I’ve seen a few sellers lately make some bad decisions.
I get it. Selling your home is something you only do so often and I don’t expect them to understand the market and all the obstacles between sticking the sign in the yard and the closing. All they know is that the market is hot and selling your house is easy.
What they don’t know is that keeping it sold can sometimes be a lot of work.
I recently had a friend decide to list with some less experienced agent who was going to reduce the commission. I was going to reduce my commission to ZERO since this person was a friend and they had some circumstances that required them to move, guess I should have told them that sooner. I had been giving advice and working towards getting this done for close to a year. To this seller, all they were thinking about was saving money. Well, you only realize that savings when you close the sale. The house sold and is back on the market. Usually when a house comes back on the market, it doesn’t get the same attention from buyers. Most buyers in the market have already seen it and either said no to the house or made an offer that obviously wasn’t the best one or they would have gotten it the first time. This is where experience is worth every penny, even though I wasn’t planning on getting any pennies from this sale.
I am currently working hard to keep a deal together for a house where the buyer went to do the final walk through before the closing and found the ice maker had been leaking and has caused $12k in damage to the house. I know if my listing goes back on the market, we will never again catch such a fantastically qualified buyer who was the highest bidder, so I better put on my thinking cap and get this done.
These are just a couple of current examples of where experience can make or break a sale. The goal is to get to the closing. I am thinking about the entire process, not just the beginning. Not just the next step.
As I was making my second cup of coffee and thinking about writing this post, it reminded me of the early days of GPS. You’d enter the destination and take off. I think that is how most sellers view this process…….”I’ve got a realtor and they just stuck a sign in the yard. It’s all downhill from here!” If nothing goes wrong, then that is very true. But how often have you had your GPS take a crazy route or not know about construction, wrecks or other annoying delays? It’s the same with real estate. A lot of inexperienced agents don’t know what to lookout for along the way or don’t know how to negotiate. Sometimes you have to take an alternate route. Sometimes you need to change lanes along the way. A good realtor is more like the Waze app……not only are we watching out for delays, we are looking for speed traps and doing it all in real time as we get you to the final destination, which is the closing.
Everybody knows how crazy the real estate market is right now. Everybody I meet wants to talk about it. Everybody assumes every realtor is crazy busy right now. We are not. The reason is because you need houses to be on the market in order to sell one.
It’s super easy being the listing realtor right now. You put a house on the market and have a busy couple of days getting offers, then it is over. Being a buyer’s agent these days is a lot about waiting for a house to come on the market, then rushing out to see it. I used to show houses 3 nights a week and all day long every weekend when it was a Buyer’s market. I think the last house I showed was mid last week. Back then, people would look at 20-30 houses before making a decision. Today a lot of people are viewing 3-4 houses and picking one. I have sold many where the buyer bought the first house they saw. I’ve got plenty of buyers. Some of them are looking for a very specific home in a specific school district or neighborhood. I have worked with one of them for about a year and only shown them 6-7 houses. That’s because so few houses have hit the market in their price range and in the neighborhoods that will work for them.
So being a realtor right now is a lot of waiting. Waiting for sellers to get their homes ready to list. Waiting for the right house for your buyer…….waiting for something interesting to happen so you can blog about it.
I had an interesting thing happen this past weekend. I showed a For Sale by Owner listing in an area where few houses are listed with a realtor. It’s a popular area and about the cheapest route to get in a super desirable elementary school district.
My buyer did some of my job for me. They found pictures of the FSBO listings on zillow. I try not to use zillow for a main source of information because their data is often incorrect and they do not list if the seller paid any of the Buyer’s closing costs or if there were any other concessions…..but pictures are helpful to see the differences in the houses.
There were four houses that were all roughly the same size…..so close that we don’t even need to make any adjustments in value for 3 of them. All sold within a few months last summer. The range was $280-$330k. Everything is sounding pretty normal so far, but this is where it gets odd.
I’ll describe each house and let you pick the sale price:
- Sale #1 was 2400 square feet. It backs to a city park. It is all original and even has a green kitchen counter top which doesn’t look that nice with original cabinets that have been painted white. Did it sell for $302k, $280k, $330k or $310k?
- Sale #2 was 2300 square feet. It recently had $45k in updates including new white shaker style cabinets, trendy lighting, subway tile in the kitchen and around the fireplace. Did it sell for $280k, $330k, $310k or $302k?
- Sale #3 was a 2300 square foot house with different types of laminate flooring. It looks like the only newer thing in this place other than maybe the furnace filter was granite counters in the kitchen and bath. This one has an odd shaped lot. It is sort of a triangle so your backyard comes to a point. Did it sell for $330k, $280k, $302k or $310k?
