Five good reasons to have a pro on your side throughout the process.
Buying new construction seems simple, right? Just pick out the floor plan you want, choose the perfect lot, and watch it go up. No sellers to deal with, no unexpected repairs that come up during inspection, no drawn-out negotiations. Right?
Not so fast. In any real estate transaction, it’s important to have a professional on your side, even if the process seems straightforward.
“Having your own agent provides a sense of security,” says Seattle-area homeowner Kristy Weaver, who has bought two new construction homes from two different builders. “It gives you some peace of mind, knowing that someone is looking out for your best interest.”
Peace of mind is just one benefit of having an experienced agent along for the ride. Read on for five more reasons you’ll want a local real estate agent by your side when buying a new construction home.
1. Help you find a reputable builder
“Your agent can rely on their own experience and that of their colleagues to help you find a builder you can trust,” says Portland, OR-based real estate agent Kim Ainge Payne of the Realty Trust Group. “What’s the quality of the workmanship? What kind of warranty do they offer? What’s their track record of resolving issues? Getting a clear understanding in the beginning can alleviate serious headaches down the road.”
2. Go to bat for you
The timeline for purchasing new construction is typically quite a bit longer than buying an existing home. From the first time you visit the sales center, to choosing your layout, construction, inspections, and finally closing, there are ample opportunities for things to go sideways — think construction delays, permit issues, and financing concerns. An experienced buyer’s agent can help you navigate all of these sticky situations.
3. Help you review your contract
Even if you’ve purchased a home before, the contract for new construction is a whole different animal, and an experienced agent can help you make sure you understand everything, from floor plans to earnest money requirements, deadlines for requesting changes, and timelines for completion.
“It’s crucial to have a third party who represents your interests in the transaction,” says Dmitry Yusim, a Seattle-area agent who has represented new construction buyers. “A good agent can add the proper addendums to protect you if something falls through.”
4. Assist with negotiations
Buyers’ agents know the areas where you’ll find the most wiggle room when it comes to negotiations.
“Builders are trying to keep their sales price up so that the next buyers through the door see the higher closing price,” explains agent Britt Wibmer of Windermere Real Estate in Seattle. “They’d much rather throw in closing costs or additional upgrade credits.”
5. Point you toward smart upgrade choices
Builders will offer you endless options for finishes and upgrades, and it’s easy to get overwhelmed. A seasoned real estate agent can recommend the upgrades that will get you the most bang for your buck in resale value, suggest finishes that might be cheaper to do on your own, and help you avoid over-improving, which can jeopardize your appraisal before closing.
Even though a friendly sales representative will greet you with a smile the moment you walk through the door of the sales center, don’t forget that they work for the builder. Bring your own agent with you starting with your first visit — in fact, many builders require your agent to register with them from the very beginning in order for them to be involved in the process and receive their commission.
With a professional you trust by your side, you’ll rest easy knowing someone is there to protect your money, your time, and your new home.
Wondering if new construction is right for you? Search new construction listings, and get more home-buying tips and resources to help you decide.
Do you need one? Do they pocket the whole commission? Let’s set the facts straight.
Buyers and sellers often enter the market with misconceptions about real estate agents — how we work, how the process works and what the agency relationship is all about.
It’s helpful to point out, without getting too far into the weeds, that in any one real estate transaction, there are most likely two agents: one for the buyer and one for the seller.
Here are five myths (and five truths) about working with both buyer’s and seller’s agents.
1. Agents get a 6 percent commission, no matter what
Most people assume that their agent is pocketing the entire commission. That would be nice, but it’s just not accurate.
First, it’s helpful to know that the seller pays the commission, and they split it four ways: between the two brokerages and the two agents.
Finally, the brokerage commission isn’t fixed or set in stone, and sellers can sometimes negotiate it.
2. Once you start with an agent, you’re stuck with them
If you’re a seller, you sign a contract with the real estate agent and their brokerage. That contract includes a term — typically six months to a year. Once you sign the agreement, you could, in fact, be “stuck” with their agent through the term. But that’s not always the case.
If things aren’t working out, it’s possible to ask the agent or the brokerage manager to release you from the agreement early.
Buyers are rarely under a contract. In fact, buyer’s agents work for free until their clients find a home. It can be as quick as a month, or it can take up to a year or more. And sometimes a buyer never purchases a house, and the agent doesn’t get paid.
