Buying A Home In Today's Market
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ONLINE INFORMATION WARNING:
The Internet is a fabulous tool for gathering information. But what the Internet can NEVER do is interpret it.
Please use online property search tools with care: relying on property data alone, without the context that a professional can provide, will usually lead to incorrect and expensive mistakes. And, making decisions regarding the purchase or sale of your largest asset with online information alone can often lead to disastrous results. |
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The Traditional Sales Approach Versus The Consultative Approach
There are two ways to look for a house:
1. The Traditional Haphazard Approach where you spend a lot of time, trying to find a property on your own, and then, once you think you’ve found it, try to find someone to show it to you. This approach is guaranteed to sap your energy, bring properties to your attention only AFTER they’re no longer available, and make you despise the whole business of Real Estate because it feels like no one is there looking out for you, (because quite honestly, no one is). Most buyers think this is the only way to find a home because this is the way it’s always been done. But there is another way...
2. The Consultative Approach where you take the time up front to interview and hire a Real Estate Consultant who can help you reach your goals and because you’ve hired them, your Real Estate consultant has a vested interest in doing so!
Let’s look a little more in depth at these two approaches:
First, The Traditional Haphazard Approach (The way most Buyers look for a house):
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Spend hours online at
the big listing aggregate sites where the listings aren’t current and you can’t get addresses...
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Scour Sunday papers
and every homes magazine you can get your hands on...
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Attend every
Open House you see...
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Call the number on every For Sale sign that you drive by...
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And FINALLY
locate your
Dream House...
after it's SOLD to someone else!
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How Did this Happen? You worked so hard!
You put in so much time! And you’re exhausted to Boot!
IS THERE A BETTER WAY? YOU BET!
Let's Look At: The Consultative Approach (the way our Buyer-Clients find their home).
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Before you waste a lot of time
running
around, we'll schedule a
Buyer Consultation where we'll
take the
time to discuss your
goals and
help you to define and
prioritize
your needs
(don’t worry - this initial
consultation
is free of charge).
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We’ll discuss the buying process
and the ins-and-outs
of agency, so you know who's representing who.
This get-to-know-you meeting is
very important to do
up front.
After all, a seller wouldn't dream of
hiring an agent without interviewing
them first, and as a
buyer
you should do nothing less!
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If we mutually choose to work
together, you can RELAX,
knowing you’ve just hired
yourself an inside teammate,
someone who will be with you
every step of the way.
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NOW DOESN'T THE CONSULTATIVE APPROACH MAKE A LOT MORE SENSE?
"But why should I work with just one agent?
I mean, if one agent is good, five might be better!
Besides, who’s looking out for me anyway?”
Well, we’re going to let you in on what really happens behind the scenes...
In years past, if you were a Buyer, you could really get SOAKED!
 Historically, Real Estate agents worked for the Seller (many times without the Buyer even knowing this!) Most Buyers were forced to look on their own, not trusting anyone. Of course without anyone advocating for them, they were often shown the homes that agents most wanted to sell, rather than the homes that best fit their needs.
And without timely market information (and we’re not just talking about listings but rather where the market itself is going), Buyers had only their own counsel (or that of Uncle Joe who hadn't bought a house in 20 years) in formulating and negotiating a fair market offer. What was most unfair, was that Buyers were told that since the Seller paid the real estate fee, they had no right to any representation or they had to “pay extra for it”. But if you logic it out, real estate fees have always been worked into the price of the house. In fact BOTH Buyers and Sellers had been paying for Real Estate services, but only Sellers traditionally had representation.
Buyer Agency has changed all this. Now, the Buyer can contract with an agent to represent THEIR needs. They receive the same CLIENT status as the Seller. And they can now receive the services that they've always paid for!
Still not convinced on the benefits to you of the Consultative Approach?
Perhaps a quick analogy may help...
It's kind of like...The 24 Hour Walk-In Clinic Versus Your Trusted Family Doctor
Let’s suppose that you get sick. You feel AWFUL!
You have a couple of options:
You can go to a 24-hour Walk-In Clinic.
