The lowest equitable price??

By
Real Estate Agent with Tomson Burnham, llc Licensed in the State of Oregon

After having a very busy October, I am finally getting caught up on my reading and blogging.  I have my ABR and in reading the September/October issue of The Real Estate Professional, I found something that I HAD to talk about. 

Bruce Benham, the CEO of Re/MAX International, writes an article called "Become Their Trusted Expert."  In the article he talks about helping buyers set attainable goals.  He writes, "Once your buyers are ready, it's up to you to be the expert and submit a reasonable offer.  The buyers' goal shouldn't be to steal a property for an outlandishly low price--it should be to purchase a home they want at the lowest equitable price." Huh?

Now, I could be wrong but during the height of the seller's market, I don't recall any listing agents (myself included) telling their clients, "Don't list your house that high, as it is not the highest equitable price."  No, we priced at what the market was doing, which was running up.  Agents priced high and sellers often got higher, since that is what the market dictated that we do for our clients.

Since we are in a buyer's market, why would our attitude be any different? Why is he suggesting that an agent not try and steal a house at an "outlandishly low price."  Wouldn't we be violating our fiduciary duties to the buyer if we said,"I know we are in a serious buyer's market, but let's be fair to the seller and offer them more money than the market dictates we offer?"  

 Real estate is basic:  Supply and Demand.  This dictates how we act as real estate agents in advising our clients, and what we suggest they offer.  Buyers are also aware that the market may continue to go down over the next year in some areas.  What may seem outlandishly low, may in fact be the right choice in order to protect your client from a future downfall.

The bottom of the real estate market is unknown.  This comment makes me think that he is hoping to stop the continuing downfall of prices.  This is not our job as agents to do.  Buyers and sellers dictate the market, our job is stay educated about what is happening, and help our clients act accordingly.

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Rainmaker
385,611
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana
That is correct.  Supply and demand.  Seems the homes below 200 are moving a lot faster.
Nov 04, 2007 05:14 PM #1
Rainer
202,735
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
REALTOR, PBD SFR SRS
Melinda just run the comps as a buyers should and don't make an insulting offer on a home that is priced right.
Nov 04, 2007 05:22 PM #2
Rainmaker
112,509
Wendy Smith
Wendy Smith Real Estate - Clearwater, FL
Real Estate Advisor
I agree with James, don't make insulting offers.  If your buyer wants to get a great deal, perhaps a short sale transaction is in order.
Nov 04, 2007 06:32 PM #3
Rainmaker
256,678
Melina Tomson
Tomson Burnham, llc Licensed in the State of Oregon - Salem, OR
Principal Broker/Owner, M.S.
James and Wendy...What is insulting?  I recently did a multiple buyer offer on three homes for a client.  Their favorite was priced at $409,000 and we offered $350,000.  The seller took it.  If I hadn't "insulted" them, my clients would have not gotten such a good deal.  One of the other homes was priced at $369,900 and we offered $330,000.  We accepted the other offer, but the listing agent called back and said the seller would take $325,000.  How was I insulting??  The homes were priced well, but there is a 17 month inventory of new construction here in Salem, OR.  Maybe to you this is insulting, but I think I'm doing my job...
Nov 04, 2007 06:46 PM #4
Anonymous
Andrea
Rock on, Melina! Any buyer would be lucky to have an agent like you (or seller for that matter!). I think the hurdle here is that many agents out there think that they can manipulate their buyers and the offers that will be submitted. If that's the case, it's time to  find a new agent. Agents are paid to educate clients and especially to be their advocate.No buyer wants to pay an exrta fifty grand to spare a builder's feelings. That's a rediculous suggestion, and I pity anyone who has an agent that would throw them under the bus like that!
Nov 16, 2007 01:25 AM #5
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Rainmaker
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Melina Tomson

Principal Broker/Owner, M.S.
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