Besides becoming friends and spending a significant amount of time together, what is the value of your real estate agent?
There is a significant amount of money he/she is going to be taking home after helping you find your new home, so let’s break down what value they bring to the table.
You’ve already began searching for a new home on Zillow and may already be pre-qualified. Now you just have to decide whom to choose out of your 20 friends who are real estate agents. Here are some things to consider when deciding on a real estate agent:
Understand Your Goals
Let’s start with the basics. Make sure she/he knows what type of home you desire. This is the time to be very specific about what you want as well as what you’re willing to sacrifice if the right home comes up. For example: location, school district, size, number of bedrooms and bathrooms, privacy fence etc. Set expectations up front with your agent so that they know what type of home to send you and locations you are okay with. Trust their knowledge of the market and if they send you a red herring every now and again based off your wants, who knows, that may become your new home.
In addition to the specifications of the home, what is your financial position and budget for purchasing a home? Just because you’re approved for a loan amount of $400,000 doesn’t mean that you should buy at that amount. You should expect ancillary expenses on top of debt services while owning a home. These expenses are lawn and sprinkler service, HVAC servicing, exterior painting, appliance replacement, plumbing, electric and many other expenses.
Owning a home is an amazing opportunity, but it can be extremely financially burdensome. Have a real talk and be vulnerable in your discussion about your comfort levels. If you are house rich and unable to afford general upkeep and maintenance of your home, it’s resale value will suffer. It is important that your agent discusses with you these expenses and together come to a purchase price that makes sense.
There have been more times than not, that the realtor on the other side of the table knew who I was, knew that when I said something they could take it to the bank. It helped get us the deal. The more connected your realtor is, the better chance you have to have a successful purchasing experience. Your realtor to realtor connections can assist you in possibly getting first eyes on a property that hasn’t yet hit the market or a “pocket listing”.
From providing legitimate inspector options to coming in the 11th hour to help you find better financing, the real estate agent’s network will be an asset for you.
I talked with a gentleman today who was just starting the home search process. He is at a price point where there are many hungry buyers and not very many sellers. It is time to have a sit down with your agent and get creative.
It may be time to look at withdrawn or expired listings, send out mailers, knock on doors or hang door hangers. As a buyer this creative route requires time and effort; therefore it would be fair if you’re asked to sign an exclusive buyers agreement. The work and effort to get aggressive and go for the house you want can be well worth it. Don’t sit back and wait for the house to come on the market…go get it.
In our present market, it is not practical to expect a significant discount on the listing price. Currently, homes are fetching 99.7% of list price, so a .3% discount is about as good as they’re coming right now. Although, there are opportunities to get aggressive with properties that have sat on the market for longer than 30 days. Those are GREAT houses to go after with wiggle room on price.
There are typically 3 main negotiation parts of buying a home and your real estate agent is your ally:
The purchase price
As stated above, this isn’t any wiggle room for negotiations in today’s market unless you are willing to look at homes that have been on the market for a while.
If you’re buying an existing build, it is important to have an inspection done on the property. Homeowners at times, neglect their home but can “make er’ look all nice and purdy” before putting it onto the market, essentially hiding all of the damage. That being said, it’s the mechanical, electrical, plumbing, exterior, and foundation that are major aspects and all should be inspected.
If there are major items of concern or that need to be addressed, this is where your agent will have to come in and negotiate a resolution on your behalf. This could be worth 1,000’s of dollars. Otherwise, you may be buying a home that upon move in will be a drain on your wallet.
Crazy offers come in and crazy offers get accepted. That doesn’t mean that the home will appraise to that amount. If the home doesn’t appraise, there are typically two options. Are you going to bring more cash to closing or is the seller going to decrease the purchase price? This should be negotiated.
Why hasn’t Zillow automated the home buying process? Basically, the variability of each sale is the reason. Zillow will figure this out sooner than later. What does this mean to you? Although there is no way an agent has seen it all, hopefully she/he has seen enough to use critical thinking and deductive reasoning to help resolve any problem/situation that may arise throughout the process. Your real estate agent should have a good reputation within the industry and leverage that to your benefit.
Buying and selling homes is most people’s biggest financial decision. You should use an individual who understands the magnitude of the financial decision being made. These are the values an agent should bring to the table if you are to work with her or him.