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Ouch! Buyer Lost $40,000--Don't Be a FloaterPosted by Jay Seville on Wednesday, December 12th, 2007 at 11:32am.
Do Floaters Pay too Much for their Condos or Real Estate?In putting together a new overpriced condominium list I came across the sale of a Clarendon / Courthouse area condo on my previous list I wrote in the Summer 2007. Most of you know I sell a lot of condos--yes I'm a realtor--and pride myself on protecting my client's interests. Too bad this buyer didn't have a rockin' consultant looking out for him. And it's too bad the buyer wasn't reading my blog....
Back in July 2007 I posted this article: Latest Overpriced Condos in Clarendon, Courthouse and Ballston -- V. I try to write these articles semi-regularly; it's just that I'm pretty busy with a lot business, family trips, 4 kids, etc. So I've just pulled up a new round of overpriced condominium for sale to write about...yes it's coming soon! In the process of running numbers on condos and listings I came across the 1423 N Rhodes building with 8 units that delivered in 2007. They offer 1350ish sq. ft. and for that reason they were notable this year. That's a pretty large condo--most run 1100 sq. ft. and less in terms of square footage---at least 95% of them.
Unit #401 closed for $655,000 with a $15,000 seller (condominium builder) subsidy to the buyer for a net sold price of $640,000ish. I went to this building and found the units to be quite attractive. What I didn't like was the rest of the old building itself. My instincts told me this was way too risky for any of my buyers even though similar square footage was selling for that price elsewhere in new buildings such as Station Square. Here's how I put it from that entry in the article in July 2007:
Previous Article on 1423 Rhodes St N Condominium
"7. 1423 RHODES ST N #401 for $679,000 is a new condo with just 8 units available. And I must say the buildings are attractive. However, I don't know of any SOLD in the building yet, meaning the value is unestablished. If there are solds the builder hasn't wanted to make it known in the MLS which raises its own concerns about much lower SOLD prices. And if I'm representing a buyer, that is very uncomfortable territory--unestablished market values. If the 1400 sq. ft. is selling for $660,000 at Station Square 2 blocks to metro with a pool and other amenities, then one has to go backwards from there. 1423 offers slightly less sq. ft. and is MUCH further away from the metros and nightlife compared to Station Square. 8 blocks to the Rosslyn metro and about 5 to the Courthouse metro. I don't think it has a pool or exercise room. I'd be leery of being the 1st to buy in this building for these reasons. I can't imagine paying more than $600,000ish given the comparison of value with Station Square. And that might be too high...."
So, now there is a unit there listed for $629,000 and another under contract for $599,990--unit #301. We don't what the sold price will be, but a slightly smaller unit there sold for $585,000. The buyer for unit #401 had no selling agent representing his/her interests. Did they try to negotiate? Did they wonder if this was really worth it? Did they seek out any counsel? They lost $40,000 instantly. That's no fun.
Because of my online presence I come across buyers constantly who are seemingly avoiding realtors like the plague.
I call them "floaters." I guess there are reasons to avoid realtors if you are buying a home such as the one I outline in this article: Realtor Egos Run Amok. The biggest is that they are just gathering info for now till they get serious about buying later. That's cool. I would just put out there that maybe your info gathering could be much more efficient and painless with just a little input from an excellent real estate consultant. It could still be a very hands-off relationship. In fact that's my preference for several reasons. But when it's time to do business make sure somebody who knows what they are doing is covering your backside....Don't be a floater at the end of your journey when you're ready to write contracts.
[some of you may not be old enough to understand the humor in this photo....]
Selecting an Excellent Realtor in Arlington VANow does working with a realtor mean you are getting a real benefit in your home, townhouse or Arlington condo purchase in Virginia in the Clarendon area?
Not necessarily. Let's look at 1423 N Rhodes St again. Unit #302 sold for $640,000. That's much higher than they are selling for now. That buyer had a realtor from a typical mainstream brokerage. By mainstream I mean the brokerage has lots of offices and the agents there split their commissions largely with the brokerage. Well I bet that agent's buyer wishes that her agent had been reading my blog, eh!
Here are some tips on selecting an excellent agent.
- use one that is sincere in wanting to protect your interests. Either get a referral based on a specific story from a friend or worker whose realtor really came through for them or just check out the realtor bloggers like myself who are passionate about this. There are several of us who are effective are watching out for our clients and we communicate with each other regularly.
- use a realtor who is doing a lot of business who can say painlessly--in terms of their own pocketbook--that you ought to walk away from a contract or a new building because the price or circumstances are not right/good/fair. A very productive real estate consultant doesn't care much from a financial perspective about a particular transaction because he/she probably has other transactions under contract simultaneously. This makes it very easy him/her to be aggressive on your behalf. An excellent realtor can't necessarily get you a "deal", but they can really help in making sure you don't overpay with good advice. I've told people a number of times this year to avoid certain condo buildings or to walk away from a deal. I had one buyer not take my advice because of his distressed situation and wham bam thank you ma'am a similar unit listed $30,000 less 6 weeks later. But I did my part in telling him to walk away from it.
- There are excellent realtors at almost all brokerages. But at your standard brokerages where realtors give away half of their commissions I'd say you want to be careful. Why would an effective realtor give away half of their commission if they were that good at what they do? I don't know. I left Long and Foster after just 16 months in the business 4 or 5 years ago which is VERY uncommon. It was a brutal transition though
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