Tag: Buying real estate

True Value of hiring a Buyers Agent

Posted on by Kyle Gordon

Picture this: You’ve budgeted diligently, saved for years, and are officially ready to buy your house. Maybe this is your first house, or it could be your next home. Excited about your journey ahead, you start searching for a real estate broker to help you in your home search.  

 

Now look, it’s no secret that everyone has a friend or family member who’s licensed and ready to help you, and they probably find creative ways to remind you of that early and often. Then there’s thousands of other agents open for business that you haven’t met yet, and each one of them would love to grab time with you to discuss your real estate goals and forge a partnership. 

 

Understanding that representation is not free, you make the sound decision to pick a few brokers to interview. And now once again, like so many other parts of your life, you’re in a position where someone is going to do their best to convince you of the value that their services will deliver, the value of their knowledge and experience and [insert a compelling and similar-to-your-situation customer story here] to make you comfortable with picking them over any of the other real estate brokers currently practicing in Portland. 

 

Value gets talked about A LOT in our society. Value this, savings that, act now and you’ll get $$$ back in your pocket! WE SAVE OUR CUSTOMERS [THIS MUCH MONEY] COMPARED TO OUR COMPETITION. Feeling fatigued yet? Yeah me too.. Feel the trust in the room? Yeah me neither. 

 

It’s no wonder that when it comes time to make one of the largest purchases of your life, you feel the need to approach it from a guarded, low trust state of mind. 

 

Lovely. 

 

So you may be asking yourself, truly, what value can a real estate broker give me, and what separates the good from the great from the.. well, everyone else? Let’s unpack that together.

 

When I think of ways to quantify value in a real estate transaction, I like to look at it from the perspective of quantifiable return on investment (you can point your finger at the exact amount of money that was saved), and qualitative return on investment (it’s still there, but harder to pin down an exact number). For the quantitative, we’ll unpack the stages of the home buying journey and address opportunities to negotiate savings along the way. For qualitative, we’ll think through things like time savings and mental/emotional health savings gained through proactive coaching and expectation setting that happens along your buying journey. 

 

First, for the sake of clarity, the Investment that I’m referring to in this blog is the fee you agree to pay your real estate broker. Whether that is a fixed amount, percentage of sale price, or something else entirely that has been mutually agreed upon.

 

Let’s zoom in. 

 

Quantifiable ROI (return on investment)

 

Offer submission and negotiation:

 

  • When drafting your offer, your broker can help you save money by talking with the listing agent about what the Seller’s priorities are other than their bottom line. Maybe they are looking for a shorter/longer escrow period than usual. Possibly offering to allow the Sellers to stay in the home for a few days or a few weeks after close is valuable and important to them. Maybe they really love their refrigerator and are hoping to take that with them, or they’re downsizing and are dreading the idea of having to get rid of the upright piano in the dining room that they can’t take with them. Notice how none of these things are related to the sale price of the home? Knowing these priorities prior to writing your offer can help you submit a strong offer while also keeping money in your pocket by being able to offer a lower purchase price in exchange for these other items. 

 

  • Everything is negotiable in a real estate deal. This includes Seller contributions toward your closing costs and prepaids (ask your lender about these), and even Seller contributions toward your buyer agent commissions. Your broker can help you negotiate these items into your offer, and doing this successfully has the potential to save you tens of thousands of dollars. 

 

Inspection period

 

  • After your offer gets accepted, you will typically have the opportunity to hire a professional inspector to assess your soon to be home and provide you with insights on things that may need to be repaired/replaced/addressed. With this new information in hand, your broker can help you go back to the negotiation table with the Sellers. There are several levers that can be pulled to find a path forward when unknown issues are uncovered, including a reduced sale price, additional Seller contributions toward your closing costs, and even repairs to be completed by the Seller prior to closing on your home purchase. All of these negotiable items must be mutually agreed upon by both the Buyer and the Seller, and having a skilled broker representing you can help you build and communicate a compelling case to get the Seller to agree to some/all of these negotiable items. Once again potentially saving you tens of thousands of dollars. 