Before jumping into an agent’s car and asking them to play tour guide, consider a sit-down consultation or a call, and read their online reviews to see if they’re the right fit.
Otherwise, start slow, and if you don’t feel comfortable, let them know early on — it’s more difficult to break up with your agent if too much time passes.
3. It’s OK for buyers to use the home’s selling agent
Today’s buyers get most things on demand, from food to a ride to the airport. When it comes to real estate, buyers now assume they need only their smartphone to purchase a home, since most property listings live online.
First-time buyers or buyers new to an area don’t know what they don’t know, and they need an advocate.
The listing agent represents the seller’s interests and has a fiduciary responsibility to negotiate the best price and terms for the seller. So, working directly with the selling agent presents a conflict of interest — in favor of the seller.
An excellent buyer’s agent lives and breathes their local market. They’ve likely been inside and know the history of dozens of homes nearby. They’re connected to the community, and they know the best inspectors, lenders, architects and attorneys.
They’ve facilitated many transactions, which means they know all the red flags and can tell you when to run away from (or toward) a home.
4. One agent is just as good as the next
Many people think of “agent” as a generic term and that all agents are created equal.
A great local agent can make an incredible difference, so never settle. The right agent can save you time and money, keep you out of trouble and protect you.
Consider an agent who has lived and worked in the same town for ten years. They know the streets like the back of their hand. They have deep relationships with the other local agents. They have the inside track on upcoming deals and past transactions that can’t be explained by looking at data online.
Compare that agent to one who’s visiting an area for the first time and needs their GPS to get around. Some agents aren’t forthright and might be more interested in making a sale. Many others care more about building a long-term relationship with you, because their business is based off referrals.
5. You can’t buy a for sale by owner (FSBO) home if you have an agent
In a previous generation, sellers who wouldn’t deal with any agents tried to sell their home directly to a buyer to save the commission.
Smart sellers understand that real estate is complicated and that most buyers have separate representation. And many FSBO sellers will offer payment to a buyer’s agent as an incentive to bring their buyer clients to the home.
If you see an FSBO, don’t be afraid to ask your agent to step in. Most of the time the seller will compensate them, and you can benefit from their knowledge and experience.
The open house tour is a critical component of most real estate deals. For prospective buyers, it can be confusing to know what to do at an open house, what questions to ask or what to look for as they take a brief peek at what could become their next home.
Some homebuyers might like to take matters into their own hands when they go house hunting, opting to forego using a real estate agent to help with the process. After all, the reasoning goes, if you're the person who will be living there, it seems like you should be the one seeking out what you want. Similarly, there's an assumption that eliminating seemingly extraneous people involved, such as the real estate agent, also cuts the overall associated costs and makes the home less expensive.
However, there are many advantages to working with a real estate agent when buying a house. Consider these five benefits:
It's true that anyone can buy a house without an agent's assistance. However, real estate agents bring with them years of experience and expertise, and they utilize this wisdom to get you the best deal possible. In addition to specialized training in buying and selling houses, most real estate agents are also licensed professionals and members of various industry-specific organizations. They have access to and knowledge about comparable houses, local neighborhoods and whether a particular property is over- or under-priced.
Seeking out a new house that meets your specific criteria, including price range, accommodations and amenities can be a time-consuming process. After this long search, you still need to worry about arranging viewing appointments and work out a deal with the seller's agent. All of this requires a lot of leg work, phone tag and email exchanges. A real estate agent, on the other hand, has easy access to all of this information and will serve as your personal liaison between the seller and his or her agent.
3. Negotiation skills
Even after months of market research, house hunting and reviewing your available options, you still might not find the perfect match. For instance, you might find a home that partially fits your criteria, and with a few upgrades or repairs could be perfect. Negotiating a better deal or a discount on the home's price might not necessarily be your strong suit, but it's a skill real estate agents bring to the table during the transaction. In addition, the agent will be able to identify trouble or potential issues you might not notice.
A real estate agent brings knowledgeable and experienced negotiation skills first-time homebuyers might not have.
While you might have a good idea of what kind of house you want and your price range, there are a host of other market conditions that will impact what you buy and how much you want to spend. Some of this information can be difficult to come by without access to benchmark data and other industry-specific reports.
