Andrew Wetzel's Musings

May 26, 2017

There’s so much more to buying a home than making an offer and moving in.

Filed under: Uncategorized — awetzel @ 2:21 PM

The “relationship” formed between a prospective buyer and their agent is a critical one if they are to succeed in finding the best home at a fair price. Despite having a Consumer Notice to explain the different “roles” a buyer may select for the agent working “with” or “for” them (there is a difference!), and despite the overwhelming amount of information “just a click” away, too many consumers really do not know what they have a right to expect from a licensed agent.

Compounding this, too many agents are reluctant, afraid or simply untrained as far as how to take charge of a possible “relationship” with a prospective buyer. This is proven by many agents not getting representation contracts signed. The fact is that the type of “agency” or representation is largely defined by what both parties agree to in writing although that is not the final determinant. What are the choices and what works for both parties?

New buyer’s agents need to construct a business model that will help them achieve success which means that it has to make sense for their prospective clients as well as for themselves. After all, our job is so much more than driving around and opening doors, isn’t it? What is urgent compared to important? What does the law and our Code of Ethics require? What does our broker or manager expect? What does our errors and omissions insurance require and expect?

I believe that a buyer must be “all-in” and fully engaged in what, for most, will be the most important decision of their financial life. Making a mistake can be very costly and hard to undo. As a listing agent, I have encountered that all too often when trying to help people move out of a house they want to sell.

There are a few basic steps to maximize a buyer’s chance for success. Despite the best advice, there are “unknowns” with any purchase and the best we can hope to do is to minimize them or use our training and experience to overcome them. After all, when a consumer hires us to represent them, they are really hiring us for our “time”/ effort and what we know. We are “directors” assisting them on a journey we have traveled before.

Here is some basic advice with action steps for buyers to ensure their success:

  1. Get prequalified:  buyers should get prequalified to determine their comfort level in terms of their down payment and monthly payment. Determining a “price” when searching for houses to consider is very basic and quite important.
  2. Determine the goals:  do you see yourself staying in a home for a long time or a short time? Is a house something you will “grow into” or “grow out of”?
  3. What features matter:  this includes locations to be considered as well as what a house has to offer (bedrooms, bathrooms, etc.). Generally speaking, the more you add to your “wish list”, the higher the price so I recommend that buyers really examine “needs” and “wants”. Buyers also need to understand that you can take any specific house and affect its market value by simply placing it in several locations. While you can improve a house to some extent, you are stuck with the area around your house. The “condition” of a property is subjective and will obviously play a part as the process unfolds.

Please keep in mind that agents are allowed to discuss the house and the real estate market. We may be the source of the source” for information that a buyer needs to evaluate a purchase (such as school and neighborhood information) but we are not allowed to steer them to or away from areas. Our opinions do NOT matter. Agents and their clients need to remember Fair Housing laws and be careful about what they say and do so keep that in mind when you ask questions of an agent. Having the best of intentions is not an excuse if someone thinks a person has an agenda.

Buyers need to be as diligent researching potential properties and locations as they are picking fruit in the market. Depending on the ratio of available houses to prospective buyers, there may be a lot of competition so preparation and timing may be critical if you are to get the house you really want. Unfortunately, in a seller’s market, there might be little time to do this type of due diligence so buyers might cut corners and risk making an ill-informed decision. That should not cause us to deviate from our role in the process.

Time permitting, I encourage buyers to drive by a house before we consider scheduling an appointment. This will allow them to evaluate the area and potential neighbors. They should also do whatever research they need to satisfy themselves. For example, they might have questions about the school system, the quality of life and other variables outside of our practice.

  1. Re-evaluate commitment: most real estate sales involve a number of steps, which might offer both parties an opportunity to re-evaluate their commitment to the process. That is not to suggest making uninformed decisions but buyers need to know that a purchase is not necessarily concluded when a seller signs their offer. They should consult a real estate attorney and completely review documents if they have questions.

To conclude, an engaged consumer is the best to work for. Buying a home is an important decision. Agents need to keep the process on track and there is so much more to buying a house than making an offer and moving in!

 

 

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