When you find a home you like, you will have to decide what you’re willing to pay. If getting the best price for your home is important to you, then the most important decision you’ll make is choosing the right broker.
Selecting a broker who specializes in working with buyers and has extensive knowledge, experience and negotiation skills will put you in position to get the best deal.
The biggest mistake buyers make is working with the seller’s agent. These buyers do not receive any guidance or information relating to the true value of the home, and the broker cannot negotiate on their behalf. It’s in your best interest to find a broker who will be your agent, have a fiduciary duty to you and negotiate on your behalf.
Your agent should provide a comparative market analysis report on any home you are considering. It lists similar homes that have sold in the last six to 12 months. Your agent should make adjustments to the CMA report for the differences between the home you’re considering and the sold homes, then provide you with the value range.
As an example, your agent might say a great price for a particular home would be $250,000 and a high price would be $270,000. That is the value range.
Once you know the value range, determine how well the home meets your requirements and what price you are willing to pay. If the home meets the majority of your requirements and you do not want to risk losing the home to another buyer, then your agent cannot negotiate too aggressively. If you like the home and it meets most requirements but a great price is mandatory, then your agent can negotiate more aggressively.
Many sellers mistakenly believe they determine the value of their property. Actually, the value of a home is what an informed, well-represented buyer is willing to pay. Sometimes, well-represented buyers decide not to buy a home they want because the seller will not accept a price within the value range.
There are too many instances when buyers pay an inflated, above-market price for a home because of poor or no representation. A common mistake buyers make is assuming that all real estate brokers have a similar level of competency and skill. That is not the case. In fact, the variance between the most- and least-qualified practitioners is very wide.
The best way to avoid overpaying for your home is choosing the most qualified broker in the market who will have an agency relationship with you. I recommend interviewing a number of brokers, checking their references and comparing the difference between the asking price and what their last 10 buyers paid for each prospective agent. Past performance is a good indicator of future results.
Steve Setka is an exclusive buyer’s agent with Keller Williams Realty in Durango and a licensed mortgage originator. He can be reached at 903-7782 or steve@durangore.net.
