Articles

How Buyers Win

June 2018

The media is filled with positive news for Sellers, while offering mainly fear-based news for Buyers.  Yet, all year long there are opportunities for Buyers that go unmentioned.  When a highly-skilled agent works with you, you will soon be opening the front door to your new home instead of constantly tracking new listings and endlessly writing offers.

But how do you win in a market filled with multiple offers, purchase prices going over list price and competing all-cash Buyers?

For a start, stop worrying that others might be all-cash Buyers.  They lose in competitions too. Who wins is often very arbitrary and unpredictable.

Purchasing a home is all about compensating factors.  Maybe your credit score is low and your down payment high (or the reverse).  Maybe you’ve owned property before.  Importantly, who your agent is, also, affects your chances for success.  Someone local, known, respected and highly skilled increases your odds dramatically.

Most Buyers find an agent by asking people they know for the name of theirs.  Yet, just like with doctors, the public doesn’t truly know skill levels.  They just know who they like.  Buyers, also, do one-dimensional research of agents online without proper vetting.  Or they attend open houses and chat with the person there, not knowing whether they are the listing agent, a new agent or an assistant.  Yet, maybe, they are representing your competition.

Instead, try this.  Read detailed biographies and testimonials of several recommended agents and then meet them, in person.  Do this as a job interview.  Use more of your people skills and intuition and less of your technology skills to make your choice, as you may be interacting daily with that agent for months.  Your focus should be a timely and successful outcome for your goals vs. your new best friend.  Your intention to meet your goals needs to be equally matched by your agent so that you work smoothly as a team and have a pleasant experience.

At that first meeting, you should have already been discussing a course of action along with a timeline.  Alter realistic goals, where needed.  If you’re agent’s good, your overall experience should be educational, personally tailored to your needs, fun, seamless and low stress.

In my opinion, choosing a long-time, well-respected agent is best, as they have built their credibility upon their reputation and keeping their promises over, say, 15+ years, so are vetted.  Skill and predictability are very important, as that agent is now your representative.

The market changes weekly, depending on inventory and on who the Seller and listing agent are.  Therefore, your agent needs their finger constantly on the market’s pulse, accurately translating what’s going on and then proceeding with tailored strategies for your success.

Although there are exceptions, a simplified overview is that agents who came into the marketplace after 1998 are generally heavier on technology, but possibly without the extreme tactical skills and historical knowledge of changing markets that older agents have.  Approximately 1998 was the turning point for advanced technology (with fancy, in-house marketing that attempts to obscure skill levels through “bells and whistles”) vs. true training through people-to-people experiences and years of seeing how the advice given paid off for their clients over time.

Older agents might not be as strong on technology at times, but they do know how to use it efficiently, and they can work both with and without it, depending on your own skill level and preferences.  (Most newer agents cannot.)  Plus, they know how to work their lines of connections.  So, the older agents are using two skills.  Newer agents are more dependent on just one (technology).  This means that you might write as many as 10-15 offers with an agent heavy in technology, while, with a more balanced agent (strong in both skills), just one or two offers are needed to win.  That’s a HUGE difference for Buyers. Repetitively writing electronic offers while reviewing 400+-page “disclosure packages”, sometimes for as much as a year, takes a toll and wastes time, money and opportunity.  It, also, distorts market data.  Instead, with a more balanced agent, within 1-1/2 to 3 months, you are in your new home and its value is increasing.  You’ll pay less and have a better location with more square footage because you acted quickly in a rising market while interest rates were low.  And, yes, there are both “good” and “bad” agents in both categories, so you still need to interview them well.

Clearly, who you choose and their method of doing business makes a big difference.  If you have written 3 offers and still haven’t purchased, revisit your game plan.  Is the problem you, your agent, the combination, or specific circumstances?  Is it time to alter your goals or switch agents?

Buyers, generally, choose agents who reflect their values and interests.  But, remember, this is not “The Dating Game”.  You have set a goal and want to hire someone good as your representative, so you need more than that.  Your agent owes you honesty, integrity, due diligence and good communication, to name just a few things required by their licensing.  This, also, implies excellent education of their client so you can make best choices to win in competitions.  Plus, your agent needs the skill level to oversee and direct every aspect of the process involved in purchasing property, much like a general contractor oversees their subcontractors.  This means your agent guides you to tested, dependable, local professional services such as lenders, contractors, attorneys and title companies while overseeing each step and being present at these meetings.  This, also, includes overseeing their own team and/or staff working behind them in the background.

Due to the extreme number of licensed agents in our industry during Sellers’ markets, there are, presently, less agents with these skills (due mainly to lack of expertise).  And oversight is only the beginning of the numerous skills required of your agent, from the time you meet through the end of your transaction and beyond.  Since 2011, we went from 2,500 agents to over 10,000 (rough estimates) in San Francisco alone.

When Buyers come through my open houses, I’m troubled by how many are now writing their 8^th or 10^th offer and think it’s normal.  Additionally, many are doing their agent’s job without even knowing it, and/or have an agent hundreds of miles away who’s unavailable.

You should expect that your agent quickly view properties you like.  Preferably, with you there.  If they work in a team, you need the lead agent, who will write your offer, consistently present at this point.  Their thorough visual check, along with their knowledge of market trends, timing, negotiating points, risks and/or future costs to you, plus anticipated future resale values are vital.  They, also, need to read the disclosures, front to back, just as you have, and discuss them with you, since you are depending on your agent to help you catch “red flags” that may be within those documents.  Not everything might get noticed by all of you (including by other professionals), but, hopefully, the biggest issues will be caught and addressed.  You can then decide to either write an offer or complete the purchase.

Contrary to how it appears, inventory is plentiful.  It’s just not trackable by the MLS, the media and the online gurus, due to alternative marketing methods, and privy, mainly, to experienced agents with people skills.  Combining this with flexible lending rules, that allow minimal down payments, makes this a very good time to buy. Don’t miss your opportunity!

Contact me for a confidential, personalized, one-hour educational meeting that will save you 6 months’ time learning on your own.  If needed, I can, also, review and troubleshoot your current buying or selling situation.