Does your agent educate you?
Originally appeared in Hills Publications, Jan. 30, 2004 and ANG Newspapers, Jan 24, 2004
Based on their background, people vary in what they need from a real estate representative. Even the most sophisticated buyers and sellers have gaps in their knowledge, including a lack of familiarity with recent pricing and activity trends.
Over the years, my conversations with clients have consistently revealed that those who were not clear about the process when they previously bought or sold were much more likely to have had a negative experience. This is why it is so important to ask, “Is my agent educating me?”
What you need to know
An overview. Pay attention to whether or not the agent has grasped the essence of your personal requirements and incorporated them into the reality of the market. A glib, “Just sign here, and I will take care of everything,” is not nearly enough. He should be filling you in on time frames, potential pitfalls and roadblocks and what can be done to minimize them.
As a buyer, you want to know what and where you can buy in your price range, or, as a seller, what you can expect to get for your house given its location, size, style, etc.
Before giving any information, the most proficient Realtors take the time to listen and discuss your situation. Your specific needs may have a major influence on how to proceed.
Viewing/marketing property. Viewing property (buyers) and marketing property (sellers) are opposite sides of the same coin. The average buyer is not sufficiently informed about what to look for and what to avoid. Likewise, sellers often do not see the relationship between details about their home and its value.
As an example, buyers should overlook clutter in their evaluation. Sellers, conversely, ought to be mindful of too much “stuff” and minimize it wherever possible.
Buyers who have been educated by their agent know that the clutter will be gone when they close escrow. In reality, many buyers will not get this information from their Realtor and may eliminate an otherwise acceptable house because it seemed too small or messy.
Condition. Along with location, this is the most important, yet least emphasized aspect of buying and selling residential property. It takes years of experience and learning to be able to effectively determine how specific issues related to condition can diminish or increase value.
Foundations are the best illustration of this point. Most buyers and sellers do not have the questions, no less the answers, about how foundations impact selling price. It is often the case that neither the seller nor his agent knows the condition of an older foundation.
I tell my sellers and buyers that foundations built in the 1930s and earlier may have problems. This is related to how the concrete was mixed, the depth of the foundation, whether it has rebar, and other considerations. Older foundations should be inspected by a qualified inspector and, if necessary, a licensed engineer.
Here is where education from your agent comes in: At a Sunday open house, you see a charming home built in 1921, but do you think about how that relates to the foundation?
If the foundation has been replaced or updated, your investment is more secure. An original foundation may be adequate, or it may not. You will know only after an inspection. If the seller has had one, you and your agent can read the report. If not, and, after you have an accepted offer, your inspectors say the foundation needs replacement, you may or may not be able to work this out with the seller. For both buyers and sellers, being educated about this in advance can save aggravation later.
Pricing. Establishing an asking or offering price is an art. Clients rely on their real estate professional for advice on how much to ask or offer. Despite being contrary to common sense, often houses are listed and bids are made without enough information about the property’s condition and other variables.
Be sure your agent is knowledgeable enough and has the communication skills to clarify his or her pricing opinion.
Purchase contracts. Real estate licensees are not attorneys; however, they must understand and be able to discuss the purchase contract. Skill in this area varies widely. Agents are charged with acting in their principal’s best interests. Handling contracts is one of the most vital of all functions.
What is included or excluded from a contract can have a huge influence on whether or not an offer is accepted, and, if ratified, what will happen later. Buyers are sometimes told to waive certain contract clauses meant to protect them. A full explanation of the pros and cons must be provided.
During contract negotiations, a seller may not know the ramifications of the inclusion or exclusion of a particular paragraph. To illustrate, a contract without a financing clause does not necessarily mean the buyer is approved for a loan. In fact, it usually signifies only that the buyer has not included it in the offer to make it appear more competitive. If the seller makes plans based on the incorrect assumption that the buyer’s financing is assured, it could be costly for him. The best agents make this clear to their clients.
Types of clients
In order to benefit most from working with a Realtor, think about how you approach buying or selling. Are you someone who looks at the relationship with your agent as a partnership and is willing and eager to learn the essentials from him or her? If so, real estate professionals will enjoy working with you.
On the other hand, you may be a successful businessperson who is used to controlling the course of action. Instructing others, even when it is not your specialty, may have worked for you in the past. The problem is that a top-notch salesperson may not be comfortable in taking direction if he feels it is contrary to what is best for you. If you choose a less competent, less confident agent, this style might be accepted, but you may not receive the best representation.
Another approach is the client, usually because he is very busy, who gives his agent free reign. He does not have the time or inclination to be educated and says, “Just show me where to sign.” If this is you, be aware that, unless you are lucky, you could discover too late, “what you don’t know can hurt you.”
Over time, as real estate becomes more expensive and complicated, most buyers and sellers find they need professional help. Before committing to an agent, be sure he or she knows how, and cares enough, to educate you.
Condition Is Critical
Foundations Are Expensive