It’s hard being a realtor. On one hand, they are salespeople. They only make money when their deal closes. On the other hand, they are consultants. They advise buyers and sellers throughout the deal process, ideally giving their clients advice that has nothing to do with their own financial outcome
Often, these two objectives are aligned and there is no issue. For example, a listing agent makes more money if he is able to sell a house for a higher amount. However, there are many situations where the right advice for a client is not aligned with the agent's monetary incentives. For example, a buyer's agent makes more money when his buyers buy a house for a higher amount.
The majority of successful real estate agents are true professionals who take the long view. Their advice is in their clients' best interests. Some agents go above and beyond by being fully transparent when conflicts arise (which they often do) and make certain any issues are fully disclosed to their clients.
So how do you know your agent is doing the right thing and giving you the best advice?
Here are some things that your agent should be telling (or asking) you:
1. Will this house hold its value?
Most buyers ask this question when purchasing a house. It is a great question to ask. First, you want to consider neighborhood catalysts. Are any major employers moving in or out of the area? Are there any other changes happening? (New developments, transportation routes, etc.) Second, with respect to the house itself, if the house appeals to you, then it most likely will appeal to another buyer when it's your turn to sell. If your needs/wants are more mainstream, then you will likely have a larger pool of buyers. If your needs/wants are more custom, then you should be prepared to have a harder time to sell when it's your turn.
2. When buying, think long term:
If the time horizon is long enough, almost all real estate will appreciate in value. The problem is, the real estate market is cyclical and no one knows when the peaks and valleys will occur. If your time horizon is too short, the likelihood of your getting caught in a down period increases. The longer you can anticipate living and being happy in the home you are purchasing, the safer it will be.
When you are buying, don't only think of your needs today; think of how they might change. If you have teenage kids about to go off to college, will you really want the big house with all the bedrooms and the big yard? As a general rule of thumb, if you are going to be in the house less than three years, it's probably best for you to rent. If you'll be there more than five years, then you probably should purchase. If it's 10 or more years, then you certainly should be purchasing. Three to five years is the gray area.
3. The great deal you think you are getting might not be that great:
There are two unique things about real estate. One is that the price you pay for a property is public record. The second thing is that the market assumes you paid the fair market value. So even when you think you are getting a great deal in your purchase price, when it's your turn to sell, your prospective buyer will benchmark the value off what you paid for it. So whatever reason there may have been for you getting such a good deal (e.g., motivated seller, you are a skilled negotiator, etc), your buyer will want to capture that discount in his purchase, too.
4. This home is overpriced:
Although your agent should work for your interests , they may fail to enlighten you on one very important fact – that the home you are about to buy , is way overpriced. And the reason is logical – the bigger price tag means a bigger commission. This is why you should look for an honest agent.
5. What might happen around your new home in future:
You need to do your own research here to check that there are no plans to build a new tower or anything which can drive the value of your property down. Equally, there could be planned additions to your local area that will drive the value of your property up. Check local planning applications, talk to neighbors and look online to see if there are local campaigns to stop any development.
Whatever the given circumstances, Always be sure to hire someone with the right knowledge, expertise and someone that you could trust so that they are able to guide you through this sensitive yet integral process.
Want to know more about the Dubai real estate market? Or would you be interested for investing in DIFC, contact Shaikh Suleman today to find out more.