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Behind the Scenes With a Real Estate Agent

Today I want to share a unique experience I had recently that will give you a little insight about what goes on behind the scenes in the life of an agent.

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The real estate market continues to be very, very active.

Inventory is very tight in the under-$300,000 range, placing us firmly in a seller’s market. Above that range, we’ve noticed that there’s been a shift toward a buyers market. Rates are going up, and whether you’re a buyer or a seller, I think you’ll regret not locking in a low mortgage rate this year. For sellers, you’ll have a larger pool of buyers to access when rates are low, since homes are more affordable with lower rates.

However, instead of focusing on market trends, today I want to talk about what goes on behind the scenes in real estate.

Real estate is a very unique business. We have competitors in the field, but we also have to collaborate to sell homes with those very same competitors. This week, I had a competitor say some very rude things to me; he hung up on me twice. In my 25 years in the business, this is very unusual.

One of my listings was under contract; we were waiting for the revised contract to come in from this gentleman. In the meantime, I was able to produce a better, stronger offer for my client. This competing agent, who had said that the offer that was taking too long to get to us, unfortunately got bumped. I have a fiduciary responsibility to produce the highest and best offer I can for my clients, so we went with the second offer.

The agent of the first offer disagreed, and he had many not-so-nice things to say, dropping the F-bomb repeatedly before hanging up on me—twice.
I always have the duty to my sellers to produce the highest and best offer that I can, and our team will always honor that.
There were a couple takeaways from this experience:
  • The agent utterly lacked professionalism. In the real estate business, the barrier to entry is very low, and I’ll admit that the encounter got my ego up. I was upset; I had done the right thing for my client, but this agent didn’t seem to think so. Rather than judging him and getting angry at him, I should have stepped into a mode of curiosity—I have no idea what’s going on in his life.
  • Anger is not the best response to a situation. Anger didn’t produce the results that he wanted, even if the transaction I have going now were to fall apart. Going back into business with him won’t likely be in the best interests of my client.
I always have the duty to my sellers to produce the highest and best offer that I can, and our team will always honor that, regardless of the agent on the other side.

If you have any questions about real estate, please feel free to reach out to me. I’ll help in any way I can to ensure your continued success in real estate and life.

Why Haven’t Commission Rates Changed?

Real estate commissions have stayed flat over the years, even though the legwork for agents has dramatically increased. Here’s the reason why.

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It’s spring, the market is robust, and we’re seeing a ton of activity in the market. However, today I want to talk about something a little different: commission rates.

Now, I cannot directly discuss my commission rates, but I do have some general thoughts on them. The base commission rate that most agents in the capital district hasn’t changed in the 25 years I’ve been in the business. This is absolutely ridiculous. 

25 years ago, agents had to do a lot more legwork. I had a book to pull up printed information, write contracts by hand, and send someone out with a fancy camera to take pictures. Today? Everything has changed with digital technology. I can electronically send documents to sign, use digital photographs, and do things much more efficiently.

So, what’s the real reason commissions rates haven’t changed if things are so much easier for agents? It’s because of referral companies like that who take their fees on every single referral they give. Agents have to make up the difference, and that’s why the rates have remained flat instead of dropping. I get a tremendous amount of referrals from companies which then charge me 25% to 37% of the full commission. Since they do not add value, I am paying them for their national advertising.

These referral companies ask for 25% to 37% of our commissions.
Want to save money on your next transaction? Give us a call and skip the middleman. We’ll provide great value for a great price and I’d be happy to discuss the specifics with you. If you have any other questions about the real estate market in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

What You Need to Know About the Dirtiest Words in Real Estate

The dirtiest word—or words—in real estate is “real estate appraiser.” Here’s why.

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What makes “real estate appraiser” the three dirtiest words in real estate? To understand, let’s take a look at what’s happening in our current market.

Inventory is tight right now, especially in the lower price points, and our market wants to start trending upward in terms of home values. Whenever this happens, it makes an appraiser’s job more difficult. I know because I’ve been there before.
Remember, appraisers represent the banks, and it’s their job to look at historical data to evaluate home values. Home values want to start increasing because of our supply and demand imbalance, but appraisers are still looking back six or 12 months to evaluate properties.

As an example, I recently sold a home in Albany for $180,000, but its appraisal first came in at $175,000. This gave my seller a tough decision to make—whether to sell at $175,000 or put the home back on the market and hope they eventually get a higher appraisal from someone else. This home had several offers above the price we sold it for, but the appraiser was saying it was only worth $175,000.

Appraisers aren’t doing their homework as far as where supply and demand is and what buyers are willing to pay.

If my client decided they wanted to sell at $175,000 even though the home was worth $180,000, a new appraiser would’ve come along after that and used that as a comparable sale to set values for other homes.

This is just one of many examples I could’ve used that have occurred over the past several months—I list a home at a certain price and then the appraiser comes along and values the home for significantly less than what a buyer is willing to pay for it on the open market.

This effect is keeping the market down when it should be easing up into positive, healthy price gains. Appraisers aren’t doing their homework as far as where supply and demand is and what buyers are willing to pay. As I said, I’ve been there before and I know how hard it can be, but unless they start easing up on their guidelines and using paired sales to measure appreciation and make time adjustments, this kind of thing will keep happening.

As always, if you have any specific questions about your home’s value on the open market or you have any other real estate needs I can help you with, feel free to give me a call or send me an email. I’d be happy to help you.