Buyer’s agent saves him from over-priced homes

Buyer’s agent saves him from over-priced homes
Date Published: March 7, 2014

Dear Sue,
At the moment I am so discouraged I don’t even know what to ask or how to ask it.
I will start from the beginning. I hired a buyer’s agent because my cousin told me that it would be in my best interest.
He told me that a buyer’s agent would not let me overpay for a property. I thought this was a good idea since I don’t know the area.
Well, according to my agent everything that we’ve looked at so far is over priced. My agent does a market analysis on every property that I like. The offers that I make are based on the value he comes up with. So far I’ve been beaten out by other buyers or totally rejected.
I have been working with him for over a year now. This process is getting tedious and discouraging.
He tells me that he is acting in my best interest but based on the results I’m not so sure.
Is this common? I feel like I should just get another agent.
What are your thoughts Sue?
~ Discouraged Dan

Dear Dan,
Your agent seems to be doing a very good job of saving you. You certainly cannot overpay if you don’t buy anything.
I believe that educated buyers can determine for themselves the value of a property. Especially after seeing several properties in a similar price range.
When a buyer asks me what they should offer on a particular property I generally ask them “what do you think?”
They usually know. I advise them that they need to be comfortable with whatever it is they offer. If they want to make a low offer I often reply with “you can’t have what you don’t ask for but you also need to feel okay if your offer is not accepted or lost all together because of a competing buyer.”
I also explain that if financing is involved the appraiser will not allow the buyer to overpay. It’s the appraiser’s job to look at the property as though he were the lender. It’s the appraiser’s responsibility to make sure that the loan is not greater than the value of the property.
It’s also important to understand that property values go up which means that the next sale will be somewhat higher than the last sale. Doing a market analysis without adjusting for increases means that you will never catch up with the current market. So in theory you will never be able to buy.
Explain to your agent that you need to work with someone who is in tune with the current market. If he can work with you on your terms then by all means continue the relationship.
If he can’t, make sure that you’re not bound by an exclusive buyers broker agreement that you may have signed when you first started working together.
Educating yourself and making offers based on current market values could be a matter of Good Home $$$s and Sense.

Sue Thompson is the owner of HomeTown Realtors in Auburn. She can be reached at seesue@mac.com, or at www.homedollarsandsense.com.