I recently met with a young couple who called on one of my listings. I met them one evening to show the house and heard their situation. They were out to look at ‘everything’ and were ‘on their own’ without an agent relying on what they could locate on the internet. They stated that their motivation was driven by the fact that the wife’s sister had bought a house in Marin for $800,000 below asking by representing herself and they wanted the same great ‘deal’.

465 Hoffman

My immediate thought regarding her sister’s great deal was that she actually paid ‘market’ rate or above but ‘thought’ she got a great deal. Let’s look at the facts as presented. If the house her sister had bought had been on the market for months and hadn’t sold and then the sister made what she ‘thought’ was a low ball offer and the seller took it – then the house actually sold for market. In many instances, several I know of here in San Francisco, specific homes that have been listed have dropped their respective prices by that much or more before they sold. If her sister bought it ‘off market’ she may actually have paid a couple hundred thousand more than the $1million off that should have occurred because it wasn’t market tested. 465 Hoffman in Noe Valley started out last year at $3.9million and was only lowered to $3million this month when it finally sold. Anyone who had made an offer while it was ‘off market’ over the Christmas holidays, let’s say at $3.4million, would have thought they’d made the ‘deal’ of a lifetime but actually paid $400,000 too much.

Secondly, the belief that you’ll get a better deal as a buyer by working with the listing agent runs counter to the actual mechanics of the transaction. Without your own ‘representation’, the seller will more than likely – in my 20 years of experience – take the same price that they would even if you had your own agent ( because remember the seller is tied to the sales price the majority of the time) and pocket the increase due to any reduced commission with the listing agent. The buyer has just lost their best resource, their own representative in the transaction. Would you do your own surgery? No, you’d rely on an expert with countless hours of experience, history in the field and connections within the industry. These are the intangibles that buyers often discount but can gain hugely from with the right agent (these provide good measuring sticks when looking for an agent of your own).

Just yesterday (see the previous) posting, I had called on the 15th Avenue house for my clients. The listing agent said that they had received 5 offers and were in counter and were going to make a decision the next day. I said that the house was still in play and I wanted to show my buyers that evening so they would be able to make an offer should they decide to move forward. Because I have experience with the listing agent, she agreed and understood that I was being an aggressive advocate for my buyers. She gave me some limited information on the situation however in discussing it with my business partner, Dan Marshall, we discovered he had been in conversation with an agent that was one of the five offers so then I had the complete picture for my buyers and now knew the counter price which was right on the nose for what I had told my buyers my best guess was at price, $900,000. This is an example of what a buyer can gain from the ‘intangibles’ of an experienced agent with countless hours of experience and connections within the industry.

418 Liberty, San Francisco

While the buyers were touring my listing describing how they were on their own and relying on whatever they could come up with on Google and wanted to see everything, these thoughts of connections and representation where going through my head. They had no idea – because they didn’t have their own tied in representative – that at that very moment a new listing was being launched within the neighborhood at an evening reception at 418 Liberty because it hadn’t formally been listed. 418 Liberty priced at $2.395million went into contract in less than a week so chances are they didn’t see it. Again, they lost out on knowing all the nuances of a neighborhood or area that don’t show up on the internet.

In closing, my best advice is to make sure you’ve accurately measured ‘the deal’ and make sure you have the best representation.

‘Til Next Time,

Lance

415-793-6140