Don’t let the Internet fool you. It’s true that you can satisfy instant gratification for a minute by looking for houses online. But there are certain journeys best not traveled alone, and real estate is one of them. There are a lot of layers to buying a house, tons of legalities, variables and options, and situations you don’t have the experience to detect. You need the expertise of a professional real estate agent who can show you the ropes of home buying. You also need someone to dispel the myths about working with a real estate agent. Here’s your ultimate guide to buying a house with a real estate agent.
- 1 You Can’t Hire a Buyer’s Agent to Help you Find a Home
- 2 Do Not Call Agents Before Obtaining Your Home Mortgage Loan
- 3 Interview Agents
- 4 Talk about Expectations
- 5 Next Step: Whipping that Wish List into Shape
- 6 Ask Your Agent What to Look for
- 7 Open House Etiquette
- 8 Benefits of Working with an Agent when Buying a Home
- 9 Don’t Blow Up Your Agent’s Phone
- 10 Stay on Your Own Team
- 11 Pay it Forward
- 12 Conclusion
You Can’t Hire a Buyer’s Agent to Help you Find a Home
Surprised already, aren’t you? It’s true. The agent you choose to work with does not work for you. You don’t pay them. They don’t earn a commission from you when the title transfers. Here’s how it works: the seller’s agent charges the seller a set percentage for commission. The seller’s agent accounts for that cut when he helped the seller’s price the home for listing, and for the compensation he offers to the buyer’s agent for facilitating the sale. So don’t whip around words like hire and fire too rapidly or carelessly because they don’t apply. Show your agent some respect and know that the agent you choose to represent you wants you to buy a house you love as much as you want that same end-goal.
Do Not Call Agents Before Obtaining Your Home Mortgage Loan
Understanding that the agent does not get paid until you successfully close on a house, you’re not ready to work with agents until you’re empowered a serious buyer with funding in place. You’ve got to be ready to make an offer quickly, invest deposits promptly, and negotiate powerfully, all of which come from pre-approval of your home mortgage loan.
Pre-Approval can also give you a clearer perspective on the reality of your home buying budget. Time is wasted if you browse homes in a $400,000 price bracket if you’re only pre-approved for $250,000. But know that pre-approval for a home mortgage loan is a time-consuming process with a ton of steps, documents, verification, contracts, and variables. Go in armed with a clean credit score, a good debt-to-income ratio, and a healthy down payment as well as a nest-egg for closing costs, separate and apart from your emergency fund. Remember, you don’t have to borrow the full amount the financial institution is willing to lend. Figure in the extra expenses like homeowner’s insurance, homeowners association fees, property taxes, and other monthly financial commitments you may not have accounted for.
You cannot hire a buyer’s agent; the agent represents but does not work for the buyer. However, you can be selective in choosing which real estate agent you choose for representation.
Start by asking around. Talk with family members, friends, co-workers, associates, and ask across social networks who others have used. We seem to place more trust in professional service providers when someone we know or respect recommends that service.
You need an agent with whom you feel comfortable, have a good rapport, and feel confident in asking questions. Agents being interviewed should be more than happy to answer any of your questions completely, without making you feel like you’re inconveniencing them or pulling them away from other clients.
Discuss communication methods with agents to determine whose style most closely matches yours. If you prefer text messages, you’d not be well matched with an old-school agent who believes in telephone calls. You might be somewhere in the middle. Nonetheless, you should be conscious at this stage about how you’ll get along and worth with your agent.
Talk about Expectations
Do you imagine your agent showing you 12 houses a day? In that vision, does the agent pick you up with at-your-door-service to chauffeur you in a high-end SUV to tour homes? Every agent has a different style, technique, and legal considerations. Do you expect to talk with your agent several times a day? If so, why? Outline these details. They’ll matter later.
When you find the right agent, you’ll sign disclosures, agreements, and enter into legal contract with the agent you choose to represent you in buying your house.
Next Step: Whipping that Wish List into Shape
When you’ve never bought a house before, you have no way of knowing how far your money will stretch. Your visions of homeownership may include high-end finishes, cutting-edge electronics, spacious open floorplans, a huge yard, and other creature comforts of your imagination. In reality, houses are expensive! And you’re not just paying for cost per square foot (although that counts!), or for location (which also counts), but for the upgrades like granite countertops, wood floors, crown molding, state-of-the-art appliances, and move-in ready charm. You may find yourself trimming some of the fat from your wish list and defining your zones for comfortable compromises. But it’s better to do that here, early on the in the game, before you start falling in love with houses that are beyond the reach of your budget.
Ask Your Agent What to Look for
There are many things your real estate agent understands about looking at homes for sale than your mind may ever conjure. You don’t know what to expect, so you’ve got to rely on your agent’s wisdom to guide you through what to look for when touring homes. Inspecting homes goes beyond the cosmetic aesthetics and digs into the structure. By talking with your agent in advance about what to expect, you’ll know what to look for and can browse quietly.
