An interesting discussion was started this morning on Twitter between REALTORS® in Michigan and North Carolina, concerning how many homes should be shown to a client before they buy. This started after a tweet from Diane Rish with a link to an article about an uber picky home buyer that saw 298 homes over a 2. 5 year period.
I don’t believe many people would think that it should take that many homes or even a third of that to make a good decision. How many homes should a buyer see before buying? Is there a number that is to many? Can a buyer see to few homes?
Personally, I have had buyers see 1 home and buy it, and I knew they made a good decision. I’ve had others see dozens of homes and make what I was sure was a bad decision.
Diane got it right this morning; “It depends on the buyer.” Some buyers feel they need to see a lot of homes to make sure they are getting a good deal, others find a real estate agent and place their trust in them.
I used to pride myself in being able to show on average just 3 homes before we would write a contract. These days that is harder as more of the purchase decisions are motivated by finding “a deal.” In our market “deals” normally have issues and buyers need to make apples to oranges comparisons. Nevertheless, I still feel that if my buyers haven’t seen the right house after a dozen, I’m not doing my job correctly.
How about you, as a buyer how many homes do you want to see? As an agent how many do you think should be shown at a minimum? How many need to be shown before you feel like you have missed what the buyer wants?
Tuesday, December 29, 2009
Thursday, December 3, 2009
Builders & REALTORS® like Oil & Vinegar
The relationship between builders and real estate agents is always a little strained. Like oil and vinegar, left alone, they would stay separate. Having been on both sides of the fence I can certainly understand why. When a real estate agent brings a client to a builder, they feel as if they lose control of the transaction, and may have to wait an additional 5, 6 or more months to get paid.
The builder on the other hand, feels that they are being questioned by an amateur, at least in regards to building, and that there is little to no value added. In many cases the builder is paying for advertising directly and writing the contract, so why pay the commission? In some cases, the well intentioned real estate agent makes claims that the builder either has to honor or at a minimum address, costing money, time and goodwill.
In order for this economy to improve we need real estate in general and new construction specifically to have better sales. So how do we put these two groups together to harmoniously and beneficially increase value for the consumer? One suggestion would be to reach out to each other. While sales are slowed with seasonal declines, take the time for some outreach and educate real estate agents, about the process and difficulties with building. Educate them about how you price and why. I guarantee real estate agents are taking more courses and learning more than ever. Add your information to the knowledge base.
REALTORS® need to do likewise. How many new homes communities have you been in recently? Do you know their price points? Do you know what drives them? Do you understand the difference in quality between builders A & B? Do you understand construction well enough to not make claims as to potential changes? Do you understand that some builders should not be asked to make changes?
Just as important, have you taken the time to talk to site reps and builders about what is going on in the market. They want to hear from you.
If you have a question, whether you’re a buyer, builder, or a REALTOR® feel free to ask. If I don’t know the answer, I probably will know someone who does. Let’s maximize these opportunities so everyone gets what they want. We can mix the two and leave a better taste for everyone.
Be great! As always comment are welcome.
The builder on the other hand, feels that they are being questioned by an amateur, at least in regards to building, and that there is little to no value added. In many cases the builder is paying for advertising directly and writing the contract, so why pay the commission? In some cases, the well intentioned real estate agent makes claims that the builder either has to honor or at a minimum address, costing money, time and goodwill.
In order for this economy to improve we need real estate in general and new construction specifically to have better sales. So how do we put these two groups together to harmoniously and beneficially increase value for the consumer? One suggestion would be to reach out to each other. While sales are slowed with seasonal declines, take the time for some outreach and educate real estate agents, about the process and difficulties with building. Educate them about how you price and why. I guarantee real estate agents are taking more courses and learning more than ever. Add your information to the knowledge base.
REALTORS® need to do likewise. How many new homes communities have you been in recently? Do you know their price points? Do you know what drives them? Do you understand the difference in quality between builders A & B? Do you understand construction well enough to not make claims as to potential changes? Do you understand that some builders should not be asked to make changes?
Just as important, have you taken the time to talk to site reps and builders about what is going on in the market. They want to hear from you.
If you have a question, whether you’re a buyer, builder, or a REALTOR® feel free to ask. If I don’t know the answer, I probably will know someone who does. Let’s maximize these opportunities so everyone gets what they want. We can mix the two and leave a better taste for everyone.
Be great! As always comment are welcome.
