Andrew Wetzel's Musings

March 20, 2019

Starting the Search for Real Estate

Filed under: Buying,Ethics,Hiring an agent — awetzel @ 3:10 PM

I want to buy a house.  How and where do I start?

I wish more buyers felt comfortable enough to ask Real Estate agents for advice when starting their home search.  Instead, they typically search online for several weeks before contacting a professional.  Shopping is fun but what is the goal?  Does it help or hurt the process?  How best can this time be spent?

An effective and efficient house search requires planning and preparation.  Serious buyers will want to identify all of the properties that match their needs and wants and they need to be in a position to make an offer when they find “the one”.   Anything that negatively affects either of those could lead to frustration.  Are you willing to accept your second or third choice?  Are you willing to let others bid on a house you really want to buy while you get ready to make an offer?

Good agents have the training, experience and knowledge needed to manage the process. Unfortunately, many Internet Empowered Consumers focus their efforts online which can become a time-consuming distraction.  Searching online has its advantages but it should not be the main focus because it can delay arranging the financing that most buyers need and it may cause a buyer to miss the opportunity to buy a house they really like if they are not properly prepared or do not know it is available.  In addition, much of the information found online about buying a house is incomplete or wrong.  Let me explain.

I recommend that serious buyers focus on three steps.  These apply to any type of Real Estate purchase:

Get pre-qualified with a reputable, local lender.  You can try doing this online but I suggest using a live, local person rather than an impersonal, faceless website.  Mortgage financing requires a personal touch.  Some buyers will not be able get financing while others will need to do a few things to qualify for a loan.  Whichever the case, it is better to know the details as soon as possible.  When you identify lenders to consider, be thorough.  Do NOT just look at an advertisement especially if the interest rate appears too good to be true.

Getting pre-qualified will accomplish two things.  First, it will establish a maximum monthly payment and price range while telling you how much of your own money you will need to complete a purchase.  Knowing this will help you focus on locations and house features that match your comfort level.  The second benefit is that you will have documentation to provide to a seller when you make an offer on their house.  Most sellers require proof of financing before negotiating.  If you are competing with other buyers, this is especially important.  Sellers like to know as much as they can before taking their house off the market and they want to minimize the risk of a sale falling through.

Hire an agent.  Ideally, this should be done before looking at houses.  I know that that is the fun part of the process but do you want a tour or do you want to be represented by someone who will work for your best interests?  As I mentioned earlier, the Internet can be a distraction.  In addition to delaying your getting financing, the Internet can delay your hiring an agent since you can easily access property information on your own and most agents will be happy to show you any house, especially if it is their own listing.

Do you want to hire a “dual agent“, meaning someone you “share” with the seller?  It is allowed in PA with full disclosure to both parties and with their informed consent.   You need to know the advantages and disadvantages.  I liken the concept to the phrase “it can be the best of times or it can be the worst of times”.  Many buyers will call listing agents to see their listings without considering what will happen if they want to make an offer.  This can become a problem.  What did you tell the listing agent?  Can what you told them affect a negotiation?  Do they expect to be paid?

We can talk about buyer representation, the Code of Ethics and fiduciary duties later but please understand and accept that we do more than open doors.  You also should consider whether to work with one agent or someone on a team.  I have posted my feelings about teams on my website,  They too can be good or bad.

The final piece is to determine what you need and want in a house.  These are different. Your “wish list” will likely evolve as you explore the market and what you find will depend on what you want to spend.  An experienced agent can help you focus on identifying the best properties to consider.  This is not as easy as it sounds, especially if you have not considered financing options.  Choosing locations and features to consider can be challenging especially if a buyer adds too many “wants” to their search.  An agent can give you an idea about pricing and explain the paperwork, the process and, assuming they are experienced, guide you through the many twists and turns that can occur.  We have done this before.

The bottom line is that buying a house requires planning and preparation.  Knowledge and experience will not be found online.  When it comes to buying Real Estate, mistakes can be costly.

There is no time for inexperience, empty promises of false expectations.

Remember, HIRE WISELY!  We are not all the same!

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