Friday, June 25, 2010

As a Buyer, Can’t I Save Money by Approaching the Seller Directly?

Can a home buyer save money by approaching a home seller directly, without a real estate agent? A first time home buyer looking for a starter home in Arcata, CA called the other day, and we had a great discussion about first time home-buying. “Why would I want to use a buyers’ agent,” he asked, “when I can go to the seller, offer to save him the commission for the buyer’s agent, and get a better deal?” I appreciate this client’s honesty and directness! Many buyers and sellers of real estate don’t really understand how the process works!

Typically, when a home owner wants to sell his home, he calls a real estate agent and signs an exclusive right-to-sell listing contract, in which he agrees to pay the agent a commission, 6%, for example, if he successfully sells his home. That real estate agent then enters the home into the local Realtor multiple listing service, or MLS, with on offer to split that commission.

Typically, in Humboldt County, California, that offer is a 50/50 split; both the seller’s and buyer’s real estate agents would get 3% each. Additionally, under California law, a real estate agent can’t split his commission with someone who is not also a licensed real estate agent. So the listing agent will get a 6% commission, no matter who the home is sold to, and he will either split that commission with another agent, or keep it all to himself; he can’t pass it on to a buyer who is not a licensed agent.

So, if the seller is not able to pass any commission “savings” on to the buyer, why would a buyer want to try to represent himself? The seller has agreed to pay a buyer’s agent through his listing agreement; why would the buyer want to turn down professional representation by a Realtor that’s already paid for?

My first-time home buyer has hired me, and we are looking for their first home as we speak!

Wednesday, June 16, 2010

Humboldt County Real Estate Market Statistics for May, 2010

Our Humboldt County, California residential real estate market shows continuing signs of stabilizing and recovery!

Our active homes continued our seasonal rise to 682, above our “normal” market of 650, but well below the 720-740 range of the past 2 years.

The number of sold homes in May of 2010 also increased to 81, well above the figures from the last 2 years, 69 & 65 respectively. 81 is below our “normal” range here in Humboldt County, which is around 100.

This lower number of active homes on the market and higher number of sold homes should encourage stability in the pricing of Humboldt County homes. Sure enough, the average sales price of a home was $279,724, right in the $275K - $300K range we’ve seen over the last 18 months. Our median home sales price was $255,000, well within the $250K - $275K range we’ve seen over the same time frame.

The next rock we need to navigate is the ending of the Federal home buyers’ tax credit. With these solid numbers heading in the summer selling season, hopefully we’ll see a smooth transition back to a stable, independently supported real estate market here in Humboldt County, California!