Buying? understand Buyer Agency
Buying your new home, I recommend start interviewing agents for the job. Selecting a Buyer’s Agent in my opinion is the most major step to finding a new home. Do you want to start scheduling appointments to tour homes before you know if they fit the bill? What if you found the perfect home and not the perfect agent When you’re searching for a home on the national real estate public platforms, and click more information. You will receive a phone call from an agent that is paying dearly for your click. You will find a realtor that way, the question is, is this agent looking after YOUR best interest or theirs. Do you know anything about them? How do they negotiate? Have you reviewed their contract in advance? What is their selling style? Do you know them well enough to trust them? That’s why I’ve taken the next step so you can know more about us and how we “Impact Real Estate Differently”. Before you can choose your agent I recommend understand Buyers Agency, I’ve attached a PDF for you… REVIEW AGENCY
Why Choose Us?
Our business philosophy doesn’t include a one size fits all when it comes to working with our clients. Our goal to customize the process each step of the way based on you and your families needs. Issues are going to come up along the way, some we can pick out right in the beginning and move on before we get in to deep. Others, need a little more work and we are excellent problem solvers. Our Team has an amazing work ethics, and goes above and beyond. In our opinion, communication is key. Not only our communication, we need to have discussions and understandings how we are going to communicate with other agents and their sellers. How we communicate with them can make the difference between success or failure. I have outlined each step of the process for you and you can decide if we need to take the next step. I would recommend you stop here and if you haven’t visited the Start Here tab, you can come back and finish this page. It will make more sense how the systems works and more insight on how we work. If you left, welcome back, let’s continue.
IDX PUzzle- How to Search for your New HOme
This has been the number one complaint with buyers. The information on the public websites are not up to date, search fields aren’t specific, or not correct. Overall the process is very frustrating. So, what is IDX? IDX is an acronym for Internet Data Exchange, and brokers give permission to share listing with other brokers. Agent can then share the information on their websites. The brokers also share listings on national public platforms as well. Here is the problem, once they allowed listings to go national they do not have control over how that listing information is shared with the public. They can’t enforce the same rules and ethics they can with other Broker’s or Real Estate Agents. They design their sites as a paid platform to agents not home search platforms for you. The key is working with an agent that has control of the information, and I know very few do. The good news, we do!
How Do We Use IDX Differently?
We are a full Web Development and Production Company that designs and codes the data in real-time that makes sense. We use a developers version of IDX to power your home search so we have control over the data. Each field in the advance search was carefully selected based on my years of working with Buyers like yourself. You can search better than a Realtor. You have more search options than we do on our Multiple Listing System. You see, I was as frustrated as you are in searching for that perfect home for my clients. So, what do I do? Take several months and become a WordPress Guru, learn coding and design my website with custom IDX home searches. I now have extensive training in Web Development and coding, and still learning. Every advance field, link, widget has been custom designed to create a highest level of success for you finding your perfect home. You can’t call the National Public Platforms or most brokers and have them create a custom search for you….I can, so call me!
- Advance Search Link – additional filter for New listing or Open Houses
- Interactive Map Search
- Golf Frontage
- City & County Search
While shopping for a home is exciting, you need to start the process at the lenders office and not an open house or online. First, you can shop around various lenders and don’t give them your social security number to pull credit. Right now, you are shopping for the best service and price. Once, you selected a lender and you’re ready to move forward toward the pre-approval, than give them all your information. The questions you can ask up front before you select your lender; interest rates, application fee, underwriting fee, any other bank fees, closing cost, will the interest rate go up if I roll in closing cost, free closing cost, in-house underwriting (extremely important) and a range of mortgage programs. I’m in the process of doing extensive interview on 3 lenders I have worked with in the past to help you get started in the process, Union Home Mortgage– Troy Rabidoux, Summit Funding – Brenda Brosnan and St. James Mortgage. Lastly , sellers expect to have a pre-approval letter not a pre- qualification letter. This will make your negotiations stronger, and if you are in a bidding war situation whether you walk away as the winner or the looser.
What is the difference between Pre-Qualification and Pre-approval?
Without proper preparation, many buyers get lulled into the mistaken notion based on what they verbally tell the loan officer for that quick Pre-Qualification. Since the mortgage melt down, there are strict underwriting rules the lender needs to satisfy before you can close on your new home. The only way you know you won’t have any hiccups along the way with your approval, send them all the documentation up front. For detailed information about the difference between Pre-Qual and Pre-Approval, check out Brenda’s Video for details.
