Monday, October 26, 2009
There is a lot of real estate information out there. Recently I got a first hand look at how harmful this information can be in the wrong hands. I had a customer who was looking for a rental property. Instead of calling me to show her the properties that I was sending her she thought she would cut out the middle man -- "Me" and go direct to the properties that she was interested in. The thing about this is she wasn't paying me for my service! The seller pays the commission. This person knows that she isn't new to the business and her mother is a retired Realtor. Well anyway on a drive by for one of the properties she noticed a condo that might be perfect. She had the listing agent meet her at 7:30 am at the property. This guy is working for the seller. He told a great story and before you know it she was not only renting this property but buying it!! She went on the various websites the give estimates of value like Zillow, Trulia, Hometrends. She saw that the average sale price was $174k. The property that she was interested in was selling for $162,900. The agent told her that he just listed it in August. He failed to tell her that it was last August 2008. She negotiated a wonderful sale price of 158k having them professionally clean it and replace the carpet. Well she was so proud of herself she called me to brag about what a great deal she got for herself without my help. I am still baffled by this because my input would have cost her nothing!! As she was going on and on about it I kept thinking why is she calling me! What is the point here. As I listened to her I realized I knew the property. I can remember showing it twice over the last two years. I asked her if it was the one I thought it was and sure enough it was. This is a unique property in a development. Every other property built there is a townhouse style with 3 bedrooms and a lot more sq ft. There are only a few 2 bdrm ranch style units built here I think two. So when she went to the website she got an average number of 174k. The problem is the she bought the smallest unit in the development. That average number is going to be high. You can not replace a good appraiser and a good Realtor. We have information and experience that the novice home buyer does not! When it costs you nothing to use a professional for advice over a website why would an educated person do this? Ego ! I have to believe she just wanted to show me that she didn't need me. This is like talking to a friend that lets say sells cars. Getting all sorts of info about a certain car and the cost of that car and then going to the competitor and purchasing it. Then calling that friend to brag about it. I don't understand this behavior. It happens over and over again to me and my fellow Realtors. Maybe it is the lack a respect the general public has over this industry. All I know is she paid about 13k too much, will probably decide it is too small and now be stuck with another property that has a higher mortgage than you can sell it for without taking a loss.Before this decline the rule of thumb was you need to live there for 5 years to be able to get out even. That is in a good market. All I could say is it will be a good rental property. I'd love to hear your comments!