Q & A with America's real estate professor: Off-market deals
Feb 26, 2013 at 4:07 PM
Q. I keep looking for properties and am not finding anything that I like in the MLS. Should I be trying to find an off-market deal and will I get a better deal with the seller? Adam K., Falls Church, VA
A. I always chuckle when I hear about someone hoping to get some great deal on an off-market property. If the seller is trying to sell it outside the MLS, they’re typically doing it so they can make more money, not less. Right now in many areas of the country housing inventory is tight. That’s just a function of the marketplace. If you are not finding what you like that you can afford, it might just make sense to keep searching for a property and take your time. Real estate is a huge commitment, it’s fraught with risks and issues, and buyers should take their time, do their research, not rush into anything, and buy a property that they love and will own a long time. Good luck!
Buying Straight from Listing Broker
Q. I have been told that in this low inventory marketplace, if I find a property I like, I should go straight to the listing broker to make my offer as I will have a better chance of winning the bid since they get a double commission. Is this a good idea? Marjorie R., Mountain View, CA
A. It is true that you probably have a better chance to get a property if you go straight to the listing broker. But, if you have an existing real estate agent representing you, you’re not doing a very nice thing by dumping them for the listing agent. In addition, you have no one really representing your best interests in the transaction because a dual representation agent has to be very cautious that they are fair to both parties, not give the seller any strategic advantage.
I would always try to stay with your existing agent if they are doing a quality job. If you make the decision to go straight to a listing broker, you can always offer to compensate your agent separately from the transaction, and I suggest you do that. This way they can still help you navigate the process and you’ve treated them fairly for the work they’ve done for you. And if you believe in karma, it will probably circle back to you as doing the right thing at some point down the road.
EDITOR'S NOTE: This story was written by Leonard Baron, MBA. America’s Real Estate Professor® - his unbiased, neutral and inexpensive “Real Estate Ownership, Investment and Due Diligence 101” textbook, teaches real estate owners how to make smart and safe purchase decisions. He is a San Diego State University Lecturer, blogs at Zillow.com, and loves kicking the tires of a good piece of dirt! Email your questions to: Leonard@ProfessorBaron.com.