Real Estate Bargain Hunting? Beware These Realtor Tricks
Friday, August 22, 2008 | Ethan Roberts
Have you ever wondered what happens when a professional seeks help from another professional within the same field?
Let's imagine a conversation between Dr. Smith and Dr. Jones. Dr. Jones is the patient. He has come to see Dr. Smith for a medical problem he has recently developed.
Dr. Smith: Good morning, Dr. Jones. How are you feeling today?
Dr. Jones: Well, Dr. Smith, it hurts when I go like this (raises arm), and I don't know what to do. So far I have X-rayed it, performed an MRI, Cat Scan, and bone denisty test, and have already ruled out arthritis, tendonitis, bursitis, inflamed rotator cuff, osteomyelitis, dermatomyositis, phlebitis, and Brachial plexus nerve injury. I am at my wits end, it hurts so much. Tell me, Doctor, what do you suggest?
Dr. Smith: Well, I suggest you don't go like this (raises arm)!!!
Ok, I know that's a corny old joke, with a slightly new spin. But I dusted off the cobwebs just to elucidate how difficult it can be for one professional to utilize the services of another in the same field. There is a tendency for the professional who seeks the help of another to still want to control the process, and there may be certain expectations for help which the other professional does not meet.
I have been a realtor for almost a dozen years, and during that time I have always tried to do the very best that I can for my clients. However, I have recently been on the other side of the realtor-buyer relationship, and let me tell you, quite honestly it was less than thrilling. So today I would like to detail some of what I experienced, and then describe for you the characteristics that you should look for in any realtor you hire. If the realtor does not possess these traits, my advice is to seek the services of another agent. If you are planning on buying or selling a home soon, this article can save you a lot of time, grief, and even money. If you know someone else who is buying or selling a home soon, please forward this on to them.
Two months ago, I wrote about my trip of 300 miles to buy an investment property. Over the past 12 years I have bought many investment properties, but always in my own city, so this was the first time since 1996 that I had to trust in another realtor to show me homes. Since that July trip, I have re-visited the area twice more, once to make improvements to the property I purchased, and again last week to meet with the tenants that I secured, while I searched for another property to buy.
Because this area was far from my home base, I did not have access to the local Multiple Listing Service (MLS), nor to the property lockboxes (which use a different electronic key than I have), and so I was unable to go inside any properties on my own. That means I would either have to call a number of different listing agents, which is a pain (but as a licensed agent this enables me to make a 3% commission on anything I buy), or I can work with just one agent to show me all of the homes. That makes things easier for me, but means giving up most of that 3% commission (I may receive a small referral fee). In fact, I tried it both ways, and let me tell you, it was about as much fun as a good case of poison ivy!
Poision ivy or working with sneaky real estate agents? Tough choice...
Let me tell you about one realtor who showed me a few properties. When we met, she raced up the driveway from her car, not even bothering to say hello or to ask me about my trip. Instead, her first words to me were, "This is the house I was telling you about on the phone."
After entering the house, she barely let me look around without blathering on and on about the various features, which were already apparent to me. Did she forget that I am also a realtor? A moment later, a woman suddenly appeared at the back door. The realtor asked her, "May I help you?" and the woman said she was just driving by and wondered if she could see the house. The realtor said YES, without even asking me if I had any objections, and just let the woman inside.
This situation is something that has happened to me more than a few times when I am showing homes. The correct thing to do is to tell the person at the door that you are currently showing the home to someone else, but perhaps give them your business card and tell them to call you at another time. That way you are showing loyalty, civility, and respect to the customer with whom you are already working. If I had been interested in making an offer on that property, it is possible that this woman may have outbid me. That's good for the realtor, but not so good for me.
It took all of my strength to refrain from walking out on the agent at that moment. Obviously this realtor did not remember the Aesops fable about the dog who was crossing the river with a piece of meat in its mouth, then saw his own reflection in the water. Thinking it was another dog with a larger piece of meat, the greedy dog jumped into the water to steal that piece, subsequently dropping his own meat, and ending up with nothing!
My agent, trying to work two customers at once....
A few minutes later, my agent's cell phone rang. From the conversation, it was obvious that it was a new customer, looking to buy a home. Instead of taking a number and calling back later, she continued talking, ignoring me all the while. Dog and the meat. I will never use this agent again.
The next day I decided I would call the listing agent on a property that I viewed at a popular real estate website. I was very interested in this particular house. I explained to him that I was also an agent and desired to work with listing agents only. He was fine with that. I then asked him if he could provide me with some comparatives for both sales and rental prices on one of his listings. His response was that since I was technically the selling agent, I would have to get my own comparatives. If I wanted his help, then he would have to act as my buyer's agent, and I would be entitled to no commission, just a small referral fee.
I explained to him that being from the other end of the state, I did not have access to his MLS to run comparatives, and that I was simply asking him to perform a five minute task, which could help him make a very quick, cash sale. However, he was so rigid in his "my role, your role" thinking, that he was not willing to do this for me. So I simply walked away. Weeks later, I noticed that his listing was still unsold, and he has since dropped the price. Now his seller is the one on the short end of the stick. Very often in this business it pays to go the extra mile when a customer has a particular need.
