Andrew Wetzel's Musings

July 10, 2017

Are you actively looking for a house??? Part 1 of 2 (the initial process)

Filed under: Uncategorized — awetzel @ 4:35 PM

I have been a licensed agent since 1996 and, while I have not seen IT ALL, I have seen and heard many different opinions on many aspects of Real Estate. The purpose of this post is to help buyers. Let me start by telling you what it was like in 1996.

From what I was told, 1996 was part of a new era in Real Estate sales. Buyer Agency was in its infancy (prior to that, ALL agents worked for the seller even if they showed houses and wrote purchase offers for buyers. Imagine that!) as was the multiple listing service which readily enabled different companies/ offices/ agents to share listing information (we used dial-up modems on computers enabled by loading a program using a 3.5″ disc. Again, imagine that!. Today the MLS is a website accessed using high speed).

The “staples” of the listing side of the business were the “For Sale” sign, newspaper ads and “open houses”, all geared towards “getting BOTH sides” of the sale or at least generating prospects/ leads for other listings. The yard sign was planted on a property by agents like an explorer claiming territory, it was OUR advertisement. There are rules covering what MUST be displayed and we can add our name and contact information as well as whatever we want to tell the public. Of course, the goal was to make OUR PHONE RING so signage and ads typically did little more than generate interest without answering all of the questions.

Buyers had choices:  they could affiliate with an agent in the hope that the agent knew what they were doing and that they would be able to keep the buyer informed about the newest listings (as well as reduced and back-on-the-market listings), provide information beyond what was available on yard signs and ads and perhaps provide information about properties not yet available for sale. Agents were clearly in charge of what I call the “Gatekeeper model” as buyers were dependent on agents. Generally speaking, if you could not reach an agent or if an office was closed, there was little chance of getting the information you wanted.

Fast forward to today. The Internet has changed the landscape as it did with so many industries although Real Estate is different:  buying a property is NOT a retail transaction so there is no “shopping cart” and the process of acquiring a house is more involved than buying on amazon, ebay or any other retail site. There is also no return policy although any sale has points for both principals to reconsider their decision.

The effect of the Internet is called “disintermediation“, meaning that the Internet has inserted itself between the consumer and agents. There are obvious benefits to both groups. Consumers can access information 24/7 rather than having to hire or call an agent or company and they can do a lot of the legwork as they move towards fully engaging in the process of seeing, narrowing down and then selecting a specific property to pursue. Agents can readily email information which generally has multiple pictures/ video and perhaps a full description which reduces the need to actually show an endless number of houses which ultimately may not appeal to a buyer. The Internet in general also allows us to analyze/ compare properties and makes available a great deal of information to buyers regarding neighborhoods, schools and a variety of other data they deem important.

With this technology there are also detriments. For the buyer, there is a seemingly endless array of questionable information, some of which is wrong and much of which is confusing, often providing comfort while really not furthering the actual search. Frankly, the longer it takes to get properly “pre-qualified” so that you know what price range to consider and the longer it takes to hire a professional who knows the process, all you are doing, for better or worse, is shopping. Should you decide to move forward without securing financing and/ or without having the assistance of a qualified professional, you will most likely be unable to acquire a property that might be the right choice for you.

For agents, the Internet is competition in that it may delay or prevent a buyer from contacting you, it is accessible 24/7 (frankly, Real Estate agents are not viewed favorably as a group when it comes to responsiveness!), it provides answers to practically any question and exposes the consumer to an endless array of choices both in terms of properties to consider and other agents vying for their business.

How does a buyer or agent cut through the noise?  Let me focus on the buyer here. It starts with their commitment to the process and by commitment I mean their sense of urgency. If they are just dreaming or shopping, so be it. It will be up to agents to determine whether they have just met a serious buyer or a time-waster. If a buyer is serious, there are a number of things they may well want to consider.

  • get pre-qualified. What can you afford and what are you willing to spend? Lenders may offer less than what is needed to get what you want. On the other hand, they may offer you more that you are comfortable spending. Balancing these takes time and it is very personal. An agent can help:  would you rather “grow into” a house or “grow out of” one and need to move sooner than you planned? Closing costs are expensive and prices fluctuate:  what is a house going to be worth in the short term? Long term? Who knows but this is a consideration;
  • hire an agent. Whether this is first or second it not important but these two should be the first two things you do. Books and many articles have been written about how to select an agent. Most consumers either know a number of licensed agents or know a number of people who know a number of agents. If either of these it true, you may know enough to know whether you really want to work with someone. Some people like working with people they know; some either do not feel that their friend or friend-of-a-friend is suited for them. How do you feel about sharing confidential information? Do you feel they are competent? Do you trust them? What happens if things do not work out? However you evaluate this scenario, understand that while it is awkward to have someone you know know that you selected someone else, it is also awkward to “fire” someone you know. However you evaluate your choices, know that when you search online you will be bombarded with agent choices. The third-party sites that offer you easy access to property listings and the related information they think you will find helpful are financially supported by agents paying for space so that you can see their information. Many agents will tell you that the large fees they pay for this type of self-promotion are well worth the exposure and added business they acquire. Many will tell you it was/ is a waste of money. As with anything else, it is just advertising and a discerning buyer needs to sift through the endless stream of information to get what they want;
  • unless you plan on touring every house on the planet, a serious buyer, especially those working within a time frame (are you relocating, do you have a house you are selling “under contract”, is your lease ending, etc.) has to know what they are looking for. While this will most likely evolve, especially if you are looking for your first house, you need to decide where you want to live, what you want in a house (detached/ single, semi-detached/ twin, attached/ row or townhouse; # of bedrooms; #of bathrooms; other features) and what condition you can live with (are you willing and financially able to update or modify or do you need something that is “ready to move into”). A Real Estate professional can assist you with each of these and, trust me, they are harder than they look and endless “shopping” online is NOT the answer;
  • what is the gameplan? I will leave this for my next post as it is literally where “the rubber hits the road”. I am sure you have heard the nugget that people who fail to plan, plan to fail. Sad but true. Buying a house is often a very competitive process and, unless you set yourself up for success, you may find yourself making purchase offer after purchase offer until you finally acquire a house that was not at the top of YOUR LIST!

HIRE WISELY!

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