Now, at first glance, the Clinic is pretty cool because there’s no commitment - you can walk in anytime with no appointment. Of course, this means that you get whatever Doctor happens to be available. And since you haven’t made an appointment, you have no special priority and you may have to wait a while to see someone. The Doctor you end up with can treat your symptoms but not your whole body since they don’t know anything about you or your history. If they prescribe a medication, you might wonder if it’s really the best drug or simply the most expensive one. And if the medication doesn’t take care of the illness, you’ll have to start all over again with a new Doctor the next time that you go to the Clinic.
 OR
You can make an appointment to see your family Doctor.
Now, making an appointment to see your trusted family Doctor may not seem like a great option when you’re sick, since you may have to wait a few hours to see him or her. But here’s the good news: because they know you and your history, chances are the diagnosis and treatment is going to be right the first time. If you DO have to go back, the Doc already knows what DOESN’T work! And because you’ve developed a relationship of trust, you know that if they prescribe a medication, it’s because they believe that it’s the best one for you, not because they’ll get a kickback from the manufacturer.
So, here’s the bottom line: You can go the "walk-in clinic" route, dealing with whatever agent happens to be available when you want to see a home, or you can interview and hire your personal specialist who will then know you, your goals, and your history, and because they’re assured of being paid, will proactively go after making your goals a reality.
One last thought:
A Realtor’s TRUE value is NOT in finding you a home
(although we certainly have the tools to save you a lot of time there).
Our true value is helping you to get the best value on that home once you find it!
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Can Someone Please Tell Me...
How Are Realtors® Paid Anyway?
Note from Mollie: If I had my way, I'd get rid of the commission system in Real Estate tomorrow - I think it is often incompatible with providing fiduciary counsel that is truly objective. That is why I'm at the forefront of developing alternative compensation plans that are a win-win for both the consumer and the agent. That said, while the commission system is the status quo, I believe the consumer should understand it!
Under the commission system, Real Estate agents are paid as follows:
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Mr. & Mrs. Seller want to sell their house.
They hire a listing agent and
put the full commission into the contract
they have with that agent.
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Price
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If a home is listed on the
Multiple Listing Service,
it almost always has the full
Real Estate Commission
included in the price!
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Now, let's assume a 5% commission (BTW - there is no such thing as a set commissions - compensation for services is always negotiable - depending on the amount and quality of service the client wants). Where does that commission go? Well typically, 2.5% goes to the listing agent to compensate them for marketing the home. The other 2.5% goes to the agent that brings the buyer. This could be a an agent who doesn't work for the buyer and is therefore, limited to functionary tasks in working with them. Or it could be a Buyer Agent, who, because they have a contract to represent the buyer and work in their best interest, can provide expertise and fiduciary counsel to the buyer.
So, as an example: 5% Total Commission
2.5% goes to the... Listing Agent
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2.5% goes to WHOEVER BRINGS THE BUYER.
Either....
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An Agent Who Doesn't Work For You
(Functionary Tasks Only)
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OR
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Your Buyer Agent
(Functionary Tasks PLUS Fiduciary Counsel & Representation)
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Why A Buyer Consultation is so Important
One of the most frequently asked questions we receive is: How come you keep encouraging a Buyer Consultation? Since your Deluxe Property Search and Daily Alert Service is so comprehensive and timely, why can't I just call or email you guys when I see something? Well, the answer is you can, but you'll be missing a whole boatload of knowledge, which can greatly effect your timetable and ultimately, the value you derive from your purchase. Here's why:
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As timely and comprehensive as the online service is, it only includes properties listed in the Multiple Listing Service (MLS). The MLS represents most but not all available properties. Because we work for a flat fee or by the hour, we're often in touch with For Sale By Owners -- if we've met and have decided to work together, we can make these properties known to you. In addition, we network with the top listing agents in Metrowest. We often know about a property that will be coming on the market but isn't yet. We can then give our Buyer-Clients the "heads up" on these properties. If we haven't met with you, we can't.
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Unless you actually work in the market day-to-day, it's very difficult to discern which towns are on the upswing or downswing. You make pick towns that are well established but because of demographics don't offer long term value. At the same time, you may exclude towns that because of who's moving in, are real up & comers and are a great buy. In other words, towns often change faster than public perception. During a consultation, we can discuss your individual needs and advise you where you may want to concentrate.
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Similarly, if you don't work in the market everyday, would you know that a house that looks great on paper is right down the street from a power plant that's going in which will effect it's values? Or that a smaller home, which you can now get for a lower price, will escalate in value once the subdivision around the corner goes in next year? What you receive via a search service is INFORMATION. Having a professional interpret that information so you can make an informed decision is KNOWLEDGE.
