Be a Good Homebuyer 101

Be a Good Homebuyer 101

By Julie Sullivan

from_our_columnistsIn today’s housing market, where buyers are scrambling for space, and sellers are entertaining multiple offers–all above the asking price–it pays to be a good homebuyer. Real estate agents are typically juggling a dozen clients at once, and what makes them happiest (besides a vacation) is clients willing to help themselves. Want to be an agent’s dream client who earns the extra effort in an insanely competitive market? According to leading real estate agents, the following phrases quickly trigger a clenched jaw and should be avoided in the interest of securing their help in finding your dream home.

“I want you to find me a house.”
The key to the buyer/agent relationship is that the agent isn’t finding you a house. The agent’s role is to negotiate the sale. While agents are happy to attend open houses with customers, they can’t possibly look at every available home. Searching, therefore, becomes the buyer’s job. Buyers must be willing to shop around and exert themselves or they risk alienating the person they need to close the deal. Kathrina Verzosa of LaSalle Properties in the San Francisco Bay Area had clients who refused to put any effort into their search. “Clients need to be proactive,” she says. “They can’t expect their agent to do all the legwork.”

“We want a place with two bedrooms and a nice kitchen.”
Before sitting down with an agent, it’s important to know what you are looking for in detail, and that means more than just how many bedrooms. Do you need a lot of light for your houseplants? Would you prefer an attached two-car garage so you won’t get wet bringing in the groceries on a rainy day? How important is location? Verzosa likes to hand couples separate pieces of paper and have them list what they’re looking for in a new home so they can see how their responses differ. Clearly, no house can have everything, so buyers need to identify their specific requirements before meeting with their agent (and then be prepared to be flexible–see “Extra Credit” section below).

“You are the only agent we’ve spoken with.”
While it may seem flattering to tell an agent that he or she is the only agent with whom you’ve chosen to work, no professional is going to be insulted if you choose to shop around. In fact, many agents will encourage you to meet a few agents and find one that suits your style. This means asking friends for recommendations and interviewing possible candidates. “Try to have some things in common. That makes the journey much easier,” says Elliott Jenkins of TRI Coldwell Banker in San Francisco. Most important: find someone you respect and with whom you can build a rapport.

“This isn’t worth what it costs.”
“It may not be worth it to you, but it is to someone else,” says Verzosa. “Value is subjective.” While it is true that you may be able to get a nicer rental apartment for $2000 a month than the fixer-upper that will cost the same per month in mortgage, the difference is that you’ll own the property. Many agents predict that the already booming housing market will continue to boom, and that the prices being paid for homes today will seem very reasonable over the next five years. Financials, however, are frequently what prompts first-time house hunters to opt for renting.

“Let’s drop all contingencies.”
Sweetening an offer by dropping contingencies isn’t a new tact in the real estate game, but it makes agents leery. Not covering yourself for a problem that might erupt during an inspection, for a loan that falls through when the lending bank appraisal is lower than the offer price, or for failing to sell your current home could land you in serious financial jeopardy. While a number of winning bids are submitted contingency-free, the consequences of paying liquidation damages in case of a default may not be worth the risk.

“What’s escrow?”
Most agents know that instructing clients on the buying process is part of their job, but it doesn’t hurt for clients to learn the basics on their own. Many local credit and real estate organizations offer homebuyer education classes, and some agents offer workshops both privately and within their agency. There are also many books on the subject–such as Homebuying for Dummies–that outline the process and introduce readers to professional Realtor jargon.

EXTRA CREDIT: The following are phrases that will earn you bonus points with any agent:

“We’ve already been preapproved for a loan.”
Prequalifying is nice, but preapproval is better. Although no loan is guaranteed until the money is in your hands, agents like to see that their clients have taken the financial initiative and have a clear idea of what they have to spend.

“I have a question about” or “I’m a little afraid of this process.”
For many people, buying a home will be the most expensive purchase in their lifetime, a process that often requires professional guidance. “There’s nothing wrong with that,” says Jenkins, who has been advising beginning house hunters for 28 years. Most agents respect clients who are willing to discuss their concerns. Not only does this show trust in the agent, but it also opens the lines of communication, allowing the agent to respond to–and hopefully resolve–your issues.

“We’re flexible.”
Perhaps the most appealing and necessary trait in a good homebuyer is the ability to roll with the punches. Clients may be forced to give up their ideal in favor of something more realistic. They may also bid on several homes before having an offer accepted. It’s critical that buyers don’t respond to a necessary change or a rejected bid as a personal blow. While some agents say that it’s the “optimistic fool” who wins the house in a multiple bid situation, Verzosa has a different message for her outbidded clients: “All you did was miss out on the opportunity to pay more for a property than you thought it was worth.”