Getting a second opinion in residential real estate
November 7, 2016
Buyers and sellers in a residential real estate transaction have many decisions to make during the process. Many of those decisions involve opinions, a subjective view of the matter at hand. While they are usually based on experience and facts, in real estate there is often much latitude as there are so many intangible components.
When it comes to value, the variables are just short of infinite in number. From location, to condition, to amenities, to replacement cost, to buyer demographics, to economy, to politics, to regulation changes in lending, appraisal, escrow, insurance, etc., the value influencing factors are so vast that there is no one way to look at the value of the property. The best way to value the property is to consider the seller's motivation and project that of the most likely buyer demographic type.
Sellers and buyers now have access to information on the Internet unlike ever before. It is fairly easy for them to put together their own estimate of value. Where an agent comes in to assist is to have current and accurate information, personal knowledge of many of the properties used in the valuation process, and the ability to compare that neighborhood to others that might compete for the same buyer. During the process that agent should find out what the seller's objective is and adjust their approach to value accordingly. Some agents spend more time telling sellers what to do than finding out what it is they want to do. If you find yourself in that position, you may not be getting a value for your circumstances. Get a second opinion that is accurate for your wants and needs.
If an agent tells you that your home is worth $50,000 more than you figured, and you just don't feel right about it, call in another agent. Some agents will tell you what you want to hear then beat you up week after week for a price reduction until it sells at the price that it should have been listed at originally, only you lost the intervening time. Often such overpriced homes eventually sell below market because of their extended market time and the doubts that creates for buyers in an active market. The converse is also true — if it is worth more can you find an agent that understands why and can market it correctly to achieve the higher value?
Repairs required as a result of inspections are another area where opinions can vary. Opinions in this case are the estimates from the vendors doing the work. Is it something that a handyman can complete, or does it require a contractor? Regardless of who you use, the price may vary according to their availability and schedule. Agents often have their favorite vendors that they trust, but they aren't always available, or their quote may seem high. Again, consider getting a second opinion if time allows.
Other areas that buyers and sellers can benefit from a second opinion include Homeowner's Insurance rates. We've seen premiums for the same coverage that were twice what others were. Shop and save. Lawn service and fencing quotes also vary greatly depending on how busy the vendors are. If a quote seems high take the time to have somebody else look at it.
Our advice: Don't hesitate to get second opinions so you know where you stand during the sell/buy process. You may have time constraints that limit your choices, and our busy market has everybody working hard and short of time. For the right items, however, you can save substantially if the preliminary information you are receiving can be improved on. It may be worth a phone call and the time of an appointment to find out.
Many professions are subject to second opinions when the situation is serious enough, i.e. doctor, lawyer, etc. Is the purchase/sale of your home serious? When it comes to choosing professionals to assist you with your real estate needs … experience is priceless!