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Patch Blog: 10 Things You Should Know About Buying and Selling a House That a Realtor Will Not Tell You

What do realtors know that you don't? The American dream should not become the American nightmare.

Buying and selling a home can be the most stressful process you may ever experience.  Even if the process is not overly stressful, it can often be a personal and emotional transaction and will be one of the most significant.  Owning a home is the American dream, it is where we build our lives and families, and it should not evolve into the American nightmare.  So how do you make sure that you get to live the dream…and live it well?  One method is to refer to one of those Real Estate checklists you come across online.  However, these lists are often written from the perspective of the Real Estate specialist.  As a Real Estate professional, I see many mistakes that the lay person may unknowingly make, so I thought it would be helpful, as both a homeowner and a realtor, to compile a list from the perspective of a client.

1.         Shop Around:  For me, this is the most important advice of all. Most people, when shopping for a simple electronic appliance like a $100 camera, will visit more than one local electronic’s store, research online, and read reviews.  Even when buying a car, buyers will go to several dealers looking for that one salesperson that feels just right so they can get just what they want.  However, when it comes to a home, generally the largest purchase that one will ever make, creating payments for the next 30 years and effecting every financial decision within the household, people have a tendency to go with the first person they come across and stick with them.  Most realtors work off of commission and do not get paid until the sale is complete, and like everyone else in today’s society where money is tight, they too have bills to pay.  Therefore, it is important to make sure that your best interest is always the agent’s number one priority.  The way to make this happen is to give this situation the same emphasis as with every other purchase you make, and interview several realtors until you find the right one that works for you.  Any good realtor will not be afraid of competition so be upfront when making appointments, ask lots of relevant questions, and let it be known that you are interviewing prospective realtors.  If you don’t feel comfortable, move on to the next one.  Having said that, you would not want to search for months with a realtor and once you find one, allow your brother-in-law to make the sale. 

2.         They Will Know Everything:  In today’s market where loans are never an easy process and lenders can want for blood, more and more personal information is required.  Your financial information will become public to those professionals with whom you are working:  your down payment, your annual income, FICO scores, savings (for proof of funds), the debt you have, assets you own, how much equity you have in your current house, etc.  If you feel uncomfortable with anyone (family member, friend, etc.) knowing this much personal information about you, then perhaps you should not include them within the circle of professionals with whom you will be working.  

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 3.        Know What You Want and Stick By Your Guns:  This could be 4 bedrooms, 2 bathrooms or a kitchen that has not been upgraded because you want to remodel one the way you have always dreamed.  You ultimately know what you want so don’t let anyone else tell you different.  Make a list of what is important to you and stick with it.  If you always wanted a pool, it might be less expensive and less time consuming to buy a house with a pool than to look for a property that requires one to be installed.  You know what you want—make sure your agent is listening.  Of course, that does not mean your wants can’t change over time, and that is okay too.

4.         You Should Always Feel Like the Decision is Yours:  There are no silly, strange, or bad questions, so if your agent makes you feel uncomfortable because of asking them, there is something wrong.  As stressful as the process can be, it should still be fun.  Seriously, what is more fun than buying a home that you would like to decorate and fill with memories?  You should always be made to feel like you and your opinion are the most important part of the equation, so have fun and make your decisions count.

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5.         Remember Who Works for Whom:  You hold the cards.  When you pick your realtor they now work for you, not the other way around.  You hired them to do a specific job.  In the same way you hire a painter to paint your house, you most likely would not question their ability to paint, but you would set the boundaries:  what color to use, what should be painted, how you want it to look, what times and days they can paint, even how they behave within your presence.  Similarly, don’t feel intimidated by your realtor.  It is good to listen to the professional guidance you may be given, but if you are unsure about any part of the transaction, always make sure your concerns are addressed before you proceed.  You are the boss, so take charge.

