One debate I often hear is whether a real estate agent should represent both sides of a transaction. The question lies on whom you represent. I have been in real estate for 13 years and have done transactions where I represented both sides. I have guidelines that I personally use when deciding whether or not I would feel comfortable in doing so. Here are the things I consider:
1) Is it a win-win situation for both parties? In other words, is the seller getting what they wanted or maybe a little bit more? Is the buyer happy with the price and it is reasonable?
2) Did the listing stay on the market long enough to give the sellers an indication of demand, or lack of?
3) Are there good comps that support the price that the buyer is paying? If not, and I am selling for a record price in the building, I would not touch dual agency with a 10-foot pole! This is where it gets very tricky. If I am a listing agent, and I am selling for a record price, and there are no comps that justify my pricing…I just hit a grand slam for my selling clients! If the buyer’s agent allowed their client to pay that amount, well let’s just say I don’t want to be THAT agent! Especially as a dual agent! NEVER! Now I will say there have been times where I represented clients that had so much money they just did not care about the price, they just wanted the condo. In that situation, you make sure that you document that conversation.
Regarding #3, this is where representation comes into play. As a dual agent whom do you represent? You should be representing buyer and seller equally. But how is this possible when you have a situation like above? If you are getting a record price for your sellers, and there are NO COMPS to support the price, how can you be the buyer’s agent and say “I did a good job for my clients”? The answer: You can’t!
If this same agent acted only as the buyer’s agent, you can bet that he would be hammering on the seller’s agent that the unit is at a record price and might be overpriced? Now, records are meant to be broken. So how much of a record price is it? Is it $10 to $30 a square foot more? That is reasonable. Is it $50 to $100 a sq. foot more? This is when you have real problems. For one, the property would most likely not appraise. But what if the buyer is paying cash and an appraisal is not required? Well then the buyer is really at risk. This is when they REALLY should have a separate agent. ( and for peace of mind, the cash buyer might still consider getting the property appraised).
In multiple-offer situations, if an agent is representing both sides, he or she better make sure that their buyer’s client is the best offer! If it is, the listing agent and the seller are making the final decision as to which offer to select. In this situation, there is no problems in representing both.
So bottom line: If both parties are happy and well educated on pricing, and there are good comps to support the purchase and sale, there are no problems.
On the flip side. If there is a big difference in price from the comps, especially if it is a record price in the building for the seller or huge discount for a buyer. This is when you need two agents fighting it out for their client’s best interest. I would never do dual agency in this situation!
Brad Golik is a luxury condo specialist with LuxuryCondosofPortland.com and Pearl District Properties in Portland, OR. You can reach him at one of his websites including http://www.LuxuryCondosofPortland.com and www.PortlandPenthouse.com or by calling him at 503-896-8856
Recently a friend came by my office and we began discussing real estate. This friend often reads my blog post, and in our conversation, he mentioned that I hammer on the issue of agents not using professional photos. He also said that he could not believe that there were that many agents who don’t use professional photos, knowing that it has been shown that great photos help sell homes faster and for more money. So, why not hire a professional photographer? It is hard to explain.
To prove my point, I asked my friend to pick any condo building in Portland. He looked at our inventory sheet and saw that Waterfront Pearl had more listings than other buildings, so I used that building as an example. In my opinion, EVERY listing should have great photos, especially higher-end listings. In this example I will use listings priced at $750,000 or higher. Currently at Waterfront Pearl there are 6 listings above $750,000 (they are priced from $798,000 to $1,049,000) Of these 6, only 2 of the 6 listings have used professional photography! Again people, these are $800,000+ condos for sale!
To say that my friend was shocked is a huge understatement. His comment: “Why would someone hire an agent who does not care enough to do their best for their client?” Hmmm… where have I heard this before? Why would an agent not spend a few hundred dollars in an attempt to gain thousands more for the client? And if that agent is not spending money to do a nice job on the photos do you think they are going to spend money on doing a nice video, expensive print material or internet marketing? Probably not.
The National Association of Realtors has shown time and time again that homes listed with high-quality photos sell for more money. If you are an agent who doesn’t spend on professional photos, you might as well be telling your clients upfront that you just don’t care what their home sells for! Harsh? Maybe. True? You be the judge.
