A real estate agent guides buyers and sellers through the real estate process. There are things a real estate agent should do for you. Some agents specializes in buyers and some focus on sellers. I choose to work with Buyers and Sellers so I can be a well rounded agent to see real estate from both perspectives. As a listing agent (working with sellers) it really shocks me how little some real estate agents do for their buyers.
Here are some do’s and don’ts for a buyer’s real estate agent.
I had a listing in Sunrise, Florida that provided many examples where real estate agents could have done better.
The house had 4 bedrooms, 2.5 baths with a 2 car garage in a gated community with no pool. A recent sale closed at $415,000 in similar condition, with a pool. So, we listed the property at $399,000 since it did not have a pool.
Some people think that you should price your property high and then come down in price. Yet, I would argue that if you price closer to market value, you will get more attention. This would lead to more interested buyers, resulting in offers. The different between pricing your listing high and pricing it at market value, is that the high listing will have to come down and the other property should not have to come down much since it is priced correctly.
I had four offers come in within the first week.
- $380,000 but didn’t have their pre approval yet
- $380,000 contingent on the sale of their house, but would pay cash if their house sold
- $370,000 FHA
- $360,000 financed, with only $1000 deposit.
To be fair, we asked all of the offers to come up with their highest and best within 48 hours.
Let’s go through each offer’s situation to see where the issues were.
I asked the agent why they didn’t have a pre approval yet and he said they were working on it. They did come up to $385,000 but since they didn’t have their pre approval in time, they missed the deal. Do not start shopping for real estate until you get preapproved. Do not work with an agent that doesn’t advise you to get one before showing you homes. (If an agent shows you properties before you get preapproved, that means that they just want to get your business. Whereas an agent who advises you to get a preapproval prior to seeing properties, is looking out for your best interests.)
- This agent was very hard to get ahold of and while I emailed all the agents in advance that they had 2 days to respond, he didn’t check his email or phone often. So, hours before the deadline, he called me and said he would send me an updated offer at $393,000. He did get it to me at 10pm at night, but if had waited any longer he could have missed the deadline. Do not work with an agent who has poor communication or followup.
- This buyer was looking up to $350,000, but since they loved this house they stretched it to make an offer at $370,000. The buyer’s agent tried to guilt me into it by telling me how much they wanted the house. They were only looking up to $350,000, but then they saw this house. They can’t afford to pay more than $370,000, but they really love the house. Do not look for properties more than you can afford. Do not work with an agent who encourages you to look at properties out of your price range. This goes back to the importance of a preapproval. A preapproval is meant to be a guide at looking at homes. A buyer should know what they can afford, what they can qualify and what they want to pay. Sometimes you don’t want to pay what you can afford. Your mortgage lender should go through all of your expenses of buying a home before you start shopping, so you can shop wisely. If you look more than your budget you are going to find two problems. One, higher offers will beat you out often. Two, you will get disillusioned on quality, since you will want more than you can afford.
- The agent apologized for his buyers. He admitted that he could not control them and they keep losing properties since they are looking out of their budget. Do not work with an agent who does not guide you. With him letting the buyers do what they want, everyone is wasting their time and energy.
And the worst part that all of them had in common? None of them looked at the comparables. I asked where they came up with their offers and they gave reasons why the buyer wanted to pay that. A good offer should come with an explanation including recent sales and how they arrived at that offer number. Do not work with an agent who doesn’t do a market analysis for the property you are considering.
To sum it up, what are some good qualities you look for in a real estate agent?
- An agent should ask to see your proof of funds or pre approval before showing you properties. They should have a list of a few lenders that they recommend to offer as you shop.
- Your agent should have reasonable communication times. If they are not getting back to you on a normal basis, how well will they do in a negotiation?
- You need a real estate who gives you the tough love you need. You need an agent who shows you properties in your budget and helps you make reasonable offers.
- An agent is there to help you analyze a property, so they should be offering you background research and comparables.