Buyers Need Representation Too!
Last week we explored the value for the seller of working hand in hand with a REALTOR®. Today we need to delve into the much misunderstood relationship between a buyer and his or her agent.
It is this relationship above all others that is at the heart of who we are and what we do for the consumer.
First let me tell you of the very real, very common scenario. One that replays itself each and every day. A buyer decides to begin the process of looking for a home. Usually they will start out either searching on the internet, or driving neighborhoods looking for homes that address their needs.
When they see a listing that interest them, they call the listing agent and ask for a showing. This is their first mistake. You see the listing agent already has a relationship with the seller. And it is to their mutual benefit to see that you pay the highest price possible for the home that you covet.
While this is in no way unethical, it is a reality. And, because of the obligation that the listing agent has to the seller, it could cost the buyer tens of thousands of dollars in principal and interest payments.
As we have discussed in a previous article the difference between appraised value and market value can be substantial because of the lag time in a shifting market that it takes for the appraisers to react to the shift.
So while a listing agent may be certain that a home will appraise for a higher dollar mount then current market value (defined as the amount a seller will sell at and a buyer will pay for) he has no obligation to communicate to the buyer that the market value may in fact be lower then that of the list price.
Prior to listing a property for sale, every agent worth his or her salt will do a comparative market analysis (CMA). This is a compilation of data which identifies the most recent sales activity of like properties. The size of the inventory and average days on market and, the trending pattern that these factors are showing.
He does this to make sure that the seller gets top dollar. Well guess what? Any buyers agent worth his or her salt does the exact same thing prior to writing an offer on behalf of his client.
By studying the current market trends, the buyers agent can determine if the asking price is a fair representation of the current market value. And, no buyer should sign on the dotted line without being absolutely certain that they are getting the best value for their dollar.
This does not mean that you should be writing intentionally low offers in the hopes of getting a steal. What it does mean is that this…the best deals are those that leave the seller and the buyer satisfied with the result.
The likelihood of this happening is greatly enhanced when the buyer has proper representation and is fully apprised of the current market data so that they can write an offer that is based on a solid education of the market of the day. And, not that of the past.
Today’s buyer must be an educated consumer. One who aligns himself with professionals who can help him navigate the sometimes confusing road to home ownership.
When our industry works best is when the buyer and the seller seek their own council. Ours is an adversarial relationship when it is at its best. In that the sellers agent and the buyers agent diligently work to see that the deal that hits paper is one in which their clients best interest is met.