 

Appraisal contingency 

 

  • Assuming that you will be taking out a mortgage loan for your home purchase, your lender will, in most cases, require that a third party licenced appraiser prepares an official report validating that the market value of the home you are buying is at least as much as the purchase price you’ve agreed to buy the home for. In some cases, the appraiser determines that the likely market value of your soon to be home is actually less than the current purchase price, leaving you with another negotiation ahead of you. When this happens, there is an opportunity for your broker to help you negotiate a lower purchase price if the Sellers agree to it. A strong broker will once again help you build and communicate a compelling case for why the Sellers should agree, and once again has the opportunity to potentially save you tens of thousands of dollars. 
  • On the flip side of this, if you and your broker were able to negotiate a strong, below market purchase price, you can find yourself in a position where the appraised value is actually higher than your purchase price. This puts you in the position of closing on your home with immediate home equity and can also be considered an added value that your broker helped you secure. 

 

Dang, that’s a lot of opportunities to save tens of thousands of dollars. 

 

Let’s move on to the squishier, less quantifiable value of hiring a high quality broker to guide you through your home buying journey. 

 

Qualitative ROI

 

Home shopping

 

  • Tailored, automated searches. As much as you may love spending time on Zillow or Redfin or whichever home listing site you choose to doom scroll on, your broker can actually set up an automatic search customized to your specific wants and needs and free up a bunch of your time for other things. 

 

  • On the subject of time savings, who likes scheduling and coordinating showings? Not you. Your broker will handle this as well. 

 

  • During showings, your broker can help point out smaller details about the home that may have been missed otherwise. Houses have A TON of things to look at and private showings are commonly described as overwhelming. Finding things during the showing will help you make a more informed and confident decision about how you would like to proceed. Whether for pointing out good or concerning things, having an expert in the room with you will help you know when you’ve found the one, and also know when you haven’t. Some call this peace of mind and that’s worth different amounts to different people. 

 

Escrow

 

  • After you have found your house and have an accepted offer, your broker will help you coordinate inspections and keep track of important deadlines agreed to in your accepted offer. These deadlines are a super important part of your escrow period and can mean the difference between a successful purchase of your dream home or a sale fail where you lose your earnest money deposit – kind of a big swing here of potential outcomes. A high quality broker will have your back every step of the way while also coaching you on what happens next and what to expect. 

 

Post-purchase

 

  • Guess what? A high quality real estate broker does not disappear the second you close on your home purchase. They’re always one text/call/smoke signal away, ready to help direct you to resources when questions come up. 

 

Alright, we’re now at the part of the show where we need to wrap things up! Hopefully this was more informative than it was a ramble. Thanks for spending some time with me either way. If you found this helpful, please let me know! My name is Kyle Gordon, I’m an Oregon Real Estate Broker at Living Room Realty, and my purpose within real estate is to give my clients more value than whatever fee they pay me – so much so that they choose to partner with me again and again, and also feel delighted to recommend me to their friends and family. I recognize that this level of trust and partnership has to be earned rather than given and I’m here for it. 

 

Not sure where to go from here? I offer free buyer consults at a Portland coffee shop near you, or at any of our lovely Living Room Realty offices. We can discuss your real estate goals and map out your journey ahead when you’re ready. In the meantime, check out my blog post that highlights things you should consider when shopping for your home. 

What Does Contingent Mean in Real Estate? A Complete Breakdown for Buyers and Sellers

Posted on by Will Sing

In the world of real estate, the term “contingent” can sometimes leave buyers and sellers scratching their heads. Whether you’re navigating the buying process or preparing to list your home, understanding contingent offers is crucial. In this post, we’ll break down what it means to be “contingent” in real estate, how it affects you as a buyer or seller, and what potential scenarios you could face.

What Is a Contingent Offer?

A contingent offer on a house means the buyer has included a protective clause in their contract. This contingency gives the buyer an option to back out of the purchase if certain conditions are not met. Typically, a contingent offer involves the buyer needing to sell their current home before they can finalize the purchase of a new one. Think of it as a step in between “active” and “pending”—the property is not quite under contract yet, and there’s still an opportunity for other buyers to step in.

If you’ve heard the term “bumpable buyer,” it means that the current buyer’s offer is contingent on selling their home, and another buyer could potentially “bump” them out of the contract. Essentially, it’s a state of uncertainty, and another buyer might have a chance to swoop in.

What Does Being Contingent Mean for Buyers?

