As the Temecula real estate market continues to transform into a buyer’s market, one disturbing trend comes up time and time again – the family real estate agent. Why could using an out of area, or new family agent be a major problem and bad buyer decision? Simply put, they don’t know what they don’t know and due to this issue, often advise their clients poorly.
Now there are many families that have full time professional real estate brokers that work and live in the area they want to move to. That is a great situation in which you can help a family member and they can help you. Frankly, I do it all the time. However, the amount of mistakes being made by people who choose to use an inexperienced family member over a professional and local real estate broker is going to have a lasting impact.
For instance, some of the issues in the high growth areas of Temecula, Murrieta, Menifee, Wildomar and North San Diego real estate are tax rates, future area planning, opportunity costs, negotiation, and the overall smoothness of the transaction. Many people are paying today for their own poor choice in representation. How about trying to sell a home in a place that has now become a major traffic thoroughfare? Or is it harder to sell a home when your tax rate is so much more than surrounding communities or the builder you bought from is now selling the final phase homes at $30,000 less than you paid with another $25,000 in buyer incentives.
Is that a good deal? Not if the tax rate is obscene and certainly not if you are trying to sell your home and the builder is undercutting you now. A lot of new, related agents put their family members into new homes because of builder incentives while fantastic opportunities were available elsewhere. You may have helped that family agent but you really hurt your financial well being and with the real estate crunch now happening, your family agent is most likely out of the business unless the moved on to become a strong and viable professional in their market.
Right now, clients need agents that see, understand, and communicate the real estate landscape to their clients. Buying a home is a major decision and shouldn’t be treated as a routine transaction. Although buying a home through a real estate agent or broker is a free service to the client, the agent gets paid to protect and use their professional skills to represent you to the best of their ability. The recent market conditions over the last few years have seemed to make buying a home a more trivial transaction then it really is.
So how do you handle a situation where you have a family agent but would prefer to use a professional? Well, there is the straight communication that you want a full-time professional broker working for you. That is the best way but can lead to some potential hard feelings. Or there is another method that most agents will hate even being mentioned, a referral fee.
The practice of referrals is very common in our business and usually means the referring agent gets 15-25% of the gross commission from your transaction. In this situation you or they can pick out an agent based on their professional and local ability and still give a piece of your business to your family agent, thereby easing any tension. Almost every agent does referrals when we have a client moving to another state or city. The best part is the referring agent doesn’t have to know the details of the future transaction, they just get a paid a portion of the commission. Again, as a buyer you pay nothing and yet this way you get the best service available and keep things good on the family front.
This can be tough on an agent that works hard for you but if you are a good buyer, it is absolutely worth their time and now you also have a professional you can use in the future when you sell, or friends move to the same place. Life is often about making good connections with experts who help you maximize your investments. A home is one of the biggest investments you will make, so don’t make a poor decision that will impact your purchase decision, negotiating, financial wellbeing, and future long term investment value just to give a part-time or inexperienced family agent a deal.
* Local tax rate information can be found here - Temecula-Murrieta tax rates.
Stefan West is a Temecula and Murrieta California Real Estate Broker who specializes in the communities of Temecula, Murrieta, Menifee, and Wildomar Real Estate. To learn more please visit his website at http://www.stefanwest.com for more information.
Source: www.articledashboard.com
