You asked a few questions:
Q: What does a typical agent do?
A: Work VERY hard to try to get a home for their buyers.
Q: what should I be expecting from my agent besides showing homes?
A: You have a right to expect the following:
â€¢ They should provide you with comprehensive lists of all available homes that fit your criteria.
â€¢ Autofeeds so that you get the latest listing as soon as they hit the market.
â€¢ Other valid options OUTSIDE your parameters.
â€¢ A CMA (Comparative Market Analysis) on every home in which you are interested. Our MLS has a wonderful feature called Cloud CMA which produces very helpful CMAs in a very short period of time.
â€¢ They should coach you to determine effective prices at which to write offers based on the current market trends and CMAs. Some buyers donâ€™t agree with their agentâ€™s coaching and never follow their advice. They think that if they switch to a different coach, theyâ€™ll get advice they want to hear. Thatâ€™s always an option â€“ but beware â€“ even though your current coach is not giving you the guidance you want, they may be giving you coaching that will actually get you a home. And at the end of the day, thatâ€™s the bottom line.
â€¢ They should write offers for you at the prices you want them to write at. You are hiring them to work for you. After their analysis, YOU are the one that sets the offering price. If they are not willing to write offers at your prices, find an agent who will. In reality, with todayâ€™s technology, an agent can prepare an offer, email it to you and have it signed by you electronically in less than 15 minutes. Another 5 minutes and the offer can be packaged and sent in. If you keep writing offers and loosing bids, that is what we call â€¦ a clue.
â€¢ Currently, agents earn the majority of their pay getting you safely through escrow once an offer has been accepted. Many deals fall out of escrow these days for a multitude of reasons â€“ it takes skill to hold everything together until it closes.
Q: My thought is that he/she should be able to tell me about the pros and cons of a location within a city â€¦
A: Yes and no. Agents have to be careful what type of information they provide so that they are not â€œsteeringâ€ you â€“ a practice that is illegal. See the following:
NO STEERING ALLOWED: 3 Important Facts To Know As A Buyer
As a buyer, you have more than likely done all the necessary research already: you know the best school score, walk scores and more. Google maps will quickly tell you how close you are from amenities, schools, shopping, etc. And with only 5-10 homes to choose from in an entire city, itâ€™s not rocket science.
Q: and what I should be expecting to pay at a certain location compared to another.
A: As for what to pay in any given location or neighborhood? The sellers have already done that for you. They are telling you what they want and, if itâ€™s a nice house in a great location, they will get what they are asking and more â€“ in about a week. If you want a shot at it, you need to play by the current rules. If you want to do it your way, you can have your agent write offers at the prices YOU think are fair â€¦ and see how that works out for you. If your agent wonâ€™t do that for you, then find one who will. As an aside, the number of agents out there who are willing to show you a number of homes every weekend and then write low offers â€œjust to seeâ€ â€¦ is a very small group indeed.
Q: Am I right?
In a normal market, there are approximately six months of inventory of homes on the market. That means that you, as a buyer, have the opportunity to visit many homes and neighborhoods, do detailed analysis and write offers based on previous sales â€“ possibly even write offers under market value to see if the sellers are willing to deal. Motivated sellers might work with you â€“ other sellers might hold on for something better.
Weâ€™re not in that type of market right now.
As an example, if you are looking for a 4 bedroom home in San Ramon under $800,000, you have almost none to choose from. If you want the better schools in the Windemere area, you have even fewer available. If you want a newer home, 2 stories with a singled bedroom downstairs â€“ there are even less. In reality, you are dealing with approximately 5 homes. In contrast to the number of available homes is the actual number of buyers in the market looking for the exact same thing. Youâ€™ve more than likely seen large groups of buyers going through the open houses. When you write offers, you are competing with all of them. The current average Days On The Market (DOM) is 18, with the nicest homes going pending in approximately a week. This is actually an artificially long period of time â€“ if sellers were accepting offers as they came, the DOM would be down to 3-5 days. Instead, listing agents are keeping them on the market a bit longer to get the maximum number of offers possible.
In Pleasanton, your options are even more limited.
You state: â€œwhile we see a lot of homes are listed at a certain price, comparative sales figure on internet say that some of the homes are over priced.â€
Question: When you drive your car forward, do you look out the front window or gaze in the rearview mirror? Obviously, you look through the front window. When you back up, you do the opposite. When the market is advancing such as it is now, you canâ€™t move forward by looking in the rear â€“ in other words, past prices are a reflection of where we have been, not where we are going. Prices are going up, therefore the homes that sell today will at higher prices that homes that have recently sold.
