Negotiate? What? Surely agents just open the door, smile, and write up offers for list price, right? Here’s the deal. Real estate has changed. I know. I know. Shocking.
It used to be that real estate agents would actually find a house because the internet didn’t have those easy to access listings everywhere. Since the internet changed the real estate game, agents have had to change theirs. While some agents are house finders, you really should be looking for a house advisor. That’s what we do.
Those of you relocating to Oregon from another state, especially on the East Coast, you need to realize that negotiations may be different here. Oregon is an “escrow” state meaning that real estate agents handle normal real estate transactions. We bring attorneys in for complex transactions or when there is a problem. Most East Coast states are “attorney review” or “attorney closing” states which means attorneys are involved in every transaction. Since we don’t use them here, having a really good agent is essential.
How can you help yourself in negotiations? I’d suggest not shooting yourself in the foot for starters.
- Know the market conditions. We only use a ouija board to help clients figure out market conditions when our dartboard is broken. Seriously. It is important to know what is happening in the local real estate market. This is what we are for, and we are great at throwing darts. While you can stare at the comps all day snoozing at your computer, the fact is that we are in and out of homes all day long. In some neighborhoods, we’ve been in a lot of the homes and know why a house sold for a certain amount sans ouija. That’s how good we are.
- Buyers and sellers have to agree to disclosed limited agency (the principal broker represents both sides of the transaction) in the state of Oregon. If you attend an open house or look at a home with a listing agent remember that anything you tell them will be shared with the seller of that property. They are legally required to do so. When they ask what price range you are looking in, don’t share the max you are approved for unless you want the seller to know that. When they ask why you are buying, tell them you are looking for a home for your toilet planter collection. That would really freak them out. Setting your buyer agent up to fail by sharing your motivations and financial means isn’t a good idea, unless you really, really like to pay full price for a home.
- Start to research your local market. What other homes are listed for is not as important as what they sell for. Some agents are better at pricing than others. Some homes sell for a lot less because they are dumps. That is technical real estate terminology by the way. A dump will sell for less than a move-in ready home. Setting yourself up to fail in negotiations by having unrealistic ideas about what homes sell for is a waste of your time and energy. You’d be more productive playing Plants Vs. Zombies in your pajamas at home and figuring out how to beat endless. You still won’t have a house, but you can share your tips with me on how to beat it and I can finally stop playing it.
- How long has the home really been on the market? Beware of the “DOM game” that some real estate agents play. Just because the MLS may list a home on the market for a short time it may not be true, you really want to know the total time it has been on the market. Look at the history of the home sale. If the seller changes real estate agents, it may appear to have been on the market a shorter time than is accurate. Some real estate portals make it hard to play this game since it shows the listing history, but some agents still try. Just say, meh.
- Look closely at the home before writing an offer. Some major red flags such as excessive garden gnomes, roof in poor condition, some types of foundation cracks, old furnace, pink flamingo collections, etc are going to give you an idea about the home. Poorly maintained homes often have unexpected issues come up during inspections so take that into consideration when writing an offer. You also have to decide if the home will meet lending guidelines, but that’s what you hire us for, to know those things and help you figure it out.
So ignore all of the crazy articles online that tell you to offer 80% of list or some such nonsense. Sometimes 70% off list might be the right offer and maybe 105% is the right offer. You can’t break down negotiations into an algorithm. Let’s face it, Zillow doesn’t know about the cool garden gnomes.