As noted by The Balance, a real estate agent can provide you with the contextual data on market conditions to help guide your decision, such as:
Properly leveraging data on market conditions will help you not only identify the best house at the right price, it can be a significant advantage for your position during negotiations.
5. Tailoring contracts
Although most purchase contracts are fairly standard, there are conditions that can be tweaked, removed or inserted accordingly. Since real estate agents deal with these on a regular basis, they have a familiarity with when a contract should be modified to better suit your specific needs and situation, according to Forbes. This provides you with better protections and puts you in a position to meet the conditions outlined in the contract.
Competition is everywhere. Knowing and understanding your competition is crucial. Knowing the benefits they are offering that you are not, what their reputation is compared to yours, and how they are structuring their deals are all things you need to know. By knowing what your competition is doing, it can help you establish an advantage. One of the best things you can do to gain a competitive edge immediately is research your competition. The old saying “keep your friends close and your enemies closer” always rings true in this competitive world of real estate investing. I am constantly on the lookout as to what other investors in my area are doing. If you are new to analyzing your competitors, let me tell you it is pretty easy to do. There are a lot of ways to research your competition. Some of these are:
Go to your local REIA and network
Real Estate Investing Tip #1: Study Your Competition
You need to study your competition in order to understand how you can differentiate your marketing and be more appealing to sellers. You are offering a service that people need. And you need to do it in a way that is more attractive to your customers than your competition. Find out what benefits your competitors are offering and then offer better ones. If your competitors aren’t helping people find apartments to move into, you need to make this one of your specialties. If your competition is doing lease backs, then you need to find a better alternative. It is important to find these positive benefits unique to your business that can be easily stated and remembered. That way, when people hear about the benefits or read about them, they always know it is your company.
One of the best ways to find out about what your competition is doing is to ask the sellers that call you and that you meet with. There is no better way to study your competition than going right to the source. Whenever I have a meeting with a seller I always want to know who I am competing with and what they are offering. Many times I have been sitting at the kitchen table with a seller and asked to see what other letters they have received. You will be surprised because most sellers will willingly give you everything that has been mailed to them. I will then take these letters back to my office and read them and compare and contrast what their marketing pieces to what I am sending out. Most of the time I realize how weak most of my competitors are, but there are a few times I have actually gotten a few good ideas from these letters or conversations with these sellers.
Real Estate Investing Tip #2: Know How Your Competitors Structure Deals
Additionally, you always want to know how your competitors are structuring their deals. I have often used this information against them by strengthening my offer. For example, if another investor makes a higher offer “subject to” the existing mortgage, I will let the seller know the risks of subject to deals. If the seller is making a cash offer then I will generally make a higher offer “subject to.” There is nothing wrong with doing this as long as you don’t bad mouth your competition. Bad mouthing your competition is short sighted thinking, as it may get back to them and can only cause trouble.
You should also try and monitor where your competition is spending their marketing money. Investigate and estimate how much money they are spending especially if they are using other forms of marketing you have not yet tried. It is fairly easy to keep tabs on your competitors and you can always use that information to your advantage.
It is important to remember that your customers have options when it comes to buying and selling. Their options are not just your competitors. For instance, a seller in foreclosure has numerous options they can explore. They can:
Those are only a few of their options. Your goal is to show them and convince them that by working with you it is in their best interest. Your marketing should be convincing enough to get them to at least call you before they explore other options. From there it is up to you to convince them that the other options are not in their best interest.
Real Estate Investing Tip #4: Your Marketing Should Never Stop
Realize that your marketing does not stop at the initial contact. It appears in the way you dress when you show up for the appointment, in the marketing materials you bring to the house, and in the way you present yourself during the meeting. It then carries on to your follow-up marketing if you were not able to put the transaction together in the first meeting. Likewise, after the transaction is complete, your referral network grows and your future marketing is positively affected.
The best way to start preparing your marketing is to make a list of all the options a seller has and then bullet point out some advantages of dealing with you instead of going another route. This way, sellers are compelled to call you because you have shown them you can fix their problem. These will most likely be the biggest benefits you will use in your marketing pieces. These will also be the points you use when handling their objections over the phone or in person.
