Know risks before hiring out-of-area agent

Why buyer may be at disadvantage during offer process

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Aug. 13, 2012

Share this Story:

Why buyer may be at disadvantage during offer process

Dian Hymer
Inman News®

Multiple listing services are coalescing into large entities that make it easier for real estate agents from other counties to represent buyers and sellers in areas where they don't normally work. They have access to new listings as they come on the market and they can search for comparable sales, even though they haven't seen the properties.

The draw of working with agents you trust and whom you've worked with before is strong. However, real estate agents owe a fiduciary duty to their clients and shouldn't work outside their comfort zone.

There are competent agents who work in more than one county and are well qualified to do so. They know the markets in which they work.

One risk you take in working with an out-of-area agent is that the agent doesn't understand the idiosyncrasies of the area. In heterogeneous neighborhoods where no two houses look alike, it can be difficult for an outsider to understand why some three-bedroom homes sell for $600,000 and others sell for $900,000 or more.

Agents with years of experience working in these neighborhoods are accustomed to the variety and know which comparable sales will best match the property you're interested in buying or selling.

HOUSE HUNTING TIP: Buyers trying to buy in a low-inventory, high-demand market can be at a disadvantage when working with an agent from out of the area. Listing agents tend to feel more comfortable working with agents who have a track record selling homes in the area. If you're using an out-of-area agent, it's a good idea for that agent to build rapport with the listing agent before you write an offer. Make sure the listing agent knows that your agent is accomplished and will get the job done.

Real estate law and custom vary from one area to the next. An agent from another area may not be aware of some of these critical issues. Often offers are written with buyers asking sellers to take responsibility for items normally handled by the buyers. This can be off-putting to the sellers, particularly if they are considering more than one offer.

It's always difficult to know how much to offer on a listing that is receiving offers from more than one buyer. A local agent is more likely to know how many offers the most recent comparable received and how much over the asking price the buyer paid. This can be used as a gauge for making an offer in competition. If your agent doesn't regularly work in the micromarket where you want to live, you could be at a disadvantage.

This is not to say that out-of-area brokerage never works. Sometimes it does, particularly if the buyers are preapproved with a local loan agent or mortgage broker and are diligent about researching the market before they write an offer. They know the local pricing so they don't have to rely on their agent for advice on how much to offer. They know the point-of-sale ordinances. They know what hazards affect the area, like floods or landslides.

Agents who choose to work in an unknown area should connect with a good agent in the area who can advise them of issues they should be aware of when representing a buyer there. A good listing agent should be willing to give your agent this information so that nothing is overlooked.

Beware of agents who claim they can do a good job for you in an area where they've never worked before. They could be more interested in the commission than in giving you the best representation possible.

THE CLOSING: The best solution is to have your agent refer you to a top-notch agent in the area where you want to buy or sell.

Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

Contact Dian Hymer:
Email Email Letter to the Editor Letter to the Editor

Add to favoritesAdd to Favorites PrintPrint Send to friendSend to Friend



(HTML and URLs prohibited)