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Tuesday, 20 August 2019
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This Old House - Do-it-Yourself

Truths About Real Estate and Agents You Need to Know

Written by Posted On Wednesday, 17 July 2019 08:43
Truths About Real Estate and Agents You Should Know Truths About Real Estate and Agents You Should Know

Facts on How Real Estate Works

Are you considering buying your first home? When you are considering a first time home purchase, there are many things you need to keep in mind. One of them is finding an exceptional real estate agent you can trust. Picking the right buyer's agent can be at times a little bit intimidating.

You should never underestimate the importance of having a good relationship with your Realtor. He or she will be your negotiator and should, just like a lawyer, be representing you. It is important to make sure your real estate agent has your best interests at heart.

Most of the time, a Real Estate agent will look after a first-time buyer very well. If a real estate agent does a great job, you are much likely to return to them when you want to sell your home and buy a new one.

Keeping a lifelong a client is worth its weight in gold to any real state agent. The same can be said when you are selling a home. Having a someone in your corner being your confidant cannot be underestimated.

Whether you are buying or selling a home, there are many truths about real estate and agents you need to know. Here are a handful of them.

Real Estate Agents Don't Always Represent You

The ugly truth in real estate is that YOUR real estate agent might not always represent you. One particular circumstance you should be very leery of as a home buyer is what's referred to as dual agency. Dual agency can occur when your buyer's agent happens to have a property listed that you become interested in.

What you need to understand about dual agency is your real estate agent does not represent you exclusively anymore. They become a neutral party in the transaction. This is significant and you should understand the ramifications. First, you no longer have someone to lean on for advice. You are on your own.

Your agent can no longer point out defects in the property. They are also no longer allowed to point out any flaws with the neighborhood or area. Doing so, would be be counter productive to the seller. Remember the agent must remain neutral. The same can be said when you are looking for any kind of advice during the transaction.

So when the home inspection happens and there are issues you cannot expect the agent to be working on your behalf. They cannot.

By allowing dual agency you give up someone who is in your corner fighting hard for your best interests. Hopefully, you now understand why dual agency is bad for both buyers and sellers. There is a reason it has been banned in a number of states.

Dual agency only benefits a real estate agent!

The incentive is for the agent to close the deal at all costs. What should you do instead? Get your own buyer's agent! The reasons for having a buyer's agent are very clear. You should make it known up front to your agent that with any listing he or she has, you'll look for guidance from someone else so that you have representation.

Agents Rarely Ever Explain The Downsides of an Open House

All across the streets of America on any given weekend, you will see street signs inviting anyone with a pulse into the property. Open houses are one of the biggest shams in real estate sales. They are an archaic marketing activity that needlessly puts a seller's home at risk of theft.

A significant percentage of Real Estate agents, however, promote them like they are marketing gold. Sorry folks but you are being HAD. An open house is completely unnecessary to sell a home in the digital age. Real buyers schedule showings when they view a house online they want to see.

The open house is the foundation of how lots of real estate agents prospect for business. They essentially use your home as their office for the day. Shaking hands and building camaraderie with those who visit.

Many of the people who visit open houses have no business being there either because they don't qualify, aren't in a position to buy, or are a potential competitor thinking of selling their own home.

For a real estate agent, however, some of these people mean potential business down the road. This is a truth most real estate agents don't want you to know.

Everything Is Negotiable - Including "as is" Properties

Property prices are negotiable. Repairs needed on a home are negotiable. Marketing a home as is does not mean you can throw your hands up the air and say take it or leave it. Well you can but you'll probably be without a buyer. Some sellers falsely believe that selling as is removes them of obligations or having to negotiate. Sorry but that is not how real estate works.

Selling as is also does not mean you can be untruthful about the condition of your home. If a buyer asks you better not lie unless you don't mind being sued.

As a buyer, don’t be afraid to speak up. For instance, if you like a property your agent is showing to you, but are concerned about repairs which may have to be done, it's worth mentioning this to your real estate agent. There is always room for negotiation and you don’t want to end up spending more for the property than you need to pay.

Commissions Are Negotiable Too?

A real estate agent can tell you that their commission is not up for negotiation. For some agents it's not and that is their right. Quite often this is a downright bad business decision. For other more savvy agents, commissions are negotiable.  For example, it is very common for a real estate agent to discount their commission when a client is buying and selling a home at the same time.

In this circumstance the agent will be earning two commissions. Any smart business person would be wise to have two sales than to walk away because they take in a little bit less money. Some agents in these circumstances are pig headed. Nobody ever said real estate agents as a group are the brightest bulbs in the world. Sorry it's true.

What many agents never think about is the opportunity cost they miss out on. Two lost sales is two properties you can't market to the world that you just sold. For the best agents, ever sale is an opportunity to make more sales.

Home Appraisals - Are They Worth It?

Some sellers believe that getting an appraisal done on their property is necessary. In most circumstances it is not. In fact, an appraisal is an opinion of value just like a real estate agent offers one in the form of a market analysis.

What is true is that lots of real estate agents are not skilled enough to put the right value on a home. Where getting an appraisal done could be of significant value is when you have a difficult property to determine value. Placing a value on a four bedroom, 2.5 bath cookie cutter colonial is easy. Getting the value right on a luxury property with intricate details can be a different story.

If you are selling a unique property, it could pay to get a home appraisal done. Don’t assume that a real estate agent will know the correct value of your home if they are new to the business.

The Home Inspection

Should a real estate agent tell you that you don’t need a home inspection, it should raise the red flags right away. Quite often buyers will hear this advice in a competitive real estate markets where multiple offers are being presented to a seller. Waiving a home inspection can be an attractive feature to a seller. It potentially takes off the table any further negotiations on any repairs needed to a home.

For a buyer there are extreme risks in skipping an inspection. You can never be sure of the hidden problems in a home that could become a huge expenditure down the road. No matter what your Real Estate agent says to you, make sure you have a home inspection done.

Final thoughts

For buyers and sellers these are just a few of the things you should be thinking about when getting involved in a real estate transaction. There are of course a whole lot more. The best thing you can do is work with a team of people you can trust including a real estate agent, lawyer, and mortgage broker.

Getting sound guidance when buying or selling doesn't always happen if you get connected to the wrong people.

Other Valuable Real Estate Content Worth a Look

Take a look the above resources for more exceptional advice when you are considering buying or selling a home.

About the author: Bill Gassett is a nationally recognized Real Estate leader who has been helping people buy and sell Metrowest Massachusetts real estate for the past thirty-two plus years. Bill has been one of the top RE/MAX Realtors in New England for the past decade.

In 2018 he was the #1 RE/MAX real estate agent in Massachusetts. His real estate advice has been featured on, CNBC, RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Bill covers real estate sales in the following Massachusetts communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

Reach out for his advice anytime.

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Bill Gassett

One of the top RE/MAX agents in New England over the last decade plus. Providing exceptional real estate services to buyers and sellers in the Metrowest Massachusetts area including the following communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

See my real estate website at Maximum Real Estate Exposure - one of the most visited real estate sites in Massachusetts.

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