Wednesday, December 2, 2009
Will changes to FHA backed loans hurt housing sales?
One of the most important tools allowing buyers to take housing inventory off the market is easily accessible money, low cost, low down payment loans. Now it appears that concerns about FHA reserves may derail a lot of plans to purchase by increasing the minimum amount required as a down payment, the mortgage insurance premiums, minimizing the seller paid contributions and possibly increasing credit score minimums.
Each of these steps that are being considered by HUD Secretary Shaun Donavan would “increase the skin in the game” and theoretically lead to less risk in the loans insured by FHA. The difficulty to any potential borrowers is that the money coming out of their pocket at closing and during the life of the loan will be greater, thereby reducing their buying power.
The initial implications are obvious; if you are planning to buy a home in the next few months, don’t wait or risk an increase in your overall costs. On the other hand this may lead to another temporary setback in housing marketability, so if you are a seller, make sure your house is priced right to draw a quick sale.
Some articles that explain what is going on:
CNN asks Should FHA home loans be more expensive?
Bloomberg claims FHA to Require Homebuyers to Put Up More Cash
From the LA Times Home buyers will have to lay out more cash for an FHA mortgage
Each of these steps that are being considered by HUD Secretary Shaun Donavan would “increase the skin in the game” and theoretically lead to less risk in the loans insured by FHA. The difficulty to any potential borrowers is that the money coming out of their pocket at closing and during the life of the loan will be greater, thereby reducing their buying power.
The initial implications are obvious; if you are planning to buy a home in the next few months, don’t wait or risk an increase in your overall costs. On the other hand this may lead to another temporary setback in housing marketability, so if you are a seller, make sure your house is priced right to draw a quick sale.
Some articles that explain what is going on:
CNN asks Should FHA home loans be more expensive?
Bloomberg claims FHA to Require Homebuyers to Put Up More Cash
From the LA Times Home buyers will have to lay out more cash for an FHA mortgage
Tuesday, December 1, 2009
Why do you do what you do?
I’m a REALTOR® but the real question is why.
For me it has always been about helping other people be or do better. Sometimes that has been totally misunderstood, like the time Mr. Worley in 7th grade science class asked me if he could help and I responded no, could I help him. He understandably thought I was a smart ass.
In college, I wasn’t a great student, but I concluded those years trying to help a half a dozen others become better debaters. I know they learned from many, but I would like to think that I contributed.
When I was showing convenience stores how to essentially become restaurateurs, I know I helped create profits, jobs and some happy customers by improving the food and service.
So why did I get involved in residential real estate? Initially, because it was an opportunity to quit being on the road constantly, and from my observations of looking at homes in 4 states, a business that could use help. Working in the business for almost 14 years as an agent and as a marketing and sales manager for a builder, I have helped many people get the security, financial benefits, fulfillment, and shelter that works best for them. In the process, I know that I helped to create dozens of jobs, add value to land, and give back to the community.
Sometime in the last few years, I lost my way. You see, I do believe that there is never a bad time for some real estate to be bought or sold. However, for the last +/-5 years, that has not been true for most. I watched as prices went up too fast and many times questioned the appropriateness of decisions, particularly for buyers, in an unstable market. I watched as prices have come back down and entertained the same thoughts. Often I wondered whether I was questioning hard enough.
Which brings me to this; Today, December 1, 2009 I recommit myself to real estate. I make this commitment, because I know that there are opportunities for many folks that will enrich their lives if they make GOOD decisions. I make this commitment because somebody needs to be willing to ask the questions, even when it results in a non-sale. I make this commitment, because there are too many vacant houses dragging down the values of all and filling them will lead to improvements, jobs, and an improved community. I make this commitment, because too many people put their homes on the market and are inconvenienced when their house won’t possibly sell.
For the rest of this year, I will be writing about some of the tools that may help us fill or replace these homes and take advantage of the opportunities that exist, not just for a select few, but a large number of people. I would appreciate your comments and suggestions for tools to discuss.
Thanks,
John
For me it has always been about helping other people be or do better. Sometimes that has been totally misunderstood, like the time Mr. Worley in 7th grade science class asked me if he could help and I responded no, could I help him. He understandably thought I was a smart ass.
In college, I wasn’t a great student, but I concluded those years trying to help a half a dozen others become better debaters. I know they learned from many, but I would like to think that I contributed.
When I was showing convenience stores how to essentially become restaurateurs, I know I helped create profits, jobs and some happy customers by improving the food and service.
