We Are Not All Created Equal
We Are Not All Created Equal (+ a gift certificate)
It was Division III college basketball, a team consistently ranked in the top 5 in the nation. I was a freshman point guard. He was a point guard and a junior. He was a better player than me…way better – who went on to play in the NBA. Meanwhile, I learned how good I wasn’t.
We are all created equal, except for skill sets. You wanted Frank as your point guard, not me. If you’re looking to buy a home you want Homebuyer Associates in the same way – because not all real estate agents are created equal. You don’t want to learn how good they aren’t – when it’s too late and your money has been spent.
Skill sets matter in basketball, life and real estate.
In the next few newsletters we’ll look at a case study – an actual purchase – to provide insight into the real estate process. The point of the study is that there are differences between Exclusive Buyer Agents and part-time or traditional real estate agents.
I thought we’d have some fun so in part 2 – later this month – I’ll pose a few questions. If you respond I’ll select 4 people with answers closest to correct answers and send each a $25 gift card for a local coffee shop. Let’s begin.
(Anyone entering the home buying process should read this case study for background. It gets far worse in part II later this month.)
It was a condominium. The asking price was $169,900. Our client made an Offer of $160,000. The agent/seller countered at $165,000 and included the statements below:
1. “Please know that the sellers are quite firm at $165,000. They are comfortable it will appraise at that value or higher and are willing to wait for another offer.”
Response: From our side, the Exclusive Buyer agent side, the seller can think, be firm and do whatever they wish. It’s their home. The seller and agent are saying they will not bend below $165,000.
Imagine if that agent was working to sell you the condo? Imagine if you had a part-time buyer agent who worked for the same company? Would either agent give a message other than “the seller is firm? How would you react?
2. “You know as well as I do that the market activity the past few months is driving sales prices up.”
Response: Well, obviously the agent isn’t on my E-News mailing list as last month I wrote about the panic mentality and how it only serves the interest of the real estate industry and sellers – not home buyers.
As to the statement about market activity, which “market”… the market in Shorewood? West Allis? Brookfield? Know that all real estate is local.
If you are reacting to and making decisions based on general statements – as opposed to data – you are playing into the hands of the real estate industry and sellers. Imagine if that agent was working to sell you the condo? You have the right to panic – it’ll just cost you a lot of money.
3. “Attached is an appraisal the seller recently had done.” (The appraisal was for $167,000).
Response: Ah, third-party endorsements (that’s what this approach is called). The agent invoked the term “appraiser.” Appraisals are an art, not a science. There are many reasons the appraiser may have come up with the figure of $167,000.
What the actual data said about the condominium was that 8 units sold in the past year and the average sale price was $159,450. The median sale price was $161,488. Why was the asking price $169,000? Why was it now worth $165,000?
Imagine if that agent was working to sell you the condo? I think you’d jump on the appraiser bandwagon and pay $167,000, certainly $165,000 because it’s $2,000 less than the appraisal.
We don’t react to the term “appraisal” – we want to take actual data and make an informed choice. The result is our client’s buy a home or condominium and without overpaying. Our client got an accepted Offer of $161,000. And then it became interesting. See you in a couple of weeks with a chance to win a coffee gift card.
P.S. It’s Bike to Work Week. Grab a two-wheeler and a friend and go for a ride. Maybe even join the Bike Federation and rub elbows with some fixed gear hipsters.
Thanks for reading,
Michael D. Holloway