Friday, September 13, 2019

Some agents get in their own way

Every now and again I run across an agent that negotiates his way right out of a deal. Only to find out later, his clients wanted to buy that property. Buyers have to be clear with their agent about their feelings on a particular property. The agent should also take great care in giving advice. If a property is well priced, it will sell. If it is a little overpriced it will still sell, it just takes the right buyer that REALLY wants it.

I have had listings that were priced up near the top of the comp range. Not way overpriced by any stretch but not a screaming deal either. Occasionally an agent will show the property, his clients love it and they write it up. The offer comes in really soft but not necessarily insulting or anything. The property has been on the market for just a few days and the seller isn't ready to go low yet. So we counter. Agent advises client to move on.

Here's where things can get messy for that buyers agent. If the agent is aware of the market conditions she knows the property is a bit high on price. She may advise the client to look elsewhere for a better deal or let her negotiate a "fair" price for the house. She needs to really find out how much they like that house and the buyers need to be very honest with the agent about how they feel as well.

So the scenario ends up playing out as the buyer comes back around after viewing a few other properties and decides to offer the full price because they REALLY want that house. But someone else already did that and it is in contract. The buyer is likely somewhere between disappointed and heartbroken. The agent and/or buyer could have avoided this by being clear about the property, it's relative value to the buyer and the nature of the market.

Relative value is a BIG part of a buyer's motivation. If a house in a neighborhood is priced in the middle of the value range say $300,000 - $330,000 the lower number sells it in a day that latter takes longer than average marketing time a buyer that really wants it probably ought to offer full price. If it is priced at the top of the range then the buyer has to consider "relative value." Relative value is the value the buyer places on the home irregardless of the actual market value. If the house is perfect for the buyer, and it checks all their boxes, reminds them of their favorite grandmas house, yada, yada, yada... it's probably worth the asking price. Of course if they are using a loan  it still has to appraise.

Likewise it can go the other way as well. A house priced at the bottom of the value range may be the hottest listing in town, but if the buyer doesn't like it, it has an even LOWER relative value. That person shouldn't be pushed to put in a puffed up offer on a house they don't like.

Agents often forget that their buyer may not like the same houses as they do or may have a completely different "relative value" they place on any given listing. Buyers need to let the agent know exactly how they feel about a property, negative or positive. The buyer's agent is working for the BUYER and needs to know these things. Some buyers act like their agent is on the other side and withhold information. DON'T do that! If you don't trust your agent, fire them and find another that you do. Your agent can't help you if you are not forthright with her. Likewise some agents forget what their client wants and/or needs and tries to impress with their knowledge about the market only to lead their client into losing the house they really wanted.

Agents: listen to your buyers, find out how THEY feel.
Buyers: tell your agent how you feel about a property you are considering

Simple really it's called communication and it really works.

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