If an agent is out to just make a commision, how can you trust them to pull accurate comps for you? I mean they can tell you the comps for a certain area are 90k, when in reality they may be only 85k.
My question is, can an Agent stretch the truth about comps in order to get more $? is it legal?
why would an agent stretch the truth…? their job is to help you list the property to get a buyer, who, if using a lender will be able to secure financing. the comps are information for you to use as a starting point. the actual “value” is what a buyer is willing to pay and a seller is willing to sell. get out of the “agents are out to screw you mentality” and use their services, or dont. if agents are guilty of anything as a whole regarding comps, it is caving to an unrealistic seller and wasting the agents time and marketing dollar.
Wendy, We generally use the comps to decide if we want to buy a property or not. In other words, if I want to buy a property that is for sale at 70% of retail value, and the houses are selling for $110k I can pay up to $77k for the house. But if the houses are actually selling for $100k I should not pay over $70k for the house. That could be the difference between me making a bid and me telling the realtor keep looking.
SCFlipper, I take what the real estate agent gives me as fact to at the property locked up. After it is locked up, during my option period, I do my due diligence. Part of that is verifying the comps. I actually look at the houses used as comps. If I find that the houses were cherry picked, I talk to the agent about it. I have an agent that understands investment real estate and is working with me in developing my portfolio. His concern is repeat business from me. His comps are regularly good. I bounce them off him. But in any event, I verify the houses myself used for comps.
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Bluemoon,
i am wendy, just on another computer couldn’t remember log on stuff. anyway, i see your point, i would only add that if it is the listing agent doing their job for the seller of getting best price, good for them, if it is the buyer’s agent with a fiduciary duty to that buyer they better know their comps. illustrates why each party to the contract should use their own agent.
Thanks
Wendy, I wasn’t dogging out agents, just wondering if some agents would do that and if I needed to be careful. The agent that works for the seller, I would assume she/he would try to get the most possible, therefore she/he may tell me the house is worth more just to get an higher offer from me. I understand that I need a buyers agent, someone to represent me, thanks for your help
When the agent givers you the comps, make them give you the comps not just a dollar figure. It needs to have the address, number of bed, bath, garage, etc, sqft, and when it sold and what it listed for. Use the sold column to figure comp not listed price. Only consider the houses that sold in the last 6 months unless you are up against a season change (winter no buy season to spring buy season)
comps just give a range; not a precise number. you probably do not know how motivated the buyer and/or seller were on any particular transaction which can easily move the final selling price by 10%.