Real Estate Investing Tip #5: Build Your Foundation
If you avoid some of the pitfalls discussed above and apply the principles mentioned, you should be on your way to building a very strong base for your real estate business. Remember, no business can be structurally sound without a proper foundation built on the quality and frequency of sound marketing.
It’s not enough to just get email leads: there must be follow-up.
When prospects submit an online form for listing information, 40% expect an instant response, and 70% expect a response within 30 minutes. But only 20% of agents respond within an hour, and some do not respond at all, according to the National Association of Realtors® Profile of Homebuyers and Sellers.
That’s throwing money in the trash.
The latest upgrade to ConnectionSM for Co-Brokerage provides the most efficient online lead solution on the market. Now, ConnectionSM for Co-Brokerage offers these enhancements:
More importantly, ConnectionSM for Co-Brokerage helps agents connect to consumers. Increased engagement means higher conversion rates.
More than 43% of consumers found their homes online—up from 11 percent—according to N.A.R.
Internet leads are an irreversible trend the brokerage community must capture—or watch their business falter.
Today’s real estate agent has to work smarter, not harder. The best way to gain the highest return on time and money is to prospect more effectively— to prospect with verified email leads for faster results.
With ConnectionSM for Co-Brokerage, there are no cold calls. Each conversation is impactful and meaningful, because agents are armed with intelligence.
While it was once common for REALTORS® and brokers to divide their time between office space and field work, times have changed. Now, agents and brokers spend more time working from their laptops or tablets, and less time occupying those pricey office suites.
As a broker, switching to a virtual office space and working from home (or at a listing, or in a coffee shop), may seem like a cheaper way to manage the business, but is it practical?
If you are currently leasing office space for your team, switching to a virtual space could save you money. But the real advantage to going virtual and working in the cloud is that you and your team can always be connected.
“Being able to be very dynamic and having everything at your fingertips—always—is the biggest advantage,” said David Newcombe, designated broker for Habitat Urban in Arizona.
While most offices exist in a 9 to 5 world, having your office with you wherever you go makes it easier to work around your clients' schedules, or to set your own schedule.
If you do decide to go virtual, you will “have to work harder on broker communication,” Newcombe says. Without the water cooler around, you will need to set up times to talk with your agents and your office staff, send regular memos to keep everyone in the loop, and find more inventive ways to train new hires.
Virtual offices may also create some inconveniences on the client side. “The client needs more than just a Starbucks to meet in,” Newcombe said.
That doesn’t mean you will risk losing clients. You just need to find another way to meet and finalize deals.
“Think forward as to what affiliates might work with you to provide conference rooms for occasional special client meetings,” Newcombe said.
Finding the Right Equipment
If do decide to switch to a virtual office, having the right technology in place is key to a successful transition. Newcombe recommends starting with the right customer relationship management software.
“Don't always go for the obvious old tried and tested solutions," he said. "There are many great new products on the market that you can customize to fit your brokerage like a glove.”
Once you have a CRM system in place, a handful of productive tools will keep your business running smoothly. At the very basic level you will need an email client, online-based cloud storage, compliance and filing software, and word processing software. Newcombe recommends looking into:
Making the Transition
With the right planning, transitioning to a virtual office could be completely painless. Start by setting regular meetings with a time and place for all of your office administrators, marketing specialists, Web designers and REALTORS®. Having regular meetings will help smooth the transition.
Before you lose the office entirely, Newcombe says to “make sure your REALTORS® are as tech savvy as they can be and used to working without paper.” Also, offer training on any software you will be using and provide agents and staff with a list of equipment they will need to buy.
Close friends and relatives should generally be avoided.
Being a real estate agent involves more than just knowing the combination to the lock box. It means having sales and marketing know-how, the diplomatic skills to close a deal and the ability to represent a client’s interests above all else.
So how do you pick the best real estate agent for you? Here are a few things that agents and real estate experts say must be considered:
Real estate is local ― hyper-local, actually. Your agent should be, too.
You want someone who has knowledge of the neighborhood, who understands the housing market there, knows the inventory, is familiar with the schools, local issues, traffic concerns and much, much more, said Tim Freund, an agent with Dilbeck Estates in Thousand Oaks, California.
Your college roommate who sells homes in a town 30 miles away should probably not be your agent ― even if she is the biggest producer in her office. You want someone who knows the specific neighborhood you want to buy in.