For buyers, there are two key scenarios involving contingent offers:

  1. You Are the Contingent Buyer: You want to buy a home, but you need to sell your current property first. This makes your offer contingent on that sale, which can sometimes be a hurdle. If another buyer who is not contingent decides to make an offer, you will usually have 48 to 72 hours to either remove your contingency or lose the property.
  2. You Are a Competing Buyer: You want to buy a property that already has a contingent offer. In this case, you can put in an offer, which then triggers the “bump clause.” The original buyer (who is contingent) will have a set amount of time to remove their contingency—if they can, they go from “contingent” to “pending,” solidifying their contract. If they cannot, the seller is free to accept your offer, and the contingent buyer is out.

What Does Being Contingent Mean for Sellers?

If you’re selling your home and receive a contingent offer, it’s important to understand the potential risks. If the buyer needs to sell their current home, this could delay your closing timeline. For instance, if their home takes longer to sell than expected, you might need to extend the closing date, which can be problematic depending on your plans.

It’s also essential to assess the buyer’s preparedness to sell their current property. Are they already on the market? Are they prepped and ready, or are they just starting? The more ready they are, the less risk you’ll face. Given the additional uncertainty, contingent buyers often need to make a stronger offer to compensate for the risk you are taking.

Key Takeaways

  • Contingent Offers: Buyers need to meet specific conditions, often involving selling their current home.
  • Bump Clauses: If you are the contingent buyer, be prepared to act quickly if a competing offer comes in.
  • For Sellers: Contingent offers can mean more risk and longer timelines, but they might come with a higher price to compensate for that risk.

Watch the Full Video: The REAL Difference Between Contingent and Pending

If you have any questions about buying a home or need more personalized advice, feel free to reach out to me. Connect with me on YouTube, Instagram, or Facebook.

For a more detailed consultation or to get started on your home buying journey, schedule a free strategy session here. You can also access my Free Buyer’s Guide to help you through every step of the process here.

Can We Practice Kindness In Real Estate?

Posted on by Living Room Realty

One of my pet peeves in the industry I’ve worked in for the past 18 years is the lack of empathy or compassion when negotiating a real estate sale. I believe that we should always strive to be nice for the sake of being nice. Real estate comes with heavy emotions, on both sides. As an agent representing either side of a deal, you can position yourself to keep a level head, show enthusiasm, check your ego, be like-able, honest and show integrity before you answer your phone and say “hello”.

A little reminder for us agents —-

If you are a buyer’s agent wishing to make a bid on a seller’s home remember: the home your clients wish to buy might be the sellers “baby”. They may have purchased it when it was a dump, given up weekends and holidays to get it done, and sweated blood, tears and have gone through multiple marriage counseling sessions to bring it to market. Don’t be the asshole agent that barks orders to accept an offer within 12 hours of them listing the house. Try instead to be more kind; more empathetic, because being rude will get you nowhere. Show that you are an organized, likeable and patient agent, one that understands that the sellers might want a couple days of market time, and your buyers aren’t going anywhere — they really want the house.

As broker’s we have a vested interest in pairing clients with a buyer that will make a good offer and a fair deal. If a broker feels as if you are difficult to work with, that you’re waving a red flag at day one, they will worry what the rest of the negations might bring. Don’t be an asshole (something I tell my 15 and 18 year old children- practice kindness).

If you are a seller’s agent bringing a new home to the market remember: Most homes are not perfect. You may have hired the painters to help your clients pre-list and stage the home, it’s looking very dialed and swanky (especially the coffee table), but upon closer inspection, the roof is three layers and the sewer is broken. In our current market, it is often the case for seller’s agent to call a buyer’s agent and say, “I have 10 offers in hand and while yours is the highest and the best, and my sellers really do appreciate that you went 100,000 over asking, they do not feel the need to credit you $5000 for the sewer repair. You must take it as-is or we will go to the back-up offer. First, threats don’t feel very nice. I implore all listing agents to have the courage to talk with their sellers not only about the deficiencies in the systems of the home that a buyer would be taking on, but how they would feel in the buyer’s shoes. As a listing agent if you know that the sellers roof is shot, get a couple of roofing bids prior to listing the home so your seller has opinions from professionals. Educate your sellers so they can be prepared to make decisions before you are at the end of your inspection period. Educating sellers makes them feel less blind sighted. My job as an agent is to bring as much finical security to a seller but it’s equally important that I ask my clients to stretch towards a place of fairness and compassion.  Its one of the way we can change the world.

Never underestimate the power of practicing kindness in real estate. Try to see both sides, that’s where the goodness lies. Being kind doesn’t make you a sucker or less business-like in real estate, it allows you to be in a place of integrity.