J. Philip's Briarcliff, Ossining & Westchester Real Estate Blog

Here in New York just about every buyer north of New York City working with brokerage uses a buyer agent. It just makes sense; the seller has an advocate in the listing agent looking out for them, so buyers should have the same advantage in the largest transaction of their life. Moreover, it almost never costs the buyer anything out of pocket beyond their purchase. A good buyer agent can help with many things, but there are some things we can't do.

Let's start with what a good agent can do. 

• Due diligence on the property background, sales history, and condition. I'm the guy that advises you to test that oil tank, septic system, and presence of radon. I check with the municipality to ensure that the taxes are correct, the square footage is accurate, and everything represented by the listing agent is true. 
• Market activity- Is the house overpriced? Underpriced? Competitive for the area? Listed previously with another broker? I can tell you what houses like it are selling for, and in many cases I know the other sales in the area very well. I may have personally made some of those sales!
• Negotiate- I can sniff out a divorce. I know what questions to ask. I probe for weaknesses. I know exactly how to handle the listing agent, certainly far better than an unlicensed, first-timer. I have seen listing agents hang buyers out to dry in cases where the buyer thought themselves wise to deal directly with the lister. 
• Advise- I can tell you if the time is right to raise your offer, stay put, how to handle a counter offer, and tons of other things you may not have even thought of. I do it all the time. 
• Refer you to competent lawyers, mortgage sources, inspectors, and other specialists you need to make sure you have proper representation and assistance. Need an estimate on a new deck? I'll get you 2 contractors. Need to know if a roof is going to need a replacement? I'll get you 2 honest roofers who'll tell you the truth, not shake you down for a job. 
• Serendipity- I have verified estimated fuel and utility costs, listened for train noise of a nearby line, timed a commute, and hundreds of other things you may not be able to do yourself. 
• Is there more? I could probably write for hours. But you get the point. 

• Predict the future. I have NO IDEA what a seller will take. Don't ask me to ask their agent. They are ethically bound to represent the asking price, period. I have NO IDEA what the house will sell for in 5 years. There is no way to tell. I have NO IDEA when the roof or furnace will go.   
• Steal a house. Well, in most cases. Yes, it is a buyer's market. No, that doesn't mean that you can insult the seller and presume they are desperate and will take anything. Have we gotten some fantastic deals done well below asking price? I have. But once that lowball offer is rejected or countered at full price, you need to understand that the odds of a steal are remote. 
• Hypnotize the seller and their agent into taking your 80c on the dollar offer. This is especially the case with highly desirable properties with recent price reductions and plenty of interested people looking. People are all about the money. If you are in a competitive bidding situation, they take best and highest.  
• Manipulate reality. This is somewhat like hypnosis. If you are making a low offer with a low downpayment and a pre approval from some Internet lender, you are not giving me the sufficient tools to make you look good in the eyes of the seller or their agent. 
• Beat the other side into submission. Being adversarial doesn't work. Sellers aren't bad people for wanting to maximize what they net for their property, so getting insulted when they counter offer or don't accept all of your terms the first go around doesn't make them unreasonable. It makes them people with their own wants and needs which should be respected and considered. Advocacy is not pillaging. 

A few other observations to keep in mind, especially in this environment where the buyer has the upper hand:

• Not every seller is desperate.
• A win/win outcome, or even the appearance of one, is superior to a win/lose outcome. I have seen sellers who felt like they were held over a barrel by a smug buyer replace large appliances with cheaper ones and do other things the buyer didn't like but couldn't fight because of ill feelings over how they were treated. 
• Never underestimate the importance of psychology and perception. If you are going to offer $395,000 on an opening bid consider 400k instead. 
• Nobody likes a bully. Sellers bullied buyers back in the hot market. It wasn't wise. It isn't wise to demand that a 75 year old vacate their home of 40 years in 30 days instead of 60 just because it works for you. Think win/win again. 
• Don't overplay your hand. A 10-year old kitchen with corian counters and black appliances instead of chrome isn't outdated or 3rd world.  
• If you adore a fantastically priced, spectacularly appointed property you probably aren't alone. Don't be shocked if such a home has competitive bidding. 

Here's the bottom line: if it sounds like I am defending sellers I am not. I am trying to portray that there are people on the other side just like you. Empathy makes you a better negotiator, and better negotiators get better deals. 

 

• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• Read my short sale blog here. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I'm hiring agents. 
• Agents: Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

Most consumers sort of understand how real estate works. These days, if they see a home they are interested in, they'll contact their buyer agent and have them arrange a showing. If that is THE place, that agent writes the offer, guides the transaction, and gets paid at closing. It is an uncomplicated process, and one that the vast majority of souls who have mastered walking on their hind legs grasp. 