So why did I get involved in residential real estate? Initially, because it was an opportunity to quit being on the road constantly, and from my observations of looking at homes in 4 states, a business that could use help. Working in the business for almost 14 years as an agent and as a marketing and sales manager for a builder, I have helped many people get the security, financial benefits, fulfillment, and shelter that works best for them. In the process, I know that I helped to create dozens of jobs, add value to land, and give back to the community.
Sometime in the last few years, I lost my way. You see, I do believe that there is never a bad time for some real estate to be bought or sold. However, for the last +/-5 years, that has not been true for most. I watched as prices went up too fast and many times questioned the appropriateness of decisions, particularly for buyers, in an unstable market. I watched as prices have come back down and entertained the same thoughts. Often I wondered whether I was questioning hard enough.
Which brings me to this; Today, December 1, 2009 I recommit myself to real estate. I make this commitment, because I know that there are opportunities for many folks that will enrich their lives if they make GOOD decisions. I make this commitment because somebody needs to be willing to ask the questions, even when it results in a non-sale. I make this commitment, because there are too many vacant houses dragging down the values of all and filling them will lead to improvements, jobs, and an improved community. I make this commitment, because too many people put their homes on the market and are inconvenienced when their house won’t possibly sell.
For the rest of this year, I will be writing about some of the tools that may help us fill or replace these homes and take advantage of the opportunities that exist, not just for a select few, but a large number of people. I would appreciate your comments and suggestions for tools to discuss.
Thanks,
John
Monday, November 16, 2009
PLAN NOW OR PAY LATER
I just opened this page to write this post when one of my team called me to see if there was anything that could be done to help in a specific situation. Her phone was not working correctly last night and she has apparently missed out on a potential sale. She was of course upset, but this is the way the real estate business works. When you can’t or don’t answer your phone it is likely that a prospect moves on.
My post today is about other opportunities in real estate which may require action to make the most of them, specifically, the tax credit. I know what you are thinking, I’m a real estate agent and of course I’m going to say you need to rush, and there may be some truth to that.
However, as a real estate agent, I also know what just happened in October, when people who had put off the decision to buy their first home, were writing competing offers, and sellers were holding fast to their price even when there were no other offers. Right now, we are in a buyers market in our area at all price ranges. The advantage a buyer has over a seller is small at the lowest price ranges, but still a buyer’s advantage.
In the month of October I believe we were, and again will be in March and April, in a seller’s market. There will be competing offers and sellers holding fast to prices, knowing the tax credit will be lost if you turn them down.
It’s your decision, but isn’t it worth $6,500 to $8,000 to do a little planning or will you miss out when opportunity calls?
My post today is about other opportunities in real estate which may require action to make the most of them, specifically, the tax credit. I know what you are thinking, I’m a real estate agent and of course I’m going to say you need to rush, and there may be some truth to that.
However, as a real estate agent, I also know what just happened in October, when people who had put off the decision to buy their first home, were writing competing offers, and sellers were holding fast to their price even when there were no other offers. Right now, we are in a buyers market in our area at all price ranges. The advantage a buyer has over a seller is small at the lowest price ranges, but still a buyer’s advantage.
In the month of October I believe we were, and again will be in March and April, in a seller’s market. There will be competing offers and sellers holding fast to prices, knowing the tax credit will be lost if you turn them down.
It’s your decision, but isn’t it worth $6,500 to $8,000 to do a little planning or will you miss out when opportunity calls?
Saturday, November 7, 2009
TIMING HOME PURCHASES
Much has been said today of the first time homebuyer tax credit extension and expansion to current home owners. For details, I suggest this as the most complete. NAR
Zip Realty TV
Aside from the money, what does the tax credit mean to you and why worry about it now? The expectation is to keep the housing market moving in the right direction. After all, doesn’t it make sense that if you might buy a home in the next 18 months or so, that you do it while you can get the gift of a tax credit? Why would you leave that money on the table?
However, keep in mind that that “right direction” is more of what we are seeing in the lower price ranges, with competing offers, and fewer concessions on homes that may be gone before you see them.
Here are some additional reasons to think about the tax credit now:
New construction
For anyone that wants to build a home, it is important to understand that the process from contract to closing often takes in excess of six months. The actual construction is only a part of the time that goes into the process, with permitting and county inspections absorbing up to two months while customized plans, selections and title work easily can absorb another.
