Realtor Expectations – Part Two: THE BUYER’S AGENT

Again, this article is built on the premise that the number of Realtors to choose from is staggering.  Most people have one or more acquaintances that are “in the business” – or they know someone who has a sibling, spouse or parent who sells Real Estate.  It’s great to know the Realtor’s name, but what else does your friend or relative know about them?  A name and a business card don’t tell you all that you need to know.

No matter how you come across the name of a Realtor, you owe it to yourself to do your due diligence and learn about their business practices before choosing one.  Here are some of the things that you should expect from a Realtor when they are acting as your Buyer’s agent.

A Buyer’s agent is a Realtor who you choose to represent you in your search for a new home.  In most states you will likely have to sign an agreement with that agent in order for him to represent you.   This is known as “Buyer Agency”.  While it is an overstatement to say that you’ll be “stuck” with the agent once your engage them (there are always ways to get out of most agreements), remember that you are making a commitment to work with that Realtor throughout the entire process of your home search – so choose carefully.

So – what are the things that a Buyer’s agent should be doing to make your search and transaction a great experience?

BUYER COUNSELING:   Your first meeting with your Realtor should include more than just looking at houses. This first meeting, must include you getting a clear understanding of the entire home buying process and your Realtor should be learning as much as he can about your specific needs and plans.

SEARCHING FOR LISTINGS:  There are dozens, maybe hundreds of sources to search for listings. Every day these resources are becoming more and more elegant ant sophisticated.  On my own website I offer three separate options.  The fact that there are so many resources available can make it difficult to decide which one to use.  After getting to know you, your Realtor should be able to recommend certain avenues for listing searches that will fit your needs and your style.

• Search on your own: Some home shoppers prefer to spend a great deal of time on the internet and seek out matching listings themselves.  I have one client who has logged into a particular search site 2015 times since I set up his account last fall.  He communicates with me about things that pique his interest and I dig for further data to help him make a decision about whether to look at the home.
• Realtor searches for you:  Some home shoppers don’t even own computers – or they have neither the time nor the inclination to use their computer to search for home. If this is you, then you need a Realtor who will spend time and get a very clear profile of what you want, pull listings and provide you with the details in whatever format you want.

Most folks fall somewhere in between those two extremes.  Make sure that you choose a Realtor who is comfortable and competent working the way you want to work.

QUALIFYING LISTINGS:  This is the next step after you have found prospective homes that fall within your stated search parameters. The information in a Real Estate listing can only tell you so much.

One example:

A listing, for example might say “Great access to highway”.

That might be a  plus to some buyers but it might not matter to you – however – you might be very concerned with the noise level in the neighborhood.  If noise is a very important factor for you then you probably want to know if having great highway access also means that you are going to hear traffic noise.  It might not – but you aren’t going to find out from the listing. So, your agent can research it for you.  Perhaps he knows the street already and can tell you off the bat – or perhaps he needs to call the other Realtor or take a drive by the house and check it out.

There are lots of other examples. The point here is that simply finding the listing may or may not tell you about all the things that are crucial to you.  Once your Realtor knows your likes and dislikes he can dig deeper and give you the additional information before you waste your time looking at places that aren’t going to work for you.

NEGOTIATING: I covered a lot about this in a previous post – the key here is to make sure that you are in sync with the Realtor – there should be no surprises.

Once you find a house, the Realtor should pull “comps” and go over them with you so you can have an idea if the listing price is somewhat in range of market value or if it is overpriced.

Well before you reach this point, your Realtor should sit with you and map out various scenarios and explain the options.  A few examples:

• What if a house is significantly overpriced?  Do you make a single bid that is at market value and stand with it, or are you going to make an offer well below, which may be perceived as a “lowball” by the seller?
• What if your opening bid is very reasonable and the seller refuses to make a counter offer?  Are you going to make a second offer?
• What if you go through several rounds of bidding then find that you and the seller are deadlocked a few thousand dollars apart?

