Hey, Buyers, Pull up a chair and let's have a heart-to-heart chat for just a couple of minutes.
Face it. Sometimes buying a house is hard. Especially if you're out there on your own.
But that's why your professional Realtor -- your buyer's agent -- is here. If you listen to your Realtor, you can get into a new home with the least amount of hassle possible at the best price possible.
All you need to do is follow a few simple rules and you'll be getting those house keys before you know it.
1.) Choose Your Realtor -- As a buyer, you deserve to have an agent who is looking out for your interests in a home purchase transaction. Did you know that the person whose name is on the sign outside of that cute house you just drove by is working for the seller -- trying to get the best deal for the seller? Think about that. If the seller has an agent, shouldn't you? This is a professional relationship built on mutual respect and loyalty between the buyer and the agent. You owe each other honesty and integrity to form a great team with one goal -- to get you into a new home.
2.) Get Pre-Approved -- There is no point in looking at homes before you know how much you can afford and in many areas you can't even submit an offer without an attached pre-approval. Go to your lender. They will ask you a variety of questions and -- if you're qualified -- will issue a pre-approval letter. Get a copy for yourself and a copy for your Realtor. Don't know a lender? Ask your Realtor to give you two or three names of lenders who have successfully closed buyers for her this year. Your agent also can tell you if there are city and county grant programs that can help with your purchase. Don't expect your Realtor to show you homes until the pre-approval letter is in hand.
3.) Make a List and Check it Twice -- Decide in what part of the region you'd like to live, how many bedrooms you need and what other "must-haves" are on your list for the home you'd like to find. Make sure you understand the difference between "needs" and "wants." You might "need" three bedrooms, but you might "want" four. Do you "need" a two-car garage, or do you "want" one. Do you want a large yard or a small one? It's easiest to develop this list in a consultation with your Realtor.
4.) Now Look at Houses -- I like to play "Bracketology" with my buyers. We'll look at four or five possibilities and the buyer will choose the one that best fits his needs. When we go out again, he'll choose the best from that lot. Then we'll pit the two top candidates from each outing against each other to get a "winner." We'll repeat if necessary, continuing to compare and contrast the top houses from each round.
5.) Make an Offer -- Your Realtor will research the home you've chosen to see what recent comparable sales tell you about its listing price. Is it overpriced based on recent sales? Is it already underpriced to elicit a quick sale? She also will check the seller's disclosures to make sure there are no red flags about the property's condition. She'll prepare the offer to purchase and will contact the seller's agent to begin negotiations.
6.) Get to Closing -- Inspections, appraisal, loan commitments, contract timelines and deadlines are just a few of the many pitfalls that must be navigated between getting an accepted offer and achieving a successful closing. Your Realtor will understand what needs to be done to protect your interests and help you hold the deal together along the way.
It can be done, my friends. Just follow the steps in order and enjoy your new home. Questions? Call, text or e-mail me.
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About the Author: Nancy Milton, GRI, is a REALTOR with the GoshenRealtyGroup at RE/MAX Preferred Partners in Edwardsville, Illinois. She and Kristina Pratt help their customers buy and sell homes and investment properties in St. Louis' Illinois suburbs with special emphasis on homes for sale in Madison County and the communities of Edwardsville, Glen Carbon, Maryville, Collinsville, Troy, Bethalto and surrounding areas.
Goshen Realty Group takes its name from the earliest nickname for Madison County, Illinois -- the Land of Goshen -- coined when the region's first settlers compared their new home east of the Mississippi River to the biblical land of peace and plenty.
For more information, visit GoshenRealtyGroup.com or e-mail Nancy at Nancy@GoshenRealtyGroup.com. Text or call Nancy at 618-791-8007. REMAX Preferred Partners is located at One 157 Center, Edwardsville, IL 62025.
Please note that individual listings periodically mentioned in this blog are accurately described in terms of availability and price at the time of the posting. Because properties are constantly coming on and off the market, please contact Nancy for the latest information on those that are of particular interest to you.
Good synopsis of the procees - and the holding it together can be a no brainer or a heroic action.
