Why Do I Need an Agent to Buy a Home -- Part 1

A few weeks ago, I wrote about whether sellers really need an agent to sell their home.  It got me thinking about the other half of a real estate transaction--the buyers.

There are two common home purchase scenarios--either the sellers have an agent, or they are DIY sellers.  Regardless of who is representing a seller, a buyer's agent is, in my opinion, a must.  This is a pretty big topic, so I'm going to break it into two posts. Today we'll focus on FSBO (For Sale By Owner) scenarios.

Just a quick conversation between friends, right?

A home is likely to be the biggest purchase you will ever make, so it's natural to be a little afraid and a little excited when you finally find that perfect home.  When it's time to make the offer, if you don't have a buyer's agent, and the home is FSBO, you will have to call the owners directly to make your offer.  It's just a phone call, it isn't that hard, right?





Have you ever seen those Facebook yard sale groups?  Plenty of "for sale" posts devolve into arguments over how much something costs new vs. how much the seller actually paid vs. how much the items cost on eBay.  Someone always comes along and asks "What's the lowest you will go?" The sellers get frustrated, everyone argues, the post disappears, and the bystanders all tell their friends about the drama that was on Facebook today.

Seems fair.

All for a $50 wagon.

Now make that call to negotiate a $150,000 home.

Without the involvement of a professional, the sellers are asking a price that is their "best guess"--and it includes their emotional attachment to the home.  Buyers without an agent may have even met the sellers to view the home, and have heard all about that emotional attachment and how wonderful the home is...all of which go in to the buyers making their "best guess" as to what is a fair offer.

Easy-peasy.

What could go wrong?


Aside from the potential negotiations disaster, there are still the formalities and legalities to navigate.  Offer contracts, title companies, inspections, home warranties, and the final purchase contract are all things an experienced real estate agent can--and should--help with.



If some of the paperwork isn't done properly, it's a mistake that could cost thousands of dollars when it finally comes to light.  Can you imagine finding out years after the fact that the largest purchase of your life may have been made with legal mistakes or missing paperwork?  An experienced professional really is a must to minimize your risk.





Next week we'll cover buyer's agents when there is also a seller's agent.  Meanwhile, stop by our YouTube channel and check out our ongoing "Why Cheyenne?" video series--you might even see a few familiar faces!

Until next time,

Steve

Comparative Market Analysis--huh?

Raise your hand if you watch a lot of HGTV.  If you’re reading a real estate blog and don’t have your hand up, then you are probably reading the wrong blog….

OK maybe not everyone has 10 hours of Property Brothers on their DVR, but if you’ve watched even just a few home shows, you’ve probably heard the word “comps” while someone is holding a stack of info sheets about other houses.  They throw out some prices of these “comps” and everyone (usually) agrees and the show moves on.  What are these powerful, mysterious comps, and what do they have to do with your house?

“Comp” is just a more fun way to say “comparative market analysis,” or CMA. A CMA is usually performed by a real estate agent and/or appraiser, and is best done by someone familiar with the area.  CMAs look at a lot of things, but especially location.  While most agents know that a house with a direct view of a power plant is likely to be worth less than the exact same home in a gated community with a lake view, local agents will also know things like the reputation of the area schools and whether there are new developments in the works for your area of town.

So what happens when someone “pulls comps” or performs a CMA?  They need to see your home, of course, so they can assess the overall condition, see the lot/property, and check out any upgrades you’ve made.

They’ll also look at current listings, and see which ones are most similar to your home.  “Similar” can mean a lot of things, but in general, what counts is location, number of bedrooms and bathrooms, similar condition, and square footage.  So while the ranch style home 2 miles away might not look like your mediterranean style home, it’s possible it will count as a “comp”—or maybe it won’t, but there’s only one way to know, and that’s to look at all the data that’s available!

At least real estate agents get pictures.

So what’s available besides current listings?  While the rules can vary from state to state, agents and appraisers can generally use pending listings (homes that are currently under contract), canceled or expired listings, and sold listings.  

