2004 January 25 | Wheatworks Blog: Financial Matters

Archive for 25th January 2004

Choosing a Real Estate Agent

1/25/2004, 10:09 pm

If you drive a car, you probably fill your gas tank a couple times a month. And most of us buy groceries fairly frequently.

However, most of us buy very few homes.

While food and gas prices rise more than they fall, their costs are insignificant compared to the price of a new home. Buying a home is an important, anxiety-filled transaction.

Because buying a home involves so much money, it’s important to do each part of it well.

Generally, you must be able to afford (and continue to afford) the purchase, decide what your family needs and wants, find a home to buy, obtain a home loan, close the deal, move in and begin making your regular payments.

While you may buy your home directly from the home’s current owner (for sale by owner or FSBO), the chances are your real estate transaction will involve a real estate agent. Most people who sell their home do so using the services of a real estate agent.

In fact, many people actually initiate their search for a new home by calling a real estate agent. If you start your search like most people, here are some ways to do your homework before you call:

1. Begin your search for a real estate agent by asking your parents, friends, colleagues for recommendations. Do you know someone who recently bought a home and feels good about the process? Ask about the agent.

2. Always remember on which side of the table an agent sits … the home seller’s side. Even if you call the agent’s office, meet and explain what you’re looking for and look at homes she or he shows you, the agent is working for the home seller. (If you want an agent who is required to work on your side, look for an exclusive buyer’s agent.)

3. Visit a couple of local real estate offices. Explain that you’re preparing to look for a home and ask questions. “I’m not ready to buy right now, but I’d like to ask a few questions about how one buys a home. What can I do to prepare to buy a home?”

During your visit ask for brochures, booklets and other literature. Gather all the information you can. If these first visits are only to evaluate the helpfulness of different real estate offices, it is important to clearly explain that you’re only preparing to buy a home. It’s important to be fair and explain that you’re not yet ready to look. You’re not “serious”. You’ll save yourself and the real estate agent time and money.

4. Review the agent’s online resources. Many real estate agents or their offices have online resources available for you to explore. Access them! Most real estate web sites will have information about houses that are currently for sale, the purchase process, glossaries of real estate terms and other helpful information for home buyers. Some even have financial calculators to help you begin your financial figuring.

Note: Wheatworks’ Real Estate Calculator Suite is a WindowsÂ®-based collection of real estate calculators that can help you with your financial calculations.

Real estate blogs are another type of online resource that a few real estate agents and firms have started using to provide information to home buyers. (If you’re reading this, you know what a blog is; a web log.)

One excellent example of a real estate blog is Southern California Real Estate Blog. If you read the blog, you’ll notice that Fran and Rowena post new articles every other day or so and provide a broad range of information about the southern California real estate market. The blog also has links to their web sites which are full of helpful real estate information.

In your search for a real estate agent, evaluate their online resources and consider letting this be a factor in your selection.

5. Finally, read the real estate classifieds in the local newspaper. You’ll find homes for sale with pictures and prices, articles written by local or national experts, and probably a few maps of the area. And remember the phrase, “asking price”. Think of the price you see in the paper as the starting point for negotiation. Though it depends on market conditions, it’s not unusual for one to purchase a home for less than the asking price published in the classifieds.

Because buying a home is an expensive and uncommon transaction, you will want to choose the people who assist you (real estate agent, mortgage broker/banker, attorney, appraiser, etc.). The specific research you do will be different in each instance, but the fundamental point is the same. Do your homework!

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