Gas prices and home buying

I don't understand. Aren't buyers' brokers supposed to cart us around for free? So what's the benefit to me of sharing their car with other people--especially the very people who could outbid me?

Foreclosure tours, I can see. Buses fit into the whole "outlet bargain" vibe for buyers convinced they're going to pick up a house at wholesale prices. But If you want to make money off of my "retail" house purchase, you're going to give me a private tour.

And I agree: It may help a broker win buyers from competitors. But it's not going to get a reluctant buyer to make an offer. Even the plasmas and cars developers were giving away couldn't do that.

I think that driving a potential buyer around for hours would be costly for a realtor with today's gas prices. I think more and more effort will be put into identifying a "strike-zone" for buyers more quickly. This requires effort on both the buyer and realtor.

My relationship with my buyers agent was such: I'd do the drive-bys and open houses on my own and if it was in my strike zone, I'd bring him in to grease the offer through, monitor the formalities and help close the deal. This way, I would be respectful and conserve his time so he had a lot of fuel in the tank for when he would make the most impact. If I burned him out driving me around every weekend, I don't think I would have gotten the effort I got from him when it counted. He did come with us for several house tours, which helped him zero in on what was our strike zone.

The flip side is that, in my research of this market, I have found realtors that do have very valuable insight and take an awful lot of effort to finding out the in's and out's of different neighborhoods and for someone without lots of knowledge of the area, they add lots of value by helping you filter stuff that would be out of your strike zone.

When it comes down to pulling the trigger, trust is the most important. Realtors that can back up their comments with research, recent sales, etc. get over that threshold. I think lots of buyers can trust certain aspects of certain realtors. They might trust a person's word, but don't trust their ability or judgement, or vice verse.

Personally, I wouldn't want to be in a carpool, looking at houses with other buyers interested in the same properties. I'm not sure if this is what you meant by "car pooling". If someone proposed this to me, I would change immediately. You want your own dog in the fight. Again, however, you should be respectful of a realtor's time and money as well.

It kind of reminds me of the little sign in the bathrooms of the hotel to "Save the Environment" by asking you to use the same towell all week long.

As a Realtor, I do drive many of my clients to open houses and to showings but with gas prices so high, it has become necessary to ask something of my buyers as well. I have often spent many weekends driving customers around to see homes and they end deciding not to purchase a home or purchasing in another area of the state, etc. at which point I do not get compensated for the money that I've spent on them in gas. I am making a financial investment to a client when I drive them around over a period of time. I am hoping that they will purchase something and I will be financially compensated for my time and expenses. If not, I lose out. I am now asking clients to sign an exclusive buyer agent form with me so that I will be compensated even if they end up purchasing from someone else. It happens very often to all agents - customers are not loyal - they have no reason to be because they are not paying anything. There is absolutely nothing stopping a person from misleading an agent or not being completely honest with an agent who ends up spending time and money on a client who will not purchase a home from them. I've lost clients through no fault of my own when they've decided to go lookin in another state or a different territory from mine.

Silly aren't reators suppose to drive buyers around anyways?

Agree that shuttling multiple buyers around in one car might be kind of strange and perhaps a conflict of interest on the agents part. I doubt any of my clients would be psyched about that nor would I want to put them in that situation. That said, I can see open house carpools for specific neighborhoods organized by buyers who want to save money (Although, i think the conversation would be a little strange after a fantastic open house. One buyer trying to steer the other buyer away from making an offer by pointing out its faults.).

KD, I am curious how much driving around really hurts you in the long run. Can't you deduct fuel expenses and mileage on your car? I know it's not a complete write-off, but those expenses are part of the price of doing business. I wouldn't expect a realtor to drive clients around a town to see everything for sale, but if the client and realtor can narrow down options before viewing homes, I think the realtor should drive. Some clients might be scared off by your exclusivity contract. How do they know ahead of time what working with you will really be like? If you (or another realtor) turns out to not work very hard, the client would be stuck. As a current buyer, I would only consider signing a contract with a realtor for the homes we viewed together. Maybe that's the kind of contract you ask for...I'm not sure.

It is not uncommon in any sales role, particularly one that involves large sums of money, to have potential clients make you work hard for the money. Or, work hard for nothing. If the client goes elsewhere, the question should be why? What did the competition offer that the salesperson didn't? What did you do or not do as the agent? I don't know about most agents, but the ones where we looked made us follow. No real gas savings there. And, we put as much drive time into looking as the agent did trying to help us look.

Cost of gas is part of the search. If you can't afford the gas, can you really afford the house?

I also do my own research and don't bother my agent until I have well-qualified candidates to look at. I probably wouldn't join the gaggle of such a carpool. But if I did, I can tell you that if I was remotely interested in any house, I'd outspokenly carp on every fault and criticize it to the Nether Dominions to dim the view of my potential competitors, and if I felt a house was a bad buy or outside of my scope, I'd praise it to the heavens to try to nudge them to make a bid to eliminate the potential competitors. That said, I can see why realtors would want or need to rein in gas costs. Not sure they'll get much net benefit from this plan. As someone actively looking to buy, I certainly don't think I'd get any benefit from it.

As a broker for over 10 years, I think it is ridiculous to pool together buyers in one car. Any successful realtor sits down with a client and asks many many questions regarding what they are looking for in a home.

Once you narrow it down to 15-20 homes, you calculate an efficient route and drive past each and every house. You can get or give feedback on neighborhoods, proximity to schools, services transportation etc. The listing sheets are printed out for them so that they can make notes as each house is passed. If they in fact like a house or two then you set up appointments.

You need to spend several days with them listening to what they want, then you get to the point where you build up some trust and eventually show them houses that they actually like. You can't just expect a bunch of people to all want the same price range, location, appeal etc. You will show that you are not commited to finding them a home.

Buyers want to feel like they are the only ones you are working with, They want to feel important. In my market the cheepest property is approximately $200,000. Even at a rock bottom commission of 2% that is $4000 and if you split it with the office that is $2000. 1000 miles of driving in a guzzling SUV at 15 miles per gallon will only cost you around $250. You get to write off mileage at around 40 cents a gallon .

A good realtor will have seen the inside of every listing in the town. They go to broker open houses, public open houses, have interior photos online through mls and will probably spend about $100 in gas per client if they listen to them and find what they are looking for, rather than wasting everyone's time and carpooling six people looking for different thing. Also, as a buyers broker my office requires the client to sign a contract. It is a mutual agreement sayign that you will work your tail off for them and they will in turn be loyal to you. If they find a house in the towns you list on the agreement, they will bring you into the deal. You can also add a clause that if they find a fsbo listing, they will compensate you as a broker or something will be put in the offer where the seller will pay a small commision to your office. In over 1500 sales, I have never had anyone buy something behind my back or had a seller balk at compensating me.

If the tour is being offered by the agents in hopes of drumming up more business, why not take advantage? I wouldn't feel bad about using their car. It's their job. Even if the homes on the tour turn out not to be of your specific taste or budget, the experience of house hunting is invaluable. Perhaps a few days spent tooling around looking at homes will help you realize your needs and you'll be better prepared to work exclusively with an agent when you are ready and qualified to buy a home on your own. Hearing the comments made by other potential buyers can also be helpful; it can also encourage you to be more critical and ask the right questions. What's wrong with a little healthy competition? If you get outbid buy someone else looking at the same home, it wasn't meant for you. Agents have to be creative. Even if their gimmicks only work for suckers, how is that any different from free delivery of furniture or appliances (yes, I realize it's not as if retailers are driving you to their stores, but you get my point)...hmmm?