Monday, January 6, 2014

Why I'm Worth It

Am I worth it? There have always been buyers and sellers who want to handle their Real Estate transactions alone.  They are sure that they can save money by not paying a commission or paying a fee for professional advice and services.  In my experience the reality is somewhat different.  Whether as buyers, as sellers, or landlords consumers are rarely their own best advocates in a negotiation. 
Buyers usually pay less, sellers get more, and landlords get quality renters when they have a knowledgeable real estate agent representing them. 

Since I am an agent, perhaps I am not the most credible witness LOL.  In my personal experience Landlords get better tenants.   Likewise, when the National Association of Realtors, based on surveys of multiple homeowners, says that sellers with realtors tend to sell for up to 10% more than For Sale By Owners, perhaps they too have a particular perspective to promote???

... Ok so what about the phenomenon known to behavioral scientists as the “endowment effect”
The endowment effect postulates that people ascribe more value to what THEY own than they do to a similar possession which belongs to another.  In other words, unrepresented sellers tend to think their properties are worth too much, and unrepresented buyers tend to think the properties they view are worth too little. This leads to problems on both ends.

People rarely negotiate effectively on their own behalf.  This is particularly true when the commodity being sold, purchased or rented is something as emotionally resonant as a home or an apartment. Nowadays many buyers believe that they can make themselves a better deal if they pursue a purchase on their own. Using the Internet, they figure, they can find whatever listings they need. And indeed they can. But to succeed at BUYING or RENTING one of these listings is another matter. 

Most sellers and landlords are represented by an agent.  In a buying situation, what buyers frequently do not fully understand (in spite of signing the required NY State disclosure document) is that the seller’s agent represents the seller, not them. If the seller’s agent has agreed to take a lower commission when there is no buyer’s agent in the deal, the seller expects to put any money saved into his own pocket, not the buyer’s. And his agent is there to help him do just that.  In addition, if there are multiple bids buyers do not have the ability to analyze value and bid strategically the way an agent, who has done this multiple times, can guide them to do. Like any professionals we have our tricks to make it that much more likely that our buyer will beat the competition.

Overall, pursuing a real estate purchase, sale or rental without an agent in the New York marketplace seriously disadvantages the prospective buyer, seller tenant.  Agents have deep experience regarding properties and the overall marketplace which it is impossible for a lay person to possess.  We can add technique, access, timing, analytics and rationality to an often emotional process.  We have a sense of value honed by countless transactions. We can help sellers maximize their return, buyers and renters to get what they want at a price within market parameters.

I have heard often over the years that real estate agents are a dying breed. I have heard often that technology, as it becomes more and more sophisticated, will disintermediate the agent as a crucial component in our marketplace.  I don’t see it tho.  This is a boots-on-the-ground business.  The transactions are too big, too resonant, and too complex for most people NOT to use an expert. 

Ask anyone who has: 
  • Rented a property in Foreclosure
  • Bought an Overpriced Property
  • Lost a sale because of an Inspection
  • Rented to Deadbeats
  • Been unable to sell their Home for Years
...if I'm worth it.  They will say YES, then tell you why.


Johnel L. Franks
The Franks Agency

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