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Buying a home can be an intimidating proposition on its own, but finding the right home for you and your family requires a lot of patience and some mental toughness. We've all heard the horror stories about a friend who looked at 50 houses and after driving all over town ended up never buying anything. This does happen! Whose fault is it? Was it the real estate agent's fault? Was it the buyer's…or was it just plain bad luck? Who knows? But before you step into that realtor's sleek-looking car for a spin around town, make sure she has your best interests in mind. Because agents get paid when they sell a house, their sole purpose is to close the transaction and many times you may feel like you are being "sold" the house. If you establish the proper relationship with your realtor in the beginning, your experience finding the perfect home will be a dream, not a nightmare. Follow these simple steps:
- Check Out Your Agent's Real Estate Selling Experience
- Determine Their Knowledge of the Area
- Identify Your Agent's Willingness to Discount Their Commission
- State the Location, Type and Condition of the House You are Looking for
- Establish Guidelines to House Hunting
- Verbalize How Serious You are About Purchasing a Home and What Your Timeframe is
1. Check Out Your Agent's Real Estate Selling Experience
Buying and selling real estate is an art, not a science. Your agent's skill in selling property will determine whether you pay $5,000 more for the house or $5,000 less. Additionally, their ability to work well with the seller's realtor can make or break a deal. Ask to see the agent's resume (i.e., number of years in real estate, number of transactions closed) and their list of referrals. Find out if the agent specializes in the selling or buying side of the transaction. (Note: If they are involved in both sides of the transaction, they must disclose it to you and the seller.)
2. Determine Their Knowledge of the Area
Real estate is VERY area specific – so much so that a neighborhood can vary from street to street. The key to buying the right house is location, location, location. You need to know everything about the potential neighborhood you are considering – the ranking of the school district, the crime rate, historical appreciation rate, the ratio of owners to renters. Find out how well the agent knows the area and how many homes they have sold in the neighborhood. Remember, your home will be the single largest financial commitment you make in your lifetime. Choose wisely.
3. Identify Your Agent's Willingness to Discount Her Commission
Everything in real estate is negotiable! The seller's and the buyer's agents typically split the commission. A lower commission may be needed to bridge the gap between the seller's and the buyer's price. Two percent of $200,000 is $4,000 – a $4,000 difference can kill a deal.
4. State the Location, Type and Condition of the House You are Looking for
Your realtor is the screening process – remember garbage in, garbage out. If you are not very specific about what you are looking for, more detail is always better, you will spend hours looking at the wrong house (a la "House Hunting Nightmare"). It is extremely helpful to the agent if you tell them exactly what you liked and did not like about each house you look at.
5. Establish Guidelines to House Hunting
Each person has a different style of house hunting. Some people like to look at every house with the realtor, some prefer to screen the house themselves before going with the agent. Don't expect the agent to know your style. Go over your available time schedule (like weekends only, mornings, evenings) with her. (Note: in a hot real estate market, you may need to be more flexible to get the best deal) If you prefer some information before seeing the house, ask for a short description of the house from the Multiple Listing System ("MLS" in CA).
6. Verbalize How Serious You are About Purchasing a Home and What Your Timeframe is
Although real estate agents are motivated to show houses, they don't have the time, or the desire to work for free. If you are serious about buying a home, TELL THEM! Your agent will be very motivated and will prioritize working with you if they know you are serious, especially if you have a short timeframe to buy a house. Additionally, the agent may be more willing to negotiate their commission if they are confident a transaction will close.
As with any relationship, communication is extremely important – be upfront and honest and use these guidelines to find the right realtor for you.
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