R.O.C.K.I.N.G Real Estate Agents - N is for Negotiating
Hope everyone had a wonderful 4th of July weekend. Back for part 7 to talk about another important characteristic of good real estate agents; negotiating.
What is negotiating? It's simply two sides exchanging and making concessions until a "meeting of the minds" can happen, or in other words a "deal is struck?.
Although, if your Realtor is one of the Agents to Avoid, you don't have much hope.
One thing a buyer's agent will typically negotiate for is for the seller to cover some or all of the buyer's closing costs for example and often times is necessary to make a buyer's purchase possible. Many buyers can swing the down payment and miscellaneous expenses like inspections, but closing costs can be very expensive for some.
Good agents think less about the size of their commission, and more about how to help their client (buyer or seller) have the deal come together for them and achieve their goals.
Let me give you an example:
A home listed for $$225,000 hits the market, and according to the comps (comparative market analysis) the fair market value is more in line at $215,000.
On the 4th day of the listing, a buyer's agent submits an offer for $210,000 and asks for the seller to pay $3500.00 towards the buyer's closing costs. This is now a NET offer of $206,500 to the seller. The listing agent advises his seller that more and better offers might be forthcoming. But, the seller's do not want to risk losing this buyer, so they decide to negotiate. The seller's counter the buyer's offer at $220,000 and will pay $3500 towards the buyer's closing costs. (NET to seller of $216,500)
At this point, the buyer and seller are now $10,000 apart. The buyer's decide to counter the seller's counter and split the $10,000 difference with $215,000 and seller to pay $3500 towards the buyer's closing costs. The seller, wanting to move forward with a sale and on to their next home decide to accept the latest counter offer.
Here's another example:
A buyer has strong interest in buying a foreclosed home that is priced at $159,000. After the buyer's agent runs the comps for this home, it has a derived valuation of $195,000. The buyer has been reading all of the local real estate headlines how homes are often selling at or above the asking price due to the law of supply and demand. So, the buyer decides to present a very strong offer at the onset in order to avoid being put into a multiple offer situation and decides to offer the seller, $165,000 with seller paying $3000 towards the buyers closing costs. (this is still a NET offer to the seller of $3000 over their original asking price)
In this example, there are not any negotiations to speak of because the buyer's offer is accepted immediately and the purchase process ensues.
A good real estate doesn't negotiate for a higher commission, but negotiates to meet their client's goals.
Good Real Estate Agents R.O.C.K.I.N.G. (summary of good characteristics)