THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, November 25, 1995 TAG: 9511220430
SECTION: REAL ESTATE WEEKLY PAGE: 12 EDITION: FINAL
COLUMN: SMART MOVES
SOURCE: BY ELLEN JAMES MARTIN, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Long : 109 lines
Are you about to hurl your longtime home onto the market? Then real estate experts suggest you open your eyes to the Brave New World of the buyer's agent.
Once upon a time - maybe when you bought the home you're about to sell - the deck of cards was stacked in favor of the home seller. Not only could a seller expect his listing agent to advocate for his interests (which is still true), but he could assume that the agent who found the buyer was also legally bound to look out for him.
Nowadays, things are changing quickly. Many home buyers are insisting on their own legal advocates - known as buyer's agents. And - through seminars and courses - the new buyer's agents are learning the best tactics for protecting their clients' interests.
Today, there's a lot more gamesmanship in real estate negotiations, says Fred A. Perry Jr., the broker-owner of a Re/Max real estate office.
The buyer's agent is going to say anything and everything to get the best price for the buyer, Perry says.
As a seller, are you unnerved at the notion of going up against a buyer armed with his own advocate? Then these pointers could help you cope with the new realities of real estate advocacy:
Dont try to spurn a buyer just because he's represented by a buyer's agent.
As Perry points out, it's perfectly legitimate for a buyer to seek his own representation in the marketplace - especially given the dimensions of the purchase he is making. And it's understandable that an effective buyer's agent would seek the best possible deal for his client.
For a seller to reject a buyer simply because he has his own advocate is to potentially risk losing a very good prospect, Perry cautions.
Meet your real estate challenger with the best advocate of your own. Perry suggests you find a top area specialist with a genuine grasp of values in your community.
List your home with an expert who will look after your own interests, he says.
An agent who closely tracks home sales in your neighborhood will have the context to know - for instance - whether a buyer is presenting an unfair lowball offer that should be countered or rejected outright.
Don't be alarmed at hearing of the proverbial other house.
Here's how the other house scenario usually gets played out:
The seller receives a low offer transmitted through the buyer's agent. Along with the offer comes word that the buyer won't pay a penny more. Indeed, if the buyer's first pitch is rejected, his agent claims he will simply move on to the other house he has selected. The buyer is characterized as indifferent between the two choices.
Why is this scenario more often a bargaining ploy than a snapshot of reality?
Of course, there are always other houses the buyer might purchase as an alternative to yours. But the reality is that very few buyers make an offer on a home without forming an emotional attachment to the place first, notes Anita E. Sloane, an agent for the Prudential real estate chain.
During her more than 10 years in real estate sales, Sloane says she can recall just one instance in which a set of buyers - two clinical psychologists - told her that more than two houses they had seen were equally acceptable to them.
Most people get emotionally involved, Sloane says.
Sloane suggests that when you get an offer, you focus not on the other house rhetoric but on the merits of the offer itself. Before you make a decision as to whether to accept or counter the initial offer, ask your agent to recheck the market and get a sense of how the latest sales in your area have gone.
Concentrating on market realities - and your own timetable - is more important than reacting to an other house ultimatum - which may or may not be based on reality.
Ask your agent to seek out information on the buyers motivation. The more information, the better, Sloane says.
The buyer's agent need not answer questions posed by the seller's agent. But there's no harm in the seller's agent attempting to learn as much as he can about the buyer's motivations.
For instance, the seller's agent might ask how long the buyer has been looking, whether he has put in other offers or whether he faces an urgency to move. The agent could also inquire about the buyer's family composition and priorities.
Answers to such questions can help the seller in the bargaining process, Sloane points out. For instance, the seller may have more leverage in negotiations with a buyer who is zeroing in on a cul-de-sac home in a neighborhood served by a particular elementary school if such a house is exactly what the seller owns.
Some seller's agents may even go out of their way to be present when a potential buyer makes a second or third trip back to his clients property. The agent can pick up clues about the buyer from his statements and questions.
Seasoned agents know, for instance, that buyers who begin talking about how they would arrange their furniture in a home are probably strongly attracted to that property and have already mentally moved in.
Remember that the owner has the last say in bargaining.
Is your agent recommending that you not chance a counter-offer, even though you don't consider the deal you've been offered through a buyer's agent to be entirely fair?
Of course, your agent doesn't capture a commission until a deal goes through. And both you and your agent have a common financial interest in getting the highest possible price for your property.
Still, if you let your house go for too low a price, you have far more at stake financially than does the agent - whose commission is based on a percentage of the final sale price, as Sloane says.
That's why the decision on how to respond to a buyer's offer is ultimately yours to make. You're the one who could leave a lot more money on the table, Sloane says. by CNB