This list is not intended to flatter myself as some sort of unassailable expert in matters of real estate. I’ve been in the business for five years, have been witness to the tail end of the price boom and now the current bust so I thought I would throw out a bit of advice regarding some of the things I have observed and learned during this time.
In no particular order.
1.)Whenever you read, hear, or see an ad produced by the NAR (National Association of Realtors), ignore it and consider it hostile to your best interests. The NAR is a lobbying organisation for the real estate industry. Need I say more?
2.)If you are a buyer, always use the services of a buyers agent. When reading comments on various blogs and publications I am constantly amazed at the number of buyers who state emphatically that they refuse to pay three percent of the purchase price for someone to basically help them fill out the paperwork for a home they have decided to buy. Listen carefully. THE BUYER NEVER PAYS ANY COMMISSION! All commission proceeds come from the sellers side of a transaction. As the listing agent is bound by law to represent the best interests of the seller, why not use an agent who is bound by law to represent yours. Won’t cost ya nothin’.
3.)Prior to the closing of any transaction, read carefully with your agent the HUD statement, that bundle of paperwork that details what you are buying and where all proceeds of the sale are to be directed, well before you sit down at the escrow office to sign. Mistakes are often made and once all parties sign there is little or no recourse. As an example, when I purchased my place six years ago, it was missed by the lender and title company that the sale represented four separate one acre parcels. The sale went through with only the parcel that the house sat on being attached to the mortgage, essentially awarding me the other three free and clear. Still wondering why our lending institutions are going down the crapper? Not me.
4.) If while interviewing an agent in this market, you ask how business is and they say “Great!” or anything similar, scratch them off the list. They are liars.
5.) If while interviewing an agent in this market, you ask how business is and they say “Awful!” or anything similar, scratch them off the list. They are desperate and will do or say anything to get your dollars into their pockets.
6.)Don’t be afraid to make lowball offers in this market. If your agent is reticent to make a low offer on your behalf in fear that they might offend the seller or their agent, they are more interested in maintaining standing with their fellow agents than in getting you the best deal. Agents are legally obligated to present all offers to the seller. If they balk, insist. If they still resist, find another agent.
7.)Use a full service brokerage when listing a home. There are any number of discount brokerages out there who for a set fee rather than a percentage of the sales price will place your home on the MLS. Be aware that this is all that they will do. The job of an agent at a full service brokerage is to use their experience and training to catch anything that is not in their clients best interest as a listing moves from the marketing process and then through escrow. In nine out of ten cases nothing will go wrong. This leads many to think that nothing can go wrong. I have a former client who is very computer savvy and elected to market her home herself through a website she developed. She has listed it through a discount brokerage as a waterfront property. It has no deeded frontage, only the right to use the waterfront which was deeded to the local municipality in order to gain permitting for the home when built. If this fact is not disclosed at some point in contract negotiations or God forbid until after closing, flocks of lawyers will descend like buzzards at great expense to both seller and buyer. Pay a little more for someone else’s experience. Chances are nothing will go wrong during the course of a transaction but when they do go wrong it can be very expensive. There is no such thing as an innocent or small mistake in a real estate contract.
8.) This may seem obvious but don’t sell your home in this market unless you really need to. At least once a month, even now, I am approached by a client who thinks that they would like to “test the waters” and see what kind of price their home might bring. I can only conclude that they either cannot read the newspapers or that they refuse to.
9.)If you’re buying, get pre-approved through a reputable lender. Not pre-qualified but a solid pre-approval with a commitment in writing stating down payment, interest rate, and how long the approval is good for. If the commitment is only good for thirty days, get another if this time line passes while you are searching for a home. This is a good idea in any market but particularly now with lending qualifications changing on a seemingly daily basis. Many transactions are falling apart during the financing contingency period these days. Don’t waste everybody’s time, most importantly yours, by stringing everybody along for a month only to have the financing fall through at the last minute.
10.)The last and most important bit of advice that I can offer is that unless you are an investor, don’t by a house for investment purposes. The past year should have taught us all a lesson in this regard. A home is a different thing than a stock certificate. To purchase or not purchase is much more of an emotional decision, or at least it should be. Save the cold hard rationality for determining whether you can purchase, not whether you should. Buy something that you like. You might be stuck with it for awhile.