Contracts for a home to be built in time to take advantage of the tax credit need to be in place before the end of the year. That means there are about 45 days to choose a community, builder, lot and plan.
Buyers that must sell a home
No one can say how much time it will take to sell your home. Each situation is a little different. It’s hard to say how long sold homes have been on the market. Through a quirk in our MLS system those numbers are hard to come by, because “days on market” refers to the current listing period only.
We do know that there was approximately an 8 1/2 month supply of homes on the market at the end of last month, assuming last months rate of sales would continue. Even in the faster moving under $200,000 market, there is approximately a 6 month supply.
Even if you don’t want to be on the market during the holidays, now is the time to sit down with your REALTOR® and put together a plan. Waiting may cost the $6,500 tax credit.
Homes that will be financed
Interest rates are near historic lows. How long that will last is anybody’s guess. If we are indeed in a recovery, as it appears, some inflation is to be expected and that means higher interest rates.
Higher interest rates translate into decreased buying power for purchasers. For sellers higher rates mean fewer people can actually afford the home.
Only you can decide what is best for you and your situation, but now would be an excellent time for you to sit down with a REALTOR® so that you have all of the information to make a good real estate decision.
Zip Realty TV
Aside from the money, what does the tax credit mean to you and why worry about it now? The expectation is to keep the housing market moving in the right direction. After all, doesn’t it make sense that if you might buy a home in the next 18 months or so, that you do it while you can get the gift of a tax credit? Why would you leave that money on the table?
However, keep in mind that that “right direction” is more of what we are seeing in the lower price ranges, with competing offers, and fewer concessions on homes that may be gone before you see them.
Here are some additional reasons to think about the tax credit now:
New construction
For anyone that wants to build a home, it is important to understand that the process from contract to closing often takes in excess of six months. The actual construction is only a part of the time that goes into the process, with permitting and county inspections absorbing up to two months while customized plans, selections and title work easily can absorb another.
Contracts for a home to be built in time to take advantage of the tax credit need to be in place before the end of the year. That means there are about 45 days to choose a community, builder, lot and plan.
Buyers that must sell a home
No one can say how much time it will take to sell your home. Each situation is a little different. It’s hard to say how long sold homes have been on the market. Through a quirk in our MLS system those numbers are hard to come by, because “days on market” refers to the current listing period only.
We do know that there was approximately an 8 1/2 month supply of homes on the market at the end of last month, assuming last months rate of sales would continue. Even in the faster moving under $200,000 market, there is approximately a 6 month supply.
Even if you don’t want to be on the market during the holidays, now is the time to sit down with your REALTOR® and put together a plan. Waiting may cost the $6,500 tax credit.
Homes that will be financed
Interest rates are near historic lows. How long that will last is anybody’s guess. If we are indeed in a recovery, as it appears, some inflation is to be expected and that means higher interest rates.
Higher interest rates translate into decreased buying power for purchasers. For sellers higher rates mean fewer people can actually afford the home.
Only you can decide what is best for you and your situation, but now would be an excellent time for you to sit down with a REALTOR® so that you have all of the information to make a good real estate decision.
Thursday, November 5, 2009
Market Stability?
Much has been made of some recent reports that show increased housing sales for 8 straight months. There will be another report in about a month that shows 9 straight months. After the October numbers, I'm not sure what we will see, but more than likely an increase over last year, and a seasonal (and end of initial tax credit rush) decline from the previous month.
Let's not forget that the market has two parts, with everyone focused on the demand side of the equation, the supply side is often forgotten. The pundits are saying that there are more foreclosures to come on the market and we can be confident that there are, even if we don't have a good picture of the numbers. I would balance this with the sort of pent up demand waiting for good economic news or a feeling that the housing market has bottomed.
In other words, supply and demand work together to give the market stability. So what is happening on the supply side? The inventory of available homes is shrinking, in some markets very significantly. So while we are not totally there, we seem to be headed towards some stability.
Comparison of the major markets covered by Zip Realty. Chart
Let's not forget that the market has two parts, with everyone focused on the demand side of the equation, the supply side is often forgotten. The pundits are saying that there are more foreclosures to come on the market and we can be confident that there are, even if we don't have a good picture of the numbers. I would balance this with the sort of pent up demand waiting for good economic news or a feeling that the housing market has bottomed.
In other words, supply and demand work together to give the market stability. So what is happening on the supply side? The inventory of available homes is shrinking, in some markets very significantly. So while we are not totally there, we seem to be headed towards some stability.