- Sale #4 was just over 2000 square feet so it was a little smaller than the others. It might be worth $12-15k less just due to square footage differences. The kitchen was just remodeled and was equally as impressive as the one in Sale #2. This one had new flooring too. Did it sell for $330k, $310k, $302k or $280k?
Okay, you ready for this?
Sale #1 sold for $330k. It was equal to Sale #3, which sold for $302k. That means somebody paid $28k for the nicer lot. That is nearly a 10% premium. That is higher than anywhere else in town. This was a great deal for the seller and a bad deal for the buyer.
Sale #2 sold for $280k. Yes, the one with $45k in recent updates sold for the least. Bad deal for the seller and great deal for the buyer!!
Sale #3 sold for $302k. This was the house that had more flooring types than Home Depot offers and the worst lot out of all of them. This one was listed with a realtor. This was a fair deal for both the buyer and seller.
Sale #4 sold for $310k. A good deal for the buyer.
So, what is my point in all this? That these people needed the help of a realtor. As a buyer’s agent, I would have advised my client not to pay $28k more than an equal house just to get a better lot. I would have told the seller of #2 that their price was waaaaay too low. I would have told both the buyer and seller of #3 that they got a fair deal. I would have told the seller of #4 to ask for more.
Yes, they could.
The app would need to be able to tell a seller that their house has a pet odor and that is what is keeping it from selling.
The app would need to tell a seller to rearrange their furniture because it currently make the living room look very small compared to other houses for sale in it’s price range.
The app would need to tell a buyer the house they want is worth less than other houses in the neighborhood that are the same size due to an unusual floor plan.
The app would need to be able to tell a buyer when the home inspection repair list is big enough to walk away from the house.
All this app would need is a way to download all the experience that only comes from being out there, seeing houses, writing offers, knowing the current market, and dealing with people.
So no, Realtors are here to stay.
I sold a listing of mine that did not inspect so well. Before we put it back on the market, we have to make some repairs. I have spent a lot of time advising my client on which repairs we need to do so that the next buyer won’t want to walk away. We don’t want to fix everything little thing because we don’t have to do so. The goal is just to do the big things so the next buyer still wants the house after their inspection.
I recently had a standoff with a listing agent when their seller did not do a few repairs they agreed to do. The listing agent drew a line in the sand and told me my people had to take it or leave it. Knowing that the seller had moved out of the house and was closing on his new house the next morning, I called his bluff by saying we would postpone the closing and go to mediation since that is how the contract says disputes are to be settled. A couple of hours later he was asking me what my buyer wanted to have done in order to close on time.
An app can’t do these things. An app can open doors. An app can provide paperwork to be filled out. An app can’t solve these types of problems. People are always going to want help from somebody who knows what to do, how to do it, and when to do it.
Many people seem to think realtors are going to be replaced with a bunch of apps on a phone. I don’t see it happening, but changes are bound to come.
I can see a day when, instead of touring several houses in person, buyers use virtual reality to narrow down the ones they want to see. I am sure any buyer will still want to see whichever one they pick in person before signing a contract.
I can see sellers and technology doing more on the listing side of a sale. I can see more for sale by owner listings and various businesses popping up to help sellers navigate the process alone, but I don’t see the same for buyers. Buyers will always want help from a pro. The seller is dealing with one house, their own. The buyer is dealing with making a wise decision. Artificial intelligence won’t ever replace the voice of a pro.
I can see a day when there are far fewer realtors than we have now. The lame ones who don’t do more than open doors, fill in blanks and who just tag along to get their check will go first. All that will be left are the really good ones. We’ll make less per transaction, but each transaction will take less time.
I can see a day when a realtor hardly has to see their client in person, or actually go in many houses.
What I can’t see is there ever being a day when people don’t want a realtor. People will always want a real live person to help them navigate through something they don’t understand, or when they have a problem they can’t solve. Don’t believe me? Then why does Apple have live people to help their customers when all the self guided trouble shooting tips don’t help? Also, short of new construction, no two houses are alike. People are always going to want to see a house before they buy it. It is something most people do only a few times in their lives. They are concerned about resale potential. This isn’t like ordering a pair of shoes online where you will wear them and then dispose of them when they are worn or out of style.
I am sure there will be things I welcome as real estate evolves. There will also be things I miss. Until then, I will just keep doing my best for my clients and laughing every time I read an article that predicts I will be replaced with an app.