Here’s where it can get tricky—all those paper numbers are great, but what we do with them is what really counts.  No two properties are going to be exactly the same, so we have to make adjustments for differences.  A few hundred square feet may not mean much for very larger homes, but for smaller homes, it can mean a huge change. 

Is that structural damage or just cosmetic?

And what if most of the comp homes are overpriced and have been sitting on the market for months?  Should you overprice your home because you want “top dollar,” or so people don’t think it must be priced lower because something is wrong?

A great agent is not only going to know these things and how to point them out, but is also going to know that “top dollar” doesn’t mean overpricing a listing.  It means selling your home for true market value.

So, are you ready for your own CMA?

www.cheyennehomevalue.com

Until next time, 

Steve

Do I need an agent to sell my home?

Sorry I've kept you waiting--we've had a busy few weeks, including the R4 convention in Las Vegas, and just yesterday had our annual awards breakfast.  Check out the honorees!  I love how technology lets us share the accomplishments of our great team of agents.

Isn’t technology great?  Because of technology, we have so many more marketing tools available than ever before—websites, mobile apps, even the ability to text makes scheduling a showing almost painless.  

With so many tools available to everyone, “Do I really need an agent to sell my home?” is becoming a common question.  I know you might think I’m biased, but it is my personal and professional opinion that you absolutely do!  I could go on all day about all the reasons why, but I don’t want to bore you, so I’ll stick with three: legal protections, market knowledge, and saving money.

Perhaps the easiest case to make is legal protections.  Remember all the papers you had to sign when you purchased your home?  There’s a good chance that they are now considered “outdated,” since they may not reflect the most recent regulations in your area.  Legally, the party who writes or presents the contract gets the least favorable interpretation of that contract if something goes wrong.  If you’ve presented buyers with an outdated contract, you are liable for any errors it contains.  How sure are you that you researched all those regulations thoroughly? Are you insured against any errors you might make?

How about omissions?  Are you required to tell buyers about something that isn’t yet a problem with the home, but might become a problem later?  Do you have to tell them in writing, or just verbally?  Where does that go in the contract?  

Stephanie can probably find me a really nice blazer.

That list of questions is getting pretty long!

If only there were someone out there who knew all about this stuff…

Speaking of knowing stuff—a huge value to having a seller’s agent is market knowledge.  Many home values are public after a home has sold, but gathering and sorting all that information, then taking into account current market conditions, the condition of those homes at the time of sale, and many other factors takes time and yes, experience.

I'm a French model.

There is no shortage of websites that want to give you a home value, and it’s tempting to take those estimates and ask for that amount.   Those estimates are based on data that might be years old and based on homes only vaguely similar to yours, and often don’t account for current market trends.  If it’s on the internet, it has to be true, right?

Real estate markets are often different from national trends.  Right now, Cheyenne is a seller’s market—since January, I’ve had two different homes go under contract within one day of being listed! Trulia and Zillow, the big names in online home values, estimated one of those home’s value at 10% and 20% less than the home’s purchase price.

Which brings me to what is arguably the most important reason to hire a seller’s agent—saving money.  If the seller in the above scenario had listed their home in the middle of the two online estimates, they would have asked for 15% less than the eventual purchase price.  Would they have negotiated down from there?  Either way, they would have missed out on thousands of dollars.

As the seller’s agent, it was my job to really know the area, the home’s features, and the market.  We worked together to set a price right at fair market value, and then I had a professional video walkthrough of the property produced to preview on our Facebook page.  The result was a happy seller with a sold home, for more than the online estimates had suggested.

Thank you for the wonderful review!

That’s a great example, but it’s not necessarily uncommon. “FSBOs (for sale by owner) accounted for 9% of home sales in 2012. The typical FSBO home sold for $174,900 compared to $215,000 for agent-assisted home sales.”  That means that, on average, FSBO properties sold for 19% less than those listed with a seller’s agent.

