Buyers sometimes are not aware that if there is a discount that it might actually cost them more in the long run. There are many start-up companies out there that think they can put up a website together and get buyers, and they are right. Many buyers are not knowlegable enough to know that this might cost them money. Consider the following example. The listing agent lists the home at $330,000 The home is worth about $300,000 based on market conditions. The agent is not a good negotiator and does not know the market and informs the buyer it is a hot market. The buyer pays full price and get a rebate from the agent, lets say $3,000. The buyer actually paid $327,000 for that house. If that same buyer chose an agent who knew how to negotiate and maybe even suggested the buyer walk away from the house, the buyer could end getting the home for $300,000. In reality saving $30,000 off the listed price. This buyer would have netted $27,000 more than a buyer who did not negotiate a good price.
I know that sellers many times think their home is actually worth more than it actually worth and convinces the listing agent to list it at that price hoping getting an inexperienced buyer or agent to make an offer. I have personally represented buyers where this has happened. In fact in one deal I negotiated close to $50,000 off the list price of the home in the low $300,000 price range.
It can be very common to find a licensed real estate agent who is simply not knowledgeable enough to do a good job. You have to search much harder to find a licensed lawyer, doctor, or engineer who simply can't do their job. You all work in fields where you might think the person doing the job should be maybe sweeping floors instead.
To get a real estate licence in Washington State you have to take a 60 hour class and pass a state test. It might supprize buyers that many real estate agents have never even owned there own home.
When I bought my first property bfore I was licensed I made the mistake many buyers make. I walked into an open house and asked the agent there how much I should pay for the home. Of course he said full price because he was representing the seller. I found out later that I should have had my own agent.
The next time I bought a property I thought I got smarter. I picked an agent to work with me to find a house and he was my buyers agent. I made the mistake of not interviewing him to see his experience and credentials. I don't think he did a very good job for me.
A year later I decided to get a real estate license and it really opened my eyes to what a buyer should be looking for and how to go about getting a good agent. I've been in the buissness now over 8 years and bought many properties for myself and have represented hundreds of buyers. I feel sorry for the buyer who doesn't know any better and just picks the first agent they speak to and don't interview them.
Many buyers call an ad in the newspaper or on a website and the property is not available, but that agent suggests other properties and that buyer starts working with that agent, in my opinion a huge mistake. Many new agents host open houses also in an attempt to secure new buyers for themselves.
Remember its not how nice they are, its what kind of job they can do for you. You might have a friend or relative that has a real estate license and you might consider using them, but if that same person came to you and asked to borrow $100 you would probably say no or they might not know finances. But you feel sorry for them and decide to let them help you buy the most important investment in your life. You would probably be better off giving them a couple of hundred dollars.
There are many free classes in Washington State that provide information on buying. You may find classes at www.WashingtonStateHousing.com.
Michael Kass, CRS, GRI, ABR
www.MikeKass.com
Associate Broker
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