How Do You Get Started Buying a Home?
Want Better Service from your Agent*? Confused by the process and customs in buying real estate? Feel as though all you see are the "leftover" properties? Tired of high stress and low results in the home buying process? While I’ll probably never be able to say that buying real estate is "fun," there are many ways you can make the process less stressful and more enjoyable. Buying real estate is usually one of the largest financial commitments a person makes, and the emotions that occur during this process can rank right up on the list with weddings or starting a family. You owe it to yourself to have the very best in service and results.
Where to Start
The first part of the process is to choose an Agent. The right professional real estate sales person can go a long way toward achieving your real estate goals while mitigating a lot of the frustration. This is particularly true in our present marketplace where there are many people wanting to buy and few properties available. The earlier you contact a real estate Agent the easier it will be to create a plan that trouble shoots any potential problem area(s), and open options you may not even be aware of. There is nothing more frustrating than falling in love with a property and writing an offer only to find that you aren’t competitive because you are not pre-approved for a loan, or didn’t have adequate information to structure a solid offer.
In order to write a viable offer, your Agent must know types and rates of loans currently available, how long it is currently taking for loan approval, how much time is needed to allow for inspectors to make inspections, who can give estimates on the cost of recommended repairs or improvements, and/or how long it is currently taking to issue building permits. You can benefit from an Agent’s daily exposure to the expertise and performance by the standard and customary related services involved in real estate transactions such as those provided by Inspectors, Lenders, Title Companies, Escrow Officers and others. While real estate brokers can’t give tax or legal advise, and most of us don’t arrange loans, we can and do often meet jointly with our clients and their lender, tax or legal advisors to structure a transaction that is most beneficial to our mutual client. This can save you considerable time, money and anguish.
One more point about starting this process with the real estate Agent. Since most buyers today understand that their offer has a much greater chance of acceptance if they are pre-approved for a loan, or at least pre-qualified, shouldn’t you go to a lender before seeing a broker? Generally the answer is no. The reason to meet with your real estate Agent first is because different Lenders make different types of loans. Some Lender’s base approval of the loan by giving more weight to the person borrowing, while others weight the property that will secure the loan and may deal with a borrower who has had a few credit glitches in the past. Each lender has its own idiosyncrasies regarding qualifications and verifications. Your real estate Agent will know which Lenders or Mortgage Brokers are the most likely to make the loan on the type of property in the area you want, and/or to a person with your financial and employment background.
Your best service and information is derived from professionals in the area you want to buy in. Whether it’s Agents, Mortgage Brokers or Inspectors, the more familiar they are with your area the more advantageous it is for you. There are times when there may be a reason to work with a professional that is not immediately familiar with the area. If that is the case, be prepared for some side effects, as other Agents or Sellers may not be thrilled to deal with someone who is unfamiliar with local codes, information or protocol.
What is the Role of the Agent?
In any real estate transaction there are two separate Agent roles. Understanding these roles will assist you in getting the best service. More and more, these separate roles are handled by two different Agents in a "single Agency" role. With Buyer and Seller permission, both roles can legally be performed by the same Agent or two different Agents from the same Brokerage company. This is called Dual Agency.
A Listing Agent (Seller’s Agent) represents the Seller of the property. The Listing Agent markets, advertises and promotes the Seller’s property, as well as negotiates and strategizes to obtain the highest price for the Seller’s property. During the escrow period the Listing Agent tracks the Buyer's performance of the contract terms and conditions for the Seller.
A Selling Agent (Buyer’s Agent) represents the Buyer of a property. The Selling Agent works with the Buyer, as mentioned above, to have the Buyer prepared and positioned to act when the right property appears. The Selling Agent continually monitors the market and their network of contacts for new properties that are coming available. The Selling Agent previews property and calls the Listing Agent for information on new properties on behalf of the Buyer. The Selling Agent strategizes with the Buyer to make the lowest offer possible while still getting their offer accepted. The Selling Agent assists the Buyer in inspections, investigations and contingency tracking during the escrow period.