So how do you find these agents?
“Pay attention to who sells in your neighborhood,” says Deidre Woollard, a real estate publicist with Lion & Orb, which is headquartered in Los Angeles. That’s right: Drive or walk around and see who has the most signs up. All your neighbors can’t be wrong. And avail yourself of the vast pool of information available online, she told HuffPost.
“Zillow, Homesnap, Realtor.com and others let you see who is most active in your area,” she said. “You don’t always need the top agent but you do need someone who has sold recently.”
Be sure to do a little self-examination as well. You want to be compatible with whichever agent you pick. If you are someone who wants answers ASAP, consider hiring someone who has a support team, Woollard said.
Getting referrals are a big measure of how successful an agent is. “Ask friends who live in your targeted neighborhood for the top local Realtor,” said Maxi Lilley of Red Oak Realty in Oakland, California.
Specifically ask who they would use today. According to the National Association of Realtors, 64 percent of sellers who used an agent found them through a referral by friends or family. And among that group, 70 percent said they would definitely use that agent again.
Your friend or relative may not be the best agent for the job.
Think of it like this: A real estate transaction is likely going to be the biggest money deal you make in your lifetime, and there really is no room for mistakes. It is not the time to toss a bone to your friend or relative who just got a real estate license and lives 20 miles away.
Your newly licensed sister-in-law may be a lovely person, and not giving her your business (and a shot at a hefty commission) is sure to add stress to the Thanksgiving dinner. But in many cases, listing a house for sale or submitting an offer through a relative or close friend isn’t such a hot idea ― especially if that relative or friend doesn’t have much experience or first-hand knowledge of the neighborhood you want to buy or sell in.
Freund has written blogs about the sticky situation of having friends and relatives in the business. He told HuffPost that letting a relative know you are picking another agent can be a tough conversation to have. He suggests that to soften the blow, you spell out your concerns and propose a compromise solution. If inexperience is the concern, ask them if there is a more experienced agent in their office (assuming it’s local) with whom they can co-list your house. And if they aren’t local, ask them to help you find a local agent and make a referral; referring agents are paid a fee when the house sells.
Blood and friendship may run deep, but at the end of the day, you have to hire the most qualified person to represent you because if you don’t, there’s plenty that could go wrong, Freund said.
“Real estate often brings out the worst in people. It’s very stressful,” he said. “It’s a big and expensive life decision. Sometimes you just need the assistance of someone who doesn’t have a personal relationship with you.”
For one thing, if the home-buying process isn’t going well, you need to be able to fire that person, Freund said. And as hard as it may be to tell your friends and relatives you can’t hire them right off the bat, it pales in comparison to when you need to fire them.
The best listing agent is not the one who tells you what you want to hear.
Everyone selling a home hopes it will fetch top dollar, and it’s widely recommended that potential sellers invite at least three agents over before picking one. As human nature would have it, we tend to like the guy who suggests the highest listing price.
That is often a foolish thing to do, Woollard said.
“You want the agent who backs up the price with local data and doesn’t just say what you want to hear,” she said.
An agent who plays along with your pricing fantasy likely isn’t going to produce a sale. More likely, he is pricing it high to curry favor and will come back to you in a few weeks, asking for a price reduction.
There are many strategies to marketing a house for sale. Some agents think pricing low and letting the marketplace drive up the price in a bidding war is the way to go. Others think pricing high and testing the waters will get you more comfortable with the idea that your house isn’t really worth as much as you thought; that’s the agent who tells you what you want to hear.
Go with the agent who actually closes deals.
There are career real estate agents and there are those whom career real estate agents call “hobbyists,” said Freund. Some people get a real estate license just to represent themselves in a transaction. Others do it a few hours a day while their kids are in school. Still others treat real estate as a second job to supplement their “real” occupation.
While some part-time agents do regularly close deals, Alex Newell, a loan officer with GMH Mortgage Services in Nashua, New Hampshire, advises asking potential agents how many transactions they closed in the previous 12 months. “Make sure it’s at least one a month,” Newell said, which is what the National Association of Realtors says is on par with the national average.
Working fewer than 20 hours a week in real estate sales delivers a median gross income of $8,550 a year, according to the 2016 member profile of the National Association of Realtors. In comparison, working 60 hours or more a week produces a median gross income of $93,400, the NAR report shows. The more an agent works, the more transactions they close and the more experience they get.
