Is your agent taking too many shortcuts?
Originally appeared in Bay Area News Group publications on October 24, 2014
“There are many shortcuts to failure, but there are no shortcuts to true success.”
– Orrin Woodward
When a real estate agent takes shortcuts this often compromises the position of the person he is representing. Sadly, it is common for some agents to skip necessary steps to protect their buyers and sellers; this is not doing the best job for them.
Handling disclosures/reports
Professional salespeople spend considerable time with their sellers to explain the myriad disclosure forms. They answer seller questions about how to complete them before the property hits the market. Less professional ones hand, or email, a giant stack of papers to their sellers with little or no explanation and rarely have a full disclosure package available once the home is in the Multiple Listing Service (MLS).
Many listing agents never suggest that their sellers obtain pre-sale inspections. These inspections provide critical facts about the condition of the property that is part of pricing criteria and is important for buyers to review before making an offer.
When buyers are provided with all relevant disclosure documents in advance, they can make a more informed decision about whether or not to write a contract and, if they do, how much to offer. Part of the selling (buyer’s) agent’s function is to review these disclosures and educate the buyer on which items are worthy of concern and, possibly, which additional inspections are warranted.
Once there is an accepted contract, it is the selling agent’s responsibility to look around the property for defects or problems and note those on a form called the Transfer Disclosure Statement (TDS). Agents are not expected to function as home inspectors; rather, their inspection is to alert buyers to any obvious issues or areas that need more attention by a professional inspector.
Some selling agents do not read all the disclosures/reports or complete their visual inspection and their portion of the TDS until after the buyer has already removed his inspection contingency. This is a huge mistake; the buyer should have this information before waiving his inspection contingency.
Purchase contracts/related documents
Your agent should be an expert in understanding and explaining the contract and related addenda. Many are far from knowledgeable.
For example, the California Association of Realtors contract has just been significantly modified and expanded from eight pages to ten. A host of salespeople are less than astute about the version currently in use because they do not have sufficient training. A large number of these unprepared agents will not take the four-hour training class on the new version I and other Realtors recently attended.
Licensees who are not informed about the contract tend to also be deficient in other areas. As an illustration, agents routinely write in “30 days” for close of escrow, rarely thinking about possible implications. Depending on when the contract was accepted, the thirtieth day may be a Monday. If this happens, the buyer’s loan must be funded on the previous Friday. It means the buyer will likely be paying three days interest before he even owns the house. This is two days more than would be true if the escrow closed from Tuesday to Friday.
Marketing
One of the most frequent marketing mistakes is misrepresenting the number of bedrooms. It is no surprise that, when there is an error, the bedroom count is always overstated. Some agents do not know that accurately portraying the number of bedrooms has implications for both value and safety. I have testified as a real estate expert witness in California Superior Court on this issue.
Picture quality is all over the place on the MLS, from excellent to horrible. Professionals make sure to always have top-quality photos whether they take them or hire someone to do so. Others in the business upload a few pictures to the MLS without a care about composition, resolution or anything else. Those who submit inferior shots also tend to include fewer pictures than those who do a proper job. Given that a vast majority of buyers shop online, photographs can seriously aid or hinder a sale.
Another marketing blunder is failure by the listing agent to include a description with each MLS photo. As viewing unidentified rooms can be confusing, this makes it so much easier for buyers and their agents.
For instance, a bedroom photo may have a caption, “Main level master bedroom.” Another, similar-looking, room might be labeled, “Second master bedroom on lower level.” This is not difficult for the listing agent or whoever is entering the MLS information for him; too often, it is not done.
Qualifying the buyer
In our area, agents are expected to bring in offers from buyers who have been “pre-approved.” Selling agents customarily include a lender letter with their buyer’s contract that indicates this pre-approval. Many listing agents, however, accept these letters at face value only to find out later that the buyer did not qualify for a loan.
Top listing agents always call the lender who wrote the letter, especially in multiple offer situations, to ensure the buyer can perform. Lenders tell me that less than 50 percent of listing agents actually take this essential step.
Final thoughts
I have presented only a few examples of poor representation. Clients usually do not know who the weak agents are, but other agents do and try to avoid them. Whether you are a buyer or seller, an agent who takes shortcuts can hurt you.
Related Articles:
What Is a Bedroom?
Is Your Bedroom Safe for Sleeping?
Pre-sale Inspections