You've done a great job of spicing up this list to make it enjoyable reading as well as helpful for home buyers! (In fact, it's so good that I just tweeted your post.)
Very nice post. I like your peresntation of the subject and have tweaked my own thinking because of how you've positioned this. Thanks.
Nancy:
This is a very comprehensive list of what a buyer needs to be thinking about. I like the reference to "bracketology." Interesting.
Well done Nancy, I like the part about the sellers have an agent you deserve one too.
This is a great synopsis of the process!
Rock on with your bad featured post writing self, pardna! :) Excellent post and very worthy of a feature. Proud to have it on our outside blog!
It seems nothing is easy these days. Your list makes sense.
This is a nice review for consumers. We do this every day. But, it is very stressful and confusing for most consumers.
This is a nice review for consumers. We do this every day. But, it is very stressful and confusing for most consumers.
Nancy, what a fantastic educational post for consumers. You really caught me in the first paragraph of the list with the VERY important point:
"Did you know that the person whose name is on the sign outside of that cute house you just drove by is working for the seller -- trying to get the best deal for the seller? Think about that. If the seller has an agent, shouldn't you?"
SO TRUE!!! (And a great way to put it!)
Katherine: Isn't that the truth. I'd like to see a few more of those "no brainers" this year. Thanks for visiting the blog.
Margaret: I'm honored that you Tweeted the post. Thanks so much!
Dave: Thanks for stopping by. I'd love to know more about what you're considering changing in your approach.
Claudette: The "Bracketology" thing occurred to me last year when I was out with a very confused buyer during college basketball season. It has really helped buyers focus their attention on the best of the best that eet their needs and and sweep the non-contenders out of the way.
Linda: Thanks for visiting the blog. During our initial buyer consultation, Kristina and I always discuss with our buyers what we think they should know about seller agency and open houses.
Judy: Many thanks for your comment!
Kristina: The outside blog rocks!
Cassi: Thanks, I am glad the list made sense to you -- it really seems to boil it down nicely for our buyers.
Melissa: It sure is confusing for buyers. I find it takes more than the initial consultation for it all to become really clear. It's fun to watch them grow in their knowlege and confidence as you work together.
Marney: Thanks for your comment. Confusion over agency is an ongoing issue, isn't it. I think we may make a buyer ed video about that for our clients.
I always get a preapproval letter before showing homes, unless it's my own listing. To do otherwise is an exercise in futility. Because we are in the business of finding a buyer the perfect home and getting the offer accepted. You can't write an offer without a preapproval letter. In fact, if I don't like the way a preapproval letter is written and feel it might hurt my buyer's chances, I get them a new one.
Thanks for stopping by the blog, Elizabeth. You're so right about the pre-approval letter. I know many buyers don't understand how we earn a living, so I take time to explain that process during the initial consultation too. Time lost with an unqualified buyer is time I can't regain and, therefore, is income gone forever. It's a lack of understanding more than malicious behavior, I think.
Nancy - This is a great breakdown. I've worked with so many buyer's this year who worked with numerous agents before me and they were not pre-approved, but were making offers on properties.
Some were surprised they couldn't afford a certain amount, while others could afford more than they thought. I'm not sure why anyone would look at homes before getting pre-approved and I'm not sure why an agent would show properties to an buyer who isn't approved.
This is good detail. If things are explained up front, there is not much dissappointment or surprise. Leave nothing to guess about.
I finally got the buyer agents on my team to start meeting their clients at the office first so the clients knew the process. Amazing what a difference it has made.
Nancy: So many buyers get caught up in the process ... and roping them back to reality and getting them to refocus is part of our job. They may not like it ... and yet if we don't they may miss the opportunity. I recently had to share some tough love with one of my buyers ... she recently closed ... and if she had not closed on that property she would be out of the market today! Timing is critical ...
Michelle: I know! My partner, Kristina, likens looking for homes without a pre-approval to putting your underwear on outside your clothes. It makes me laugh and it's true, true, true. Thanks for stopping by.
