Buyer’s Agents have tools to establish Fair Market Value.
I was working with a family earlier this year to find a waterfront home with easy ocean access that could accommodate 3 boats between 30-60 feet. After exploring waterfront homes in three counties together, they found a home while driving around on their own. They contacted the listing agent directly on a direct Intracoastal waterfront home listed for $2.49 Million and negotiated to purchase it for $2.4 Million.
Commissions are paid by the seller and negotiated at time of listing not at time of sales contract.
Some buyers believe they can renegotiate the listing commission during the sales negotiation process. The Listing Agreement is a legal contract between listing agent and seller – BEFORE marketing the home.
Misconception of Saving Money.
The buyers throught they had saved $70,000 by going directly to the listing agent. Out of curiosity, I did a comparable market analysis (CMA). My CMA showed the fair property value was $2,150,000 unfurnished. Without an experienced Buyer’s Agent with tools and experience to research fair market value – the buyers overpaid $250,000 (less value of furniture).
Seek expert advice from a Buyer’s Agent so YOU don’t overpay!
CALL (561)827-2952 for assistance to BUY or SELL Florida real estate.
Zillow is a popular tool for buyers and sellers searching online to find the value of a particular property. If all homes were built by the same builder and of the same quality that may be the perfect tool. As with any electronic or general comparison tool that is not done ‘by-hand’ I have found that it has issues and shortcomings (but then people do too)…..
What do I mean with that? As a licensed Jupiter Florida real estate agent, I was creating a comparable market analysis (CMA) for a buyer of a single family home in Tequesta, Florida. There were several recent comps in the multiple listing service (MLS). I looked further into the tax records and saw that another property had sold privately. The home that had sold privately appeared to be owned by two individuals who were probably related. Each owner already owned half the home so when one of them bought the other one out the price was recorded as 50% of the home value. That home was then a comparison for future sales on Zillow, via the tax records and other automated systems. I am not for or against Zillow or similar companies in any way. This is simply an observation of what can happen when relying on automated tools and not real people.
What is “Buyer-Seller Price Equilibrium”?
It is a time in the real estate market cycle when Buyers are realistic about the fair market price. At the same time the Sellers are realistic about their asking price and selling price. For this ideal situation, I have coined the term “Buyer-Seller Price Equilibrium”.
Ideal state in the Florida real estate market
During a Buyer-Seller Price Equilibrium, the exchange of title and ownership of real property is done under win-win circumstances. Think of it as an ideal world, where the selling price of a property is at fair market price.
Luckily, for both buyers and sellers, this is also happening at a time with historically low mortgage rates below 4% interest. As the real estate market is in constant flux, unfortunately the current state will not last forever…
Now, is the perfect time for Buyers and Sellers to Upgrade or Downgrade.
In South Florida in general and North Palm Beach County in particular, the shortage of annual and seasonal rentals creates more buyers. The local real estate market is in a state of “buyer-seller price equilibrium” where the properties are sold and purchased for fair market price agreed by both buyer and seller as a win-win situation without a win-loose or loose-win.
When prospective tenants search for months and months without success due to low supply and high demand of rental listings they are increasingly interested in buying a property. Many buyers are cash buyers but the mortgage rates are also remaining at historical lows. This is a very special time in the real estate cycle where both buyers and sellers can close a deal and both parties feel good about having made the right decision.