“The Buyer Who Paid Way Too Much”
A Cautionary Tale
A few years ago, a couple of local real estate agents scored a major coup, the sale of a luxury home for $2.55 million. What made the sale particularly profitable for them was the fact that, because there was no buyer’s agent involved to split it with, they got to “double dip” the sizable commission and keep both ends for themselves and their broker. Great day for the agents. Considering the price, an even better one for the sellers.
How about the buyers? Well, not so great.
If you believe that what you don’t know can’t hurt you, think again. Because the buyers did not have their own agent representing them exclusively, they probably had no idea that for over four months at the end of 2005, when the market for luxury homes was much stronger than in early 2008, the home was listed for sale with a different agent for $1.975 million.
Yet, the buyers paid $2.55 million. That’s nearly $600,000 above the original asking price.
Adding insult to injury, they did so at a time when desperate sellers would have been grateful to get anything close to their asking prices.
Considered a bit too pricey at the time – back in 2005 – by many agents in the know, the house went unsold. It went off the market, to return in mid 2007 with new agents and no significant changes in the property – just as the luxury market was about to tank – for $2.875 million.
Those agents performed something of a miracle for the seller in getting the property sold for $575,000 more than the previous list price – at a time when the luxury home market was at its lowest ebb.
Again, great for the agents and the seller, but a very expensive turn of events for the buyers.
It’s not clear whether the buyers were entirely unrepresented or were given the option of Dual Agency by the listing agents. Most likely the latter. In either case they did not have the benefit of independent representation by an Buyer’s agent. Any such buyer’s agent would have been sure to have done his or her homework and passed on the property’s listing history and Sedona’s general market conditions to the buyer and bargained far more aggressively – perhaps saving the buyer at least an extra $500,000 or $600,000.
As it was, without someone to work with their interests exclusively, the buyers might well have thought they were a getting a good deal by getting the price down from $2.875 million to $2.550 million. Were they given the information about the previous list price? We can’t say for sure. If they were, though, one would have to conclude that the listing agents were indeed phenomenal salespeople to have persuaded the buyers to pass up an additional half million or so that they might otherwise have saved.
Now…The Good News…
Fortunately, Sedona is one of the few places in the country that has Certified Buyer’s Agents who work only for buyers – never the sellers. That means no double dipping (dual agency) or conflicts of interest.
Spearheading this revolution against the “Buyer Beware” mindset of the conventional real estate business model, is Russ Lyon/Sotheby’s Buyer Brokers Group of Sedona & Flagstaff and its president, Dr. Roy Grimm. The agency boasts a highly successful fourteen year track record of buyers-only representation and unparalleled service. Despite being a small firm with a very personal touch, it is one of the top producing companies in Northern Arizona and the number one Buyer’s Agency in the state. Mavericks though they are, Roy and his crack team of elite agents are members of the Sedona and Flagstaff associations of Realtors® and are highly regarded by their peers. They currently occupy the top two positions for buyer’s agent market share by a wide margin in Sedona and the Verde Valley. Furthermore, Roy was recently elected President-Elect of the Sedona Luxury Real Estate Professionals. They’ve clearly earned the respect of their colleagues and their clients and, given the opportunity, they’ll earn yours as well.