Brad Golik is a condominium specialist at LuxuryCondosofPortland.com and Pearl District Properties. If you would like to see any listed condo or loft, call Brad today at 503-896-8856.
Now is the time of year that buyers begin to hunt for condos and lofts in Portland’s Pearl District, Downtown and South Waterfront. When looking at these properties, please be aware of the importance of price per square foot. Most important, and I have said this before, the price per square foot can vary dramatically based on where the unit is located in the building! I often deal with agents who mostly work in the suburbs, presenting offers on listings based on price per square foot. Trouble is these units were far inferior to the one I had listed. You cannot compare a 12th floor unit with views of Mt. Hood or the West Hills to a 3rd floor unit that is looking into an apartment building. It is also difficult to compare a unit with a deck with city views to a unit that is ground floor with no outdoor living space and less security.
I specialize in condos because I want to be an expert in what I do. Today, too many agents try to be all things to all people. In the end, they become experts at nothing because you cannot understand every part of the city and the nuances of every area. If you are looking for a home in Alameda, I am not your guy! There are agents in that area who know the market very well. Why as a buyer, would you use an agent from who does not understand the delicate balance of pricing based on the difference of just a couple of blocks?
The same can be said of the condominium market. Why work with a buyer’s agent that does not understand the nuances of the condominium market or the pricing of this market? As a buyer, it does not cost you more to work with a specialist. The truth is, it pays! As for someone who is selling their condo, it becomes even more important to work with a specialist. Last year, I spoke to a seller who was told by a competing agent ( who works for a company that does a ton of marketing on TV, stating they can save their clients thousands of dollars) that they could sell their condo for 5% higher than the Zillow “Zestimate”. Problem was that the Zestimate was extremely low for this property, which is not unusual. ( Zillow has an even tougher time with comparables in the condo market than Redfin or agents from the suburbs.) Had that person only priced their condo 5% higher than Zillow’s Zestimate, it would have cost them many thousands of dollars. In addition, the same agent, whose company says it can save you money on commissions, could have cost that same client thousands of dollars because of the lack of experience.
In addition to correctly pricing a unit, sellers should consider this one thing: I am in the condo market EVERYDAY marketing to condo buyers EVERYDAY. Every week I speak with folks walking by my office on 11th Avenue who are up from the Bay area looking for a place to buy. This presents a huge marketing advantage. I have said this before, a typical agent cannot go from marketing homes in Lake Oswego one day and then flip a switch and fill up their pipeline with condo buyers overnight. It just does not work this way.
And for that same agent to understand condo pricing overnight? It does not happen.
Please visit my new website at LuxuryCondosofPortland.com. See some great aerial drone photography of many of downtown condo buildings! Just click on the Buildings page.
In a post I wrote a little while back I mentioned that even in a hot market, where everyone seems to believe that there are no deals in the market, that sometimes deals do come along. Today is one of those days! If you are in the market for a 2 bedroom unit with over 1400 square feet, this is your lucky day! Just a short walk north of the Fields Park in the Pearl District, you will find a wonderful 8 story condominium tower called Pacifica. I have sold many units in this building and know it probably better than any agent in town. Two days ago a unit came on the market priced at $575,000. This 3rd story unit has a spacious layout, 2 and half baths and a very large deck that looks over the Willamette River. The reason I know it is drastically under priced is that two years ago I sold the same unit, two floors up, for $575,000! In this time the market is certainly up more than 10-15%. Taking that into consideration, you would be looking at a price of $610,00– to $632,000. The current price, at $391 a square foot is VERY low to the comps in this building. I sold 4 or 5 units in this building between $418 to $450 a square foot last year! I will be pricing another unit there soon and we were going to be looking at $500 a square foot. This might be a little more difficult now with the agent selling unit #303 so far below market value.
Again, for those who are patient, and work with an agent that knows the condo market, there are good values that do come up in the market. Unit #303 at Pacifica Tower is one of them!
If you are a buyer and looking for a great 2 bedroom unit, there is not another unit under $750,000 in the market right now that I feel beats this one.
