The Housing Scene by Lew Sichelman

How Much Is Free Advice Worth?

Just as some people look for love in all the wrong places, some homebuyers and sellers look for advice in all the wrong places.

Rather than seek the counsel of their real estate agents, they ask practically everyone else how they should proceed.

Among the questions they pose to anyone within earshot: “Should I offer above the asking price?” “Should I hire an attorney?” “Should I forgo a home inspection?” “Do I really need to offer a warranty?” “Can I make a lowball offer?” “Can’t I just sell my house myself?”

But ask yourself this: How much is free advice worth?

The topic was raised recently on the ActiveRain online real estate community by agent Scott Godzyk of New Hampshire’s Godzyk Real Estate Services.

Admittedly, Godzyk was having a bad day. A client of his had sought advice from numerous sources, but not from Godzyk -- the agent with whom he had listed his property for sale. The place was priced at the highest end of the market, but needed some work, and had been for sale longer than neighboring houses listed at more reasonable prices.

“The seller solicited advice from everyone but the listing agent,” said the broker-agent, who just happens to have 30 years’ experience in the field. In situations like this, he said, “the seller ignores the listing agent’s value and ignores the listing agent’s advice.”

So before you think about taking someone else’s advice over that of your agent, ask yourself: Do you really want to take the word of someone who last sold a house 20 years ago? Or should you, instead, trust someone who bought or sold 11 houses in a single year?

Why 11? That’s the number of deals the typical realty agent handled in 2017, according to the latest member profile published by the National Association of Realtors.

Some other profile stats worth noting: The average agent works 40 hours a week. She (52 percent of all agents are women) gets 17 percent of her business from referrals and 12 percent from repeat clients, so she must be doing something right.

Many agents bring broad experience to the real estate world: About 32 percent had previous careers in fields like management, finance, retail or sales. And they work at real estate day in, day out -- often day and night.

Sure, there are agents out there who don’t have this kind of experience or success. But you won’t be saddled with one if you do the homework necessary to find a good, qualified agent. And once you do find an agent you trust, listen to him or her -- not the peanut gallery.

“Sometimes sellers shoot themselves in the foot,” says Anna “Banana” Kruchten of the Phoenix Property Shoppe. “Even though they’ve been given expert advice, (they) decide to do it their way, or somebody else’s way that has no clue.”

Myrl Jeffcoat of GreatWest Realty in Sacramento once listed a house for a seller whose two sets of in-laws “almost got into a fist-fight over how to proceed with a sale. Yet, neither had thoughts that were sound, or based on professional knowledge.”

Similarly, Francine Viola of Washington’s Coldwell Banker Evergreen Olympic Realty worked with a buyer whose neighbor told her she should offer $10,000 over the asking price, even though the house had been languishing on the market for months with no nearby competition.

Some other examples of really, really bad advice:

-- “You can sell your house as-is. You don’t need to disclose or fix anything.” Wrong. An owner is obligated by law in most places to divulge anything and everything regarding the home’s condition. You don’t have to repair what’s wrong -- but of course, you should. Otherwise, you will almost certainly get lowball offers, if any at all.

-- “Where I come from, the seller doesn’t have to pay the buyer-broker’s fee.” Incorrect. In most places, the buyer-broker, who is working solely on behalf of the buyer, is paid half the commission paid by the seller to the listing agent.

-- “It’s a seller’s market, so you can ask whatever price you want.” Sure, you can ask for the moon. But if the market is starting to turn -- as it is now, in some places -- you won’t get any offers. And if you do get a contract, it will be for well below what you’re asking.

-- “Pick an agent who promises to obtain the highest price possible.” Nah. Overpricing a property is one of the oldest scams used by agents to secure listings. Better to base your choice on his or her past performance, expertise in your specific market and marketing plan for your home. Price is a separate issue.

So, the next time someone offers you an opinion, ask yourself this: Just how much is free advice really worth?