What got me miffed was watching this buyer’s agent do like all of them do on those shows. The agent is getting ready to write an offer and asks the buyer what they want to offer. I call that order taking! May as well ask if they want to super size their offer or if they need fries with that? I just want to scream at them “Hey, why don’t you tell them what YOU think the house is really worth?” You’d be pretty miffed if you went to the doctor and he asked you what you thought you should do about your own medical problem, right?
You’ve just got to know what the house is worth. Using a terrible agent can cause a lot of problems, but they usually all get worked out by the closing. If you overpay for a house, that is the one mistake your agent can make that will survive the closing and haunt you later.
How do you know what a house is worth? Order an appraisal? Yeah, you could, but the only difference between what we call a Comparative Market Analysis (CMA) and an appraisal is a few hundred dollars and an appraiser’s license. The steps and values should be the same.
I always do a CMA before I let somebody make an offer. I WANT to tell them what I think the house is worth. After that, I’ll suggest some strategy, then they can tell me what they want to do. You can’t assume that the asking price indicates the real value of a house. I’ve had some folks buy a house for much less than the asking price because it was over inflated, and I’ve had people make near full price offers because it was priced on the low-end of the comps. Neither paid too much. Maybe this is why I have never had a house NOT appraise. When the market slowed and lending got really tight, I was always hearing bad stories about houses that didn’t appraise. Personally, I would be embarrassed if I had done a CMA and then not had the house appraise for one of my buyers.
Something else that bothered me about that show yesterday was that the buyer had flown in from out of town to buy a house. The one he picked needed $70,000 worth of structural and plumbing repairs. The buyer wasted his time and money on a trip that produced N-O-T-H-I-N-G!! I’m not asking any Realtor to be a home inspector, but gez louise, know enough about houses to be able to prevent your clients spending their time and money, not to mention emotional investment, in a house that isn’t going to work. When people start to get serious about a house, take a look at the roof, the electrical panel, the foundation, check the seller’s disclosure to see the age of the furnace and air conditioner.
Maybe I should have just watched Hannah Montana yesterday instead.