Comparison of the major markets covered by Zip Realty. Chart
Monday, November 2, 2009
A recipe for your new home
A question came up the other day concerning the practice of real estate agents sending out recipe post cards. I know the theory is to stay in touch and build a brand, but what is the brand? Why would you want to be in touch with someone who sends you recipes for things that you may never want to eat much less make. If you did decide to make something and had a problem, can that real estate agent help?
The real question should be how can this agent help you buy or sell a home? Have they shown that they are familiar with the market (real estate not food)? Are they in dozens of homes each month? Is there an indication that they are a professional? Can they negotiate? Can they discern your needs? Are they willing to work for you?
I’m sure you get all the unsolicited and irrelevant recipes you need from attorneys, bankers, accountants, doctors and dentists, so I’ll try to stick to information that impacts real estate.
The real question should be how can this agent help you buy or sell a home? Have they shown that they are familiar with the market (real estate not food)? Are they in dozens of homes each month? Is there an indication that they are a professional? Can they negotiate? Can they discern your needs? Are they willing to work for you?
I’m sure you get all the unsolicited and irrelevant recipes you need from attorneys, bankers, accountants, doctors and dentists, so I’ll try to stick to information that impacts real estate.
Wednesday, October 28, 2009
So you want to buy a foreclosure
Every one wants the best deal, and let's face it we hear all the time how foreclosures are the best deals. Some one thought we ought to know. Have fun:-)
Monday, October 26, 2009
Getting the best price on your new home
The seller sets the list price of a house with the aid of their agent. In Richmond, VA this usually is very close to the selling price of the home, but not always.
The first step in the process of obtaining the best price is to learn about the values of homes and how different neighborhoods affect those values. This process starts with a broad exposure to homes in the market so you may judge value for yourself. Once you have an idea of the value of the market in general there will be an examination of current pricing trends and of the effect of the location of the home in a neighborhood.
The information above will allow you to determine the value of the home for yourself. Now is the time to consult a REALTOR® to see how the market is corresponding with the value you place on the home. To do this you need a comprehensive Comparitive Market Analysis. Much like an appraisal the CMA will let you know what other people are likely to be paying for the home and it may or may not agree with the list price.
If this is the home that you definitely want then the best price is the one that allows you to purchase it without giving away your money. Armed with the information on pricing above you will know what that number is so that you can negotiate for that amount.
The first step in the process of obtaining the best price is to learn about the values of homes and how different neighborhoods affect those values. This process starts with a broad exposure to homes in the market so you may judge value for yourself. Once you have an idea of the value of the market in general there will be an examination of current pricing trends and of the effect of the location of the home in a neighborhood.
The information above will allow you to determine the value of the home for yourself. Now is the time to consult a REALTOR® to see how the market is corresponding with the value you place on the home. To do this you need a comprehensive Comparitive Market Analysis. Much like an appraisal the CMA will let you know what other people are likely to be paying for the home and it may or may not agree with the list price.
If this is the home that you definitely want then the best price is the one that allows you to purchase it without giving away your money. Armed with the information on pricing above you will know what that number is so that you can negotiate for that amount.
Saturday, October 24, 2009
Real Estate Agency
This is a summary list of the duties owed the client in a real estate agency relationship.
Reasonable Skill and Care
Arriving at a reasonable purchase price and advising client of such
Affirmatively discovering material facts and disclosing them to the client
Investigating the material facts related to the sale.
Loyalty
The real estate agent must act in the best interest of the client
Obedience
Must follow the lawful instructions
Disclosure of all material facts
Examples but not limited to:
Relationships between agent and other parties
Existence of other offers
Status of earnest money
Seller's financial condition
Property's true worth
Commission split with other brokers
Confidentiality
Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.
Accounting in dealings
Reporting of where any money placed in the hands of broker is kept.
Copies of all documents pertaining to contract.
On the other hand when you are an unrepresented buyer, the agent only needs to be honest with you, disclose that they are working for the seller, and most importantly sell you the house.
Reasonable Skill and Care
Arriving at a reasonable purchase price and advising client of such
Affirmatively discovering material facts and disclosing them to the client
Investigating the material facts related to the sale.
Loyalty
The real estate agent must act in the best interest of the client
Obedience
Must follow the lawful instructions
Disclosure of all material facts
Examples but not limited to:
Relationships between agent and other parties
Existence of other offers
Status of earnest money
Seller's financial condition
Property's true worth
Commission split with other brokers
Confidentiality
Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.
