Patrick Beringer

The stock market has been crazy lately, but housing prices haven't started their climb yet. While sales volume is growing, I attribute much of this to bargain hunters snapping up short sales, foreclosures and aged inventory--Which of course, will not show prices rising on a wholesale level.

I think we're going to see inventory levels drop a bit before prices start going up. However, if you're waiting for prices to drop further before buying, I need to caution you to consider interest rates. Most likely, you're going to see interest rates rise before you see prices rise. This means that waiting to get into a property might cause you to do so with a more expensive loan--Thus negating any price savings you enjoyed by waiting.

Sometimes buying at a lower price will cost more. For instance:

$500,000 Purchase Price.
30 year loan at 5.81% with 20% down: $2349/mo $445,843 in total interest. Total paid: $945,843.

$465,000 Purchase Price.
30 year loan at 7% with 20% down: $2474/mo $518,974 in total interest. Total paid: $983,974.

Of course your actual numbers will vary, but this gives you an example of one scenario. So yeah, price is one variable, but sometimes the interest rate is more important.

I've been seeing lots of posts about Redfin and other discounters and some agents have commented on the frustration they feel when these discount clients want the listing agent to do the buyer's agent's job and do the showings. I've noticed on the MLS that a lot of agents are putting a commission stipulation that says something like "must be at all showings or 1%."

Before I continue, let me assure you that I go to work to make money. But I also think being a good person pays dividends as well. So I want to offer a suggestion to the listing agents out there--And yes--I do practice what I'm preaching here.

I want to talk about ways to handle an unrepresented or Redfin buyer who calls you about your listing.

First, know that most likely, you're not going to be able to "steal" this person away from Redfin. You're simply there because buyers know that many listing agents will bend over backwards to show a property. After all, your job is to best represent the interest of the seller, which is to facilitate marketing, showing and hopefully, a sale of the property.

If it's an unrepresented buyer, I know, you think "new client!" But I personally feel that dual agency, while beneficial to the seller, really doesn't offer the buyer much. Sure, I can offer to discount their commission, but even with a commission discount to the buyer, strangely, I find that sellers net MORE in a dual agency situation. This satisfies your duty to the seller, but what about your duty to the buyer?

So what do I do? I first ask these buyers if they are working with an agent. If so, I inform them that there's a keybox and that the agent can show them the property anytime (according to the showing instructions on the MLS).

If there's no agent involved, then I refer that potential buyer to another agent. An agent who will put that person's interests first. Sometimes it's someone in my office, and sometimes it's not. We all pay referral fees, and sometimes it's better to earn a referral fee than a full commission. Personally, I prefer to work with sellers, so I try to refer buyers to those agents who love working with buyers.

What's funny is that 9 times out of 10, the "unrespresented" buyer who wanted you to go show the property suddenly has an agent they're working with at this point. Hmmmm...

Those of you who say I'm stupid for giving up a client do have a point--I got it. But for me, it's better to keep things simple. A little bit of something is better than a whole lot of nothing. And time is an important commodity as well--Instead of wasting it, I'd rather use it working for my existing clients.

This is for the listing agents out there--I just wanted to tell you about something I do that you might want to consider.

We all know the rules with regard to picking up expired listings, right? You know about not soliciting listings that are not truly expired or cancelled. You know about not marketing other people's listings as your own. You know about many other rules I don't need to bring up, but I wanted to offer my own 2 cents with regard to how you handle aquisition and disposition.

First, I think it's extremely tacky to cold call people in order to list their home. But that's just me. I've never done it, and I never will. I'm sure it works for some people, but that's not my style. One of my listings in Shoreline expired and the seller called me and asked me to relist it sooner than we planned because he was so angry at all the phone calls he got from other agents. He said, and I quote, "If one more Realtor calls me today I'm going to tell them to **** themself." We laughed about it, but it really got me to thinking that we as agents are not doing our image any good by acting so desperate, so "salesman-like." Treat yourself and your business as the professional enterprise it is.

Tell your clients the truth. Don't inflate the value of the property just to get the listing. "Buying" listings ends up costing all of us our credibility and does a lot of damage to a marketplace that's already struggling.

Once you have a listing, and you've got that purchase and sale agreement, pay a referral fee to the agent who had it listed before you. It doesn't have to be much, maybe $500 or so. This agent made it possible, if indirectly, for you to even have this listing. Maybe this agent really needs that money. Even if he/she doesn't, how do you think he/she is going to feel about you when that check arrives in their office? Do you think that maybe your future listings are going to get a little bit of extra attention?

To put it another way, which phrase would you prefer that other agents use when talking about you:

1. Oh that sneaky b*tch took my listing!
or
2. That is the nicest agent--I was so surprised that he/she actually paid me a referral fee on that house! I think I have a buyer for his/her new listing down the street!

Yeah, we are in a highly competitive business, but that doesn't mean we can't be kind to others while competing