6.         Don’t Judge a Book By Its Cover:  In any business it is important to look professional at the proper times.  However, just because someone shows up driving a fancy car or wearing a designer suit does not make him an expert.  That comes with time, experience, and education, so don’t be fooled by a façade or gimmicks.  This also goes for a house.  Try to look past someone else’s tastes or decor.  By simply adding a few of your own touches or a coat of colored paint you may find that you have the perfect place—use a little imagination.

7.         Be Realistic About What You Can Afford:  Calculate how much you can afford and are willing to pay on a monthly basis for the home you want.  This should be an amount that equals a percentage of your income that you feel comfortable spending (according to some financial experts, total DTI, Debt to Income, should not exceed 30%), leaving you with enough for your other monthly bills, vacations, savings and general living expenses.  This is a big mistake some people make.  They go for the most expensive house for which they qualify and forget that it is connected to 30 years of payments.  They also do not consider the additional bills that come with a house including, but not limited to, insurance, property taxes, gardening and maintenance (your landlord is no longer responsible for your living space).  Struggling financially is okay for a while to get what you want, but it wears thin after a few years.

8.         Know What You Are Signing:   When you are selling with an agent, you sign a standard listing agreement along with a whole list of other forms that protect both you and everyone else within the contract, which is understandable when you consider the expense of marketing and other related items incurred by the listing agent.  When you are looking to buy, it is also common practice to sign a contract with an agent to represent you as a buyer.  This protects the agent from you going to someone else after they have put work into showing you homes.  Make sure if you are asked to sign any contract that you did your homework and you are with the right realtor for you.  When looking for a home, you don’t want to be under contract with an underperforming agent.  You need to make sure that if you see a property you like, you can get in to see it within a reasonable amount of time and if you put in an offer, especially where there may be more than one buyer, that your offer gets into the right hands as quickly as possible.  For me, I would much rather work with someone who chose me because they thought I was the right person for the job and not because they were obligated under contract to stay with me.

9.         Don’t Get Too Emotional:  This one is hard, but try not to get too emotional.  As a seller, someone looking at your house will most likely not have the same taste as you or the same reasons for wanting to live in your house.  You might love your neighborhood because it is so quiet, someone else might like it because of the school district.  You may have remodeled the bathroom and decorated it with the tile you imported from Europe, someone else may walk in and say, “I hate tile, this has to go!  I want fresh paint, wood floors, and a jet tub”.  You might feel like your home is Turnkey and deserves top dollar, someone else might think it looks dated and needs a lot of work.  In the end, the true value of anything, including your home, is the price someone else is willing to pay for it, not what you or anyone else thinks it’s worth.  A good marketing strategy will bring people in to see your home.  The rest is their choice or reasoning.  When buying, remember there is more than one house that is perfect for you.  If you get too emotional over one property, you might get yourself into a situation that is not in your best interest and you may even miss out on one that fits your needs better, you just haven’t seen it yet.

10.       Location, Location, Location…Educate, Educate, Educate:  The popular expression used in Real Estate is “location, location, location”.  When you are a client, I would recommend this expression: “educate, educate, educate” yourself.  The more you know, the less chance you will find yourself in an unpleasant position.  The more you know, the more power you have.  Don’t be shy about it.  Both buying and selling a home can be a confusing process for someone who has not been through it, and learning about terminology, the loan process, what to do before buying or selling, and what to expect can make it more relaxing and more enjoyable.  A good agent will be just as happy to work with a client that is well informed and knows what they want, as with someone that might need a little more guidance.   There are many different agents out there with as many different ways of doing business.  Whether you select an agent who has been in the business a long time and who you think might have more experience, or someone who is new to the business but works twice as hard because she has to prove herself, the choice is yours to make.  Whatever your reason for picking the right agent for you, make sure you get the information you need when you need it.  Put the power in your hands and educate, educate, educate yourself.

Good luck and happy house hunting.

 

Billy Malone - SunRealtors, San Marino ban1997@sbcglobal.net                                                             

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