On my previous trip to the Gulf Coast, I called a real estate office to inquire about one of their foreclosure listings. When the agent on desk duty (who was not the listing agent), found out that I was also an agent, she told me that the home already had a contract, but she had some other listings of her own that she could show me. A few days later I found out from another agent that the home I had called about was still available. The desk duty agent had lied about it because she could not make any money if I bought that property.
So just a few days ago, I called another office about a foreclosure listing, only to again hear that it already had a contract on it. However, this time I was speaking with the listing agent, not another agent on desk duty. She asked if she could show me any of her other listings. I explained my situation to her, informed her that I am an agent, and gave her the parameters of my search.
She asked what was my price range, and I told her between $70,000 to $110,000. I told her that $110,000 is definitely the maximum. She then said that her son, who is her partner, has a 1400 square foot foreclosure home listed for $134,000, but that "he might do better". It was not made clear whether the son was the seller or in fact representing the bank. In an area where the foreclosures of that size sell for $95,000-105,000, this was certainly no bargain. I replied that I wasn't really interested. Just to be absolutely clear, I repeated that the maximum I would spend is $110,000, and at that price the home would have to be 1700 square feet or larger.
Ten minutes later, my phone rings, and it's the same agent.
"My son says he'll go to $117,000! He's very anxious to move the property."
HUH?!
What part of "maximum $110,000" didn't you understand?
What happened in this conversation is a perfect example of a realtor who is more interested in moving a stale property and making her sale, than in LISTENING and responding to the customer's needs. I don't need that from someone who is supposed to be "helping me", and neither do you. It's an old trick, and the sign of a realtor who lacks confidence in her ability to hold onto a customer until the right house comes along.
When you tell your agent that you want a four bedroom ranch with a pool between $200,000 and $225,000, and they show you a two story home with only three bedrooms, no pool, and a price tag of $245,000, it's a sure sign that they aren't listening to you. When the agent searched the MLS, there were probably no homes that met your criteria, and they figured they would just show you anything at all in the hopes that you will pay the extra money, put in your own pool, and double up the kids in a bedroom. It rarely happens, but some realtors try anyway.
When you tell your agent that you want a four bedroom ranch with a pool between $200,000 and $225,000, and they show you a two story home with only three bedrooms, no pool, and a price tag of $245,000, it's a sure sign that they aren't listening to you. When the agent searched the MLS, there were probably no homes that met your criteria, and they figured they would just show you anything at all in the hopes that you will pay the extra money, put in your own pool, and double up the kids in a bedroom. It rarely happens, but some realtors try anyway.
Now sometimes buyers do have an unrealistic sense of how much home they can buy in an area at a particular price. When that occurs, the realtor should explain to them what the current market offers, and ask them which features they might be willing to forego. For example, "Mrs. Wilson, I can find the size you are seeking for that price, but it may have to be a slightly older home, or in another part of town." Any realtor who is worth their salt will do this.
This brings me to the four qualities that signify that you have an excellent realtor working with you:
1) Ability to focus their complete time and attention upon you and your needs
2) Ability to listen and to respond to what you want, not just what they want to sell you
3) Willingness to go the extra mile to help a buyer find the right home or to sell a listing
4) Putting honesty and ethics before any personal gain
Those are really the things that are most important! I don't care how many million dollars of sales an agent had last year, or if they were the top realtor in their office, or if they promise to work hard for you, or even if they look like Brad Pitt or Angelina Jolie. All of that still doesn't make someone a great realtor!
1) Ability to focus their complete time and attention upon you and your needs
2) Ability to listen and to respond to what you want, not just what they want to sell you
3) Willingness to go the extra mile to help a buyer find the right home or to sell a listing
4) Putting honesty and ethics before any personal gain
Those are really the things that are most important! I don't care how many million dollars of sales an agent had last year, or if they were the top realtor in their office, or if they promise to work hard for you, or even if they look like Brad Pitt or Angelina Jolie. All of that still doesn't make someone a great realtor!
Big deal, so she's cute, but could she find me a great foreclosure?!
So to sum it up, I want a realtor who isn't off gabbing on their cell phone or wooing another potential customer when they are supposed to be showing me a property. I want a realtor who doesn't try to sell me any old home, but is willing to wait until the right home comes along that meets the criteria of what I am seeking, assuming my wish list is realistic. I want a realtor who is willing to spend five extra minutes to do a small task for me if necessary, and not try to snooker me out of a couple of thousand bucks for it. I want a realtor who doesn't try to minimize my legitimate objections about a really bad home, just to make the sale. And I want a realtor who doesn't lie to me, saying a home has a contract when it doesn't, because she wants to sell me something else.
The purpose of this article is not to trash my own industry. Believe me when I say there are many good apples in real estate, as well as some bad ones. I'm just trying to find one good apple when I can't represent myself. Hmmm, I guess what I really want...is someone like me!
The purpose of this article is not to trash my own industry. Believe me when I say there are many good apples in real estate, as well as some bad ones. I'm just trying to find one good apple when I can't represent myself. Hmmm, I guess what I really want...is someone like me!
HOME
RAIDER
Ok, so I don't look as good as Angelina. But I know how to find a foreclosure!
RAIDER
Ok, so I don't look as good as Angelina. But I know how to find a foreclosure!
Got a good story or a bad story about a realtor who represented you? Do tell!
See you next week!
(Please let us know what you think about Ethan Roberts's article.)
Rate his article here »
Rate his article here »
Ethan Roberts
Chief Investment Officer
<