8 Steps to Success

1. Shop early in the loan process for the best lender and program for you. Get pre-approved, and stick with that lender. Close collaboration with a great lender is an important process in buying a home. A great lender who will call the listing agent when you have an offer submitted –may help you win in a multiple offer situation. The lender not only sings your praises to the listing agent and seller, but shows an added level of professionalism as a lender –adding clout to your offer and helping you stand above the rest. Lender recommendations can be obtained through a reputable real estate agent. We always recommend choosing a lender with whom you or your Realtor have a business relationship. “On line” companies may profess to have the lowest rates, but your loan will be just one of a “number” in their volume business model, and they can afford to “blow it” occasionally without hurting their business. Conversely, a loan officer who cares about the relationship with you and/or the Realtor, will move mountains to earn your repeat business and referrals.

2. Be prepared to pay higher than list price. Most good homes priced close to the last sold comparable properties, are selling with multiple offers for over list price. High-demand properties can sell for many thousands above the asking price.

3. Be prepared to compete, and to act quickly when you find a property you like. A good real estate agent will assist you in putting together an attractive offer package and will guide you in the amount of urgency needed in each situation. A knowledgeable real estate agent and a trusted lender are an important part of your winning team.

4. Set your search parameters a little lower than your “top price” knowing you may have to offer over the list price, to purchase a home. The danger of looking at prices too far outside your budget, other than losing precious time while you lose out in bidding wars, is that you will have acquired a taste for homes that exceed your budget. It is then necessary to lower your expectations along with your price.

5. In some cases an overly zealous seller with an overly zealous asking price, may be ready to drop their price. A savvy agent can often identify one of these “primed properties” and help you slip in and purchase it before the price drop.

6. Interview for, and select a Buyer’s Agent to represent you. Just as a Seller interviews for a “Listing Agent” this important step is one many Buyers skip over. They may jump from agent to agent, going with “whoever found the property.” Or some Buyers think they will just “go direct” to the listing agent, thereby cutting out the “middle man.” Contrary to this belief, “going direct” to the listing agent, is NOT in your best interest most of the time. So how do you find a great Buyer’s Agent? Visiting open houses or searching the internet for a specialist in the area is a good first step. If you have a “good feeling” about the agent, ask for a formal interview and set up a time to meet in that agent’s office. This meeting will tell you a lot more about that agent; their experience level, if they work mainly with buyers, sellers or both, and what you can expect if you work together.

7. Commit exclusively to that agent for a minimum of 30-60 days for a “trial run” and if it takes longer than that to buy, and you’re happy with the agent, stick with them! With a mutual commitment in place, a dedicated agent, will go above and beyond to get the job done. They will work evenings and weekends, and late into the night, when needed. They will knock on doors, send letters to homeowners, and network with other agents to find homes not yet on the market. When they present your offer, they will represent you as their exclusive client and talk about your committed business relationship, which makes you stronger in the listing agent’s and seller’s eyes.

Resist the idea of “Going Direct.” Some Buyers think that they will find the property themselves, go direct to the listing agent to write the offer and therefore automatically get a discount on the price. There is a lot of mis-information circulating about this idea. If a Listing Agent agrees to write an offer for a potential Buyer, then that agent will be “representing” both parties at the same time. It’s called Dual Agency. While it’s not impossible to represent both sides fairly, it’s extremely hard to do. The most professional Realtors shy away from representing both parties. Most often, one or both parties feel suspicious and short-changed and almost without exception, both parties come away feeling “under-represented.” The first impression a buyer makes to the Realtor community when he says he’s going direct” is one of “under informed bargain hunter.” It is a red flag to the listing agent – and may even cause them to recommend the Seller NOT accept your offer – the opposite result of what you’re aiming to achieve.

As far as an “automatic discount” this is not be the case at all. The agent works harder and puts their reputation on the line when working as a Dual Agent. The job is much harder and riskier. Any agent worth his salt, will not discount their commission a dime, when putting so much at stake. If an agent is eagerly encouraging this situation, agreeing to reduce their commission to entice you to write the offer with them, there’s a good chance (1) they may not have enough experience to handle the complexity of this transaction, (2) they put earning a little more money before their reputation, and (3) they don’t fully value the job they’re supposed to do for you, putting a little more money in their pocket- over everyone’s best interests. Is this someone you want representing you- in something as important as your home purchase?

Lastly, remember, there is an established relationship between listing agent and Seller, with prior agreements you will not be privy to – which puts you in a weaker position from the start. The price you think is a discount may actually be higher than a price the Seller would accept if you were represented by another agent. You will never know for sure.

In summary, unless you are a licensed real estate agent yourself, and feel you don’t need any guidance or support whatsoever, think twice before announcing to an agent you would like to “go direct.”

8. Consider working with a “Buyer’s Agent, or Buyer’s Specialist.” Does the agent work primarily with Buyers, or Sellers, or both? This is a question you should ask in your interview. Attached are some additional questions to ask during your interview with a potential “Buyer’s Agent.”