If you would like to go view this unit, give me a call today and I will set up a showing! Call me at 503-896-8856
Today I sat at Starbucks with my tablet to do a little work. As I took a few calls and reviewed listings online, I noticed the person next to me taking an interest in my work. We struck up a conversation as she enjoyed hearing about real estate and what was happening in the current Portland condo market. One of her comments was, after listening to 1 or 2 of my phone calls, how important marketing was to me when it came to listings. She mentioned to me that agents she had used in the past did very little marketing and pretty much just posted her listing in the local MLS and waited for a buyer. This is not unusual as this is exactly what many agents do!
As she became more engaged and interested, I explained to her my “Laws of Probability”. What I mean by this is that the more marketing you do, and if you do it in the highest quality fashion, you will attract more quality buyers. The laws of probability show that if you have more people interested in something…the price usually goes up!
This person, I feel, became very educated today on what a person needs to do to capture a top price in the sale of their condo or home. She was pretty shocked when I showed her some new listings that came on the market the previous 2 weeks. What I showed her was that with half of those new listings, the listing agent did not use a professional photographer. In fact, a couple had photos that were so bad she felt bad for the owners trying to sell. I explained my philosophy on this subject… If an agent cant spend a couple hundred dollars to “show off” your home the best they can, they should not be in real estate. Good agents work hard for their clients and spend the money to “Market” their home. This is part of what they are getting paid a commission to do. If that agent is not spending money on quality photos then they probably won’t spend money on a video, quality print materials or internet marketing! It was interesting when she asked me why owners would hire agents like this? I told her sometimes they just hire the agent that helped them purchase the unit and often don’t know any better. I also told her that unfortunately, many sellers think like those agents. In other words they think they can just put it in the MLS and get it sold. While this may be true, it will sell eventually…but at what price? There is a reason that many advertisers try to put their product in the consumers best light, because they know those consumers will pay a higher price if they perceive that product to be better.
If I get a listing and put it in the MLS with average photos and no additional marketing will it sell? Yes, eventually it will, but I don’t believe that I would have done everything possible to get my clients the highest price for their unit. I believe it is my job to spend the money necessary to promote that condo the very best that I can and make it stand out so that buyers perceive this to be the best unit available and are more comfortable in paying a higher price.
Brad Golik is a condominium specialist with Pearl District Properties.
Find him at http://www.LuxuryCondosofPortland.com 503-896-8856
Economics 101: Supply and Demand
How’s the Portland condominium market? If you are waiting for lower prices in the condo market… that train has left the station! A year ago would have been the best time to purchase. But, like picking the bottom in any market, timing is difficult. Let’s look at where we are now and where I think we are going… again, these are my opinions only but they are based on the research of many others.
Like many parts of the country, we are now in a situation of low inventory and buyer demand has picked up tremendously. Again, getting back to the basics of supply and demand. When you have limited inventory being chased by multiple buyers in the marketplace, prices will go up and they have already started! Will we see the huge appreciation of past years? I don’t believe so. I believe we will see steady, healthy growth moving forward. National levels are expected to see growth of 3-5% a year for the next several years. I believe Portland will be just slightly higher in the 5-7% range.
What’s happening in our markets. For Portland’s condo markets, same thing… no inventory! Why is this? Well, I think it is a couple of things. Many people are still underwater on their condo and waiting for a little appreciation before they can sell. With no inventory this is what will happen. Prices will begin to start going up and as they do, more condo owners will be able to sell. The other issue in the condo market that I am seeing is that the rental market has been so strong and rentals are at a premium, thus keeping more condos out of the market place.
With that said, many condo owners live in buildings where there is a 30% rental cap… and guess what? They are all at the cap! In fact, some buildings like Streetcar Lofts have a long waiting list (Streetcar has 21 people on the waiting list!). These are the owners who are waiting for some appreciation so that they can sell, because they can’t rent their condo.
If you are a condo owner who is thinking about selling, give us a call and we will be happy to do a market analysis for you to see where you might be and to see what other units like yours are selling for. We have put together what we believe is the best condo marketing program in the city and we would love to share this with you. It is remarkable how much mediocrity we live with when it comes to selecting an agent to help sell your condo. If you want top dollar for you condo, average should not be acceptable, you deserve more for your hard earned money…and this is something we truly believe!