5 Top Blunders of Internet Home Buying

How to avoid the common pitfalls of online real estate searching

By Matthew Bandyk

Posted: January 7, 2009

[See How To Avoid Foreclosure Rescue Scams]

5. Putting too much stock in home valuation websites. Sites like Zillow.com and Cyberhomes.com have changed the way people buy homes by putting pricing information at buyers' fingertips. But they're not infallible. Don't assume to know what the value of a home should be based on what these sites tell you about the neighborhood. There are many elements of a home's value that home valuation sites cannot incorporate. "Take their values with a grain of salt," says Dorkin. He recommends using this information merely as a range. Do other research to narrow that range. For example, walkscore.com can tell you the number of amenities within walking distance of a location—those are some of the tangibles that can raise or lower the value of a home.

Buyer Agency in Virginia

Connie, that is not exactly true. It is Virginia law that if the real estate agent does not have exclusive buyer agency with the buyer client, i.e. a buyer agreement signed, the buyer is only a customer and the agent is automatically a sub-agent of the seller.

Yes, you can be liable if you perform certain "minesterial acts" that imply a fiduciary responsiblity. I am not a lawyer, but agency is very clear in VA. The agent represents the seller as a sub-agent if there is no signed buyer agreement with the buyer.

If you look in the MLS, you will see the sub-agent compensation and the buyer-agent compensation. If you have no signed buyer agreement with the buyer and the sub-agent compensation is 0, you will not get paid. Therefore, you should not be showing your buyer customer those properties where the sub-agent compensation is 0.

Cathy B of VA @ Feb 20, 2009 15:51:31 PM

Home Valuations

This is great information, and good warnings about how to use online real estate sites. I must say, though, with respect to the home valuation bit, that Cyberhomes is partially owned by LPS, which provides home valuation data and software to the commercial lending and government institutions that are appraising the value of our homes in the U.S., and then using those appraisals for their lending decisions to consumers. Of course the true value is determined by the actual buyer market and many of the psycho-social factors there (LOVE Walkscore, btw - best site ever!), but when it comes to “relative” valuation, I trust Cyberhomes to tell me how much the bank thinks my home is worth. As a matter of fact, I recently found out that they actually provide much home valuation data to MANY other home sites for their home valuation tools, with Zillow being one of them. Of course, the values you see on Zillow are different than those on Cyberhomes, b/c Zillow applies their own algorithm to deciphering home values, but the data they use comes from LPS/Cyberhomes…it’s not a perfect science, though.

Sanjay of CA @ Feb 07, 2009 12:51:37 PM

What About Educating Buyers Why(Benefit) They Need To Sign Buyer Representation Agreements

We agents know why the Buyer should sign a Buyer Representation Agreement, and the ramifications for them if they do not. I always have them sign one from the very beginning and still, they seem to think it means nothing!

One problem I see is that not enough information is out there that is directed at the Buyers.

More articles need to be directed at Buyers rather than agents.

The Information About Broker Services addresses the differences

in client vs. customer, but most buyers still really do not understand and think it is just another scam to get them to sign and make them stick with that agent.

Elia Cooper of TX @ Jan 28, 2009 14:16:36 PM

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