Are you looking to buy a home? Especially if you’re a first time home buyer, you need a guide on what your obligations are (as a home buyer) to your Realtor! “What? I have responsibities to my agent’? You bet! Most agents, it seems, are either afraid (or don’t know) to tell you that they have certain expectations too. But if you can follow this guide somewhat… It will make your whole experience of buying your first home, just THAT much better. Honestly… Have I steered you wrong yet?
Yeah, I know… The title is cheesy and I ripped it off from the “Hitchhikers Guide to the Galaxy”, but nevertheless… You need a guide. Hopefully this article will give you some insight into the real estate world (or what I like to call… “As the Real Estate World Turns” or “All My Realtors” or “The Young and The Realtors”).
First and foremost, hopefully you read my previous article about obtaining your own buyer’s agent to help you a buy a home. If not, you may want to read it first: Get your own buyer’s agent.
There are a few basics you need to know when working with the Realtor you chose to help you find a home/house/apartment/commercial property/duplex/cardboard box. I’ll write about these more in depth later in this blog post:
- Don’t be surprised if that agent asks you to sign a buyer’s representation agreement
- Don’t call your agent at the last minute wanting to look at 4,769 houses
- BE HONEST WITH YOUR REALTOR!
- Don’t call the agent off the sign
- Be realistic
Buyer’s Rep
When you find the right Realtor to help you find the right home, don’t be surprised if that real estate agent asks you to sign a buyer’s representation agreement. This is essentially a contract between you and your Realtor. This helps establish a “client” instead of “customer” relationship. It’s best to have this in writing. By establishing a client relationship with that agent, that agent will have certain obligations to you — obligations to look out for your best interests. The buyer’s representation agreement can help clarify any potential fiduciary misunderstandings too. It will also let everyone know that the agent is working for YOU, the home buyer (and not the seller).
While it’s a good idea for the buyer to have a signed buyer’s rep agreement, it’s also a good idea for the agent too. It’s a win-win situation. It helps that agent to protect the work and time they’ve put into you as a client. If there are any commission disputes with other agents (hopefully there won’t be), your buyer’s agent will be able to produce a written and signed buyer’s rep agreement, which give them a huge leg up. Not to mention it shows that agent how serious you are as a buyer.
If you want your agent to devote time, energy, gas, etc… to you, you need to show the agent that you’re a serious home buyer. By signing that agreement, you’re showing your Realtor that you’re willing to commit and are serious about a home purchase.
Last Minute Help
Wow, this happens all the time too. Usually it’s not a problem, but sometimes it can be. If possible, try not to call your agent at the last minute wanting to look at a long list of homes that day. Especially if it’s a weekend! Sometimes it’s not an issue, but weekends can be pretty busy (even more so in the summer months). Your agent may not be able to show you property on Saturday if you call them at 9:00 p.m. on Friday night wanting to see houses the next day. There’s a good chance that your Realtor may already have appointment or at the very least, plans with their family.
Of course, there can be extenuating circumstances that can throw that out the window. Maybe you’re only in town for a couple of days and you’ve already communicated to your agent that you may need some help that weekend, etc… Calling at the last minute though, can prove to be problematic in actually viewing the homes too. Your agent has to set up the appointments with the seller. If your Realtor calls that home owner at the last second to try to show it to you, that may be inconvenient to them and they may say it’s not a good time. The more notice you can give; the better (and easier) it is for everybody!
BE HONEST WITH YOUR REALTOR!
You’d be surprised how many potential home buyers aren’t just “less than entirely truthful”, but intentionally dishonest! Here’s one for you (true story):
A few years ago I had a buyer call me up. The said that they were moving to town the next month. So I asked them if they needed to find something fast. They said yes. I asked them if they were working with another agent, they said no. So the next day I cleared my schedule so I could spend the entire day with them to find a home. I spend the entire day showing them houses. We did find a couple of homes, but the house they really liked was a little more than what they wanted to spend. So they were going to think about it and let me know.
The next day I called and they said they were still thinking about it. I gave them a couple of more days then tried calling. No answer. I left a message. I tried calling again, but the same thing. Over the course of the next week I tried contacting them several times and could not get them to return my emails or phone calls. Finally, I gave up thinking that something must’ve happened.
After about a month, I decided to look up in the county records and see if they ever bought a house. And they did. I was obviously curious who they ended up using as an agent. I went back to our MLS system to look for that info. I looked at the house that they purchased. Okay, fine they used another agent (sometimes it happens). But the kicker was the close date and the date they put the house under contract. I noticed that they had closed on the house just a couple of days after I showed them several homes! I then looked at the date at which the buyer put the house under contract and it was about 2 months BEFORE I showed them houses!!!
This means that the buyer who called me and said they weren’t working with another Realtor, not only had one, but they also had a house under contract at the same time!
If you find an agent to work with, by all means, be HONEST with them. You may not know it, but Realtors don’t typically earn a “salary”. Most of us work on commission, that’s how we put food on the table for our families. Sometimes transactions fall through because things change and that happens, but when someone is being intentionally dishonest, that’s something else.
Be Realistic
That should go without saying. It’s part of our job to show you what’s available in your price range and for what area you want to live in. What you “want” to spend may be different than what you may “have” to spend. A house with a pool? Usually going to cost more than those without. The 3 car garage? More. The 3rd bathroom or 5th bedroom? More. Etc….
I once came across someone who wanted to buy a house and sell his too. I showed them the house they wanted to buy… Actually, it was a great deal for that neighborhood (Twin Rivers). It was brand new on the market and I knew it wouldn’t last long. They had told me that that they didn’t need to sell their house first before they bought another one, but they wanted to put it on the market.
I went to their house on the listing appointment. I went over the comps with them for their neighborhood and pointed out things specifically about their house that was good and not so good. I then told them what price they would probably end up getting for it (most likely). They were not happy at all. I asked them what they were thinking they could get for their house. I was shocked to say the least!
The house they wanted to buy was $275,000. The house they wanted to sell was… well, according to comps, was worth around $155,000 (they were upgrading to a bigger house and different neighborhood). Anyway, they told me that they thought their house was worth at least $325,000!!! Wait a minute here… Their current home had no real “extras” either… no granite counters, average size yard, newer carpet, no pool, no gutters, etc… Not to mention the house they were selling was SMALLER than the one they were trying to buy! I asked them why they thought their house was worth that much. They said that a house in their neighborhood sold for that much. And they were right, it did sell for that much, but it was newer, almost twice as big, had a pool (and hot tub), 3 car garage, granite counters, sat on 2 lots, etc… the works.
I pointed out to them that they were trying to get more for their house than the one they wanted (plus it was newer, had community pool, and just in a general more expensive subdivision). I asked them that if they were shopping today and they had the choice between their house and the house they wanted, which house would they buy… Of course they chose the other house. I then asked, why do you think someone else would pick their house over the other (cheaper) house. They didn’t have answer, but said that they were firm. $325,000 and that’s all they would take. Needless to say, I didn’t take the listing.
I mean, if I can’t get the house sold at the price they wanted, then I didn’t want them to get mad at me when it didn’t sell. If I can’t meet or exceed someone’s expectations, then they have no business hiring me as their Realtor.
Just remember, be realistic, be open, and ask a lot of questions. There’s always a lot to learn about current market conditions.
Don’t Call the Agent Off the Sign!
Refer to this article I wrote: Buyer’s Agent
Buying a home can be a both exciting and exhausting experience. If your agent will remember and peform their obligations to you and if you, the buyer, do the same for your chosen Realtor, it can go a loooooooong way to a more pleasant memory of buying your first home!
