Seven Main Roles Of Your Real Estate Agent
A Buyer’s Real Estate Agent:
Qualifications are important. However, finding a solid, professional agent means getting beyond the resume, and into what makes an agent effective. Use the following questions as your starting point in hiring your licensed, professional real estate agent:
1. Request E-Mail Listings & Updates
Most buyers don’t know that the information that they are looking at online may be dated for many different reasons. To avoid wasting your time, ask us to register your e-mail address so you can receive daily MLS changes of reduced prices and new listings. This is one way to gain access to the same data agents receive.
2. Tour Price Reductions
If you’re like most buyers, you will want to offer less than asking price. It’s just human nature. But if you plan to offer less then you’ll probably be unsuccessful at getting that type of offer accepted if the home was recently listed. Choose homes that have had recent price reductions or have been on the market for at least 30 days or more. These sellers are more likely to be receptive to lower offers.
3. Obtain Comparable Sales
When you find a home you want to buy, we will print out a list of similar homes in the same neighborhood over the last few months sorted by:
The list should contain the following specifics:
Compare this data with online home value sites such as Zillow and RealEstateABC, and you’ll see first-hand why the data that we give you will be more accurate.
4. Ask For An Allowance Or Credit
If you find the perfect home but you don’t like the color or condition of the carpet, for example, ask the seller to give you a carpeting allowance in your offer. Check with your lender before you write the offer to find out how to word a credit clause that is acceptable to the lender. You can ask for more than it will cost to repair or replace an item to cover your “hassle” factor. Many lenders let borrowers receive up to 6% of the sales price as a cash credit against closing costs.
5. Reduce Your Closing Costs
Depending on your local area, there may be fees associated with closing that are customarily paid by the buyer such as title insurance, property taxes, recording fees or escrow. In a buyers’ market, you can ask the seller to pay these costs. Typically, they can add up to one or two percent of the sales price and are often paid out-of-pocket by buyers. Ask us if these fees are negotiable. Then ask the seller to pay them.
6. Renegotiate After Home Inspections
All buyers should obtain a home inspection. Most contracts give buyers the right to cancel a contract if the home inspection reveals repairs or defects that are unacceptable to a buyer. However, if the repairs are minor, you might want to renegotiate the sales price or ask for a credit against your closing costs. Caution: don’t ask for a price reduction if the repairs were evident when you first saw the home or the seller might not be willing to negotiate with you.
7. Request Extras
Sellers realize that in buyers’ markets, often they have to give a little something extra to the buyers to entice a sale. Don’t be afraid to ask for a home warranty plan that covers you in the event an appliance breaks down or the plumbing or heating malfunctions. Normally these plans protect you for one full year from the date of closing.
8. Ask For An Item You Don’t Want
Did you like the sellers’ dining room table? China cabinet? Fish tank? Ask for it in your offer and use it as a negotiating tool. Often this draws the sellers’ thoughts away from price and directs those thoughts toward the personal property. If the listing stated the washer and dryer are not included in the sales price, ask for them. If the sellers balk, then tell us to say, “OK, if we leave the washer & dryer, are you then ready to sign the offer?”
9. Shorten Acceptance Period
There often is no reason to give a seller more than 24 hours to make a decision about your offer. There are a lot more homes on the market and you deserve a fast answer.
Your lender decides what you can borrow but you decide what you can afford.
Lenders are careful, but they make qualification decisions based on averages and formulas. They won’t understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected, for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.
Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn’t be more than 28 percent of the buyer’s gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn’t be more than 36 percent. (In Canada lenders apply similar formulas to determine how much a buyer can afford. The Gross Debt Service ratio, or GDS, is not to exceed 32 percent of the buyer’s gross monthly income, and the Total Debt Service ratio, or TDS, is not to exceed 40 percent of the buyer’s total debt load.) As home prices have risen, some lenders have responded by stretching these ratios to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.
Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.
Please use this excellent handbook for your reference to guide you through the home buying process!