However, there is a misguided minority of prospective home buyers who, due to either ignorance or selfishness, don't get it. Ignorance is not their fault. Selfishness, however, is. This past Sunday I received an email from a new buyer who saw a property on my IDX site that they wanted to see right away. I emailed and called them a number of times, and several hours later I got the following response:

Thanks

Our realtor decided not to go out of town so we will continue with him
Thanks so much anyway
David

I actually breathed a sigh of relief that I did not waste my time re arranging my Sunday to accommodate them, only to find out that I was a pro-bono tour guide for the day. These people do not understand that real estate agents are not interchangeable. If I had shown them this property and they used their agent to buy it, I would have had the double whammy of losing not only that commission, but whatever I would have earned spending my time in a more productive endeavor. 

I averted a disappointment. One of my licensees was not so lucky this past week. I referred a buyer email inquiry on one of my listings to him, and he contacted the prospective buyer to set up the showing. At the showing, a "friend" accompanied the buyer, who identified herself as a licensee. Not so much as a business card. A friend. Of course, this "friend," a week later is now claiming to be the guy's agent (she didn't even set up the original appointment) and entitled to the commission. There is no meeting of the minds yet, but guess who the buyer keeps calling and emailing? You guessed it, my agent.

This "friend" is not a board or MLS member, has not produced any representation or agency paperwork, and hasn't adhered to the usual protocols when a buyer oversteps their agent. She is a licensee; that much has been verified. But she did nothing to earn her fee! She didn't set the appointment, write the offer or hold the buyer's hand this past week! If this deal goes together, I'll have to jump through extra hoops to avert a mess, and my guy has a baby due in a month.  

If you are buying a home and use an agent, use your agent from the start. You have no idea the can of worms you'll open by not doing so. Agents are NOT interchangeable. We are not free tour guides, and we have mouths to feed just like you do. Think about that before you ask for our time. 

 

• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• Read my short sale blog here. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I'm hiring agents. 
• Agents: Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

A question was asked on Trulia earlier today that stated a desire to not use a buyer agent so as to save 3%. Now, aside from the mistaken presumption that all buyer agents are paid 3%, the questioner inadvertently brings up a point that all purchasers should understand:

You don't bring a knife to a gunfight.

My answer began as follows:

The notion that you are spending an additional 3% if you use a buyer agent is inaccurate. The listing agent already has a contractual commission arrangement with the seller, and they will not cut it in almost all cases just to make the deal work for you. Moreover, you are not represented in the largest transaction of your life. A good buyer agent will save you more than 3%.

Some people think themselves as skilled and savvy enough to deal with the seller's advocate without assistance. Most of them are sadly mistaken. They'll get Uncle Lou or someone they don't know out of the yellow pages to do their home inspection. They'll hire the cheapest lawyer. The transaction can get stalled at the 11th hour because they didn't know that there was no Certificate of Occupancy for the finished basement or extra bathroom. They lock their rate too early and end up paying an expensive extension fee (this is especially sad when the fee is unnecessary- if rates have gone down they'll benefit from the common worst-case-scenario policy from a prudent rate float). They get to closing and find out the property taxes are $2000 higher than advertised. They get left out in the cold a week before closing by a sham Internet mortgage deal. The list goes on, and I've seen it all.  

Skills alone won't make MLS data and comparable sales materialize. Negotiating on a home is unlike any other transaction. If you treat it like a car, PC or ebay you are tempting fate. There may be some lame listing agents, no doubt. But I know agents that, if given the chance to sell their own listing to an unrepresented buyer, will smack them about the head and face & call them Shirley and have the buyer think they just got a foot rub. It has nothing to do with deceit. It has everything to do with knowing the things at the deep end of the pool. This is the biggest transaction of your life and there is no need for machismo. USE A PROFESSIONAL with references, a track record, and local knowledge.  

Now, I haven't shared the question with you yet. It was as follows:

Can someone send me the details on how to buy a home without hiring a buyers agent? a format of offer letter

Folks, if this is your starting point you need a buyer agent. This guy won't save 3%.

____________________________________________________________

J. Philip Faranda is the Broker and Owner of J. Philip Real Estate, LLC in Briarcliff Manor, NY. He is a Top 10 Producer for closed single family transactions out of almost 7000 licensees in the Westchester-Putnam MLS in both 2007 and 2008. You can log onto the company Home Page at www.jphilip.com

You can search the MLS like an agent and find your dream home before other buyers for FREE confidentially & at no obligationat http://jphilip.listingbook.com.

J. Philip Faranda ranks among New York's premier short sale REALTORS specializing in short sales in Westchester, Rockland, Putnam & Dutchess Counties. www.NYShortSaleTeam.com. Read Phil's short sale blog at http://NewYorkShortSaleBlog.wordpress.com.

J. Philip Serves Briarcliff Manor, Ossining, Croton on Hudson, Pleasantville, Sleepy Hollow, White Plains, Yonkers, Peekskill, Cortlandt, Tarrytown, Yorktown, Montrose, Hawthorne, Thornwood, Valhalla, Hartsdale & all of Westchester County, New York.

 

• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• Read my short sale blog here. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I'm hiring agents. 
• Agents: Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission