The Finance Blogger


Trust your Real Estate Agent

Trust your Real Estate AgentDo you trust your real estate agent? Most agents are honest, but some can twist or make it look like they are doing you a favor when they are really not. We recently ran across a situation and wanted to share it with our readers to find out if you feel the same way or have a different opinion. This solution can cost a great deal of money and you need to pay attention to what your agent is saying. Consumers also need to run the numbers to make sure that the cash flow and profit / loss works in their favor or at least delivers the best solution for them.

Trust your Real Estate Agent? – A Real Example

A friend of ours is selling their condo unit. It has been up for sale for a while with little interest by any potential buyers. The market is pretty tough right now with few buyers and lots of homes available. It is essentially a buyer’s market so if your home is not upgraded and looking great, buyers just have too many other homes to consider. The competition is pretty fierce and our friends must decide if they are going to continue to leave it on the market or take it off the market for a little while until conditions improve. The market can play a huge part in deciding on how much you want to charge for home.

They really do need the cash for their retirement and medical bills so there is some motivation for them to sell, but they are not in any kind of desperate situation either. The agent is recommending they drop the price and spend $20k on upgrades to make the unit more attractive to buyers. It needs new carpets, paint and really the kitchen and bathrooms should be upgraded. In total with the lower price and money spent they would probably lose about $40k from what they originally expected. This is a large amount and most people could not afford to lose this much money.

Is it a Deal

The agent has offered them a deal which is what we find a little difficult and we question whether we should trust her or not. Essentially if it does not sell in a few months the agent will buy it from them at the reduced price with the upgrades completed! They get a guaranteed sale but they are losing $40 k and what motivation is there for the agent to actually sell the unit? Not much as far as we are concerned. Why would she even try to sell it when she can pick up an upgraded unit at a low price.

Trust your Real Estate Agent – Make Your Own Assessment

Is this a good deal for the agent or what? They get a condo unit at a reduced price that has been upgraded and all they have to do is not sell the unit. Prices in the area have been increasing and there is a good chance in the next year that prices will go up further as the economy picks up. What do you think the agent is going to do? They will not work to sell the unit, pick it up cheap and then sell it as an upgraded unit or perhaps rent it out since the agent picked it up cheap! They may rent it out for a year while they wait for the price to increase.

Let us know what you would do? Our opinion is find another agent and get a second opinion.

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