It isn’t necessary that you make firm decisions on these and other scenarios in advance – but your Realtor should have laid the possibilities out for you early in the game so you can consider your options. In the heat of a negotiation you should be executing your well thought out strategy – not developing one.

POST SALE: Once you make a successful bid on a house, you will be dealing with lots of other people:  Home Inspector, Septic Inspector, Attorney, Loan Originator, and Loan Processor – to name some of them.  Your Realtor’s “official” role is ending.  Having said that, however he can and should assume the role of “expeditor”, staying in touch with everyone and keeping track of who is where in the process so that you have an advocate should there be an unexpected wrinkle.

SUMMARY: Generally speaking, you should choose someone you feel comfortable with but that comfort should come from you knowing that your Realtor has a plan to work with you from beginning to end at your pace; following your style and helping you make the most of your home shopping experience.

Realtor Expectations – Part One: THE LISTING AGENT

NOTE:  This is a pretty long post but worth reading – print it out.

With so many Realtors to choose from, this is intended to help you look at some of the things you might want to clarify with an agent when selecting the one to sell your house.  Realtors, like any group of people, have many different styles, work ethics, and philosophies.

There are a lot of homes on the market today – some sell, some don’t.   Working with the right Realtor can definitely have an impact on which group your home falls in to.

Every Realtor should have the same objective when listing your home.   The objective, put simply, is this: To help you sell for the highest possible price, in the shortest amount of time, with the least amount of inconvenience for you.

This  objective should be the basis for everything else in the Realtor’s Strategy:  Highest – Shortest – Least  or HSL.

Every plan and every action should be geared towards one of those three components.

PRICING: A Realtor’s first responsibility to you is to help you decide the right asking price.

You agent should perform a detailed analysis for you of your local market, including sold properties, active listings, properties that did not sell, as well as information on how many homes have sold in your areas recently and the pricing trends.

Once you know the right price, it is the responsibility of the Realtor to advise you not to overprice your house.   Why  you should not overprice your home is covered in THIS POST.  The subject at hand today is that your Realtor should not be telling you what you want to hear. Brutal honesty should gets high marks.

The tendency for many sellers is to ask about listing above market value for  “a while” and then lower it if doesn’t sell.  Doing this is rarely in the best interest of the seller and usually ends up with months of anxiety and ultimately nets the seller less money for their home.  Look for a Realtor who will stand by his analysis and work with you towards HSL.  It may be the path of least resistance for a Realtor to simply go along with the client on this issue – but it may not be the best thing for the client.

MARKETING: I’ve heard it said that no one “sells” a house, people look at at and choose to buy it.  If that’s true then the key to finding that buyer is to get as many people to look at the house as possible.  Not everyone that views your home is going to want to buy it – that’s OK.  You only need one buyer.  The odds of finding that buyer are greatly increased by the Realtor’s ability to generate interest.    Ask your Realtor for his Marketing Plan.  What are the specifics thing he’ll be doing.  What will be done in the first few days, the first week, the second week.  What will be done on an ongoing basis.

How will he be promoting the home to the other Realtors in the area?   Remember, it’s the other Realtors who have the buyers.  So  while advertising your home to consumers is important, it is equally important to know the specifics of how your Realtor will be communicating with the other area Realtors – or even Realtors not in your area.  Your buyer may live  down the street or thousands of miles away.  In our area of Northern Fairfield county, there are multitudes of folks who move across the state line from NY.  How will your Realtor approach the NY Realtors with information about your listing?

Part of  the marketing plan includes preparing your home for showings.  This may include staging advice, which again calls for brutal honesty.  For certain homes, it might be appropriate to bring in a professional home stager, but  even without that there will be things that your Realtor will likely notice that will make your house more appealing to buyers.  Again, what you want here is for the Realtor to look beyond saying what’s comfortable – he needs to point out anything he notices to you that will help reach the prime objective.

