As I'm going through the multiple listing service looking at the homes that have sold recently I find a lot of homes that have either been listed or the buyer agent isn't from the general area that I'm looking at.
For example Denver agents listing and helping people buy a home in Greeley. Is it a good idea to use a Realtor's service in an area where they might not know the market. In most cases no. Why not? You will not be getting the best representation if you use an agent that lives and works 30-60 miles away. On a listing how can that agent service your listing properly? First of all what if a potential buyer calls that Realtor to see your house and would like to see it within a couple hours. Chances are that Realtor who is 50 miles away can't do that. Therefore that buyer might never see your home. Also we have 3 major MLS systems on the front range. I currently just have access to the one that covers Northern Colorado. If I listed a home in Denver I could put it on that MLS. The problem is most Denver Realtors use the Metro area MLS. They would never find my listing as they wouldn't look on the Northern Colorado MLS for homes. There are exceptions to this as I can search the Denver MLS from the Northern Colorado MLS for listings in Greeley, but it isn't automatic. And some Realtors submit to both or all three MLS systems. But the majority don't.
The most important part is pricing and local rules and regulations. Last summer I listed a home in Ft. Collins. It was near Colorado State University. I found comparable homes in the Multiple Listing Service that compared fairly well. But here's the thing. I was having a hard time believing it would be worth what the comparables showed. I primarily service the Greeley area. In Greeley that same kind of home would sell for $105,000 if that. In Fort Collins that home would sell for $157,000. I just had a hard time getting over that value. Plus I really got tired of driving over to Ft. Collins. There also is a funny rule having to do with the final water bill in Ft. Collins. To sell a home the seller has to pay a large amount at closing. Way more then what the water bill normally is. Maybe they have done away with this rule. I had listed another home over in Ft. Collins and at the closing the water bill was $500.00. That was nearly 3 times the actual water bill. Some rule that Ft. Collins had at the time. This can cause a problem with homes that have zero to no equity when they are sold. I didn't know about this rule until the closing. But I bet nearly every Realtor that services Ft. Collins does. That's just a small example.
As for representing buyers in an area quite a ways away from where they normally service. The pricing, rules and regulations apply again. But also so does the location. If I were to represent a buyer in some neighborhood in Denver and they asked me how close was the local mall or downtown I couldn't answer that off the top of my head with any degree of accuracy. I would have to say I don't know, but I'll find out. Here's another example. A couple of years ago I sold a friend's house for them in Evans. It was a nice Bi-level home. A Realtor from Denver had a buyer and made an offer. Before the closing she said "this is a great deal for my buyer!!" I said sure...... It wasn't a great deal, it wasn't bad either. It was at the current market. I was representing my seller so it's my job to get the highest price possible. But this Realtor was from Denver and this house in Denver would have been worth quite a bit more. The house sold for $143,000 in 2006 I believe. Earlier this year it was foreclosed on and then sold for $115,000.
So what should a Realtor do if they have a buyer or a seller in an area they don't service. They should be honest with their buyer or seller and disclose this and offer to find them a Realtor that does. Realtors can refer clients to each other for a portion of the commission at the sale. This works out well. The out of area Realtor gets some compensation and the local Realtor gets a new client. The client who is the most important part of the sale gets the best representation they can.
Thanks again for visiting my blog. Feel free to visit my website at www.weldcountyproperty.com or call me at 970-302-1233 with any questions you might have.
Marc Oster
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