“This is hard work,” Freund said, reiterating Newell’s advice to ask agents how many deals they’ve closed. “If you are inexperienced, it’s hard to answer that question.”
Virtual Real Estate Transaction Coordinator Company
Want to buy or sell a home in 2018? Here’s what agents say you should do to get ready
Tips for Sellers
1. Declutter and Organize
“After the holidays is a great time to clear out all the things you no longer need,” says Charleston agent Tammy Trenholm. “Decide what you want to keep and then pack and store anything you don’t immediately need at your new place. Be sure to organize your closets and pantries so they are tidy. This will help showcase your storage space.”
2. Paint Inside and Out
“First impressions mean everything. Make sure interior rooms are freshly painted with a neutral color,” said Trenholm. “The exterior should be power-washed and painted if needed; often the front door can use a fresh coat of paint or stain, too.”
3. Make Updates to Increase Your Home’s Value
You should talk to your agent about small changes you can make that might have a big impact on buyers, says Washington D.C. agent Chelsea Traylor. Updates like a kitchen backsplash or new hardware throughout the house can leave a lasting impression.
“The more value a buyer sees in a property, the greater the chances that one or more buyers will make an offer at your list price, if not more,” says Traylor.
4. Talk to and Collaborate With Your Neighbors
“If you have nearby neighbors, buyers will likely be curious about how well your neighbors keep up their homes,” says Traylor. “If you share a hallway or lawn, let your neighbors know of your plans to sell and kindly ask them to tidy up. A speedy and profitable sale for you only means great things for your neighbors when they decide to sell.”
5. Figure Out the Right Time to Sell
Sellers tend to think they need to wait until spring in order to sell quickly, but in many markets that’s not the case, says Phoenix agent Raegan Kraft.
“Homes sell well year round in the Phoenix area; there are more sales in the spring and summer months. But because there are more buyers at that time, there are also more sellers and more competition,” she said. “Ultimately, sellers should sell at the time that makes the most sense for them. The beginning of 2018 is a great time to list, as buyers left over from 2017 have exhausted the limited inventory, and new buyers will begin looking as well.”
6. Price Your Home to Sell
“Look at key market indicators such as recent sales, pricing trends and inventory to guide you to the best listing price,” says Traylor. “Be cautious of overpricing and underpricing. Overpricing could scare off potential buyers who may think a seller isn’t being realistic, while underpricing means that you as a seller could leave money on the table. Agents use a tech-powered comparative market analysis tool to help guide sellers to the right price. Work with your agent to develop the right pricing strategy so that your list price is either at or slightly below market value, thereby creating as much interest as possible from the buying community.”
Tips for Buyers
1. Limit Credit Card Spending and New Purchases
“Commit to refining your purchasing habits. Reducing credit card use, not opening new credit cards, and avoiding large purchases can all help improve your credit score,” says Miami agent Jessica Johnson. “Sometimes a difference of a few points can increase your purchase price approval or get you a better rate. What better time to implement new habits than a new year!”
2. Find Out How the New Tax Bill Affects You
“The 2017 tax bill that has been signed into law changes several financial considerations when buying a home, and the conforming loan limit has also been increased,” says Chicago agent Daniel Close. “There are several changes you will want to acquaint yourself with that buyers in 2017 did not have to consider.”
3. Maximize Savings
“Review your finances and set a monthly budget to start saving up for a down payment, if you haven’t already,” says San Francisco agent Miriam Westberg. “If you already have a savings account, think about other ways you can add to it. Can you cut monthly expenses somewhere else to offset more savings? Keep upcoming tax payments and/or refunds in mind too!”
4. Get Pre-approved
Many sellers won’t even entertain an offer without a pre-approval letter, says Redfin agent Danielle Parent in Cleveland. So it’s best to find a local lender who has a reputation for closing on time and get pre-approved before you submit an offer.
“The market has been so competitive that I have had sellers request a pre-approval from a local bank. In multiple offer situations, if you have a pre-approval for an FHA loan with 3.5 percent down, you should see if you can qualify for a conventional loan with 5 percent down, as this will make your offer more competitive.”
