I am stuck in my dining room today while the flooring guys put down hardwood in the next room. What a good time to blog about some of the things that have been on my mind.
I recently met a couple who paid way too too much for their house back in 2007. They want to sell it now, but they are going to take a big hit. I know you are thinking that stuff like that is happening all over these days, but there is more to this story that just a slow market.
This couple used a well-known agent in town. They moved from a much more expensive part of the country. To them, ALL the houses looked like a bargain. They told me they didn’t want to use her again since she didn’t tell them that they were buying the most expensive house on the street. She also didn’t do a Comparable Market Analysis (CMA).
I thought, well maybe there were multiple offers. Sometimes if a person finds the right house and there are other buyers in the picture, you got to move fast…………Nope. Not a multiple offer situation.
Well, being a little OCD, I thought that I would do a CMA based on the date they bought it. It is easy to do. I just plug in the date of the sale and look back 6 months to see what else had sold that would have been comps for the house. It was as if it was early 2007. The exact same info available to the other agent. The only surprise was that they only over paid by $7-10,000, rather than the $10-15,000 I had suspected.
So, I have 4 things your realtor should do for you. There are countless others, but these 4 will eliminate a lot of potential bad surprises for you.
1) You guessed it. Your realtor should do a CMA. Sometimes my clients will ask me how much they should offer based on the asking price. I usually tell them that we first need to find out what the house is worth. If it is over priced by 10% and you offer 95% of the list price, you have just over paid. You HAVE to know what the house is worth independent of the asking price.
2) You need to know who owns the houses around you. A quick check of the PVA website will let you know if there are a lot of rental houses around you. Nothing scares buyers more than buying in a high rental area. See, the PVA site will tell you where the tax bill is sent. If it is sent somewhere other than the house in question, odds are the occupant is not the owner. I once had a client who fell in love with a house and was ready to buy it. A PVA search revealed that about 40% of the neighborhood was rental. One of the big builders in town owned about 20%. I could have sold them that house and saved all the time we spent looking at about 20+ houses after that, but that is not my business model.
3) Your realtor should check the crime map before making an offer. That will tell you what kind of neighbors you’ll have and/or what kind of people are coming into your neighborhood. Bear in mind that a neighborhood under construction will have a lot of theft from people taking tools, material, copper from vacant houses, etc.
4) Your realtor should verify the schools for the house. I see a lot of wrong info on the MLS, especially for schools. Sometimes agents get lazy and do things like assume that the closest school is the one. My kids are in a magnet school that you can only get into by lottery. I was amused to see that one realtor had put the school as the disctricted elementary school. Can you imagine buying that house and thinking your kid was going there?
There are lots of other things a realtor should do, but to protect yourself, make sure they at least do these 4!