Editorial
Front Page - Friday, July 10, 2009
Agents make the real estate world go ‘round: Part one
David Laprad
Say what you will about the “do it yourself” attitude in America, most people are smart enough to know when they need an expert. A defendant against criminal charges will rarely argue his own case in court; a smart businessman will hire a trusted accountant to do his taxes; and even stubborn male drivers have been known to break down and ask for directions. When someone with more know-how represents your interests and handles a complicated task for you, you usually end up better off than if you’d tried to do it on your own.
This concept holds true in real estate. Even as FSBOs pop up like dandelions all over Chattanooga, forward-thinking homeowners and buyers are using real estate agents to manage their end of what is often the largest financial transaction they’ll ever make. No longer do Realtors simply handle listings and shuttle potential buyers from house to house; they frequently engage in delicate negotiations, offer professional advice and bring their considerable experience to bear in a variety of ways.
What’s more, with financial scams and the troubled economy making headlines on a daily basis, people want to have someone in their corner who will protect them and make sure they get the best possible deal.
In the first of a two-part series that looks at the importance of Realtor representation, the Hamilton County Herald explores the reasons many homebuyers use an agent to help them find and purchase a house. The next installment will cover the trend toward using a seller’s agent.
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When Weston and Jennifer Boyd arrived to live in Chattanooga in late 2008, they were carrying the burden of a massive loss in the sale of their previous home in Connecticut. But they were optimistic about the future as each of them settled in at new jobs and started pouring their paychecks into eliminating the debt they had incurred.
“We’d taken a loan to sell off our house,” says Weston, who works at Westinghouse. “When we bought our house in Connecticut, we took out a VA loan, and the value of the home went down in the three years we were there, so we lost money on the sale.”
The Boyds quickly overcame what seemed like a bad situation, nearly paying off the loan by March 2009. With both of them working stable jobs, they started looking at homes.
“By that time, we had a good idea about where we wanted to live,” says Jennifer, who teaches ecology at UTC. “One of the listings on Signal Mountain caught my eye, so I went on Trulia and asked if it was still on the market.”
Liz Wilkerson, a multi-million dollar producer for Crye-Leike on Signal Mountain, responded. One thing led to another, and the Boyds asked her to help them find a home.
“I felt good about going with Liz,” says Jennifer. “When you move to a new town, everyone recommends a Realtor. Call my friend this; call my friend that. But I’d made contact with Liz, and she was really nice, so we went with her.” It helped that Wilkerson lived on Signal Mountain, as the Boyds wanted to move there so their children could benefit from the community’s exceptional public schools.
Wilkerson demonstrated her value early on, patiently showing her clients a slew of listings. Weston says her staying power made him feel better about looking at so many houses. “There were times when I wondered if she was getting annoyed, but she didn’t say anything, so we kept going. We were really picky.”
“I wish I had five dollars for every client who said he was sorry for being picky,” Wilkerson says to Weston. “You’re spending a lot of money.”
More importantly, Wilkerson didn’t hold back when it came to offering her thoughts on the homes at which the Boyds were looking. “Liz was great about pointing out problems,” says Weston. “And ultimately, that’s why you go with an agent. We’re not professional homebuyers.”
Weston says Wilkerson’s knack for doing “comps,” or making comparisons to recently purchased nearby properties with similar features, was also helpful, as it gave him and his wife a strong economic advantage. “The comps gave us something to go by and justified the offer we were making. We knew we were being fair.”
“You felt confident because of the comps,” Wilkerson says. “And you had an advantage. Sometimes, a buyer will ask how much he should offer on a house, but it’s not my job to answer that question. It’s my job to educate, so I’ll tell him to look at the comps.
“Some agents have a hard time telling a client that his offer isn’t high enough or that he needs to seriously consider an offer that’s been made for his house. It’s not easy to put the hard truth out there, but we have to be honest with our clients.”
Although Wilkerson describes the Boyds as “savvy homebuyers,” her clients often benefit from her ability to bargain. “Negotiating hard is one of the things I do, as some clients are unsure about how to reach a deal,” she says.
Finally, buyer’s agents handle the mass of paperwork involved in a real estate transaction.
Despite the advantages of using an agent, some homebuyers proceed without one, thinking they’ll save money. But when the seller has an agent, as many increasingly do, that’s not the case; the Realtor’s fee is the same, with or without a buyer’s agent.
“When you’re buying a home, you have nothing to gain by going with the listing agent and you have everything to gain by having your own agent,” says Wilkerson. “If you go with the listing agent, he’s going to get his 5 percent; when a buyer’s agent is involved, the fee is split. And if you go with the listing agent, you have no representation. When I represent a buyer, I go to bat for my client, which frees him from worrying about what the other side is doing.”
Unlike in the world of big business, tension between the two sides of a deal rarely occurs. “Normally, Realtors work well together,” says Wilkerson. “I might have a listing where the other agent will bring me a buyer, so I want to have a good relationship with him.”
As Wilkerson prepares to pose for a photograph with the Boyds and their two-year-old daughter, Ada, outside the Crye-Leike office in downtown Chattanooga, she crouches down, holds out her arms and calls the toddler to her. The young girl runs to the Realtor, allowing Wilkerson to scoop her up. Her familiarity with the family friend shows there’s more to buyer’s agents than meets the eye: in addition to helping with a major transaction, they’re frequently the first person newcomers get to know in a new community.
And everyone knows first impressions are important.
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