Choosing a Realtor
To select a real estate broker start by asking friends, neighbors or coworkers who live in the area you are considering. Ask them if they recommend the Broker they worked with in their purchase. Another source is to look at local real estate publications for the area in which you wish to buy property. Be sure to select a full time Broker that is actively involved in real estate sales in the area to get the best service and results. While giving a lot of weight to personal recommendations, take into account the similarity of your style and your style to the person who made the recommendation. If you feel you have the choice of living in more than one location, you can choose a Broker from each area and inform them of who you are working with in the other area, making sure everyone is informed and they will not overlap their efforts for you.
All Agents have access to the same property information if they are staying up to date. No matter which role the Agent takes, the limiting factor is their time. To do an effective job for any client they need to dedicate time and energy to the client. Each of us has limited time and priorities around how we will spend that time or the time of our staff. If you want the best service, don’t be surprised if after meeting with the agent, they want a commitment from you to work with them and effective Agents will make a commitment to the Buyer as well. They will keep you updated in a timely way on everything pertinent to your needs. To get the best service from your broker, think of yourself as part of a team. Once you’ve chosen an Agent, feel free to direct all real estate questions and discuss your real estate decisions with your broker. A proactive approach paves the way to a smooth and effective real estate transaction. The more your real estate broker knows about what you wish to accomplish through a particular real estate transaction, the greater chance that they can assist you in creating it.
Initially, call and schedule a meeting with the Agent (don’t plan on actually looking at properties). Tell them you are interviewing for an Agent, wish to learn about them and get an overview of property choices in the area that they cover.
When you meet, ask for a resume. If you do not personally know anyone who has used them in a transaction ask for references of at least 2 or 3 past clients. No one can be everywhere all the time. Ask what kind of assistance and staffing they have to handle their business and how they partner or are otherwise covered for their Client’s needs. Ask how many transactions they do annually and how many clients they take on at any one time. Even in the best of situations, real estate transactions can be stressful at times. All relationships have chemistry, sometimes an Agent who was great for a friend, may not be the best choice for you. You deserve a competent, experienced Agent with whom you have confidence and good rapport. Interview as many Agents as needed to find one with whom you communicate well and in whom you have professional confidence. Most real estate Agents appreciate the advantage of spending a little time with people up front, to help them determine if they can, or want to, proceed. This will save you and the Agent time and energy.
In every field there are professionals that are worth their weight in gold, so why not go for the gold!
Start Previewing Property
Once your method of payment is in place, now you can start looking for your property! Usually the first time you go out to view property it will be an overview where the agent points out areas that fit the criteria you previously outlined, as well as taking you into "available" properties to preview. However, in this market place, if they are still available, they are probably the "left over" properties that haven’t sold because they are overpriced, unkempt, or poorly located. Although it is usually the exception, there can be other reasons properties don’t sell. Occasionally the very best buys are in fact properties that have been on the market for some time and an effective Agent can point out the difference.
Presuming that you don’t actually find a suitable property on the initial overview session, you and your agent are in a position to create an action plan for you to view and quickly act on any appropriate property of interest. Leaving word when you’re going out of town, knowing when is the best time to reach each other are important to increase the responsiveness necessary in this market.
In this market place, property can move very fast. A property can be sold immediately, or a Seller can hold off for a period of time and hear all offers at one time. Agents obtain information about prospective property in a number of ways. Most agents track the MLS (Multiple Listing Service) at least once a day, have networks of other agents with whom they are in contact about upcoming properties. Once your agent knows what you are looking for they can contact you immediately to make sure you have a chance to look at the property.
Making an Offer
You may wish to review my article, "SOLD! How Do I make an offer on Real Estate that will be accepted?" so you’re further prepared once you find a property you wish to purchase.
I am using the word "Agent" for both Agents and Brokers in this article. I am referring to real estate sales people licensed as either real estate Brokers or real estate Agents. I am not referring to the Real Estate Company, or their designated Broker. A Realtor® is a licensed Agent or Broker who is also a member of the National Associations of Realtors, which adhere to a code of ethics . There are other professional designations such as CRS, GRI, and CCIM that designate specialized levels of education and training.