It is imperative that your agent knows how to handle the challenges that will arise. Wisdom in overcoming challenges comes through experience in today’s fast paced market. Many challenges exist throughout this process that you do not need to go through. An agent with a track record of success has learned to avoid many of the potholes that exist. It’s important that your agent has a strong understanding and experience with:
1. #Mortgage & Financing
Today’s mortgage world is filled with obstacles that can keep you from obtaining the house you select as “the one.” The best advice I can give is to ask your agent:
- Which lender they would use if they were buying a home?
- How many transactions have you closed with this person?
This mortgage professional who you have identified is an important piece of the puzzle because they are now responsible to you and to your agent who will continue sending them business long after you have closed (assuming they are successful with your closing). I still encourage shopping around, not for the purpose of finding someone you like better, but for making sure the loan you are obtaining is competitive. Let the lender know you are doing this and then give them every opportunity to earn your business if they are not the best in interest rate or fees (cost to acquire a loan).
Regardless of your lender, they will require a lot of you. It is extremely important to disclose all of your income, debts, and have your credit pulled before beginning the house hunt.
To summarize, a great agent will connect you with a great lender that will require a lot of you upfront to avoid challenges after finding the perfect home. The last thing you want to do is squander a contract on the perfect home for your family because you were trying to save $50 on a loan origination fee.
Crazier things happen every day!
2. Market Values
Seek proof of market values in the form of a Comparative Market Analysis known as #CMA. Your agent needs to help you understand the market values some you can negotiate from a place of justification. I always tell buyers, “I will submit any offer as long as it can be justified.” Some homes and communities are much harder to evaluate than others, so it’s important to have an open-minded discussion of market values with your trusted, hired resource…your Realtor.
Headache Relief: You will save yourself a lot of headaches if you can come to the realization that MARKET VALUE is more important than LIST PRICE. If a home is priced at priced at $50,000 below market value and you pay $25,000 more than the list price, this is a success. Inversely, if a home is listed $50,000 over market value and the seller won’t take less than $25,000 below the list price you need to move-on. Always keep
How your agent interacts with you in telling you positive news and the news you don’t want to hear is likely how they will converse with other agents in the negotiation. Ask specifically what their strategy is in presenting your offer. If you have an agent who was weak negotiating with you on parts of the purchase offer, don’t expect them to become a hero when negotiating with the seller for you and your family.
Also, understand that there are many sellers out there that are unwilling to listen to justified market values or are not in a position to sell except at a certain price (unrealistic). The best negotiator cannot create deals when there are no margins, so understand that going into it.
There are many other things that need to be negotiated other than price. A good offer should also protect you as the buyer in the form of contingencies (inspection, appraisal, financing, etc.) and portray clear timeline from the point of contract though closing. A good agent can also foresee certain issues that may arise and attempt to address them in the first version of the contract rather than having to engage in a second negotiation later. DO NOT assume you will be able to negotiate something after the first contract is agreed upon. Include your concerns in your first draft. Your due diligence (inspection) period is to uncover things you did not know about the property.
Lastly, it’s important to know that there are many small negotiations through the closing process such as property repairs and appraisal issues. So, it’s important to keep a positive relationship with the other side or they will be less likely to agree to any future requests.
This may be the most important part of this post. Do not become jaded by a drawn out negotiation and allow that to affect your goal of obtaining the property. Understand that every seller and buyer are looking for the best end result as possible. Stay focused on the goal and understand there is give and take to every #negotiation, and you need to realistically determine what success is for you before starting any negotiation. Keep market value in mind, and protect yourself in a well presented offer preceded only by an agreed to negotiation strategy. Keep It Simple.