There are myriad reasons you should work with a real estate agent when house-hunting. There are a lot of tricky waters to navigate in real estate, and agents know tricks of the trade that can save you big bucks in the long run. There are many things an agent does for you that you may not realize; it extends way beyond showing you houses. But just because you’ve decided you might be ready to see what’s out there doesn’t mean you should rush right out and start ringing up real estate agents. Here’s your guide to buying your home with a real estate agent.
- You’re Not Prepared to Shop if You’re Not Prepared to Buy
- Interview Real Estate Agents
- Understanding the Hierarchy
- Legalities and Technicalities
- Your Agent and Your Wish List
- Open House Etiquette
- Submitting, Negotiating, and Competing Offers
- Don’t Blow Up Your Agent’s Phone
- Why You Need a Real Estate Agent When Buying
You’re Not Prepared to Shop if You’re Not Prepared to Buy
When it comes to real estate transactions, window shopping is not the best option. Before you tie up agents and sellers with your agenda, you should make sure you’re pre-approved for your home mortgage loan.
Your home mortgage loan pre-approval accomplishes many things for you. First, it declares that you are a qualified and empowered buyer ready to take action. Second, it sets a realistic home-buying budget. Third, it signals to the real estate agents that you’re prepared to shop as a serious buyer, and it also positions you to negotiate more efficiently when that time comes.
Interview Real Estate Agents
Real estate agents don’t all hold the same credentials. There’s not a blanket certification that deems one agent expert at all things real estate. There are, however, niches real estate agents serve in – whether that’s in numbers such as price ranges, whether it’s location such as specific parts of town, or niche home styles like condominiums, waterfront properties, or luxury homes. Your goal is to find the agent who works in your price bracket in the areas of interest selling the types of home you want to buy.
When you narrow your list down to agents who fit your criteria, you’ve got to thin the herd again be weeding out agents based on personality differences. The reality of the situation is that you’re entering into a semi long-term business relationship. You’ll be communicating with the person a lot, and about big investments and life decisions. Don’t you think it should be someone you like?
You can whittle that down even further by selecting from remaining agents only those whose communication styles and preferences match yours. Do you prefer to chat via quick text messages? Are you more of an email and 24-hours to reply kind of person, or do you need verbal reassurance? There’s nothing wrong with any of these communication styles, but catering to that knowledge by choosing an agent whose style matches your own creates a professional working relationship with someone who is pleasant to be around.
Understanding the Hierarchy
You may think that because you had to interview agents and choose one that’s right for you, that you’ve hired someone to work for you – a common misunderstanding. The real estate agent you want to work with does represent you but is not employed by you. In fact, did you know that as a buyer you don’t pay the real estate agent at all? Your real estate agent only gets paid when you buy a house. They don’t get paid by the hour, or by appointment. And if you don’t pay your agent, how does the buyer’s agent get paid?
The seller’s real estate agent earns a direct commission from the sale of the house, a figure that was woven intelligently into the asking price. That seller’s real estate agent then offers compensation to the buyer’s agent for assisting the sale.
So be careful when building professional relationships that you don’t forget who is in charge – you’re not the one calling the shots. You’re all equally in an agreement to conduct a business transaction. You don’t have the right to boss your agent around.
Legalities and Technicalities
When you find the right agent and are ready to seal the deal, your agent will present you with a few documents to sign – disclosures and contracts. Read these carefully.
Understand the difference between the seller’s agent and the buyer’s agent, and stay on your own team. In other words, don’t call the seller’s agent to try to negotiate on your own.
When you sign on with the agent, there’s likely a bit in the contract about a termination agreement. If things don’t work out, if you’re not satisfied with the service, you’re not able to end the relationship before a certain amount of time or without meeting certain criteria. However, if you catch that little bit of info before you sign on the line, those details can be modified.
Once you’re in a committed relationship with your real estate agent, support their effort to sell your house in any way you can. Keep your appointments and be on time. Respect your agent’s time and other clients and don’t prolong your visits with pleasantries and idle chitchat.
Your Agent and Your Wish List
Your agent’s first official task on the job is to help you understand the reality of how far your money will (or won’t!) stretch when buying real estate.
You may have an entirely skewed understanding of what properties cost, how location influences prices, what’s standard and what’s not? Talk with your agent in great detail about what you’re looking for in a house.
Remember that finishes can be changed later. It’s okay if you hate the carpet or think the paint is tacky or if the linoleum floor is giving you an anxiety attack. Those are all cosmetic and are easily changed over time. Focus on more important details like neighborhood, size, floor plan.
With your priorities straight and your wish list refined, you’re ready to start shopping properties!
