There is no doubt that opportunities for home buyers are more abundant than they have been in decades, particularly in urban markets where real estate prices soared to record heights. Suddenly, the idea of home ownership is not longer unrealistic for average income families.
The New Market
It is a regrettable fact that many homes now available at affordable prices land on the market because of foreclosures. Perhaps the solace, for the newly qualified buyer, is that they will not be subjected to predatory practices and poorly structured mortgages that fueled the real estate decline. Along with greater vigilance and more conservative practices in the lending business, buyers have been educated by the media. Headlines let people know the dangers of adjustable mortgages with balloon payments, the costly danger of no down payment loans, and the dishonesty of lenders who get creative in qualifying buyers.
With this in mind, new buyers of foreclosed, bank owned homes still need to be wary. There is a great deal to think about when purchasing a home the largest and most significant investment most families will ever make. As a former real estate agent, business writer and home buyer, I have a few suggestions to make your home buying experience a positive and successful one.
Educate and Interview
First, for families with absolutely no experience in the real estate market, many communities and some financial institutions offer home buying seminars. Of course, it s important to be aware of who is teaching the class and why. A real estate brokerage or a lender has a vested interest in attracting your attention, no matter how unbiased the information offered may seem. Instead, look for seminars offered by colleges, adult education programs or nonprofit community groups. This is to say, get educated, but be careful who you choose for a teacher.
Fortunately, there are online resources for first time buyers. Again, it s critical to select Web sites that are not selling you anything at all such as xxx, sponsored by the xxxxx.
Once you have some familiarity with the purchasing process and real estate and lending terms, it s time to take the next important step. Find a good, compatible and trustworthy real estate agent. In my experience, this is best done through referrals from someone who has had an excellent experience with a real estate agent. You may receive solicitation through the mail and see lots of advertising asking for your business but, remember, it s marketing. Ask friends, neighbors, family, and other home owners for referrals to agents who made their buying experiences pleasant and successful.
Then, interview agents. Make appointments with a few select agents from established companies, invite them to your home and have a chat. The relationship between buyer and agent is important. You should be a compatible team and share a mutual trust. Ask questions; get a sense of the person s business ethics and experience. Ask for referrals from a few of their satisfied clients. Don t make your decision on the spot when the agent is at your dining room table. Don t trust someone who pushes you to do so. Give it at least 24 hours of consideration before you sign on with a professional that will help you with one of the most important decisions of your life.
No Do It Yourself
Why do you need a personal agent? The real estate process is extremely complicated. It s rife with regulations that vary from state to state. There are volumes of paperwork that accompany all real estate and lending transactions. You, as a buyer, can t be expected to understand and have command of the vocabulary and legal requirements. Licensed real estate agents should know the regulations and documents inside and out and be able (and willing) to translate them for you.
But, what if you drive past that perfect house and it has a For Sale sign in the front yard? Do you grab your cell phone and call the listing agent? No, no, no. You call your agent. The one who is representing you as a buyer. When an agent has listed a house he or she represents the seller. If the agent also takes on the buyer, that s dual agency and you can imagine there might be a personal conflict when a commission is involved. In a regular transaction, the buying and selling agent split the commission. In dual agency, the single agent stands to rake in the entire commission. Thus, there might be a predisposition to oversell a listing for greater financial gain.
A professional helping Hand
A good real estate agent loves the work of helping families find their perfect home. An agent works very hard for commissions and works hours that are convenient for clients. A buyer s agent will advocate on behalf of his or her client, give advice about making an offer, point out the highs and lows of a property and protect the buyer every step of the way including a careful walk through the required paperwork.
Like most things in life, home buying isn t as simple as it appears. Particularly now, when prices are attractive and choices are plentiful, there is a tendency to jump at the chance before the market changes. I say, go for it! But do so by educating yourself, interviewing and selecting a real estate professional who will be available to you and completely trustworthy every step of the winding road to home ownership.
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