5. Set Up a Saved Search
“Once you have a general idea of your borrowing ability, jump onto app and start setting up saved searches; Will send you a smartphone notification or email when a home that meets your criteria is listed,” said Seattle agent Allie Howard.
“You can set a price cap and filter by location. If you want your child to go to a specific school, you can filter by that school etc. One thing to keep in mind, however, is that in a strong seller’s market like we have in Seattle, many of the homes will end up selling above list price. So it can be a good exercise to set your search for approximately 10 percent below your price cap to allow some room to escalate up in price if a home you like ends up receiving multiple offers.”
6. Start Exploring in Person and Online
It’s good to check out different neighborhoods to get an idea of what you’re looking for, says Westberg. Then, look up the neighborhoods you like on Redfin.com and review sold homes to get a sense of sale prices in that area. Once you’re ready, you can start looking at homes.
“We saw a very busy, hot market starting in early 2017, so buyers should plan to hit the ground running,” says Close. “Do your research before February and go see some homes to get the process started. Well-prepared and experienced buyers will have the best chance at success.”
Parent says you should request a tour as soon as you see a home you like hit the market. “The Redfin team can accommodate same-day tours and if it turns out to be ‘the one’, we will be able to place a bid quickly,” she said.
7. Be Creative With Your Search
“While everyone else is looking for the three-bed, two-bath home in the ‘established’ neighborhoods, I believe you can get a better deal on homes that have room to build an extra bedroom or bathroom,” said agent Gus Sanchez in Portland. “Look for the up-and-coming neighborhoods in your area that are expected to improve and appreciate over the next few years. Renovation financing for ‘fix up’ buyers and creative financing for contingent buyers will also be key in obtaining your goals!”
8. Be Flexible With Sellers
You can make yourself more competitive by accommodating the seller’s needs, says Parent. “I will often ask the listing agent what day the seller prefers to close as this can be a consideration when looking over multiple offers. I have won offers because of my buyer’s willingness to close when the seller needs to. The more accommodating you can make your offer, the more appealing it will be to the seller.”
9. Be Patient
“Keep at it!” says Parent. “It will take time to find your perfect home but don’t get discouraged. If you lose out on a home or two, it wasn’t meant to be. In most cases, my buyers end up with a better home than the ones they lost bids on. Be patient. It will happen!”
Virtual Real Estate Transaction Coordinator
From housing inventory to price appreciation to generational and regional shifts, these are the top trends that will shape, and reshape, real estate markets in 2018. Buckle up! It's going to be quite a ride.
Game-changer no. 1: Supply finally catching up with demand
After three years of a crushing shortage of homes for sale, the realtor.com economics team is predicting that the shortfall will finally ease up in the second half of 2018.
“The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall,” says Danielle Hale, chief economist for realtor.com.
That’s a potentially transformative development for many would-be buyers who've been frustrated in their search for a home that meets their needs—and their budget.
“Once we start to see inventory turn around, there is plenty of demand in the market,” Hale says.
Although for-sale housing inventory is expected to stay tight in the first quarter of the year, reaching a 4% year-over-year decline in March, if it increases as predicted by fall, that will be the first net inventory gain since 2015. Markets such as Boston, Detroit, and Nashville—all of which recently made it onto our monthly list of the nation's hottest real estate markets—may see inventory recover first.
Bullish construction is the engine that’s turning this ship around, bringing new homes to the market and creating opportunity for people to trade up into new homes.
“It’s adding inventory instead of just shuffling people around in existing homes,” Hale says.
But those itching to buy a starter home may have to be patient for a while longer.
“We expect the relief to start in the upper tiers, and it will make its way down to the lower tiers,” Hale says. Specifically, most of the initial inventory growth will be in the mid- and upper-tier price ranges, $350,000 and up.
As the market eases, home prices are expected to slow to 3.2% growth year over year nationally. But again, it’s the higher-priced homes that will be appreciating less. And even slower appreciation still means that prices will continue to rise.
“Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes,” Hale says. “It will get a bit worse before it gets better for buyers of starter and midprice homes.”
Game-changer no. 2: Millennials starting to come into their own
The housing market in 2018 will continue to present challenges for millennials—sorry, all of that student loan debt isn’t just going to disappear—but there are some bright spots on the horizon for these millions of Americans.
Millennials seem to be having more success at taking out mortgages on homes at varying prices, and not just starter homes, Hale says.
