Tuesday, July 29, 2008

Are you really getting the best deal?

As I watch what properties are going under contract or have sold I am sometimes flabbergasted why this property sold and not another very likewise one for considerably less money. Here is the most likely reason for that: The buyer had no idea that the other less priced property was on the market.
If you worked with a Realtor you probably assumed that the Realtor did her/his job and aided you in finding the best deal. That is unfortunately not always so. I won't bore you with agency relationships (They are what enables an agent to do the unethical thing of selling you something that might be overpriced and not tell you about other properties for sale by other agents).
When an agent gets a listing; the 'going rate' for commission is between 6 and 7% in Florida. (This is not a fixed commission!). The agent then lists the property in the MLS and agrees to pay (Generally half of the commission)to a cooperating agent who brings a seller. Needless to say that all agents prefer to sell their own listings: Making 6% instead of 3% and making their seller happy.
Let's say you call an agent on an ad they are running for a listing; that listing in particular does not suit you but the agent asks what it is that you are looking for and sends you some listings that you are interested in. You meet with the agent, look at some properties (Let's use condos in this case)and really like one complex. The agent happens to have 10 listings in that complex and shows you all ten listings. It is clear to see which of the ten listings is the best deal. You make an offer and the seller is quite negotiable in price. Wow! What a deal you got! Except the condo next door to the one you just bought for (let's say) 630K and is in the same condition as yours, is on the market for 499K.
Beware: Make sure that your agent is a transaction broker and not a single agent for the seller! Ask your agent to give you a print out of all listings listed in the MLS (Not just the agents listings)and demand to see all of them.
I just had an agent who is on site at a condo complex call me and ask me to give him a higher commission should he sell my listing in the complex where he works; if I did not agree to the higher commission he refused to show my listing. (It is the lowest priced nicest unit on the market and by far the best deal).
Something might look like a great deal but you better make sure that there isn't an even better deal out there!

Here is the usual update:

These are all new listings since my last post

Properties that have gone under contract

Sold properties

Thanks for reading my blog!

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