Although more buyers seem to be paying more attention to this issue than they used to with the change of the market in recent years, far too many still don’t give enough thought to which agent/broker/company is going to represent them on their purchase because the seller pays the commission. WAY too much money is on the line for that choice not to be well thought out and several interviews of potential agents/brokers should be conducted before choosing.
Here are some important things to consider before hiring someone to represent you on such a large investment:
- Finding a place you want to buy is only the first step. Any agent/broker can set up an MLS search, but an experienced, active agent/broker will also look at FSBOs, pocket listings, and even get you in to see properties that haven’t even been put on the market yet. Getting a great agent/broker on the front end can also save you a lot of time getting up to speed on the market as many buyers start the process with a lot of misconceptions about how the process works and what is currently happening in the marketplace.
- Many buyers are also uncomfortable asking the owner the tough questions or relying on their answers, which means you have further reduced your buyer pool by excluding those who want representation.
- There is a lot more to making an offer than just deciding on purchase price. It happens often enough that multiple offers come in with the same or close to the same price. Assuming that the financials are similar, what gets one offer accepted over another is how well the winning buyer’s agent/broker positions the offer, and how well he/she presents the offer and buyer(s) to the listing agent. This is frequently where deals are made (or lost). One example:
- We represented some buyers for a single family home that had three offers with the exact same offer price and very similar terms. We learned through conversations with the listing agent that the sellers had owned the property for a long time and raised their children there, so they had some attachment to a family moving in. When we told the agent that our clients had just had twins and were in love with the house – done deal. Sometimes a little extra is all it takes.
- Almost as important as being knowledgeable is that your agent/broker knows when a questions/issue is outside their knowledge/experience base. There is no shame in getting outside assistance from attorneys or other industry specialists, but failing to can also cost you big time.
- You need an agent/broker who you can be sure is truly looking out for your interests, and there are some easy ways to figure this out before it’s too late. Does your agent tell you what they see as issues with the property and/or if they don’t think you should buy a particular place and why, or are they always telling how great a property is and that if you don’t hurry you’ll miss out? You should never feel pressured into making an offer whether it seems like a good deal or not. If you do, or if according to your agent every property you see is just right for you, run far and run fast.
- A knowledgeable expert and experienced negotiator can save you tens or even hundreds of thousands of dollars through negotiation and offer positioning, help make sure you are in good position on value, and potentially save you from losing money due to construction/tenant issues.
- Does your agent have sufficient experience with the type of property you are buying? Each property type has its own set of issues and things you need to look out for. You wouldn’t go to a podiatrist for an elbow injury, why would you go to a home specialist for a TIC or multi-unit property?
- An experienced agent/broker is likely to have a lot of industry resources (contractors, stagers, etc...) that have been vetted through years of use. An easy way to find this out is ask. If they look at you with a blank stare you’ll know you’re in the wrong hands.
- Does your agent/broker have sufficient time to dedicate to your purchase? While it’s great to have someone who has a lot of experience, if they are so busy that you are an afterthought what good is that experience to you?
Bottom line: There is way too much money on the line to choose your agent/broker lightly, or be pressured into using someone by family or friends. Get referrals, do online research, interview at least 3 reputable Brokers, and ask about the number/recency of deals they have closed. Pretend you are handing your representative the purchase price in cash. If you don’t feel comfortable doing that, keep interviewing until you do – settling for less can cost you a lot.
For questions and/or no-strings expert buyer (or seller) consultations:
Lance R King/Founder Managing Broker
King Realty Group
King Realty Group - Better Service. Better Price. Better Results
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