“They’re at that point where they’re seeing their incomes grow, and that will help them take on bigger mortgages,” she says. That’s because of both the overall strong economy and their own career development.
And as the largest generation in U.S. history reaches that sweet spot in their 20s to 30s when they're settling down and starting families, they're particularly motivated to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017, based on mortgage originations. That 3% uptick could translate into hundreds of thousands of additional new homes. As inventory starts to rebound in late 2018 and in years to come, first-time home buyers will likely make up an even larger share of the market.
They probably shouldn't wait too long to buy, either—mortgage rates are expected to reach 5% by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization.
Game-changer no. 3: Southern homes selling like crazy
When it comes to home sales growth, bet on Southern cities to beat the national average in 2018. We’re especially looking at you, Tulsa, OK; Little Rock, AR; Dallas; and Charlotte, NC. Those markets are expected to see 6% growth or more, compared with 2.5% nationally.
The South has been luring corporations and individuals to its balmy cities with its low costs of real estate, and living in general. The resulting strong economic growth and strong household growth, combined with an accommodating attitude toward builders, is setting the stage for an accelerating boom in home ownership, Hale says.
As soon as there are more homes to sell, these places will be selling strong.
Game-changer no. 4: Tax reform (maybe)
The Republican Party’s proposed changes to the tax system could change everything—but with both the House and Senate versions in limbo, the jury is still out on this one.
If a version of tax reform does pass with the current provisions affecting real estate, Hale says she would expect to see fewer home sales and declining home prices. However, it would be the upper price tiers that would likely be affected the most, in areas with expensive homes and high taxes, such as coastal cities, especially in California.
Virtual Real Estate Transaction Coordinator
The proliferation of services that help homebuyers and sellers complete their own real estate transactions is relatively recent, and it may have you wondering whether using a real estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go--and could end up being more costly than a realtor's commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking. Find out why you shouldn't discard the notion of hiring an agent just yet.
1. Better Access/More Convenience
A real estate agent's full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer's and seller's agent work full time as real estate agents and they know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real estate agent will track down homes that meet your criteria, get in touch with sellers' agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you're shopping for homes that are for sale by owner.
Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don't respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.
2. Negotiating Is Tricky Business
Many people don't like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true--assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn't always an easy relationship.
What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner's decorating skills and rant about how much it'll cost you to upgrade the home without insulting the owner. For all you know, the owner's late mother may have lovingly chosen the décor. Your real estate agent can convey your concerns to the sellers' agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner's feathers.
A real estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that a seller can reject a potential buyer's offer for any reason--including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real estate agent who will represent their interests without turning off potential buyers who want to niggle about the price.
3. Contracts Can Be Hard To Handle
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren't met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale--and you aren't approved for the mortgage--you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract.
An experienced real estate agent deals with the same contracts and conditions on a regular basis, and is familiar with which conditions should be used, when they can safely be removed and how to use the contract to protect you, whether you're buying or selling your home.
4. Real Estate Agents Can't Lie
Well, OK, actually they can. But because they are licensed professionals there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real estate agent under an agency agreement, (i.e., a conventional, full-service commission agreement in which the agent agrees to represent you), your agent will be bound by common law (in most states) to a fiduciary relationship. In other words, the agent is bound by license law to act in their clients' best interest (not his or her own).
In addition, most realtors rely on referrals and repeat business to build the kind of clientèle base they'll need to survive in the business. This means that doing what's best for their clients should be as important to them as any individual sale.
Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent's broker, professional association (such as the National Association Of Realtors) or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties.
When a buyer and seller work together directly, they can (and should) seek legal counsel, but because each is expected to act in his or her best interest, there isn't much you can do if you find out later that you've been duped about multiple offers or the home's condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent's commissions by the time the transaction is complete.
5. Not Everyone Can Save Money
Many people eschew using a real estate agent to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets the keep the percentage of the home's sale price that might otherwise be paid to the real estate agent.
However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can't both save the commission.
The Bottom Line
While there are certainly people who are qualified to sell their own homes, taking a quick look at the long list of frequently asked questions on most “for sale by owner” websites suggests the process isn't as simple as many people assume. And when you get into a difficult situation, it can really pay to have a professional on your side.
Transaction Coordinator Company