Homework time

It's a crazy real estate market out there. I've been helping some people buy and emotions are quite high right now. As the lending market becomes tighter, buyers are rushing to try to buy with the record low interest rates we have been having. I've witnessed people getting into crazy bidding wars, and I think this is the best time to have an agent.

I know I am biased, but hear me out. There are people out there using private listing services and are trying to cash in on the hot real estate market. They price their house based on what they want to get, not on the advice of someone that knows what the market is worth. This can be troublesome in two ways.

The first way, the seller does not know what his house is worth. He/she may undervalue it. They may not be informed enough about their house and what the market is going for. What the market is going for this spring is very different than the fall. You need to know what a place is worth in order to save possibly 10's of thousands of dollars, well worth an agent's fee. This information can be shared with an experienced agent, and one that recognizes the different market factors involved.

This is important for both the buyer and seller. As an agent, I have advised clients multiple times to go over asking price to try to buy a house. In some cases, it has worked, and in some cases it wasn't enough. It was important though, as an agent, to be able to advise my clients as to what the house was worth. My clients were ok with walking away from a property because they knew what the house was worth. We didn't have one of our offers accepted because someone offered $35,000 more than asking. It wasn't worth it at that price, but certainly warranted a bid over asking. Hence, we lost the house, but we didn't go broke looking for one.

The other way, the seller overvalues the house. Buyers can sometimes be had in this case because they think they are saving money without the services of an agent. First, they may be exposed legally by not going through the proper procedures and paperwork. Second, the existence of an agent or no agent does not change the value of the house. You need an experienced agent to know what a place is worth. If someone overvalues the house, it is sometimes deceiving from the seller that you are truly saving money. Houses are likely going to be your single greatest investment in your lifetime. You should get professional help to ensure you won't be set back for years. Hire an agent.