Should I use an Agent? How Important is an Agent?
If you've eaten ham sandwiches all of your life, you may not know just how great a prime rib can taste. Or, if you've never had a spoiled piece of ham on that same ham sandwich, you may never know just how "bad" a ham sandwich can taste, and how the effects can linger on - leaving you ill long after the ham sandwich is gone. We're talking real estate, right? My point is, if you've never had a bad experience, or you've never been represented by an outstanding agent - you may not realize that there is a VAST difference in how well your "best interest" can be represented.
As a former real estate recruiter, trainer and manager, I've seen just about the full spectrum of agent representation. And there IS a difference. And you SHOULD care. And you SHOULD ask for referrals, talk to homeowners who have bought or sold in the neighborhood you are interested in, interview many (agents), spend time with several (agents) and select and work with only ONE (agent).
In today's real estate market it is crucial to work closely with an agent that is entrenched in the current lender and market trends. Loan programs are changing DAILY. The Southern California mid-to-low end market is beginning to shift ever-so-slightly from "mostly bank-owned" listings to "mostly short sale" listings. In many cases there are multiple, competitive bids which I've seen drive prices up some $30,000. It's not uncommon for a 6-8 month waiting period for a short sale. Every single facet of today's market requires an immense amount of education, experience and negotiation to successfully navigate.
Buyers today have more information at their fingertips than ever before. That's a good thing. Unfortunately the information is limited and what looks great on the internet may not contain all of the "right" elements for your family. Working closely with the right agent will enable that agent to quickly identify which properties match your loan scenario, timeline, neighborhood desires, family lifestyle and price.
For instance, remember those multiple bids on a single property? Let's say that 27 offers came in overnight (I'm not kidding, this just happened). Let's suppose that your offer was written by a relative - a part-time agent who doesn't keep up with the daily shifts and had no idea that 100% financing was currently UNavailable. They wrote the offer based on your decision to offer quite a bit less than the asking price because you've been reading too much ill-advised media and they wrote it without reading the listing agent's specific requests for submission. Guess what? Every other offer on that listing agent's desk is not only written at a higher offering price, but each and every one of their buyers are now better-qualified financially than you are, because they're using loan scenarios that actually exist and you aren't. Your offer won't even be submitted to the bank for a counter offer because it wasn't submitted in proper format as requested by the listing agent.
Had you used an experienced, educated agent, they would have gone above and beyond to represent you, such as:
- FIRST found you a successful financial scenario and obtained written pre-approval;
- Pre-educated you on the fact that you would need to bid above asking price in this particular instance (and therefore lowered the initial price-point that you "shopped" in to accommodate this adjustment);
- Based on their discussions with the listing agent PRIOR to preparing the offer, they may have advised you to offer above asking price or full price, depending upon the requested concessions or repairs;
- Researched the intricacies of the hurdles that you would need to work through specifically for this listing, such as obtaining pre-approval from the listing agent's lender or writing the offer on their specific form and ensured that your offer was prepared precisely in the manner that was requested;
- Remained in touch with the listing agent throughout the following week to find that the bank countered all offers, but none of the initial buyers and agents either submitted their offer in proper format or hung around long enough to re-counter through the next few phases, leaving the property available for negotiation once again.
- Now that all of the competitive riff-raff is out of the way, your agent can submit an offer that will have a high likelihood of being accepted without a counter.
That's a true story, by the way. And it highlights only a FEW of the many items that come into play to demonstrate how important an exceptional agent can be. And that was just BEFORE and DURING the offer. Just imagine how much time, money and legal headaches that same agent can save you throughout the negotiations of an actual escrow! Knowing neighborhood nuances, septic issues, constructions issues, etc. are just a few of the other items that a local agent can help you with that the internet cannot.
Please, please continue to use the internet to get a great idea of area, price and what you want in a home. But please also spend just as much time researching local agents to find that exceptional someone who will make your real estate investment a success. You know . . . someone like me!
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