Get what you pay for, or not…

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When you hire a real estate professional to assist you in a real estate transaction, they can be a world of help, or they might just get in the way. They can seemingly work wonders or they could mess up the transaction without even knowing why or how. Each person has a different demeanor and background. What you get for your money should be worth what you pay (or more) and I offer a couple of suggestions to make sure you are working with someone who will help you get what you want. And what you need.

Have they been in business for a period of time? How long? How many sales have they been involved in? And have they done a transaction similar to what you want to do? If they are relatively new to real estate sales, do they have a history of business dealings and are they knowledgeable about contracts and solving problems? Sometimes the new brokers are better for a customer because they are eager to learn and have the time to devote to your deal. Are they able to provide you a timeline of the events that will occur during the escrow period? Do you perceive that they are honest and will tell you the truth no matter how painful it may be? Do they know the answers to the questions you ask them, or are they ducking the questions because they don’t know, or don’t even know to say that they will find out and get back to you? And how reliable is that promise?

If you are thinking of buying a foreclosure or a short sale, have they ever done one of those, or how many have they done? Do they know the unusual and lengthy process that these distressed properties require to get to a successful closing?  Did you ask them for market comparables so you can properly determine the value of a distressed property you want to buy? Did they show them to you?

I have heard buyers tell me they are not paying the Realtors commission. Not so fast, my friend. Is it not the buyers funds that go thru the title company that result in the seller getting their proceeds and the Realtors getting paid? The Realtors are paid by the buyers funds, though somewhat indirectly. If you are a buyer and interviewing a broker, do you expect them to work for free? I hope not!!  There are many great causes people can volunteer for, but helping someone buy or sell real property is not usually one of those things.

How much time do you spend understanding the details and fine print of all the documents? Would you agree that a 2 minute discussion now is better than a 2 hour argument in a month?  Did you read the documents that are involved in your listing a home or attempting to buy a home? Why not?  Why would you not read a legal document that you are about to sign? What is your defense when later you realize you did not understand that certain paragraph or deadline? Did you ask questions? Please read before signing. Stop and ask questions if you have any doubt about what a document says. And pay close attention to what the real estate professional says in response to your question. Ask follow up questions.

If you are able to buy a home, make time to pay attention to everything that is part of that action. If you get a home inspection, and I say you definitely should, be present during the inspection and ask questions of the inspector to get the background that is more valuable than the written report. Why is that floor not level, or why is there staining on the vigas below the skylight? (just two examples). When you decide to buy a home, set aside the time to do it right. I am always amazed when I hear of a buyer making an offer on a home and then going overseas for 4 weeks on a pilgrimage to see the Tibetan Monks without cell service. Maybe wait on that home purchase until you can be present and accounted for during escrow. That is the time you have to learn everything you want to know about the home you are buying. There are no money back guarantees when you buy a home that is a resale. The builders warranty no longer applies. What if something fails in the first week, or month, or year of your ownership? Who gets blamed for that? What did the property disclosure say and what did the inspection say? You didn’t get one? Did you ask questions? And how about that Home Warranty? Did your broker explain the relative cost and value of having one? Did you ask?

How much earnest money should I offer? Buyers like to put down a small amount. Sellers like to see more. There is no rule, so to speak. If you want to negotiate that, then you should. Often it is the last line of defense against a party that defaults on the contract. As a seller, don’t kick yourself later on for having agreed to  $2000 earnest money on a $450K sales price with a 6 plus week escrow. If you think it should be higher, ask for it. If the buyer is serious and wants the home, they are putting up much more than that small amount eventually. And if they decide to terminate per the contract terms, they can do so. Read the contract. Everyone is supposed to be dealing in good faith. That is not just a way of saying we should all be nice.

How far above and beyond the license law duties do you expect your salesperson to go? We generally think of someone that goes above and beyond to be providing exemplary service. But sometimes too far is TOO FAR. Your Realtor should not be expected to mow your lawn, or paint your family room walls, or steam clean the carpeting. They are not the person to ask if you have the right to open up a goat milk farm on the property you want to buy. But they can hopefully point you in the right direction. I often will agree to, or offer to do a few extra things, but I cannot certify that the roof of the home is in good shape. I cannot state with certainty what will happen in the vacant land across the street. Yes it could become a bunch of warehouses with auto body shops or a refuse transfer station. Ask questions.

Heaven forbid a salesperson has had a complaint filed against them or someone sues them for some real estate related reason. Is it OK to ask the Realtor you are thinking of hiring to tell you about all complaints and/or lawsuits they have been involved in? If I am your Realtor, you have the right to know and I will tell you.

Are commissions and fees negotiable? Some are and some are not. Some Realtors and salespeople will negotiate and some will not. All I want to add about that is the professional that says they will do it for less may not provide the same service and guide you through the process quite as effectively as the more expensive one would. I am not a discount broker. They are out there. If you think you only want to pay $2000 and everyone is quoting more, best to confirm what the lower fee will get you, and confirm what is not included. As with so many of these things, you usually get what you pay for. Is the best Realtor the most expensive one? No, the best one is the one you trust and that gets the job done on time.

Posted in Real estate career and tagged , , , .

The writer is a 68 year-old young man engaged as an active REALTOR (associate broker) with Keller Williams, in real estate sales and management in the Santa Fe NM market area. My career has been in and around the real estate industry for more than 35 years, ranging from mortgage lending (interim, commercial, residential); residential property management and leasing; shopping center development and leasing; real estate sales; sales training; title insurance as an executive and an escrow officer; various management positions; consulting and other related activities. That plus a bunch of banking experience including our family-owned Bank of Santa Fe in the 1980s. Where has the time gone?
My background means you have my working knowledge of the entire transaction process at your disposal. That comes with honesty and no bullshit.