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Gosh! Working through the negotiation strategies sometimes feels like you’re in a frustration dual vs logically working through the process based. The struggle between facts and emotions is frustrating if you don’t have a plan. Creating the Purchase Agreement is only the 1st step in the negotiating process. Once the all parties sign the agreement, there are a few more steps that may come in to play. One is the possibility negotiations after the home inspection, the other could be the appraisal.
Now that your found your perfect home, what’s next?
The next phase would be Negotiate Price and Terms. Next is the Inspection, and negotiate any issue slowly and methodically. Okay, now we get the Lender involved and order the appraisal. What if something goes wrong along the way? My natural problem-solving skills kick in. If there is an issue with an appraisal, I will have a pretty good idea before we even right the offer. This also would be discussed with the Seller in advance, and if it was lower than your offer we would already have a plan in place. If a Seller was not interested in lower the price to Appraised Value we would have that discussion and a plan before we even moved forward with the inspection. If there was an issue with the inspection, I recommend a certified inspector that takes pictures of the problem and incorporates it in the report. It’s a hard for a Seller to dispute a fact; picture next to it a problem and a solution. You can also decide based on the inspection not to move forward with the purchase. I don’t want you to spend money on a house you can’t Close on. Every problem have potential problem will be address on facts. We no drama sometimes enters the negotiations process based on personalities. When you hire an excellent inspection company with amazing credentials and reports, facts are facts and they are hard to dispute. The inspector I have on my team is a master in his profession and will recommend specialist for more inspections. You can visit Weatherstone Website for your review, or choose your own inspector. Just make sure their reports have pictures, problem and solutions next to each issue. The most important key is, take the time to work through the process one step at a time. Review all information and do your “Due Diligence”. Everything is in writing every step of the way. I have detailed tips for Buying…
Balancing Both Relationship and Substance
It’s important to understand to have a favorable outcome in your negotiation process, relationship and substance occur simultaneously. Let’s say we start of the negotiations with a series of offers and counter offers. Eventually this process results in an agreement and agrees on price and terms. The terms of the agreement, is the substance of the negotiation process. During the process of defining the terms of the agreement, buyer and sellers develop a feeling about one another. This feeling can either be favorable or unfavorable. These feelings everyone is having towards the transaction is the relationship. Is it a good relationship, one that needs work or did everyone get off on the wrong foot?
Preparing Yourself to Negotiate
To overcome “Form Phobia”, I recommend before you sign a buyer agency contract review the real estate documents in advance and ask questions right away. Don’t wait until you have found a home you want to buy. You want to feel comfortable with the legal documents and an understanding what your signing and why. This will help you keep a clear sense of reality, and not feel overwhelmed with the process. The goal is knowing you are making the best decision on moving forward base on facts. Determining your flexibility will help you stay focus on the goal you are trying to meet.
Know up front the Negotiating Guidelines that your Realtor follows
Make sure you discuss and have a plan about adequate preparations. An agent should spend at least the same amount of time preparing the documents as it does for you to check them. I recommend doing this in advance, like a trial run if you will, so you are comfortable with the process. This will also define your communication process with your agent, and prospective seller. To have an effective negotiation will depend upon you and the seller maintaining effective communications. If you don’t prepare in advance you are worrying about substance and neglecting the relationship.
Adding Emotions to the Negotiation Process
Yes, everyone does respond differently to the negotiation process. It’s important to respond logically based on facts and not react emotionally. I find this is prevalent when we start the negotiation after the home inspection. That’s why I recommend having excellent reports about issues that have come up during the inspection. Without an excellent report and communicating the fact to the seller can make or break the sale moving forward. My job as your agent is to put in the best situation when it comes to negotiation strategies. I constantly read to improve my negotiation strategies and found this article in the Huntington Post an interesting read. “10 Tips for Strategically Negotiate Real Estate”
What can you do if you find yourself in this situation? If you plan for it up front you won’t be surprised. I will share with you my view points on the subject, and how I handle the situation. When you are working through your interview process for an agent, find out how they would handle the situation. It doesn’t hurt to ask a few “What if’s scenarios” as part of the interview process, and working towards building trust. You may find you don’t want to work with them,and you should know that up front. The last thing you want to do you put in the time, find your perfect home, put in the offer, and loose it based on how the agent negotiated or on recommendations. Usually I find, the breakdown between buyer and agent was over “TRUST”.
