"Palos Verdes Resident since 1947"

November 2014 Newsletter

Dear Neighbor:

The market continues as before.  I would say it’s about a 7 on a scale of 10.  I sense, though, that many buyers think the market has peaked or is about to.  The argument for buying now remains low interest rates – just over 4% for 30-year fixed.  I’m telling you, we’re all going to look back on this as the good old days.

The subject this month is the agent you hire.  Hire me.  OK, letter’s over.  But seriously, I often get the feeling when speaking with (especially) sellers that they think either a) all agents are the same, or b) they should hire the one that gives them the highest estimate on their house, or c) they should hire the one that charges the lowest commission, or d) they should hire based upon the ethnicity of the buyer they think they’ll get:

a)  All agents are absolutely not the same.  From market knowledge in setting the price, to knowledge of the past sales when negotiating the offer, to knowledge of how to handle the problems that inevitably come up, the difference between agents is vast.  You want an agent with sufficient experience, resources, and commitment to know the market and solve the problems that come up.  This means someone who regularly does business in your area — so ask for a list.

b)  We call this “buying the listing” when an agent gives a flatteringly high estimated value, figuring that you’ll think he can somehow get you over the market value.  That might (hopefully will) happen, but putting the house out at a price clearly over the market is not the way to make that happen.  The other cause is that the agent just may not know your market so, as in a) above, ask for a list of homes he’s sold in your area.

c)  See, here’s the problem with this seeming no-brainer:  the market sets the commissions, the agents don’t.  The commission you pay is split between the buyer’s agent and yours . . . the agents then have to split it with their brokers, by the way, so don’t think your agent can retire after your escrow closes.  If the market is 5% and you’re only paying 2% to the buyer’s agent when everyone else is paying 2.5%, you are likely to lose more in the sale price than you “saved” in the commission.   It isn’t that 2% isn’t a lot of money.  It’s that a buyer’s agent who has schlepped his buyer all over town for the last 6 months, written 12 offers that were rejected, had ice cream spilled on his leather back seat by the buyer’s 3-year-old, and given up his personal life trying to find this lovely family a home, is not . . . how can I say this delicately . . . going to burn rubber to show them your house.  As a result, you are unlikely to see all buyers, which may include the guy who would have paid you the most.

d)  The ethnicity of  your agent has zero to do with the buyer you get.  Hire the agent you’re comfortable with to represent you.  The buyer will have his own agent that he’s comfortable with.

As you may have noticed, we have changed our name to Berkshire-Hathaway.  Ballyhoo notwithstanding, the only effect you’re likely to see is that our signs will change from blue to “cabernet”.  As discussed above, what really matters is the agent you hire, not his company affiliation.  If you’d like to talk about any of this, call me at 310 613-1076, or visit my website:  www.DanaGraham.com.  Just think, you could be the first on your block with one of them snazzy new cabernet signs.

Sincerely

Dana H Graham

 

 

 

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