UncategorizedAre You Getting What You Deserve From a Discount Real Estate Service? Here Are 8 Big Things You Should Watch Out For
July 25, 2018
Especially in the past few years, there have been so many real estate-related startups that promise to revolutionize the business and make the process seamless, cheaper, etc. for clients.
Some of these offerings might sound too good to be true for a reason. Unfortunately, a lot of these services make things seem way simpler than they really are. Everyone’s trying to figure out how they can make themselves stand out as real estate agents, and the truth is, as long as you do your research and hire an agent who knows their stuff, that’s going to serve you best in the long run.
When you’re searching for a real estate agent (especially if you’re considering a discount real estate service), here are 8 things to keep in mind and watch out for:
An agent’s reputation matters: It’s not just about an agent’s know-how—it’s about how they’re known around town. A solid agent with a good reputation can get you so much further than some of these pop-up shops that come through town. For example, as listing agents, we know which buyer’s agents have properly prepped their buyers. We know who is going to consistently bring strong offers to the table, and we know they’re managing their buyers and their expectations. This counts for a lot when you’re on the listing side of things, as you want to give the best advice possible to your clients.
Is your agent willing to be honest with you? So many agents don’t want to say anything negative to their clients, but it’s SO important that clients are properly educated by their agents and prepped for a variety of scenarios, including the worst case scenario, just in case.
An agent should be protecting their clients emotions. Buying and selling a home are both super emotional experiences, and it should not be any harder than it already is. Even when everything goes as smooth as possible, emotions still run high, and your agent should be doing their best to make smart decisions that get you what you need and keep you protected.
A good realtor should be protecting their clients interests too! We talk our clients out of most homes. I always tell clients that we won’t be living with them so whatever home they like is perfect! However, what we do care about is making sure the home they choose will do well for them financial and truly meets their goals. We know the market won’t always be CRAZY. We’ve been through a few markets in our 11 years. We know all homes sell now and that won’t be the case in slower markets. We guide our clients to homes that will always be desirable. We want them happy when they call us to sell the home down the road.
If you’re buying a home, your offer needs to make sense. Even if you have the cash to make a huge over-asking offer, your agent should be helping you make the most advantageous move for you—not for them! For example, we recently had a client who wanted a home that we hoped would sell for $880k, but we knew it could go up to $910k. Our clients *really* wanted the home, and they wanted to make a $950k offer to seal the deal. But we knew this was too high—if our clients did get the home for $950k, there would be an appraisal issue. You want your offers to be TIGHT. So if the comps on the home were $880k, we told our buyers to offer $910k. It’s JUST enough over! We like to see about a $6k difference.
On that note, if you do make that $950k offer, there are a lot of agents who will do whatever it takes to get the price to escalate to meet your offer. They start calling around and trying to get another offer and therefore you are just overpaying for a home you could have paid $910k for.
That being said, when you overbid, you’re artificially pumping up the market, and this could actually lose you the home. When we see an oddball offer that’s WAY over asking come in for one of our listings, we’re immediately skeptical. If it’s too good to be true… it probably is. Once we had 2 offers that were crazy high, and we realized that the offer was not at all well put together, and we were very suspicious as to whether or not the clients were prepped properly. Do the clients truly understand what’s going on, and what the agent is doing on their behalf? (In the end, we didn’t go with one of these super high offers—our client picked one of the more reasonable offers themselves, because it was better overall!)
A lot of these services make you use their financing options and professionals. We definitely have our preferred professionals and we’re always happy to recommend them (because they really are the best!), but you always have the power to choose your own lender, inspector, etc. when you work with us.
A good agent will take responsibilities for their mistakes. If a good agent messes up, they’re willing to pay up. One time, our sewer scope guy missed something… and we paid to have things corrected. We’ve also purchased a hot tub and a washer/dryer on separate occasions to remedy our mistakes. I have never heard of a pop up shop servicing their clients this well.
You should get your own inspection that you’re present for. One of the discount real estate services out there right now offers inspections as something that’s included in the deal. They’re saying they already have inspections of homes… and unfortunately, they’ve been going into people’s homes and inspecting them without permission. (One of our preferred inspectors was even asked to do this without the homeowners permission! This is not only wrong, but it’s illegal. What are people thinking these days?!)
Ultimately, your agents ability to write a strong offer is going to serve you best. It’s not just about how much money you offer—it’s about who your agents are, who your lender is, the terms of your offer, and so much more. In fact, we’ve offered up to $28k UNDER the highest offer and we’ve still won.