Accounting in dealings
Reporting of where any money placed in the hands of broker is kept.
Copies of all documents pertaining to contract.
On the other hand when you are an unrepresented buyer, the agent only needs to be honest with you, disclose that they are working for the seller, and most importantly sell you the house.
Why have an agent?
You probably know that not everyone wants to have a real estate agent, and that is perfectly o.k., as long as the decision is made knowingly.
In the example of a journey, I have taken minor trips to a place I haven't been before and simply let the local events and culture guide me, with the result being a good time. However buying a home is not a minor trip, it is more like a long journey, half way around the world, where the consequences of not planning or not having accurate information, could lead to many unpleasant surprises.
Lets take a moment and review, what the implications are for going through the process of buying a home with no or partial representation (customer) versus full representation (client).
CUSTOMERS are SOLD, CLIENTS are REPRESENTED.
Look at a scenario that occurs everyday. A buyer walks into an open house or a model home, they are greeted by an agent that quickly tries to establish some rapport. After the agent is able to establish rapport, they start to ask some probing questions, about what the buyer is looking for, and their ability to buy the house that the agent is selling. The questions will include such things as features, price range, mortgage qualifications and on and on.
Now it is the job of that agent to utilize the information they gather to sell the buyer the house, or one of the builder's houses with terms that are favorable to the seller. If the buyer has volunteered that they can afford the list price or more, and offers less than the list price, it is the legal responsibility of the agent to relay that information to the seller, so that the seller can negotiate price and terms favorable to themselves. On the other hand, if the seller is willing to take less than list price, it is the legal responsibility of the agent to withhold this information from the buyer.
Many times the buyer does not even know that this is occurring, because the seller's agent has established rapport and is working with the buyer to solve any problems that might prevent the buyer from purchasing the house.
Nevertheless, in this scenario, while the agent is working with the buyer, they are working for the seller and will represent their client's best interests, in this case selling a customer a home.
In the example of a journey, I have taken minor trips to a place I haven't been before and simply let the local events and culture guide me, with the result being a good time. However buying a home is not a minor trip, it is more like a long journey, half way around the world, where the consequences of not planning or not having accurate information, could lead to many unpleasant surprises.
Lets take a moment and review, what the implications are for going through the process of buying a home with no or partial representation (customer) versus full representation (client).
CUSTOMERS are SOLD, CLIENTS are REPRESENTED.
Look at a scenario that occurs everyday. A buyer walks into an open house or a model home, they are greeted by an agent that quickly tries to establish some rapport. After the agent is able to establish rapport, they start to ask some probing questions, about what the buyer is looking for, and their ability to buy the house that the agent is selling. The questions will include such things as features, price range, mortgage qualifications and on and on.
Now it is the job of that agent to utilize the information they gather to sell the buyer the house, or one of the builder's houses with terms that are favorable to the seller. If the buyer has volunteered that they can afford the list price or more, and offers less than the list price, it is the legal responsibility of the agent to relay that information to the seller, so that the seller can negotiate price and terms favorable to themselves. On the other hand, if the seller is willing to take less than list price, it is the legal responsibility of the agent to withhold this information from the buyer.
Many times the buyer does not even know that this is occurring, because the seller's agent has established rapport and is working with the buyer to solve any problems that might prevent the buyer from purchasing the house.
Nevertheless, in this scenario, while the agent is working with the buyer, they are working for the seller and will represent their client's best interests, in this case selling a customer a home.
Wednesday, October 21, 2009
Picking a Buyer's Agent
We discussed types of representation, and the reasons to have an agent, but how do you pick an agent to help?
Unfortunately, most people pick the agent that has a home for sale that they are interested in. Of course, that agent already has a relationship with the seller and a duty to sell the buyer the house.
The better way to pick an agent is based on 3 criteria, their skill, their integrity, and the strength of the services they will provide. In the example in the last post, we chose number 4 over number 3 because of that travel agent's ability to perform based on his skill and knowledge of the area, or in other words a stronger service than the local agent. The result an extraordinary experience.
Unfortunately, most people pick the agent that has a home for sale that they are interested in. Of course, that agent already has a relationship with the seller and a duty to sell the buyer the house.
The better way to pick an agent is based on 3 criteria, their skill, their integrity, and the strength of the services they will provide. In the example in the last post, we chose number 4 over number 3 because of that travel agent's ability to perform based on his skill and knowledge of the area, or in other words a stronger service than the local agent. The result an extraordinary experience.