Terri & Howard: You're both right. Explaining upfront has made a big difference in our success in helping buyers. To do any less is a disservice to the buyer and to the busy Realtor. Thanks much for your comments.
Kathleen: Yep, "focus" is a word our buyers hear a lot. Once in a while we discover a buyer that truly isn't ready yet -- especially when they can't decide on a particular town or style/age of home. That's when we tell them to take a deep breath, make some clear decisions and come back to us when the time is right. Others just really need someone neutral to talk to about it. I also tell them up front that I am never going to "sell" them a house. Instead I make sure they know I am here to help them get a good, safe deal on the house that they choose. That helps them understand that the pressure they might feel in the homebuying process isn't going to come from me. Once some buyers just relax a little bit and get rid of the natural jitters, the whole thing is easier for them.
Nancy, I agree with your list. I think you have valid points. Esp. point #2 and #3.
#1 is a little misleading. You say:
Did you know that the person whose name is on the sign outside of that cute house you just drove by is working for the seller -- trying to get the best deal for the seller? Think about that. If the seller has an agent, shouldn't you?
Where I live in Florida, we are classified as "transaction brokers" unless otherwise instructed. Therefore, we don't work for the best interest of the seller. Here is a list of our duties:
1. Dealing honestly and fairly;
2. Accounting for all funds;
3. Using skill, care, and diligence in the transaction;
4. Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
5. Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
6. Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
7. Any additional duties that are entered into by this or by separate written agreement.
Limited representation means that a buyer or seller is not responsible for the acts of the licensee. Additionally, parties are giving up their rights to the undivided loyalty of the licensee. This aspect of limited representation allows a licensee to facilitate a real estate transaction by assisting both the buyer and the seller, but a licensee will not work to represent one party to the detriment of the other party when acting as a transaction broker to both parties.
So if you called on a sign in Florida, you will know that you will get an agent who is more interested in putting a deal together than working to get the best price for the seller. All states have different laws on agency disclosure, so as a buyer it is impotant to investigate that first. Just wanted to clear that up!
I am Rhea S. I have visited your website and I would like to congratulate you on building such a valuable online resource. I am sure your visitors find your site as useful as I did.
Have a great day.
Thanks and regards,
Rhea S.
Many buyers need this encouragement and advice. Good for you for posting.
This is a well thought out post with good advice for the buyer....thanks so much.
Patricia
Hi, Aaron. I live and work in Illinois, so all of my blog posts relate to my experiences with real estate in my state where we have fiduciary responsibilities to our clients and agency must be disclosed. But thanks for dropping by to educate us about the concept of transaction brokerage under Florida's laws anyway.
Rhea, thanks for visiting the blog. I appreciate the nice words about my online resources.
Hey, Judi and Patricia: Thanks for the comments. I hope this will encourage buyers to find a great agent and take the plunge.
Great list. I would add a couple of steps before #1. Yes, I'm not normal for recommending this, but too many people buy things they truly cannot afford.
Before #1 Choose your Realtor (or agent), #1 you need to have saved a very healthy down payment of at least 20%, and #2, make sure that down payment is not all your savings. You need a healthy rainy day fund of 5 to 6 months worth of your monthly budget living expenses. Then and only then should you be considering purchasing a home.
Deciding you are financially secure enough to take on the responsibility of home ownership is #3. Choosing your Realtor (or agent) is step #4 if and only if you have passed the step #3 self exam.
Nice points, Michael. You're right. I always tell my buyers during our initial consultation that getting the home is just the beginning of their financial obligations.
A great easy way to break things down for buyers. I think buyers need to be more educated as they make decisions about their home search, and this is a great start.
Thanks very much for the comment, Christine. The process is a mystery to many people and I hope this will help some think more logically about it.
Great post Nancy. Sometimes we assume that most people understand how things work and then are surprised how little they know! We do need to keep educating our buyers!
Thanks, Eileen. You're right, we can't assume. I remember how little I knew before I started living and breathing real estate, so I can empathize with the misunderstandings and just keep the education flowing.
It is important that the buyer have a clear understanding of the process and what they need to do to insure that they are well represented and get a home.