Joe's Corner  

Joe White - Real Estate Broker
Northern California Real Estate
Northwest Sonoma County and Southern Mendocino County
Recreational And Estate Properties
We have been doing this since 1976

Buyer's Broker?
or Understanding The Process

March 13, 2007
We find that between 20 to 30% of properties advertised are not actually on the market. The magazine ads have a lead time from 1 to 2 weeks from receipt of the copy to publication. Things do happen in that time. The magazines do not publish a date on them to give them longer shelf life. Some ads in classified have a special rate and you pay for a month’s ad. If it goes into escrow and you cancel it, you do not receive a refund. Many agents just leave them run. Let us not forget, if you are short of inventory bait and switch is a process that has gone on for centuries.

Is subjective. Unfortunately, it is not unusual to see properties come to the market over priced by as much as 200% of value. This is called “buying a listing”. I think it is very counter productive. Sellers are given false hope and looking for an uneducated Buyer is not a good plan.

Have some problems. Hiding it is not a solution we think is effective. If Highway 101 is 120 yards from the master bedroom window, you should know it before you spend the time to look at it. It is true there is a match for every property. In that case, it would need to be a home for the deaf. Having a vineyard as a neighbor may not be as peaceful as you think. Some operations can be noisy and are done at night. Are you down wind? You can have 160 acres and still have the neighbor from hell.

10% of real estate is on the market. The motivators are the obvious things; job transfer, death, divorce and changing needs. Country properties are more recession proof than inventory in town. Usually less than 10% of properties for sale are nice and fairly priced. Our job is to know which those are.

We concentrate on ten acre’s or more. Some specialize in listing and may handle over 100 sales per year. These agents usually sell very few properties themselves. Some agents do not like carrying listings, as they do not like the paperwork and keeping the Seller informed. Many (30%) are part tine, as selling real estate sounds easy. You should not be afraid to ask questions before you start to work with someone. Do your homework. Your telephone and the web are great tools. Just because they are next in line to take a call or a walk-in is not proof they are qualified.

To ask: How long have you been in the business? Show me your typical brochure. The quality of work generally does not increase as the price of the property increases. Is it 75% about them or the inventory? What did you make last year? What was your last lawsuit over? What did you do before this? How many hours do you work a week? What is your web site? Any agent should be capable of sitting in his office and reaching out and touching all kinds of information about any piece of real estate. This includes topo maps, county assessor maps and tax information.

Many web sites. It is impossible to keep those up to date and this is why I do not authorize anything but a link to my site which is The BAREIS web sit is full of errors because agents are putting in the information. Some agents have in the past taken material from my site and posted it on their site as if it is theirs. Keeping our web site up to date takes a lot of work and we try to do so.

Than anyone else and because of this, we are good judges of value. Other agents are aware of this and if we post the very few that are nice that we like on our web site, we would tell them where to take their clients.

Have seen a property before they take you to it. You, in effect, are hiring them and they should have done their homework. They should have information and be willing to give it to you. From 1990 to 1994, the real estate sales force in Sonoma County went from about 3,000 agents to about 2,000 agents. Those 1000 have not been missed. We are in the process of the same thing happening now.

We are in an industry where the top 10% of the agents are doing about 87% of the business. Many agents do not like dealing with country property as there are more questions to answer and the driving time is more. Country properties are much more time consuming because of needing to find the right fit for the prospect. Residences normally fill a basic need. Country is more matching wants and desires and Buyers are more demanding that the fit is right. Remember less than 10% of the inventory has a good ambiance and is priced realistically.

Typically 6% on houses, 10% on land and a blend of the two if it is a property which the value is heavy on land. Commissions are normally split 50/50 between the listing and selling office. A dual agency is where one office is handing both sides. In this case, the agents must be careful to be fair to both sides. Commissions are negotiable.

By giving an unrealistic value. Properties are sometimes priced as much as 100% over their market value. This is typically very counter productive as Buyers usually are more familiar with values than Sellers. We see many properties that agents take a reduced commission to get the listing. It may also indicate a difficult Seller or a weak agent.

Agents tend to look at each prospect as a dollar sign. They are getting between 60 to 70% of the side of a commission, as 30 to 40% goes to the broker. If a $600,000 house is offering a 2% commission instead of 3% that means the selling agent is looking at about $8,000 instead of $12,000 in their pocket. As I write this, I know of 3 properties that I feel are under market because of this and it is by much more than the amount of the reduced commission.

To stay in business, we must make a profit. If you will sign an agreement with us to make up the difference if we cannot negotiate a realistic commission, we will take you to those properties that most agents avoid because they carry a low commission. You will not be disappointed in our performance. This is a difficult business. It does not take a rocket scientist. If we make a mistake, we hope we will be the first one to tell you about it. We are not a potted plant. We think selling is teaching about a subject so you can make an intelligent decision.

Read and understood. Actual compensation to be agreed to as an offer is made if in this area, If out of this area or the requirements of the Buyer are unusual and require a lot of research, there is a standard contract form to complete from Professional Publishers.



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