Now, commissions are negotiable, but let's say the commission for these FSBO properties would have been 6%. Selling on their own and "saving" that 6% actually cost the DIY sellers 19% of their home's value.  You read that it right--it would have been "cheaper" to have had a seller's agent.  13% cheaper, to be exact!

So, how do you feel about needing a seller's agent now?  I'd love to hear your thoughts!

Until next time, 

Steve

New Video Series--"Why Cheyenne?"

Are you considering a move and looking for the perfect place for your family?  Perhaps you're a military member and your family has just gotten PCS orders to F. E. Warren AFB and are searching for more information about your new community.  No matter the circumstances, Cheyenne is an amazing place to call home, and the team at RE/MAX Capitol Properties wants to share the reasons why!  

We looked around us and found real people and places that we are excited to show you.  Whether you've grown up in Cheyenne or you haven't yet stepped foot in Wyoming, check out the series and tell us what you think!

What do you love about Cheyenne?  Tell us in the comments and you may find yourself starring in our next video!

Until next time, 

Steve

Why do I have to clean so much?

Getting ready to sell your home?  You might be surprised at the amount of “elbow grease” you’ll need to put in, even if your home is in pristine condition.

A first impression of a home should always make potential buyers wonder “Why are they selling this home?  It’s amazing!”  Realtors know this, so one of the first instructions they give their sellers is to clean, declutter, and then clean some more!  Just when you thought you were finished getting your home ready to sell, you find out it has to stay that way—all the time.

We often hear from sellers that keeping your home “Ready to Show!” is the hardest part of selling a home.  Getting the kids to keep their beds made and toys put away is hard enough when you don’t feel pressured to also clean the kitchen, the bathrooms, and everything else every day!  “They know someone lives here, they can’t expect it to be perfect all the time!” sellers say.  And while buyers know that it isn’t realistic to expect a family to keep a home spotless, the subconscious doesn’t always see it that way.

Let’s say you’re moving because your family has simply outgrown your home—maybe you’re still in a “starter home” that was perfect for a family of 3, but just doesn’t have enough space for your family of 5.  Of course there will be clutter and dishes, because you’re out of room!  A family of 3 should be able to see that they won’t have those problems, right?  Wrong!  All they’re going to see is that maybe they will also outgrow this home, and what if that’s soon?  Where will they put everything?  If you can’t find a place for everything, why should they think they will?  After all, you’ve lived here longer, so if the house had enough storage, you would already know.  

Since the house doesn’t have enough storage, it seems small.  Even 4,000 square feet feels cramped if you have to step around toys, the counters are full of dishes and small appliances, and you can see things spilling out of closets and from underneath beds.  A freshly cleaned home feels welcoming and cheerful, and decluttering helps the space feel larger, and these things together give that first impression Wow! that makes your house feel like a desirable home worth the asking price.  

You chose your listing agent because you trusted their expertise—their advice is valuable, and if you follow it carefully, it will definitely pay off in the end!  Even if you aren’t ready to buy or sell yet, take a few minutes and browse current listings.  See which homes make you want to see more, and which homes you know right away you don’t want to see—I bet you’ll see how valuable a clean, uncluttered house shapes your opinion!

Until next time, 

Steve

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Do you agree or disagree?  Have a real estate question?  Or just want to give some feedback?  Leave a comment below!

Does an agent’s company brand matter?

Let’s start with a simple truth:  what matters most about your real estate agent is that they have your best interests in mind, and work with you to make your experience a positive one. That is true across all areas of real estate, and there are lots of great brands with agents who fit that description.

Now, here comes the “but…”  There are a lot of reasons to consider the real estate brand of a potential agent, and I believe they are an important part of choosing your Realtor.  In case you don’t find real estate as riveting as I do, I’ll focus on just one—resources.

I don’t mean resources as in money; I mean the total package that a brand brings to the table.  Let me explain.

Real estate brands are built on years of experience, knowledge, and most importantly, the reputations of its agents, and brands are committed to maintaining those reputations.  The best way to do that is by employing outstanding agents who consistently provide great service to their clients.

