That's right! It's a popular myth that real estate brokers are still just "matchmakers", bringing buyers and sellers together and taking a piece of the pie.
A REALTOR'S® job isn't the same as it used to be. In the past, after a time of "shady dealing" by unscrupulous brokers, a group of legitimate brokers got together an formed the National Board of REALTORS®. This group agreed to abide by set rules and regulations and a strict Code of Ethics. (Don't be fooled! Not all real estate agents are REALTORS®) Soon after, governments decided to make laws regarding the sale of real estate as well. Brokers found themselves being held accountable as "agents" to those who had listing agreements with them.
How does this help you? Well, as an "agent", whether representing the seller or the buyer, we must place our client's best interests ahead of all others, including our own. That means that we are bound by law and our own Code to work to get you the best price at the best terms! How do we do that?
Read on for real-life examples where I saved my clients a lotof money!
The For-Sale-By-Owner The buyers I was working with decided to hire me as their Buyer Representative. They found a home "For Sale By Owner" listed for $200,000. After doing some research, I advised my clients that the property would sell on the "open market", or listed by a broker, for $230,000 or more. After finding out that we were in competition with another couple with a Buyer's Representative, we decided to offer $215,000 with 2.4% paid to my company out of the proceeds. Obviously, the seller was quite happy to get multiple offers and only pay 1/3 of a normal commission. He was quite smug that he did it all on his own and saved the commission. What he didn't realize is that my buyers actually got the "deal" here! If he had been listed with an agent, he would have walked away with about $216,000. Instead, he lost $20,000, saved my buyers $15,000 and had to do all of the work himself!
The Nightmare Buyers As a single mother in the midst of an ugly divorce, my seller had precious little time and resources to devote to selling her house. When I saw the property, I spotted some potential problems. So I referred a home inspector to "pre-inspect" the property. The inspection revealed some problems with the roof and foundation. I recommended that we get bids for repairs and disclose them to potential buyers. I also "staged" the home to highlight the best assets of the slightly unconventional property and gave the seller decorating tips to make the house show better. Confident in my market assesment, I suggested a listing price of $194,900. We had an offer the first day. You would expect that offers would be less than asking price because of the bad roof and foundation. But the buyers had the seller's pre-inspection, so they felt comfortable knowing that there wouldn't be any surprises. They actually offered $201,000 and asked the seller to replace the $6,000 roof before closing! A few months afterward, the buyers called their agent to complain about some unusual things that they found. I investgated the situation and determined that everything the buyers were complaining about was disclosed in the pre-inspection that we gave them. Still, my company agreed to make a couple hundred dollars in repairs on befalf of the seller. Then, the buyer came back again to say that they were going to sue the seller and agents for $15,000 for non-disclosure of the basement issues. Rather than bother my seller again, I inspected the basement and noted that these were the same issues as previously disclosed in the inspection report. Once confronted with the fact that they were obviously well informed of the situation, the buyers were forced to back down. My seller was blissfully unaware that any of this had happened because I was able to handle the situation for her. She paid $11,700 for the commission, but my services saved her more than $21,000 for the higher offer, new roof, repairs and the possible lawsuit. AND she walked away with $34,260 after just two years!
The Past Clients My past clients wanted to hire me to sell their house. They had purchased the property with me five years earlier for $60,000. After seeing the work they had done, knowing what buyers like and determining that I could stage the house properly, I determined that they could ask $120,000. This made Mr. Seller a bit uncomfortable as they had had an agent who listed a lot of homes in the area tell them that their house would only sell for $92,000. They felt loyal to me and decided to give me a chance, but they wanted to price the house at $99,000. I practically had to beg them to let me try it at $110,000 for one week. I spent a couple hours rearranging furniture and knick-knacks, took photos for the internet and gave the sellers some homework and instructions for setting up for showings. We had two full price offers on the first day, with all of the seller's needs met. If you think about it, my advice five years earlier to buy in this up-and-coming neighborhood net them a 45% return on their investment and my knowledge of buyers and staging property saved them $18,000 on the sale!
The Guy Next Door After holding open a property that already had an accepted offer, I ran into the next door neighbor working in his yard. He was surprised to hear that I had already sold the property and asked if I would give him a price opinion on his home. After a quick tour, he explained that he was planning on painting and replacing the kitchen and bath floors. He said that he planned to buy ceramic tile. Now, I know the kind of homes that buyers like and this one had all of the right stuff: hardwood floors, high ceilings, beams, paneling, etc. Unfortunately, it was lacking what I call the "ooo" factor. That's when I house has those characteristics that make a buyer say "Oooo!" when they walk in. The dingy white walls, worn floors and outdated fixtures distracted from the beauty. So I told him that his house would sell for $130,000 or so. However, if he could trust my advice and invest time and about $2,500, I could get him $160,000 or more. So, we sat down and went through twenty or so design books and I picked out light fixtures and paint colors. I told him to find similar fixtures at the outlet store, match the paint and to go with an inexpensive, vinyl floor in a back & white checkerboard pattern to go with the retro look I was going for. In the meantime, I spent a couple hundred dollars for some chrome shelves to match the fixtures and a new bathroom rug, towel and chrome accessories to match the new paint in a "spa" theme. Then, just before showings started, I went to the house and rearranged the furniture, set up the kitchen and bathroom and eliminated the clutter until the house looked like something on "This Old House." Within 3 days we had a full price offer at $165,000. My design background and knowledge had saved the seller almost $30,000 and even saved him the trouble and cost of putting in a ceramic tile floor! You can see the results in the virtual tour.
The Anxious Couple A couple was referred to me from their co-workers to buy their first home. They had at least four months before their lease was up, but they wanted to start looking right away. As we went from one county to the next, they became more and more anxious that they wouldn't be able to find the house that they wanted. I told them to be patient as they had just started looking and they couldn't move yet anyway. As we got closer to their move date, they became more excited about every house they saw. I even had to talk them out of a couple houses that were all wrong for them! One house was at the top of their price range and it didn't even come close to fit their needs. After calming them down, I told them that I thought that they could do much better and to let that one go. Finally, a house came up in a great neighborhood that had everything they wanted AND was a great price. After negotiating the price after the home inspection, they ended up spending thousands less than if they had bought the house that I talked them out of!