Real Estate Talk:
Why use a broker to buy?

A few major advantages to using a broker to purchase property

By Joseph Marovitch

March 30, 2022

A buyer searches for a property without a broker. The buyer spends months checking various newspapers and websites. The buyer visits open houses and finds a property represented by a broker. Now they are getting advice from a broker who is representing and being paid by the seller.

The buyer makes an offer on a property next to a schoolyard. The average sale price in the area is $300,000, but the buyer really likes the house and offers $550,000. It is a seller’s market. There are many buyers and few houses for sale. The buyer does not want to lose the house, so they forgo inspection, which causes the seller to sell without warranty.

The buyer did not think to request the heating bill, which is high due to the old non-insulated windows and old roof. After possession, the buyer finds water in the basement, and the next-door school has a bell that rings three times a day, 8 am for the first bell, noon for lunch and 5:30 pm signalling it is time to go home. Now, the buyer wants to sell, but no other buyer wants to pay over $550,000 in an area where the average price is $340,000, next to a school that has a bell that rings three times a day.

Real estate is an acquired skill that, practiced after many years, can almost be an art form.

In the process of buying or selling a home, stress is a factor we would like to avoid. Anyone attempting to perform a service or function for themselves that they are not trained or experienced to do eventually feels the stress. There is a saying that it is better to be an expert at one thing than just good at many things. Real estate is an acquired skill that, practiced after many years, can almost be an art form. Buying a property without experience and knowledge is like trying to paint like Rembrandt using a paint by the numbers kit. It is no Rembrandt.

A home represents many things for an owner such as life savings and investment, retirement, their children’s education and so much more. Real estate is not something anyone wants to make a mistake with. Therefore, using a professional realtor is a tremendous advantage to reduce stress, avoid costly mistakes and make the right decisions.

Here are a few advantages that make a realtor a necessity when purchasing:

• Time – Brokers have access to almost everything for sale. In the time it takes to survey newspapers and the Internet, a broker can narrow down the search to a buyer’s specific criteria, thus reducing the time to find the right property significantly.
• Knowledge of the area – Brokers know the area, where the schools, parks, pools, restaurants, vets, and grocery stores are located, thus further narrowing the search and quickening the time.
• Market – The broker provides knowledge of the comparably priced homes to ensure the price a buyer pays for a property is fair.
• Conditions – The broker advises on the conditions of the offer, such as inspection, review of documents and financing.
• Negotiations – With detachment from the situation, the broker negotiates the best price and terms to favour and protect the buyer.
• Issues – There are all sorts of issues that can be costly or permit legal liability. These issues can be avoided or resolved by an experienced broker. Brokers are there to manage complications. Sometimes there are no complications, and buying is simple. However, more often than not, there are complications, and a skilled broker can manage the issues due to countless past experiences.
• Commission – A buying broker is only paid for their service if they complete the goal of finding and purchasing the buyer a home.

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State of the market

Market prices and demand continue to rise as inventory remains low. As a broker searching for property for buyers, it is evident that prices rise due to high demand and little inventory. Many brokers selling property price the property for the market not realizing how many and how hungry buyers are. Therefore, the listing brokers are surprised at the response and how fast the property sells. In almost all cases, properties sell above asking.

The situation is spurred on by Government policy including maintaining low-interest rates and removing COVID-19 restrictions, thereby causing a sixth wave of infections. With the pandemic, many homeowners have elected to stay put rather than permit people to enter their homes. As well, homeowners do not want to go out and search for homes that may cost more than what they sold for and, at the same time, risk entering other homes and being infected.

‘Many brokers selling property price the property for the market not realizing how many and how hungry buyers are.’

Another factor affecting buyers is inflation. Prices for goods and services have risen across the board. Between rising interest rates and the cost of food and gas, demand is slowly decreasing. With the pandemic, prices rise as inventory falls. The real estate market is a storm at sea with large swells and a few dips. Let’s celebrate the day some stability arrives.

Have a great week, and stay safe.

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Feature image: Alena Darmel

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