If you want a competitive advantage in your home search, begin the process by choosing an experienced, skilled buyer’s agent. To personalize the issue further, my wife and I recently purchased a condo in Miami, and chose to use a buyer’s agent despite my successful career as an agent in NYC. I wanted someone active in that market, who knew the cultural intricacies of transacting in that market. While I know what data is important for a buyer to have working knowledge of when searching, because I’m not licensed in Florida (I will be shortly by the way but that’s another blog post!), my only access to that data was public-facing sites like Zillow and Realtor.com. I know that the data on these sites is notoriously inaccurate and unreliable, and I would never rely on it when measuring the value of a home I was personally interested in. No other buyer should either.
While I’m intimately familiar with the nuts and bolts of a real estate transaction, I don’t yet have professional knowledge of the inventory and neighborhood character in Miami. What I thought I wanted changed fundamentally after one conversation with my agent. She knew what I wanted better than I did, and as an agent myself, I understand why.
Once we found a building we liked, my agent knew of an upcoming listing in the building, and used her relationship with the listing agent to get us early access. Although we immediately made an offer (we took our agent’s advice to offer 1% above the asking price), we had competition from another buyer who already lived in the building. The Miami market was hot, and homes were routinely under-appraising… In order to compete against the other interested buyer in a way other than simply agreeing to pay more money for the home, we waived our appraisal contingency, making our offer more attractive, even at the same price. We’d have never known to use this strategy if our agent hadn’t educated us on the pace of the market from the outset. Best part is, we got lucky and the home appraised. We were able to ‘outbid’ a competitive buyer by offering no more money, and putting no additional equity down, simply by implementing a better strategy!
We also conducted a successful search over one weekend seeing no more than ten homes, since our agent knew from what we wanted exactly what buildings and neighborhoods to take us to.
Many buyers are under the impression they’ll find the seller more negotiable if they don’t have a buyer’s agent with whom the commission will be split. This is a misconception. Direct buyers- and this is especially the case in NYC coop purchases- are much more work for a listing agent than represented buyers. If the listing agent is going to do more work, they expect to be compensated accordingly. Additionally, commission agreements are negotiated before homes come to market. The net-to-seller after commission is the same, regardless of whether or not a buyer is represented. As a buyer’s agent representing a buyer in a competitive bidding scenario versus unrepresented buyers, I’ve had listing agents tell me exactly where the other offers are, enabling my buyer to win the bid without overpaying. They did this because they could tell from the structure of my offer that both I and the buyer would be an easy partner to go through the process with. As a listing agent, I’ve also advised sellers to prioritize an offer more seriously if I knew that the agent was a competent expert– a highly skilled buyer’s agent makes the listing agent’s job much easier.