Is Your Realtor Trying To "UpSell" You? thelasvegasluxuryhomepro.com /blog/is-your-realtor-trying-to-get-you-to-spend-more.html High end restaurants train their wait staff to "up-sell" diners. It starts with the designer water. The server may continue to suggest the higher priced appetizers, entree and wines. The restaurant and the server make more money if you run up a big tab. Some of our top Strip restaurants hold training classes to teach
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Is Your Realtor Trying To "UpSell" You?thelasvegasluxuryhomepro.com /blog/is-your-realtor-trying-to-get-you-to-spend-more.html
High end restaurants train their wait staff to "up-sell" diners. It starts with the designer water. The servermay continue to suggest the higher priced appetizers, entree and wines. The restaurant and the servermake more money if you run up a big tab. Some of our top Strip restaurants hold training classes to teach
the staff how to recommend the more expensive items. They seldom recommend the less expensive itemif you ask for an opinion.
Car dealers and department stores are also good at upselling consumers. Buyers worry that Realtors willwork the same. This is one reason buyers are cautious about letting a Realtor know they're looking to buy. Here are some tips to help you establish and stay with a reasonable budget when buying your home.
Setting the Budget for Your New Home
Start by finding how much home you can afford. Your Realtor should be able to refer you to a preferredlender or two. Getting pre-qualified is quick and may give you an idea of how much home you can afford. It's better to take the time to get a full pre-approval letter. The full pre-approval will include a review ofyour tax returns, pay stubs and other documents. It takes a little longer to get the full pre-approval letter. You will need it when you're ready to make an offer.
The full pre-approval will show how much home you can buy. Find out how much the monthly paymentswill be for principal and interest on the loan. Add to that the property taxes, homeowner's insurance andany HOA fees. Are you comfortable paying that much every month? Will you be able to pay those itemsand still have money for other expenses? Will you still be able to avoid an occasional dinner out, movie,concert, etc.?
You may have been pre-approved for a mortgage that could buy an upscale home. That doesn't meanthat you should spend that much. You may want to limit mortgage payments to an amount that won't leaveyou house poor. Make sure your Realtor understands what price range is comfortable for you.
You've explained to your Realtor that you don't want to spend more than X amount. They keep sendingyou homes that are over your price limit. The homes may be beautiful but you don't want to waste yourtime looking at homes you can't afford.
Experienced Realtors will not waste time showing you homes that are more than you can afford. Smartagents understand that pushing you to spend more is short sighted. An increase of $100K in price will onlyadd $2-$3K to the gross commission. By the time they cover their split with the Office/Broker, it is less. Most experienced agents will not risk their relationship with a good client over a few thousand. Theyknow that helping you find the home in your price range will be more likely to get your referrals and futurebusiness. Helping you find the home you want at the price you can afford is how a Realtor creates a "clientfor life".
As Top Frederick, MD Realtor Karen Highland explains it,
If I get someone to buy a home for $10,000 more, I'll make an extra $250 to $300. In truth,I'm not willing to sour the relationship when they find out and they eventually will. Not for$300. The old adage really does apply here: If I give you stellar service and you are happy,you'll probably tell 2 people about me. If I give you bad service you'll probably tell 100about it!
If an agent is showing you homes that exceed your budget, ask them why. It may be a simple mis-understanding. They may have assumed you wanted to look up to the amount of your pre-approval. Orthey may be stretching the budget to find homes that offer all the items on your "wish list".
Is your search criteria realistic? If your agent is continuing to send you homes that are in a high pricerange, maybe it's because of your criteria. Summerlin is one of Las Vegas' most popular neighborhoods. The demand for homes in Summerlin means it can be more expensive than some of our lesser knownneighborhoods. If you wanted to buy a home with a pool for $200K, you would not be able to find anythingin Summerlin. The lowest priced home with a pool in Summerlin today is $239,900 for a 1634 sf homebuilt in 1997.
If you want to live in Summerlin and have your own pool, you will have to spend more than $200K. Anexperienced Realtor will tell you when your criteria isn't realistic. Then they can discuss how you mightvary the criteria to something that is realistic. Maybe you can find what you want at your price if you look atanother area.
How do you know if your requirements are realistic? An easy way to do that on our site is to use ahome search tool. Type in the zip code for the area where you want to buy. Then add the price range.
As an example, I just searched the 89138 zip code in Summerlin. That's one of our most searched zipcodes. I put a price of up to $300K. It gives me 16 options. When I add 3 bedrooms, it only gives me 13listings. When I add in the pool, it gives me zero listings for $300K or less. If I'm going to buy a 3bedroom, 2 bath home with a pool I have to search in the $350K to $400K price range. Today there arefour options in that range, with the lowest price coming in at $359K. I will have to pay more than $350K orI will have to look in other zip codes if I'm going to have a 3 bedroom home with a pool.
If you take the exercise we did with Summerlin homes, you can vary the zip codes until you find whichones do offer that pool home for $200K. If you move North from the Summerlin area, you can find a 3bedroom listing in the 89129 zip code for $194K. Ten minutes North of Summerlin but meets all theremaining criteria. Go Northeast to the 89130 and you find five homes for less than $200K.
This same exercise of entering in the features you want works just as well for luxury homes as for lowerpriced homes. Even the buyer who can pay cash up to $2M may find they have to compromise on the sizeof the yard, age of the home or some feature. Start by entering in your price range and zip code. Addcriteria, such as lot size, number of bedrooms and see how the options decline with the criteria you add.
Decide What's Most Important in Your New Home
Finding out how much home you can afford is the first step to your new home. After the flood offoreclosures, Realtors do not want to see you spending more than is sensible. Once you know how muchyou can spend, decide which of the items on your wish list are essential.
Can you get everything and stay within your budget? If not, ask your agent to help you explore options like
an older home or other neighborhoods. No one likes to feel like they've "been sold". Goodcommunication with your Realtor should help you avoid the "upsell". Find tips for hiring the right buyer'sagent in Kyle Hiscock's "How To Interview a Buyer's Agent When Buying Your Home ."
Debbie Drummond is a Full Time Realtor with over ten years experience in the Las Vegas Real EstateMarket. She and her team of Real Estate Pros offer the highest level of service. If you’re buying or sellinga Las Vegas home, call (702)354-6900 or email [email protected]. They’ll be happy to assist youin your move.
