First Time Home Buying 101: Agent or Not?

Yes, Yes, Yes! I think I've already answered this question with all my references to your real estate agent! Granted, a home can be purchased without the aid of a real estate agent; however, they do earn their money. Their job is to find right home for you.

REASONS FOR A REAL ESTATE AGENT:

1. You are a first-time buyer.
2. You are purchasing a home in an unfamiliar location.
3. Laws vary from state-to-state. They know the laws, however, they are not lawyers and cannot give legal advise.
4. The agent is familiar with the county, city, neighborhood.
5. The agent has access to all new listings on MLS.
6. MLS (Multiple Listing Service) also gives the agent access to property history, includes when purchased, purchase price, tax information. It also includes information as to days on the market and prior listings.
7. A real estate agent Is an experienced negotiator, familiar with the market, finance issues.
8. Can refer you to others in the industry to help with your purchase; i.e., mortgage brokers, appraisers, home inspectors, even movers.
9. They have seen hundreds, perhaps thousands of homes and know the what to look for--the good and the bad....the issues that could save you money and the ones that could potentially cost you a fortune.
10. All the foreclosures, short sales, auctions, etc., in this market present totally different issues than the market did a few years ago, when their were actually "bidding wars" for homes. The real estate agent will know how to guide you through these specific situations.

REAL ESTATE AGENTS AND AGENCIES: (General & simplistic description. Laws can vary.)

A real estate broker is a person in the office holding the license to own/manage a real estate office. Ultimately, the broker is responsible for every transaction and supervision of the real estate sales associate. The industry is highly regulated by the State. Brokers may also list and sell real estate. All Realtors, agents, sales associates pass an exam and are licensed by the State. Many agents don't necessarily want to be "management" or supervise other agents. They like selling. The point being, don't feel that you have to have a broker working for you.

Real estate agents work on a commission. When an agent (agency) is hired to sell a property, a contract is signed stating what the commission on the sale will be. Generally, it is 6% of the sales price. (This can vary, but let's keep it basic!). So how does that apply to you?

• Example: Agent X has a home listed for sale. Your agent, Z, takes you to see that home and you decide to purchase it. When "title" transfers to you, the 6% is split between the two agents. The agents then must pay an amount of their percentage to the brokerage where they work). Now, had you seen the home listed with agent X's name, contacted X and purchased it, X would receive the entire 6%. X would be representing both the seller and the buyer.

I think it wise to find your own agent. The listing agent (X) has a contract with the seller to sell his property at the highest price. I feel it's is better to have YOUR agent negotiating the best deal for you. The result may be the same, but at least you know your interests were given 100% attention. (The laws on this may vary in different states, but I don't know of anywhere it is not allowed.) I have heard of agency's that will ask another agent in the office to assist the buyer simply so there are no appearance of conflicts.

HOW TO FIND A REAL ESTATE AGENT:

1. Locally you could ask a friend or neighbor.
2. Go back to the Internet listings. Each listing has the agency, usually the agent's name and also a photo.
3. Go to a agency web site in the area you are moving, very often the site will have "profiles". The profiles have photos and "bios". ." If someone impresses you - give them a call.
4. Go to a real estate office, meet the agents.
5. Go to "Open Houses". You can get a first-hand impression of the agent at work. (Because you are moving across the country, it may be something you would do at your current location to receive a basic impression of what you are looking for in the person you hire to represent you). Every time you enter a house, you will learn more, not only about what skills you want to see from your agent, but also about what to look for in selecting a home.

WHAT SHOULD I LOOK FOR IN AN AGENT?

1. Whether meeting on the phone or in person, did you have a good impression of the person?
2. Did you feel that this is a person that will diligently spend the time it takes to find you the right home?
3. Did you think your personalities "clicked"?
4. Does the agent seem willing to answer all your questions?
5. Do you feel this person is "hearing" you?
6. When you are shopping for homes, do feel you are feel you are being pushed to buy?
7. Do you feel you are only seeing or encouraged to buy property at the top or above your "price point"?
8. Does the person seem knowledgeable in answering your questions or giving explanations?
9. Do they seem to have done their homework?
10. When shopping for homes, are they talking about the area, the school district, etc.,?
11. When you in a home, does the agent point out the defects as well as assets?
12. Do you feel they are knowledgeable about repairs or renovation costs?

The real estate agent, of course, wants to sell the property. They want your business when you decide to sell that property. You are a great referral for business and will talk to friends and neighbors. The best advertising is a client that thinks "you walk on water".

