By Terry Roberts
The Home Loan Hub
Published Feb. 8, 2023 at 12:03pm
After spending nearly 20,000 hours of my life over the last decade meeting with potential homebuyers across the nation, I have been asked a lot of questions about homeownership. These are the 8 most common questions that I have been asked. This article will only focus on the sixth question, as this is an article series, answering each of the 8 questions individually with as much thought and experience as I could recall and also with respect to your time.
How will I know if I’m ready to own a home?
Is now the time to buy?
Is my credit score good enough?
How much does it cost?
Can I afford it?
Do I have to have a real estate agent?
What is the best financing option for me?
How do I get started?
This is a lot to educate yourself on and consider, but it’s important to do so because your home purchase may be the single largest expense of your life.
Real estate agents exist to ensure that the homebuyer or home seller is represented in the real estate transaction as effectively as possible. Most people buying or selling real estate might experience the process once or twice in a lifetime. Given that there are many critical factors in a real estate purchase or sale transaction that can be costly, it's wise to consider leveraging the expertise of a local and experienced real estate agent.
While real estate agents work for a commission, the real estate agents who truly put in their all to represent their clients are worth every penny, every time. Even better, when buying real estate, it's common for the seller to pay the realtor commission fees. While the real estate agent's goal is to help the buyer buy or the seller sell, there is an in-depth process that the reputable agents exercise to ensure that their clients get the best service at the best price and at the right time.
A buyer's agent (real estate agent who represents someone who is purchasing real estate) typically has access to a Multiple Listing Service (MLS). High-performing agents differentiate themselves by getting to know their clients, their clients' goals, family, school, work, life habits. They do this to build relationship, but they also do this to try and understand what home characteristics are required in order to best meet the needs and desires of their clients, i.e. square footage, location, school districts, neighborhoods, floorplan, yard size, proximity to employers, etc... Additionally, buyer's agents leverage access that they have to home sale records to identify comparable home sales as a way to help their client make the best offer possible. Along with drafting offer letters and establishing a relationship with their clients, buyers agents usually order home inspections, communicate with title companies, listing agents and lenders.
A listing agent (real estate agent who represents someone who is selling real estate) also has access to the MLS, but will leverage platforms like this to verify what comparable homes have recently sold for so they can list the home at a price that is near market value but still high enough to get the sellers the sale price that they demand. Similar to the buyer's agent, sellers agents work with the sellers to prepare the home to list for sale, host open houses, work with title and inspection companies as well as collaborate with the buyer's agent once under contract.
Not all real estate agents are equal, however. Agents can be compared by communication, experience, relational fit, community reputation, and work ethic.
Communication
The homebuying process can be difficult and long. Things change from day to day and you expect your agent to be available! Excellent real estate agents are on call just about 24/7. Nights, weekends, weeknights, whenever you need them, they will either answer your call or they will be back in touch with you as absolutely soon as possible. Some agents, not so much. Understand what your requirements are of an agent before signing an agency agreement with them and interview 2-3 agents before committing.
Experience
Since 2020, the real estate industry has realized many new real estate agents, given the surge in demand for homes. As a result, there are many newer agents in the industry with less experience. Some of those agents are motivated and will grind for you. Other agents (experienced or not) may not be as motivated to work hard to help you achieve your goals in the timeline that you demand. While a significant level of real estate experience isn't required, having a motivated agent who is constantly willing and able to go the extra mile for you is imperative. Usually, having a more experienced agent who is also motivate to do just about whatever it takes to help you achieve your goals will get you the most bang for your buck.
Relational Fit
Some people simply don't get along with one another for various reasons. Looking for a good fit with your agent will help ensure that you work together well through the process of the home search, communication, and it will be easier to establish trust with one another. Checking these boxes will help make your overall experience in the homebuying or home selling process much more enjoyable.
Community Reputation
Look for agents who are local because they will know and understand the market better; good enough to relay their knowledge to you in a way that is easy to comprehend. Also, look for an agent who is involved with their community and gives back. This could be serving at a local non-profit, hosting community events, recurring lunch & learns, PTA, HOA, etc... This is a sign that the agent simply isn't working to make money, but they also care about their community. Benefits of working with agents who are well connected within their community is their network. Knowing who the reliable home inspection companies are, home repair companies, title companies, insurance agents, local lenders, the list continues.
Work Ethic
This is a differentiator between an average real estate agent and an outstanding real estate agent. Agents with motivation, determination, and willingness to go the extra mile for their clients thrive and they have a community behind them because of the reputation they've built by working so hard for their people.
Do some research on the agents that you're considering. Ask around. If they're great agents, you'll likely receive affirmation from various community members, online research, and they will answer their phone when you call them.
It is not a requirement to have a real estate agent. However, for most people who are buying or selling who have little or no experience with facilitating real estate transactions, it may be wise to invest in hiring a real estate agent professional to ensure that all bases are covered (legally, ethically, and morally). With consideration given to this information, in most cases, having a reputable real estate agent is necessary.
The answer to question #7: What is the best financing option for me?
Terry Roberts is a U.S. Marine Corps Veteran and specializes in residential mortgages, including new construction, conventional, FHA, and VA home loans. He has helped more than 10,000 clients start the homebuying process across America.
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