2 months and it may really work out with his home.

Sep 11, 2008 10:33 AM