Everyone has different criteria as to why they buy a specific property. Remember, the agent may have only seen this property from photos prior to your visit together. Is your agent noticing things like the age of the furnace, foundation cracks, etc.? I want to know the "the why or why not" from their "experienced eye." I don't want a "money pit" and would appreciate an agent that actually says "I don't think this is a good choice for you, let's find something better."

After working with your agent, you realize really aren't impressed with this person. Whatever the reason, if you are not comfortable and don't feel that it is simply resolved, find another agent! You are not under a contract with them. Having said that, if you have found the right agent, who is working diligently for you, it is simply common courtesy to have them representing you when you purchase.

• Example: You are driving down the street and see an "open house". Agent X has the listing and is showing the property. You love it and think you want to buy it. Call your agent and tell them, they will probably drive right over. Or tell Agent X , "I'll have my agent call you." At least give them a really fair chance.

First Time Home Buying 101: The Internet

I know you've been dying to check out the internet for homes! It is a great place to start. You will find a tremendous variety of homes in every price range. Most of the sites will offer numerous photos both the exterior and interior of the home, plus a property description. It is fun! You will discover the hours slipping away and feel that it is as addicting as a video game.

The internet sites operated by real estate companies insert "tools" to calculate your basic mortgage information for the home you are viewing. It's a tool to give you a "ball park" estimate of the monthly mortage payment on that property.

Most major real estate sites will do "courtesy listings". That means they are getting information from MLS and listing not only their listings, but also listings from all the other real estate companies. Some of these sites are kept up-to-date within 15 minutes of a listing sent to MLS. Obviously, the interest for them is that you will call their company when buying a property.

Whether moving across the country or across town, the internet will let you browse what is available in the area that interests you and help you define what you like and dislike.

1. When you find a property that you think really suits your needs, print, email, or bookmark the listing. You probably won't have any difficulty finding things you like, but rather amazed at how many homes you like.
2. You will begin to discover what is really important to your needs and find many similarities in what you find attractive. For example, you may discover you like two story homes, one-level homes, or daylight ranchers. You will also find styles that may be unfamiliar, but are characteristic of the area; i.e, east coast vs. west coast.
3. You may find yourself attracted to only older homes or new homes. Perhaps you are attracted to more acreage, location or view. Having a file established with your favorites can later be shared with your realtor, mostly to share your personality. A bit like me going to the hairdresser with a photo of Angelina Jolie. Of course, the hairdresser is thinking "you must be kidding". Your real estate agent is probably thinking "you want this for how much?" Don't worry you'll get down to reality! But your agent will quickly see trends in your choices.
4. Don't be afraid to check the listings above your price point. Depending on rapidly changing circumstances you might find "the next bracket" makes a tremendous difference in what you receive for your money. Sometimes a few dollars more on the monthly payment could save tremendous dollars in remodeling costs. Real estate is negotiable, perhaps now more than ever before.
5. Check Google map for mileage and the estimated time it will take to drive to work. This is especially helpful in familiarizing yourself with an area where you may not know the names of the counties, surrounding towns or local references. Google Earth will let you view the topography of the area.
6. You will soon realize you are recognizing the names of local real estate companies, agent photos, their specialties, i.e, hobby farms, waterfront property.

What are good sites to start with?

1. There are a tons of good sites: Realtor.com, Homeowner.com, Caldwell-Banker.com, Century 21.com, ReMax.com, Keller-Williams (KW.com), ForSaleByOwner.com, are examples of companies that have agents located across the country. Once on their sites you will often find "courtesy" listings that can take you to "local" companies and agents. Check their sites also.
2. Craigslist.org - go to the state and city you are interested. Many agents list properties on "Real Estate for Sale". Also you will find homes listed by homeowners.
3. The local newspaper's on-line classifieds.
4. Look at the unexpected. For example, Farm & Ranch magazine has on-line listings. It is a great source for farms or farmettes. It is a good site, great pictures (terrific magazine), but being a magazine the listings may not be "updated" as frequently, but you may discover an agent "profile" that impresses you.

Should I buy the house I found on the internet?

Never buy without seeing it in person! Buying on the internet without seeing the property...your chances of being overjoyed with your purchase are about as good as your odds of winning the lottery!

1. The photos of property are always distorted. (Try taking a picture in your own house!) Rooms that look large, may actually be really small.
2. Quality of the workmanship is hard to determine. (Some do-it-yourself homeowners perhaps should have hired a professional!) Detail on a photo is deceptive.
3. Remember, the photos are designed to highlight the the most positive features of the property.

I remember looking at a place that had posted photos of a property that included large shed. I never saw that shed on the property and wondered about those photos. Finally, while driving around the neighborhood, I discovered the shed.... it was two farms away! You don't want to become an internet "horror" story!