For Sale Sign in Front of a House

Despite Thanksgiving being over and done, there really is no reason to stop being thankful. For instance, I am super thankful my crystal ball is no longer cracked and sitting in a pile of broken glass on my floor! It’s back to ready-aim-fire, and I want to share with you three issues that are occurring more and more in our recovering market.

1. I will save money on the transaction if I work directly with the listing agent. Per the listing contract the Realtor fee is an agreement between the seller and the listing broker. If you work directly with the listing agent, the seller is obligated to pay the agreed-upon fee to the listing office unless there is another agreement in place and in writing. If you believe working directly with the listing agent is an automatic savings to you as the buyer, please ask your agent what their office policy is regarding that issue and how much the “discount” is.

I will take this to the next level. Who says you will receive this difference in price? Are you writing that into your sales contract? If you expect a discount on the price via someone taking a hit on the fee, you must also expect [potentially] compromised representation. It’s that simple.

Say you are purchasing a $700,000 home and you want to work with the listing agent to save a nickel (that’s my own personal terminology). You best review the Agency Disclosure Pamphlet to fully understand YOUR obligation as well as the broker’s obligation. Once you have that conversation and agree in writing, if the agent is discounting their fee at closing, are you seeing the savings? For example, at $700,000 the difference in the brokerage fee from 6 percent to 5 percent is $7,000. Are you getting the home for $7,000 less? Or just what “your agent would have gotten,” which could be half of that amount? Is that worth it?

A skilled and talented buyer’s agent is worth their weight in gold. A listing agent in today’s market is worth their weight in gold. Find a better agent if they cannot negotiate and support their fee. Done.

Wait, one more thing: If you as a buyer want to hire an attorney to represent you with your purchase, you are entirely within your right to do so. However, the seller is not obligated to discount the fee they have agreed to pay to the listing broker because you are not utilizing a real estate agent to represent you as the buyer.

Also, you’re negotiating a purchase with an attorney who is not familiar with market values, has limited access to real estate forms and cannot even get you into the home. They will bill you for their time, but what are they billing you for? How do you know you got a good price? Does your attorney hire a third-party agent to do a market analysis so they can recommend a value, and pass that fee on to you, when a buyer’s agent would do the SAME thing without costing you anything?

In Oregon, the seller pays the real estate fee, and the cooperating fee paid to the other broker is spelled out in the listing contract. This does not imply that a buyer’s agent is “sleeping with the enemy” even though the buyer’s agent fee usually falls on the seller’s closing statement.

A seller is simply NOT obligated to reduce their fee if you work directly with their agent nor if you choose to hire an attorney to represent you.

Whew! That took up a lot of space in this article!

2. Home inspections. Home and/or property inspections are really important whether a home is older or new construction. The main point I want to stress here is that I am seeing more and more bloviating on inspection reports.

While it certainly is a fine-line for an inspector to report on the facts, when an inspector says: “the crawlspace shows serious signs of water penetration and I highly recommend a lot of work be done in the basement, and this is NOT fun work, not fun at all.” (Yes, this is a direct quote from an inspection this year.) The report went on to say all the things the inspector felt should be done and made it sound as if the property was a complete wasteland. The buyer’s ran like chickens being chased by a fox! Home inspectors: Please report the condition of the home, not your opinion of what is fun or dirty work, or how much something may cost if you do not have the bid in hand.

My seller’s hired a licensed contractor to come in and remedy it, and it was done in four hours for a few hundred dollars. Please do not make your job, nor mine, more difficult than it needs to be.

3. Serious (and smart) buyers are “pre-approved.” This goes without saying in any market. However, lenders today are telling me more and more buyers think they are qualified and then it’s a week to close/pack/move, and they cannot get financing. Someone dropped the ball. Being pre-approved means they’ve already applied for the loan, the bank has verified their financial information and (if the numbers remain the same until closing) it promises to loan a specific amount at a specific interest rate.

Still, after an offer, us experienced agents will call the lender and verify that the prospective buyer is preapproved for the necessary amount. At the same time, that agent will verify that the lender would have no problem closing in the expected time period — usually 30 to 45 days.

If your agent is not verifying qualifications of the buyer directly with their lender and finding out the information above before you take your home off the market during escrow, your agent simply is not asking enough questions.

Ronald Reagan summed it up nicely: “Trust, but verify.” He may or may not have been the originator of that quote, but I don’t really care. I make it a policy to contact the lender prior to serious negotiations so that my client knows as much as possible before diving in to the emotional bath of uncertainty during escrow.

Anything can happen in real estate and sometimes, I, personally, take it very hard when something takes a sudden turn. Do your best so that others can succeed. Agents: Utilize your success to assist your clients to the best of your ability. Clients: Be open and clear with your agent so they can help you. Communication is key in this business — it always has been and it always will.

See you on the mountain! Or the skate parks, or the Old Mill, or the trails, or wherever we meet. No matter where — let’s keep it simple!