So brands invest heavily in the education, training, and support of their agents.  From staying on top of the latest real estate trends to continuing education course information, RE/MAX provides us a host of tools to make sure we have everything we need to take care of our clients.  (In fact, RE/MAX Capitol Properties was chosen to film a training video for RE/MAX!  Check out the photos here.)  

Brands also provide an instant network of agents who use the same tools and receive the same training, but who bring their own unique experiences to the office. For example, we have weekly meetings that bring together veteran and new agents, so that everyone can learn from each other.  

One of the greatest resources, though, is the brand itself.  When you’re selling your home, you want to know that your agent has a marketing plan, and the resources to put that plan into action.  When you’re buying a home, you need an agent who is connected with other area agents to make sure you don’t miss a great listing.  When your agent is part of a great brand, you know you’re getting everything that brand stands for. 

No matter how great a brand’s reputation is, it can’t replace a face-to-face interview with prospective agents.  I encourage you to interview more than one agent, to make sure you’re choosing a Realtor who not only has the experience and resources you need, but a personality that fits well with yours.

Until next time!

--Steve

Why Move to Cheyenne?

First, welcome to my new blog!  I'm excited to start blogging and sharing my real estate knowledge, my love of Wyoming, and maybe even a joke or two along the way!  

When people think about moving to a new place, Wyoming is often not high on the list of places they consider!  Even so, Wyoming, and Cheyenne in particular, has been steadily growing, and there's no reason to think that trend won't continue.  Some of that is of course due to F. E. Warren Air Force Base, located just off I-25, but much of the growth isn't because of incoming Airmen. So what's all the fuss about?

My wife Stephanie and I are proud to call Cheyenne home—even though some locals teasingly refer to the wind as “population control”!  If you are considering relocating, whether for economic opportunity, retirement, or just a change of scenery, I’d love to share with you why I think Cheyenne should be at the top of your list!

A great economy: Compared to the national average, Cheyenne has a lower unemployment rate (3.4% vs. 6.3%) and lower income taxes (0% vs. 4.72%).  We also have higher recent job growth (3.24% vs. 1.18%), higher projected future job growth (43.1% vs. 36.1%), higher income per capita, and higher median family income. (Information taken from Sperling’s Best Places on 12/1/2014, http://bit.ly/1FPnjjZ) In November of this year, the website beyond.com ranked Cheyenne as the #6 city in the nation to find a job, and Global Trade Magazine named Cheyenne as one of America’s Best Cities for Global Trade!  Even with all that going for us, Cheyenne’s cost of living is 4.1% lower than the national average (Forbes Magazine).  So basically, the statistics tell us that Cheyenne residents make more money, pay less taxes, have increased job access, and spend less to live here—sounds pretty great to me!

Great education options: Cheyenne residents are served by 27 elementary schools, 3 junior high/middle schools, and 4 high schools; the district also boasts a teacher:student ratio of 1:13.3, one of the lowest in the nation.  We are also very homeschool-friendly!  

There’s no shortage of secondary education options, either—Cheyenne is within 50 miles of one community college, one technical college, and three 4-year universities (also offering post-secondary programs), including the University of Wyoming.  UW offers not only a quality education, but one of the lowest in-state tuitions in the country!

A great community: Cheyenne’s spirit of community shows year-round—from the 2,000+ residents who volunteer their time during Frontier Days, to the annual Christmas Parade sponsored by our wonderful local business community, you’ll feel the sense of community pride and involvement as soon as you arrive.  In fact, Cheyenne was voted the “most polite city” by executives across the country!  And it doesn’t stop with the residents; our local government invests in infrastructure and development projects such as parks, recreation, and employee training.  Cheyenne is a prime example of community pride and involvement, all the way through!

Those are just a few of the things that make Cheyenne an amazing place to live and work. If you’re a Cheyenne resident, weigh in on the comments with your favorite thing about Cheyenne!

If you’re moving, or considering a move, to Cheyenne, send me your questions!  I would love to help you get to know the area.  You can also follow us on Facebook to see great new listings and open houses each week.

Until next time!

--Steve