In addition your Realtor should make a point of preparing marketing materials for your home that will point out “the high points” to visitors.  Remember – neither you nor your Realtor will likely be present during showings and the buyer’s Realtor does not know as much about your home as you or your own Realtor.  “Call outs” which are small signs can be placed throughout the house to draw attention to certain features.  If there’s a cedar closet for example, buyers will only see it if they open and look inside – so a small sign on the outside of the closet can help.

There are a variety of other materials that can be placed in the house, co-located with the agent sign-in sheets.  Property and subdivision maps, neighborhood information and transportation options are just a few.

FEEDBACK: Ask yourself how often you want updates from your Realtor about  “what’s going on”.   Will your Realtor provide weekly written summaries of all showings and re-showings of your house?   What is the Realtor’s plan for following up with the agents who bring buyers for showings?   With today’s electronic key boxes, your Realtor can have the capability of knowing very quickly what other Realtors showed your home.  Does he have a systematic plan to get feedback and follow up with them?

NEGOTIATION: Your Realtor should have a negotiation strategy which he goes over with you before the house is ever shown.  While he will bring you all offers and you will ultimately decide,  he should be discussing likely contingencies and options with you.  When an offer comes in, it begins a series of fast paced back and forth telephone conversations that should lead you to a successful sale. If you’ve discussed the strategy in advance, you’ll be prepared for and can come up with well thought out positions on things such as:

• What will you do if you get a full priced offer on the first day of the listing – before you’ve had an open house?
• What are your options if you get multiple offers?
• How should you respond to “lowball” offers?
• What if you get an offer form someone who has a healthy down-payment but needs an extended closing date?

None of these things should be surprises if and when they come up.

POST SALE: Once an offer is accepted, the primary point of contact will likely be your attorney but that, by no means, says that your Realtor’s responsibility is over.  Your agent should be prepared to follow up with all the various parties to make sure that everyone else is doing everything they are supposed to.  There is an old adage among sales people  that applies here:   “A salesperson’s job begins when the buyer says yes”.   Everything that happened prior to your finding a buyer will mean nothing if the deal falls through.  There are many things over which you or your Realtor have no control, but he can stay informed and at least try to avert any one of the many things that can go wrong.

SUMMARY: Generally speaking, you should choose someone you feel comfortable with but that comfort should come from you knowing that your Realtor has a plan which involved more than taking the listing and waiting for the buyers to come.

Mortgage Rates Creeping Up

Well -they’ve been going down and down and down – and while no one can predict for sure what is coming tomorrow – Mortgage Interest Rates have been slowly and steadily climbing for the last couple of weeks.

If you are one the “double jugglers” the time to move may be right now.  A double juggler is someone who is waiting for housing prices and mortgage rates to simultaneously be at the lowest possible combination.

Sometimes jugglers can juggle themselves right past the optimum point.   If, for example, you had bought a home 4 or 5 weeks ago ago for 300K, and got a mortgage of $250K at 4.5% for 30 years, your principal and interest payment would be roughly $1266 per month.

Assuming you wait for another 90 days and hope that the price of the house drops to $285K (which it may or may not) and you are able to purchase it and get a mortgage for $235K at 6% for 30 years, your prinicpal and interest payment would be roughly $1408 per month.

If you add up the increased monthly payments over the life of the loan, you will end up paying about $50K more for the house which, obviously more than wipes out the $15K you saved by waiting out the price.

Also keep in mind, that there are some  indications that housing prices have hit bottom or will very soon.  So, you could, not only pay more on the mortgage, there is no telling what the price of the house is going to be in 90 days.

Again – I can’t predict what is going to happen.  If I could, I’d probably would have competed with Penske for the purchase of Saturn from General Motors

Everyone has to make their move when they feel it’s right to do so.  Just make sure you don’t wait right past the bottom.  It could cost you.