1. What more is there to know about the area? You heard what a great place it is from your brother’s sister’s cousin who has a friend who drove through here once on their trip from Seattle to Montana.
Yes, I hear this all the time. Prospective buyers will insist they know the area whether through their own research or perhaps they have even visited the area once, twice, maybe even yearly for the past 30 years. Hum… that definitely replaces daily interaction in the community and extensive knowledge of the area and it’s neighborhoods.
2. The home was supposed to be a wonderful investment, it looked GREAT in the pictures!
Yes, because we all know that pictures show everything we need to know about a property… NOT! A tear down can be made to look like a show home (and I’m not exaggerating, I’ve seen it!!) and that “steal of a deal” price really… isn’t.
3. Your friend moved to the area 4 years ago and they told you that the home next to theirs is available for a “Steal of a deal” right from the owner… no commissions!!!
Ok, this one sort of gets me. Why on earth would anyone allow a “friend” to advise them on a $200,000 purchase, when that “friend” is not in anyway educated or experienced in the real estate business? I mean come on, it’s not their money they are messing with!!! It’s YOUR money. Afer all, my neighbor the plumber told me I needed brain surgery, so of course I went ahead and had it.
4. You know you’ll get a “better deal” buying directly through the listing agent because the seller won’t have to pay “double” commission!!
Let’s just look at this one realistically. First of all, the commission is a negotiated agreement between the listing agent and the seller. Going directly to the listing agent is not going to save you any money, here’s why: The listing agent can not change or renegotiate the terms of the commission agreement with you, an unrelated party to the listing contract. The seller agreed to pay a certain commission, whether the listing agent brings the buyer or whether the listing agent pays another buyer’s agent. It’s that simple. Yes, in the buyers mind they think that gives the seller “room to negotiate more” when in reality, if the seller has agreed
to take a lower commission if the listing agent brings the buyer, it means more money goes into the sellers pocket - NOT that less will come out of the buyers pocket.
5. Heck, the extra money you have to put into the property in improvements is made up for by the extra appreciation a particular neighborhood will have.
I can not count the number of times this has been brought to my attention. Investors who purchased through other agents and were advised by those agents to buy “an older home”. ARGH - if you don’t live in the area, don’t do this! An older home in a “mature neighborhood” is not going to appreciate faster than a newer home in a newer neighborhood. I’ve had multiple clients dump dollar after dollar (thousands) into older homes and then not being able to sell at a high enough price to recoup their investment.
6. You believe that either all agents are created equal or all agents suck, why on earth do I need an investment property expert?
After all, what does it matter? 95% of the REALTORS(R) in the Kootenai County Market have not sold a SINGLE PROPERTY in the last 3 months. 60% of the REALTORS(R) in the area did not sell a single property in the last year. I’m sure that the advice they give an investor owner is well educated, well researched and very experienced… NOT. Be very careful about lumping agents together. Less than 8% of the agents are doing 92% of the business, that’s pretty amazing and quite frankly, “production” DOES matter. Don’t let agents who do very little (if any) business tell you otherwise. Look at it this way, if you needed surgery you’d pick a surgeon who has done hundreds of the surgery you need over the surgeon who’s done 2 of the surgery you need. The higher the numbers, the lower the mortality rate.
7. Hey, this management company cost me less money in repairs and maintenance every month. I can take care of that stuff later (or, it’s unnecessary work).
Oh boy do I see this A LOT! People worried about their monthly expenses compromising maintenance issues they should not compromise all in the name of “it’s not ‘necessary’, it can wait, I don’t have the money now.. yadda yadda yadda”. I also see owners choosing property management company’s because the company doesn’t require specific maintenance (ie, fertilize the lawns, painting between tenants, lock changes between tenants, etc). They choose to delay and then they want to sell… and the expenses they have at selling are significantly higher than if they had simply taken care of the property all along or, if they refuse to make the repairs and updates prior to selling, they take a serious hit in the sales price (more than if they had simply done the work) in order to get the property sold.
The thing is, it’s imperative that the property management company you hire actually wants to do more than “get you a tenant”. Most could care less. You want a company that wants your property to appreciate in value, that cares as much about your investment as you do.
8. Of course you should go straight to the builder. They will give you the best price possible. After all, You’re experienced, You’ve “done this” a few times!
Let me get very blunt here: no matter how many times you may have “done this”, you still haven’t “done it” more than I have, period. That’s the point - I have sold more homes than any one person has sold of their own properties and that’s what you want, EXPERIENCE!! Secondly, the builder is NOT going to reduce the price of a home just because you think they don’t have to “pay a commission”. Their price is their price and that’s what you are paying, plain and simple. I guarantee you, buying through the builder will NOT get you a better price. In fact, because we work with several of the largest builders, we do have an “in” and can get you a much better price on some specific properties than the builder will EVER negotiate directly with the buyer. Since the price of having a specialized Buyer’s Agent is already included in the price you’ll pay through a builder, why on earth wouldn’t you want to have one? Have your own Buyer’s Agent who can negotiate a better price than you can on your own (that is if you have a good Buyer’s Agent) and save you money!!
Ok, clearly this list was written a bit satirically, but I guarantee you it’s contents are true. I’ve worked with clients that have done one, a few, most or all of these and lived to tell about it. They all too often come to me regretting their previous experiences but, they also know I will do my best to help, no matter what the past entailed.
Posted under For Investors
This post was written by Christina Ethridge North Idaho Real Estate on April 8, 2009