Open House Etiquette
By the time you reach the house-hunt part, which is often the most highly anticipated part for the buyer, you’re on pretty good terms with your buyer’s agent. You’ve settled after the interview process and refined things by reviewing the budget and wish list. You also may feel a certain sense of entitlement as you’re the one making the investment and commitment to take over ownership. You have the right to your opinions and expectations. What you don’t have, however, is the leeway to speak freely with disregard for the sellers. So don’t start parading through houses with up-turned noses making fun of the carpet, paint, or wall paper choices. Hold your tongue.
When you’re away from the property and can speak frankly in confidentiality with your agent, then unleash your ideas. Your agent can then take that experience and refine the search for future properties.
Benefits of Working with an Agent when Buying a Home
- Your agent can eye-spy a good deal or a hiked price way more quickly than you can.
- When touring homes, your agent might spot potential problems such as cracks in the structure, problems with plumbing, or ways to negotiate a lower price. Your untrained eye may never recognize those risks.
- Your agent can ask the tough questions for you. You never have to reveal the hand you’re playing to the seller or the seller’s agent. Talk with your own representative, and allow the professionals to work out the details. Your agent can also help you negotiate for repair costs if the home is in less than perfect condition.
- With years in the industry, real estate agents develop niches, study neighborhoods, learn about communities, make themselves aware of amenities, and can share a lot of information with you about how location and housing style can influence budgets. Your agent can then help tailor the search for affordable houses that meet your criteria.
- When you find a house you’d like to buy, your agent will help you draft up an offer that includes a price, a timeline, and contingencies. Your agent submits that bid to the seller’s agent, and the negotiations begin. Your seller can counter-offer with a different price, a revised timeline, or in relation to contingencies. Your agent will discuss with at length what all of your options are, what to expect along the way, and how to approach each phase based on experience.
- Contracts are another reason real estate agents are beneficial. Although they’re not lawyers, they have a solid grasp on real estate law and legal documents detailing real estate transactions. Ask your agent to comb through all the documents word for word. Clarify any points you don’t understand.
- Oversees Closing Timeline. When you buy a home, the house has to undergo many processes including surveys, appraisals, inspections, title checks and transfers, lenders, escrow agents, and other services and providers. Your agent keeps his or her thumb on the pulse of the transaction to make sure everything stays the course towards closing day.
- Real estate agents keep immaculate records. If ever you need to obtain a copy of a piece of paper dealing with your transaction, your agent probably has a copy.
Don’t Blow Up Your Agent’s Phone
You may be finding out exactly how far your patience can stretch. The waiting game is horrible. It begins the moment you submit your fist offer and continues through the moment you get your keys. You can’t wait to find out if the seller accepted your offer, if the appraisal turned out in your favor, if the inspection went off without a hitch. You’ll have dozens of questions and heart-racing moments where you just want confirmation and validation that what you’re feeling is normal. But don’t use that as a reason to become more demanding of your agent’s time or energy.
Stay on Your Own Team
When you’ve secured a buyer’s agent to represent you in purchasing a home, never all a listing agent. Nor should you speak directly with the seller. You may think you’re relationship building, but they may see it as an opportunity to gather information that they could use to their advantage in negotiations down the road. Your agent’s job and moral responsibility is to work in your best interest. Trust that agent to go up to bat for you.
If there’s a situation where your agent simply cannot get away and a house that’s perfect comes on the market, you may find yourself mad-dashing for a sneak peek at the property you found online. If this happens, go armed with at least your agent’s business card. As your first order of business in the open house, tell the listing agent you have representation and hand them your agent’s business card. Then quiety explore the house for sale, minding open-house etiquette and reserving your opinions for discussion with your agent later.
Pay it Forward
When your agent successfully helps you reach the dream of owning your home, celebrate the win. Take a moment to give that real estate agent a five star rating on their Facebook Page, a testimonial for their reviews page, and be ready and willing to recommend that agent to a friend or associate who asks, “Hey, does anyone know of a good real estate agent?”
Recognize that you’ve got everything to gain and nothing to lose from working with a buyer’s agent when you’re ready to buy a home. Understand that you cannot hire an agent, but that agents representing buyers receive their compensation directly from the seller’s agent. Interview agents to find the right match, then read and sign all documents and disclosures. Let your agent help you understand the relationship between your wish list and your budget. When touring houses, use good manners and proper etiquette. Trust your agent to help your create and negotiate a competitive offer, and can help iron out terms and conditions. Your agent then acts as a type of conductor, overseeing all the moving parts of the transaction including inspections, appraisals, and legalities. When it’s all said and done, pat yourself and your agent on the back for a job well done. Then share that appreciation in a public way so buyers know who they can trust. Remember, having that representation when buying your house didn’t cost you a single thing. You had nothing to lose and everything to gain.
Call the The Laura Castillo Group at 432-701-0506 to discuss buying or selling your Midland home.