My bestfriend is buying a place in another state and he wants my help.
All went perfectly when I found him a listing agent in Chicago. He was Eugene Fu, subsequently featured in NAR's Top 30 Under 30 (alongside ActiveRain's Jonathan Washburn). I made sure he staged it, took 30 wide angle photos, etc and it sold in a week for over the already aggresive asking price.
But now on the buying side, he picked the Realtor.
I even drive there to see my friend's "best of" homes with him. The Realtor (a state I'm not licensed) even seemed like a nice guy and all.
But, WOW is it frustrating being a back seat driver.
My way of pricing homes and putting in offers is so drastically different. I guess I took it for granted! For one, it is very frustrating trying to gather the data that I find necessary. Apparently I'm a data bloodhound (at least compared to this guy).
I hate to admit this, but I resorted to looking on Zillow for data! Imagine that. If any client tells me "but Zillow said," I shred it to pieces with the data that we have access to. But I guess it is all relative.
Here are some problems I had with that Realtor's system of offering:
- The data sucked. His "CMA" was 15 homes, all the way back to 9-07 and only had 1 line of data. It didn't even have the freaking sales date. I didn't know whether something sold last week or 9 months ago. What I wanted was an area trend and the most recent 3 homes, and much more detail about the difference in those homes. An "average" of an area is worthless if some are 4,000 sq feet and some are 2,000 sqft (I hate averages of unlike properties).
- It seemed like he was recommending a price (which I never do) based on what the last 12 homes sold for under list? WHAT! Sure I might use that as part of a 10-15 step analysis (ie the average in Virginia is 8% off, and 1% off if sold in 7 days) but I wouldn't rely too much on that. So if a home is $100,000 overpriced, we will just trust the listing agent and offer $10,000 less?? As if overpaying $90,000 is ok. No wonder so many consumers have no confidence in Realtors. Sidenote: One of the front runner properties dropped $40,000 last week. If we had taken the $10,000 strategy, we would have left $30,000-$50,000 on the table.
- They don't do seller subsidy down there. The CMA even left off that column. So this is a HUGE opportunity to stack the seller subsidy. If you can either buy it for $500,000 or "$520,000 with $20,000 seller concessions", which do you think will help the resale in your neighborhood? Especially if Realtors aren't looking up the seller subsidy? (I would say 75% of Realtors look at that up here in Nova, but many consumers doing research on teh tax websites will completely miss that). Of course the $520,000 close price helps his areas valuations a ton.
- Verbal offers. I hate this. Our company requires that all offers be in writting. None of this: A) We take the time to submit a 20 page written contract and then B) the seller takes the easy road and verbally says, "what about $XYZ." No. That doesn't work for me. If the sellers are serious, they have to also spend the 1 hour to write up the counter and send it.
- And so much more!
So I took for granted all the stuff we do to help clients come up with a price. Just the other day a buyer came to me with what he thought was a ton of data (from tax records). It was partially right, but sometimes $30,000 off! Minor detail!
Maybe one day I can outline a typical transaction, but be ready for a long a** post.
Written by Frank Broges LL0SA- Broker FranklyRealty.com