Buying a Home…Why get help?
You have already decided that you would like to purchase a home. So the next decisions concern the type of agency or representation you desire, and who you want to have an agency relationship with.
The first decision is agency and whether you want full or partial representation. In the first message we discussed the similarity in home buying decisions and those made in preparing for a journey.
A few years ago my wife and I took a trip to Australia. When we made the trip we had some choices to be made. 1) We could have just flown over and picked hotels and drifted around. 2) We could have done some research and selected and called hotels and other destinations from home. 3) We could have gone to a local agent that had some of the information, and let them book for us. 4) We selected an agent that was intimately familiar with the areas we were interested in and had them select an itinerary based on criteria we discussed with him, and then book it after we approved.
In the first example we would have had no representation. In the second instance we would have had partial representation. Finally, in the third and fourth instance we would have had full representation, which is what we chose. In the full representation model, the travel agent gave us information ahead of time so that we could make good decisions.
The first decision is agency and whether you want full or partial representation. In the first message we discussed the similarity in home buying decisions and those made in preparing for a journey.
A few years ago my wife and I took a trip to Australia. When we made the trip we had some choices to be made. 1) We could have just flown over and picked hotels and drifted around. 2) We could have done some research and selected and called hotels and other destinations from home. 3) We could have gone to a local agent that had some of the information, and let them book for us. 4) We selected an agent that was intimately familiar with the areas we were interested in and had them select an itinerary based on criteria we discussed with him, and then book it after we approved.
In the first example we would have had no representation. In the second instance we would have had partial representation. Finally, in the third and fourth instance we would have had full representation, which is what we chose. In the full representation model, the travel agent gave us information ahead of time so that we could make good decisions.
Tuesday, October 20, 2009
Home buying
Buying a home is a lot like a long journey.
Before and during the journey, there are decisions that will impact everything that follows. Good decisions mean a journey that is rewarding both during the remainder of the journey, but also afterward in memories. Bad decisions could mean a disastrous trip that may even be aborted before it starts.
In purchasing a home, good decisions mean a smooth process for achieving your goals and the rewards that follow when living in your new home. A bad decision could mean not being able to purchase the home you desire, or quite possible any home at all.
There are literally dozens of decisions that you must be prepared to make. Some of the more common decisions concern:
Mortgages - which lender, which program, government backed, conventional, how much, how long, what rate…
Insurance - homeowners, homeowner warranties, title insurance, changes to life, health and disability insurance…
Terms - what's offered, what's needed, what's reasonable…
Offers - how to structure, how to present, what to include, what to avoid…
Closing - when, where, who does it…
Attorneys - should you use one, should you save the expense, what is their role, who is good, whom to avoid…
Agency - what type, what who to use…
Purchase price - how much, what is the home worth on the market, what is it worth to you, what is too much…
Earnest money – how much and what risk
Escrows – who holds
Moving companies – do it alone, use a local, national
Counter-offers - how to get what you need and want
Very few people make these decisions often enough to have a process developed for good decisions. That is why it is very important to start developing your plan now.
Before and during the journey, there are decisions that will impact everything that follows. Good decisions mean a journey that is rewarding both during the remainder of the journey, but also afterward in memories. Bad decisions could mean a disastrous trip that may even be aborted before it starts.
In purchasing a home, good decisions mean a smooth process for achieving your goals and the rewards that follow when living in your new home. A bad decision could mean not being able to purchase the home you desire, or quite possible any home at all.
There are literally dozens of decisions that you must be prepared to make. Some of the more common decisions concern:
Mortgages - which lender, which program, government backed, conventional, how much, how long, what rate…
Insurance - homeowners, homeowner warranties, title insurance, changes to life, health and disability insurance…
Terms - what's offered, what's needed, what's reasonable…
Offers - how to structure, how to present, what to include, what to avoid…
Closing - when, where, who does it…
Attorneys - should you use one, should you save the expense, what is their role, who is good, whom to avoid…
Agency - what type, what who to use…
Purchase price - how much, what is the home worth on the market, what is it worth to you, what is too much…
Earnest money – how much and what risk
Escrows – who holds
Moving companies – do it alone, use a local, national
Counter-offers - how to get what you need and want
Very few people make these decisions often enough to have a process developed for good decisions. That is why it is very important to start developing your plan now.
Subscribe to:
Posts (Atom)