Sellers know this, and price their homes higher than previous sales. And buyers who want a home willingly pay the price. Buyers that want a â€œdealâ€ typically get nothing. And I hope you are not using Zillow thinking it will provide you with a good cost analysis â€“ Zillow, quite frankly, is a waste of time. See the following post:
Zestimates: Zany, Zesty Z-Evaluations With Zero Z-Value
You state: â€œMy agent on the other hand keep talking to me about listing price as the offer price.â€
Your agent is simply telling you the truth about the current market. In reality, if you only offer list price in the current market, you will more than likely not get the home. Multiple offers are bidding prices over list price all the time.
You state: â€œHe isn't providing me a good reasoning for comparative sales to discuss a good offer price.â€
Let me give you a reason: â€œBecause we are in a sellerâ€™s market and that is how it currently works.â€ If you want a house in a great neighborhood with awesome schools and master bedroom suite downstairs, then you need to put aside your spreadsheets, pull out your wallet and offer over asking. If you are content to have a lesser house, then get your agent to pull up the list of homes that have been on the market longer than 3 weeks and go dicker with those sellers. That will give you 5 homes to choose from in Pleasanton and 2 in San Ramon.
See Part 2 for the remainder of the answer:
There just may be a connection between your feelings and the job your agent is doing. A common mistake is accepting what is dealt to you without expressing your concern or disappointment. The best way of approaching this scenario would be to sit down with your agent and "air" your feelings.
The reality is that unless there is an awareness there is little hope of making a difference.
The best solution to your problem may not require you to find a new one....simply to address the issues with them.
Great responses and I appreciate each and every response. I have decided to continue with my agent and discuss openly our concerns and expectations. If things go well then we are all winner if not I guess i can say both parties are to be blamed and move on. It is quiet challenging to be looking for a home. Hopefully we be back here to share some good news.
In the interim please keep your inputs coming as this definitely helps level set expectations.
Today's housing environment is stressful, for all parties! Buyers are frustrated because there are so many other buyers wanting the same homes. Buyer's agents are stressed because it is hard to deliver bad news to buyers -- the home they saw, and loved, yesterday now has 15 offers (and many for all cash, above the list price). Listing agents are stressed because there are multiple offers coming in quickly, and they want to make sure their clients accept the "best" offer -- the one that will close without problems or unneccessary delays at the hightest price. And sellers are stressed because their home sold so quickly, they haven't had time to find a replacement or they wonder what price they might have gotten for the home if they had waited 6 more months to sell (or worry that interest rates or inventory will go up causing fewer buyers and lower offers).
You seem to be one of the many buyers who are frustrated with the process. Give your agent another chance by having an open conversation about your frustrations. And trust your agent, not the internet, for current and accurate information.
I sense the frustration that you and your husband are experiencing in your search for a new home. Please know that you are not alone. Buyers in all Bay Area markets are experiencing the same frustration these days. Why? It is because there are far too few homes available for sale in the face of current strong buyer interest. The demand vs. supply equation is out of whack! The dynamics of this market have shifted the advantage to the buyers who can set prices higher than recent sales â€“ since prices are going up. They can demand strong offers be submitted within a short time frame and end up selling their houses with multiple offers for a price that will be higher than they expected.
What can you do? Admit that your desire to get a good deal on your new home is probably going to go unfulfilled in todayâ€™s market. It is the sellers who are getting the good deals. If you are serious about buying, change your strategy to one in which you make the best offer that you can on the house that is right for your family. If you get the house at a price that will be higher than you thought you would have had to pay be comforted in the realization that you were successful in buying the house that will be your family home for some years to come.
Orâ€¦you can sit back and wait for the market to change to your advantage. How long that will take is anyoneâ€™s guess. Where prices and interest rates will be at that time are two more parts of the home buying equation that no one knows at this time.
Have you clearly discussed what you want WITH YOUR AGENT? If not, then please give him or her the benefit of the doubt. We're not mind readers, and every relationship is unique.
If you HAVE put forth your expectations and your agent is not delivering, then perhaps it's time to interview some other agents.
As far as prices, most California cities, including those in the Bay area are experiencing low inventory levels and multiple offers. Your agent may be discussing list prices as offer prices because of this trend. Again, try discussing it.
Put out what you want, whether it's this agent, or the next one, and you will have a far better chance at getting it!!!