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Lastly, (and this is the most important), if you call an agent simply to get you in to see a property, what you'll get is simply a tour guide, and if you wish to make an offer, a secretary, who will write up any offer you wish to make. But, without a contractual relationship, you cannot receive advice, counsel, or the agent's true opinion of the market and prices. And even if they did give you advice, how much could you believe, given that you've never developed a relationship.
We're aware that when you're just starting the process, you may not be ready for a relationship. We Understand! That';s why we strictly adhere to a strict policy of NO OBNOXIOUS SALES TACTICS. But we also know that unless you take that next step and set up a Buyer Consultation, all you'll receive from any agent is functionary tasks, rather than benefit from the fiduciary counsel, expertise, and accountability that a Realtor who's your teammate can provide. Because of our unique Consulting rather than Sales approach to our Real Estate practice, you can meet with us confident that you WILL NOT BE SOLD TO!
ONE LAST THOUGHT: Open Houses, Homes Magazines, and the Internet are wonderful starting points for gathering information and looking for services. But, when it comes to fiduciary services such as Law, Medicine, Mortgage, & Real Estate, they can never provide the counsel, personal care, and ACCOUNTABILITY that a local pro can. We hope you'll give our office a call and set up a time to get together and chat. We know you'll be glad you did.
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Customer or Client
There IS a Difference!
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Before you actually see a property, it's important that you determine whether you wish to be a CUSTOMER or a CLIENT. Though these terms may seem synonymous, they mean very different things in the Real Estate industry and will make a tremendous difference in how seriously you're taken as a buyer and the types and level of service you receive. Once you understand the difference, you'll know whether you want to be one or the other.
A BUYER-CUSTOMER is someone who is not represented by an agent. Any services they receive will only be functionary: providing the buyer access to the property and writing up any offers that a buyer wishes to make. Since there is no contract, the agent cannot provide counsel or utilize their skill or knowledge of the market to negotiate on the buyer's behalf. Most buyer-customers aren't aware that real estate services are worked right into the price of a home so they're paying for their agent whether they have representation or not. In fact, their own representation doesn't cost the buyer a penny more. Also, without a contract, there is little motivation for an agent to work very hard for a buyer since there is no assurance that they'll be paid.
A BUYER-CLIENT is someone who has signed a contract with their agent. This releases the agent from a fiduciary responsibility to the seller and enables the agent to pursue the buyer's goals. They become the buyer's teammate and they can utilize their experience, skills, and knowledge to negotiate on behalf of their buyer. And since they have a contract with the buyer, the agent has every motivation to aggressively search and negotiate for the right property.
If you have any questions about our Real Estate practice or would like to set up a buyer consultation, please feel free to give a call or send an e-mail.
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CONSUMER DEMAND FUELS
REAL ESTATE CONSULTING
Ripping The Roof
Off
Real Estate
How a Multi-Billion Dollar Industry
Came To Have an Identity Crisis
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By: Mollie W. Wasserman |
No matter how it's presented or deressed up, there is an inherent conflict of interest when a real estate agent is expected to act as a fiduciary agent providing objective, unbiased counsel MORE...
Available in all major book stores.
Or order online at Amazon or Barnes & Noble.
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IT'S TIME FOR YOU TO
TAKE CONTROL!
How to Make Your Realtor®
Get You the Best Deal
By: Mollie Wasserman &
Ken Deshaies
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A guide through the real estate
purchasing process,
from choosing a Realtor®
to negotiating the best deal
for you! MORE...
Available in all major book stores.
Order online at Amazon or Barnes & Noble.
OR receive a complimentary copy
when you
schedule a
Buyer Consultation
with a member
of our team.
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© Copyright 1996-2008 Mollie W. Wasserman All rights reserved.
No reproduction, distribution, or transmission of the information, graphics, or design included in this site is permitted
without the written consent of
Mollie W. Wasserman.
The Real Estate Internet Warning is the one exception to the above rule as we encourage agents to use it but ONLY WITH THE FOLLOWING CREDIT:
"Courtesy of Mollie W. Wasserman, http://www.TheHomeConsultants.com
Any questions or comments about this site should be directed to: Mollie W. Wasserman, Email or (508) 613-9101 |