We need to check , “what is the home worth? “
Most agent will start with the comps, what other home sold for in the area and leave it at that. Yes, this is important and we will check these numbers and set them aside for the next set of numbers. Let’s take a look at the property through the eyes of the Appraiser, what condition rating could they give the home about value, what updates this one has that the others didn’t have, and can we put a dollar value on those improvements. I call this Price Driven Vs. Value Driven Approach and have more details on the subject in the Buyers menu including appraisal changes. Next I pull public records and check what is the city’s opinion of value. Lastly will look at our Market Intelligence Report, our crystal ball about home values. We will check all the documents regarding price and value, figure in your mortgage approval and see if there is any money to play with. There are two ways we can write the offer NOT contingent on appraisal (you pay the difference) or contingent on appraisal (opens negotiations with the seller about price). At the end of the day and after reviewing all the information about price, “What Is The Home Worth To You”?
Ask the Listing Agent Questions?
Maybe the seller needs more time after the closing and that is more important them than the highest bid. You can write the seller a letter, we don’t know who they are and maybe to them finding the perfect family is more important than just the money. Don’t assume the price is the end-all-be-all to the sellers. Now for the important emotional questions, is this house a want or need? Does this house have EVERYTHING you are looking for? Does it fit your budget if you go up in price? How is it going to make you feel living there, and how are you going to feel if you don’t. Then make your offer knowing you have done your BEST!
What a price the seller is willing to sell and a buyer is willing to pay. The question come in what are you willing to pay and how are you going to decide that price. For us, we put in a lot of time and effort gathering the facts to check. We start like most agents and look at what other homes sold for, this is the Price Driven Approach. Next we need to filter in condition and improvements. We review the information through the eyes of an appraiser, and start with what condition rating the appraiser could give the property. Next, review the improvements that the other properties that sold didn’t have. Depending on those improvements will it add value, and this is the Value Driven Approach. I know this is a lot of homework, and a lot to take in. The sooner we start this process before you look at homes, the sooner you will have a better understanding about value.
Other Sources to Determine Value
Most cities, or townships use a real estate service that can give valuations using mathematical modelling of comparable properties and can calculate the property’s value and the range of homes in the development. This type of modeling, AVM on the public records, and this is our 3rd source. Don’t confuse AVM with SEV, which is State equalized Value or assessed value for property taxes, it’s different. Lastly, we will check the Market Intelligence report and this report also evaluates homes based on a mathematical modeling of sold homes. If you are in bidding war, you don’t need to trust my recommendation, you will understand market values. Doing the work up front puts you in an excellent place to move forward on an offer, and puts you at ease knowing the facts. If you find a home and looking at all the information and you feel a home is on the market to high and want to make an offer of X, we will share those report with the seller and how you came up with that number. We don’t want to insult the seller, and at the same time it’s a business decision. I don’t know about you, I feel better about my decisions when I know I fully understand the process,and the numbers. This isn’t the fun part of buying a home and it’s the most important.
Not all home warranties are created equal and most Real Estate Brokerage firm have a company they recommend their agents use and not always are they the best. You need to check the home warranty information if the seller is offering a home warranty up front. Call the home warranty company and ask question. Some have a the most they pay out let’s say a broken water heater. Most important question, do you have a pre-existing or defect clause. I’ve heard to many stories when a home warranty company denies a claim based on age. If you don’t agree with the company they’re offering you ask for one you feel the most comfortable with. There are some good ones out there that will actually pay on a claims and without a pre-existing clause.
This whole process can be frustrating with emotion and stress if it’s not done right. You want to make sure you are substantially reducing your risk for your large investment in your new home. This is the EMOTIONAL phase of the buying process. The inspector’s job is to find deficiencies with the home and put them into proper perspective for the Buyer (and give the home credit where credit’s due). The Seller, however, often times takes deficiencies personally; this is their home, after all, and how dare you point out her faults! The biggest problem I found in this process was the communication between EVERYBODY. You can choose any inspector your comfortable with, from my perspective here lies the problem. When there is an issue that you as the buyer feels the seller should fix prior to your closing date or compensate you for doing the work, communicating exactly what the problem are could cause a problem. In order to fight on your behalf based on facts, I need an excellent report and simple to read. If you want me to protect your interest than I must have a report that displays a picture showing you and the seller the problem, explanation what caused the problem and recommendation on how to fix it. When I share the report and the inspection addendum with the sellers in this format I usually don’t have an issues, and in most cases the seller wasn’t aware of it. It is a must to have the picture and problem in the same paragraph, it is hard for the seller to dispute the issue, if they can see it. If you send in a report with no proof to substantiate, you can see how it can fall apart quickly. When you search for your home inspector, check their qualification, more importantly review the reports in advance. This is the how future communication and negotiations will take place with the seller, and if the roles were reversed, wouldn’t you want proof. I have a couple of great reports for you review as examples.
Sample #1 and Sample #2
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