1) In this region there are roughly 1/3 the number of homes available that are needed to have a NEUTRAL market... we are in the same kind of market as in 2002-2006.
2) Many listing agents at this time are setting the date when they will review offers. This means that the median market time at 15 days is LONGER than it would be if offers were reviewed as they came in.
3) I don't know what the average number of offers are throughout the area, but in our office it is around 12... and the homes are selling for 6 to 10% over full price. The list price gets you a ball park and is often on the high side of the comparable closed escrows... but in a rising market that is normal.
4) Based on historical data from our last strong sellers market, you can expect a substantial across the board increase in prices after the holidays
If you want to buy a home a take advantage of the incredible interest rates and the low prices that we are still experiencing, then you will ultimately have to change your personal definition of "a great deal" ... I have several clients looking for that perfect deal who are already priced out of the market because the house they could have gotten at $550k is now $630k.
You should feel that your agent is going above and beyond for you. If your exceptions are inline with the current market. The inventory is low so therefore most properties are receiving multiple offers. Your agent should provide you with recent comps and guide you to where you offer price should be. It is your final decision on what you want to offer. The job of an agent is to provide you with the information to you, so that you can decide.
A house is worth what someone is willing to pay for it. Someone may decide that the property is there dream house and they have to have it. Therefore they are willing to pay a price for that.
Your agent should be talking with the selling agent to find out what it is the sellers are looking for and sometimes the seller does not go with price but terms. For example "Do they need a rent back" not every buyer can offer that.
Please contact me if you have any other questions.
With regards to your questions, yes on all counts.
If you like your agent then I would go to him with your concerns and see if they can be addressed. If not, find one who can.
1. Your agent sits down with you to determine your budget and what kind of home you want. Assuming your expectations are realistic, he/she will set you up on an automated email alert system which will make sure that details of every possible home that could interest you is seen by you as soon as it comes on the market.
2. Your agent should preview every home that could be of interest to you when it comes on the market (typically on the Thursday Brokers Tour), then call you to tell you about the ones he can tell you would like to see. He then shows you those home syou agree could be interesting as soon as possible.
3. Having identified a home you want to write an offer on, your agent provides you with a Market Analysis that shows what that home should probably sell for. That is based initially on the most recent sales of similar homes but also takes into consideration the current market (which is a rising market in San Ramon), availability of inventory in silmlar price ranges and known existence of any other offers. If you don't follow your agent's reasoning, you need to keep discussing it until you do.
4. You decide if you still want to write an offer and YOU decide the offer price.
It really isn't rocket science but you do need to have confidence in your agent and your agent should be making sure that you see where the figures are coming from. Sometimes you need to have a few offers rejected in order to get a true feel for the market.
Good luck to you.
The short answer is, if your not happy then they are not doing their job. I see it all the time, agents that don't go the extra mile or don't want to put in the time to research for their clients. They should know the areas and if not at least offer to find out things when asked. Pricing is somewhat subjective, but comps always tell the market value of a house. I will never give my clients an exact amount, but will provide a range that I believe the home is worth. The reason you hire a Realtor is to advise and negotiate one your life's biggest purchase, so you should be happy with them.
Best of luck!
Are you using a local agent that is knowledgeable about the area and has invested in tools to provide local market report data? Most local boards provide tools and statistics, but if your agent is out of area, his reports likely are for other cities and counties. Data can be extracted and custom reporting utilized ii such instances. Ask for it.
The list price may be more that the home is worth...or less. But sticking to comparables sold in the past as primary reference for current value is a challenge, as we are in an appreciating market. So past sales provide support and guidance, but perhaps do not indicate current value.
Make it a great day!
Vickie Nagy, CA DRE#01363932
Don't know all the issues with your agent, but these are some things to keep in mind.
An agent should be able to answer your questions about the city as well as explain to the pricing and the comps in the area. Comps from Internet sites are not always accurate so beware. Your agent should be able to provide you a marketing analysis of a property you are interested in based on the most recent market conditions. Currently in the Bay Area the market has shifted to more of a sellers market due to a low amount of inventory. If a home is priced competitively it should attract multiple offers and many homes are going above asking price. However your Realtor should be able to provide you all the information you need on the property, the market and help put together a good plan to buy the home you are looking for. My advice for buyers right now is be patient, but be ready for when that home is available you can move quickly. I hope that helps, please let me know if I can assist your further.
Zip Realty - Bay Area
Although, if your agent is truly steering you away from homes you can't afford. You should thank them. I've seen too many people get excited over a home that they should have never looked at to begin with.