Saving Money on your next home,
By Steve Levine - REMAX First Choice
Your Massachusetts Real Estate Leader and National Relocation Specialist.

 

Today's Question.... Why is the Real Estate Market like a Halibut?

So Many people think that the Real Estate Marketplace is like the stock market, trending upwards and downwards on some great macroeconomic scale. In reality, the local real estate market is much more like a Fish Market. On days when they catch few Halibut, the price is very high. Tomorrow, they may have a whole boatload full of halibut and be giving it away.

Getting a better deal on your next home can be easy if you follow a few simple techniques. Before we get started though it is imperative that you analyze in the context of your own needs the answer to the following question;

Q: What exactly is a "good deal?"

As simplistic as it sounds, the answer is far deeper than it appears. . . .

Answer #1
To a person with easy-to-fill requirements for housing, a good deal may just mean that they paid less money for a house that they could satisfactorily live in with their family. They are looking for a 3 to 4 Bedroom slab ranch in Framingham, Massachusetts and there are 50 of them on the market, at least half of which would be satisfactory. In their case, the main objective would be pricing above all else. These are great times where having an agent like myself represent your interests as a "Buyer Agent" can come in extra handy. In this inventory-rich environment, the difference between a successful and unsuccessful purchase can come down to the skill of the agent negotiating the contract on your behalf.

Answer #2
To a person who always wanted to live in, for example, Circa 1700 Estates in Hopkinton, Massachusetts, a good deal may be quite different. Houses in that neighborhood rarely come on the market at all. To this Buyer, having the chance to get in and see this home even BEFORE it hits the market and have the opportunity to bid on it would be a fabulous deal. it depends on what you want, and whether money is your primary objective above satisfying your family's needs and desires. You see, an "Exclusive Buyer Agent" is an agent who represent only Buyers. Their real estate firm never takes listings because they choose to work only with the Buyer community. In doing so, they feel that they can never be accused of having any ties to the Seller of a home, and therefore can always show undivided loyalty to the Buyer only in the purchase of a property. Overall, an OK concept, but by no means the only way to go, and certainly not without it's repercussions

The problem is however, that by the time Agent Jones, at "Buyers Only Realty" ever finds out that John Brown at "Buyer and Seller Realty" in Hopkinton is putting the Johnson's home at Circa 1700 on the market it may be too late. Obviously, agent John Brown, knowing that the Johnson's house was going to be coming on the market since he first met with the Johnson's weeks ago about their relocation, has by now called all of his own clients and given them the "inside scoop" on the home and most likely, with the Johnson's permission, has already shown it to his clients while the Johnson's wait for confirmation of the transfer. Additionally, the other agents at "Buyer and Seller Realty", knowing that John has been working on the Johnson Listing have had the time to call their customers as well and notify them about the upcoming sale. Unfortunately, by the time Agent Jones sees the listing come up into the Multiple Listing Computer it may be too late for his clients.

Answer #3
To a person relocating in from out of the area, a Good Deal means buying the right house for their family's needs in an area that will hold its value. They lack the in depth knowledge of the area that a local resident may have and therefore must trust the instincts, knowledge, and experience of their Realtor, regardless of whether that agent is a Buyer's Agent, Seller's Agent, or Dual Agent. In their case it is even more vital that the agent have an in depth knowledge of the marketplace in many surrounding communities as well as necessary information on schools, housing trends, and what the future may hold. Getting you a "Great Price" of $300,000 on a 3000sf colonial in Blueberry Hill Estates does you no good if there are plans for a nearby subdivision to be opening in the springtime offering the same house for $50,000 less. There's that Halibut Analogy again.

Answer #4
To the local person interested in buying New Construction, a good deal means having an agent with a tremendous amount of new construction experience. This agent can help them in many ways.
First, by having worked closely with each of the different builders in the area, they can illustrate for you the pro's and con's of each development. This is a great asset, even for the builders! You see, an open dialog about what the pulse of the builder/buyer community is thinking is beneficial to all parties. Telling Builder Smith that his electrical allowances and particle board construction are killing his marketability in the eyes of the buyers enables him to address this issue and generate more sales. By the same token alerting to a buyer that they will want to look into requesting the "plywood exterior" help the Buyer to get a better house for the money.

Second, an agent who has sold tons of new construction in the area has by necessity developed the respect of the builders as a "Major Player" to be dealt with, often in friendship, when working with that agents clients.

I can tell you for a fact that having Sold 75% of the Houses that were built in Subdivision X here in Shrewsbury, that I am in a better position than some agent who has only sold one or two homes there, to know; How the Builder thinks; What he will and wont negotiate on; What lots will be coming on-line, when, and at what price; What we can do to improve the home; What plans we can utilize from other neighborhoods, etc...; and in the process see to it that my clients get the home of their dreams at a price they can afford.

Is this Adversarial, not typically. The builders would much rather work with me than with an agent who has no clue about how they operate. They take me for lunch, we chat about the market, have a dandy time, each in the knowledge of what the others interests and obligations are, yet each with a respect for the other. In fact, I can state categorically that in a huge number of cases, my clients received huge financial benefit from buying through me - moreso than even if they had dealt directly with the builder themselves.

With an in depth knowledge of new construction, I can often times save a buyer $30-$40,000, simply by redesigning the home in such a fashion that it becomes more cost efficient to build. This type of help is the kind of thing which I do routinely whether acting as a Subagent or Buyers Agent, but is well beyond the scope of what an "Exclusively Buyers" real estate firm is capable of providing.

 

 

Frequently asked Questions Buyer Agency, Seller Agency, and why each has its place.