15 Things Your Real Estate Agent Won't Tell You
These are sure to shock even the most intrepid homebuyers.
Whether you're renting or buying, having the right real estate professional on your side can mean the difference between a home you love and one you can't wait to get out of. The right real estate agent can negotiate on your behalf, help you explore neighborhoods you never would have considered on your own, and can even make you look like a more attractive buyer.
A sub-par agent, on the other hand, can easily lead you astray by recommending bids that are too low to compete with other buyers, overlooking or omitting costly repairs your future home will need, or simply wasting your precious time by showing homes that just don't suit your taste.
Learning the ins and outs of this competitive industry is a powerful weapon when it comes to landing the perfect home. In fact, it's often what clients don't think to learn about their real estate agent that can make or break a deal. From how to win a bidding war to whether those renovations are a wise investment, these curated real estate broker secrets are sure to shock even the most intrepid customers. And when you've got the keys to that dream home in hand, make it shine both inside and out with the 30 Best Stylish Home Upgrades of All Time.
Self-Promotion is Everything
You may think those Facebook ads listing the same apartment over and over, or those bus stations bearing agents' faces are annoying, but they're an essential part of landing clients.
"There is heavy promotion when marketing a property for sale, including everything from direct mail, email marketing, website marketing, search engine marketing, social media, public relations and old-fashioned, pick-up-the-phone and dial broker after broker after broker until we locate a buyer," says Andrew Sandholm, a licensed real estate salesperson with BOND New York. "My team and I actually go down the list and individually call the some 30,000 licensed real estate salespeople in New York City until we find one with a buyer."
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Kitchens Don't Always Sell Homes
Don't shell out a huge amount of cash for a kitchen remodel assuming it will yield a major return on investment when you sell. Sandholm says that, in urban markets, like New York, where clients eat most of their meals out, a beautiful kitchen won't make the difference it would in a suburban home.
"People often think the $10,000 in renovations they've made to their kitchen should translate into a $7,000 to $10,000 bump on the asking price. It doesn't really work that way" says Sandholm. "Sure, the right buyer might pay $10,000 more for a kitchen renovation, but only if the renovations match their taste and style."
Your Agent Knows Your Neighborhood Better Than You
A motivated salesperson should have done their due diligence on a neighborhood before showing you homes there. If they don't know the neighborhood you're considering, don't be shy about choosing someone new to work with.
"There is something seriously wrong if you haven't studied the neighborhoods you're selling in. As a listing agent, you need to know every single thing about the neighborhood you're selling in, including everything from its best restaurants and coffee shops to proximity to parks and entertainment, as well as any upcoming developments that might raise the neighborhood's home values or make it even more desirable," says Sandholm.
Cash is King
While taking out a mortgage is still standard practice for most buyers, if you want to ensure that you get your dream home, having cash in hand is not a bad idea.
"Even if you are extremely qualified, a bank will only lend the amount of money that the home is appraised for, so you wouldn't be able to offer over asking price in most cases," says Sandholm. In competitive markets, that often means having the extra available in your bank account. "If you are financing your purchase through a home loan, you can really only pay over asking price out-of-pocket."
Real Estate Agents Aren't Always Making Big Bucks
It's true that many people working in real estate are pulling huge commissions, but that's not always the case. In fact, many agents, brokers, and salespeople are barely scraping by, particularly in ultra-competitive markets.
"The real estate industry is very competitive, especially here in Manhattan. There are roughly 30,000 licensed real estate salespeople in New York City and yet only 15,000 transactions each year on average," explains Sandholm. "That means more than half of those agents and brokers either only handle rentals and don't do sales—or they are sitting on their hands and doing nothing."
A Home in Move-In Condition is Essential For a Sale
While TV shows may make buying and selling a home that needs serious work seem easy, getting a fixer-upper sold is actually pretty difficult.
"A home that's in move-in condition is extremely important. If your home is not up-to-par and you can afford to make the repairs, it greatly reduces the amount of time your home sits on the market and increases the final selling price," says Sandholm. "There are certain buyers who will take on a home improvement project and consider a home that's not in move-in condition, but beware: those buyers also tend to low-ball."
You're Probably Overestimating Your Home's Worth
You may love your home, but that doesn't mean it will sell for what you're hoping. Sandholm recommends letting the pros take the reins when it comes to pricing. Most sellers will drastically overestimate what their homes are worth, and their homes sit on the market for longer because of it.
You May End Up Paying Way More Than You Want
It's nice to imagine that paying extra will get you the home of your dreams, but that's not the case. In markets where homes are selling like hotcakes, you'll have to bid aggressively from the beginning. Sandholm says that it often takes as much as 15 percent over asking to even get you in the game. Before you start negotiating, make sure you know The Best Way to Buy Real Estate.
They're Not Judging You Based on Your Home
You might imagine that an experienced agent is mentally critiquing your small or outdated pad, but Sandholm says that's not the case. If you feel like your real estate agent is judging your décor or offering suggestions that are more judgmental than helpful, don't be afraid to hire someone else.
An Empty Home Will Work Against You
Many sellers believe that emptying their home will help them attract buyers, but the opposite is true. "People cannot visualize use of space and will therefore offer less than if they can see how a house can be a home with the kitchen table here, the couch and armchairs there," says Sandholm.
Working With a Small Firm Won't Always Improve Your Experience
Just because you're working with a small brokerage firm doesn't mean you'll get a more personalized experience. While many first-time buyers or sellers assume that shying away from big firms means they'll get more attentive care from agents, a salesperson at a big firm often has the same number, if not fewer clients than an overworked one at a small agency.
Selling Without a Broker Won't Save You Money
Selling without a broker might seem appealing, but it could cost you in the long run. "Real estate is incredibly time-consuming and you have to be very savvy about the market, sales and negotiation, dealing with all types of people and handling multiple types of communication, and making time to show the property and quickly, as well as know the ins and outs of how condos or co-ops work versus the sale of a town-home, how the board works, how to put the board package together, where to find a real estate attorney and how to manage them, etcetera," says Sandholm. He cautions that when you end up negotiating against an experienced buyer's agent, odds are you won't come out ahead.
Staging Makes All the Difference
Your home shouldn't be empty when prospective buyers or renters visit, but that doesn't mean it should be full of your stuff, either. Sandholm says that the right staging is essential, and that an experienced stager can work magic, creating solutions to issues that might otherwise tank a sale, like poor lighting or a less-than-ideal view.
That Commission Isn't Negotiable
If you wouldn't haggle with your plumber or doctor, you shouldn't haggle with your real estate agent. "Please don't try to negotiate my commission with me; I find it offensive and will most likely not take you as a client. Your tax accountant, attorney, doctor, daycare provider, grocer, restaurateur all do not negotiate the price they charge for their goods and services and neither do I," says Sandholm. "If you hire a real estate agent who pays him or herself anything other than the market rate, how could you trust them to sell your home for market rate?"
Compromise is Key
You shouldn't buy a home that you can't see yourself loving someday. However, that doesn't mean you need to adore everything about it right now. Sandholm says that, without a virtually limitless piggy bank, there's always going to be something you wouldn't mind changing about your home. Look for a place that checks off the items that are most important to you, whether that's a large master suite or finished basement, and fix what you can along the way. If you do have deep pockets, make sure you enter any real estate deal armed with the 10 Secrets Luxury Home Buyers Should Know!
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