Open House Etiquette
Perhaps not at first, but in due time, house-hunters begin to loose their inhibitions, to loosen their lips, and to speak freely and critically about the home they’re considering. By the time the buyer is looking at the tenth house, they’re narrating their tours like they’re on some snooty real estate reality show. Just because you’re seriously contemplating investing significant funds into the purchase of a home doesn’t give you the right to be rude. Mind your manners. Go ahead and share your opinions with your buyer’s agent, but do so in private and in a positive way. Not only is it good manners, but openly insulting someone’s home without realizing they’re within earshot could cost you the chance to buy the house.
Never go to an open house without your real estate agent present. If there’s some critical urgency that would make it impossible to wait for your agent, then tell the seller’s agent without delay that you’ve already got representation.
Submitting, Negotiating, and Competing Offers
You may look at dozens of houses before you spot one that suits your fancy. It may have been like pulling teeth trying to find the right home, but once you found it, you knew that was it. So you put in an offer as if to say, “Yes, I’ll take this one.” What you didn’t expect, however, is that the seller would reject your offer, counter-offer with modified terms, or compare with multiple offers to choose the best fit.
When a seller places a list price on a home for sale, that dollar amount is what he hopes to get. But most people understand there’s some wheel-and-deal room in real estate transactions, so buyers sometimes offer prices that are below list price. Other times, buyers are feeling the pinch of a community with low inventory of houses and competing bids, which jacks up home values and makes buying homes more expensive. Your goal is to submit just the right amount of money – and terms – to give your offer an edge over the competition without over-extending yourself to get there. And that can sometimes be a fine line, the desire to protect your interests by negotiating in your favor, but at the risk of possibly offending the seller with a lowball offer.
Other factors besides money include contingencies, conflicting timelines, and even personality wherein the seller chooses the offer with the best “feel good” aspect to it.
Trust your real estate agent’s wisdom. Your agent cannot refuse to submit an offer, even if they know it’s a bad move, but he or she can give you a heads up that it’s probably not a good choice.
Don’t Blow Up Your Agent’s Phone
Waiting it out is near impossible. Your mind has already moved and is building daydreams on the foundation of your new home, but your body is stuck behind in a holding tank of paperwork and processes. Minutes feel like hours. Your entire future depends on this decision. Did your offer get accepted? Let your agent do their job. Remember, they’re as anxious as you are because they don’t get paid until you own a house.
Don’t shoot the messenger. If the seller doesn’t respond as you’d hoped to your offer, it’s not the agent’s fault. Don’t get riled up in emotion and start playing blame games with your agent. Don’t get emotionally attached to any property until you have the keys and title in your hand. Anything can happen between your offer’s submission and the scheduled close of sale.
It’s tempting, too, to call your agent for updates as you wait for things like appraisals, inspections, surveys, and other hiccoughs keeping you from moving into your new home. But give your agent room to do what he or she needs to do to make sure your transaction is on track for successful closing.
Why You Need a Real Estate Agent When Buying
You don’t know what you don’t know, and what you don’t know can hurt you. Your agent does more than just show you houses. In fact, your agent uses all available options to narrow your search only to properties that match your criteria. Even still, your agent keeps an eye out for hidden dangers or problems with a property that you’d never have considered.
Your agent understands the delicate finesse of submitting offers that are compelling yet reasonable and without being insulting. And, your agent is a master in the art of negotiation. Your agent can play hardball and ask the tough questions for you.
Your agent can protect your interests in legal documents and contract by pointing out loopholes or loose ends. As an added benefit, agents generally keep organized records, so if you needed to access a document that you thought you had but can’t find, your agent probably has it.
Remember, you’re not hiring someone to work for you, you’re choosing a professional to work with you at accomplishing the goal of buying a house.
Don’t start contacting agents before you’ve secured your home mortgage loan. That’s like asking them to work for free.
Your agent will help you understand your wish list and where that list might need some of the fat trimmed. Be open minded and consider homes that may not suit your style of decor. Behave professionally and conduct yourself morally when touring other people’s homes for sale. Trust your agent’s advice when submitting and negotiating contracts. Lean on your agent’s expertise in understanding legal documents and processes.
There’s a reason the real estate industry is full of competing agents – there’s a strong need for representation when buying or selling properties.
And when it’s all said and done, when you’ve bought the house and moved in, take the time to share your insights via ratings and reviews. More than ever, the public refers to public opinion when choosing businesses and services. Share your rating on their social network or rating sites, and write a testimonial about why your agent did an excellent job in helping you become a homeowner. And, if you find yourself in the position of needing to move again in the future, remember the agent who did a great job from the beginning.