1. What to Expect from Your Realtor®
You are considering making the largest financial decision of your life, and you know you need some help, but from whom? We would, of course, advise you to get a Realtor® to represent your interests, be your advocate, and provide you with expert guidance and advice. Why? Attorneys, financial advisors, bankers, accountants, and friends may each know parts of the real estate market and the process of buying and selling, but only a real estate agent knows how to fit all the pieces together and provide a bird’s-eye view of the entire process. Only your agent advocates for your position and represents you whether you are a buyer or a seller.
So, what should you expect from your real estate agent?
If your real estate agent is a Realtor® you should expect someone who subscribes to the higher standards and ethical code of the local, state, and national associations of Realtors.®
You should expect someone who will be honest with you and possesses integrity that can be verified either through online references or through individual references provided by your agent. (Not all agents get online references, but they may still be great agents. Ask your agent for references.)
A real estate agent who listens carefully to you and your needs is critical to you finding the home you want or selling your home as quickly as possible for the best price.
Your real estate agent should be accessible and responsive, answering your questions when you ask them, or if not available at that moment, returning your calls or texts within a reasonable time frame.
Is your agent knowledgeable about the area and the current real estate market? In this rapidly changing, high-pressure market, that kind of knowledge is more important than ever.
You should look for an agent who is tied into a network of service providers that he or she can recommend to you. Those providers should include mortgage lenders, title companies, stagers, and home inspectors. Frequently, agents also know painters, cleaners, landscapers, and more.
When reading agent reviews, look to see how your agent rates when it comes to being a good negotiator. Talk with your agent about bidding or listing strategies. The ability to negotiate on your behalf is one of the reasons you hire an agent.
Taking a property from listing or offer to settlement is a multi-layered process that requires a knowledge of the steps involved, the ability to multi-task, and a keen eye for deadlines and detail. A good agent is an expert in process.
Remember, your Realtor® is not an attorney, accountant, or financial advisor, however, he or she should be knowledgeable and experienced, and someone who treats your home search or home sale as a sacred trust. That’s our operating philosophy at the PJ Team. We are a team of agents working together to support each other and to do the best possible job for you.
2. Whose Agent Are You Anyway?
Until about 2012, all real estate agents in Virginia technically worked for the seller. Surprised? As a person who had bought more than one house prior to 2012, I was stunned to learn this. In fact, the first time I’d heard about it was when I studied for my real estate license. My agent seemed to work for me.
Are there exceptions? Yes. It is possible for one agent to work on both sides of a transaction. That person is called a dual agent. The catch is that a dual agent can manage the details of the transaction but can’t offer guidance or advice to either the buyer or the seller. Since agents are usually hired to represent and negotiate on behalf of their client, and since they are required to be loyal to and maintain their client’s confidentiality, you can see why a dual agent can only be an officiant…making sure the “i”s are dotted and the “t”s are crossed, but not engaging otherwise.
So, rest easy that, unless you’ve agreed to dual agency, your real estate agent is working to represent only you and your interests in any given transaction.
One vestige of the old system: whether you are the buyer or the seller, it is still the seller who pays the real estate commissions! From a practical standpoint, it means the standard 6% commission paid to the seller’s agent’s firm (not to the real estate agent him/herself), gets split with the buyer’s agent’s firm. Changing this would be very complicated, but at some point in the future, it could happen, and you may see the sellers and buyers each paying for their own representation.
3. Patience and Perseverance
It's often been noted that few attributes contribute to success in any endeavor quite like perseverance. Wealthier, smarter, and even stronger souls have lost contests of one sort or another to those who would persevere when others did not. My father was fond of saying that, "Many's the man whose ship came in moments after he left the dock."
In a competitive real estate market (and make no mistake, this is an extremely competitive market) this is even more true than ever. The odds are that, if you are looking to buy a home right now for any reason, be it needing more space, moving for a new job, downsizing, or looking for that first home due to historically low interest rates, you probably will not acquire the first home on which you place an offer, even if you're working with a highly qualified Realtor®.
HINT: Do work with a highly qualified Realtor® if you hope to succeed in this highly competitive market.
Above all I encourage you to persevere. Many first-time home buyers are so disappointed by not having an offer accepted on a home they "just had to have," that they quit (at least until they finish licking their wounds). A seasoned Realtor® will help her/his clients persevere and ultimately succeed.
To be successful in your next home purchase, start by getting pre-approved (not just pre-qualified) for your mortgage loan, work with a qualified Realtor®, make a plan of attack, execute that plan, be patient, persevere, rinse and repeat until you arrive at the closing table, sign the papers and get your keys to your new home.
The only thing as vital as patience and perseverance to succeeding in real estate and in life is beginning, hence the saying "Begun is half done!" If you are thinking about, or dreaming of a new home, call today and begin a conversation that could result in you walking through the door of your next home.
4. Need or Want to Sell a House?
Is this a good time to sell? Is it ever! There may never be a better time to sell a house you own today.
The combination of historically low-interest rates and low home inventory is currently creating "a gold rush" atmosphere and driving up both demand and prices. It is not uncommon for properties in our area to receive multiple offers within days of being listed and sometimes before they are made active, but listed only as "Coming Soon." Coming Soon properties are not available for showings, so this means people are in some cases making offers on properties sight unseen, and almost always above the asking price.
This truly is a great time to sell a house.
However, just because the financial environment is primed to provide you a substantial gain on a home you may wish to sell, this doesn't mean success is guaranteed. Especially if you define success as not only maximizing your profit, but also minimizing the opportunities for a deal to fall through or come back to bite you in other ways. This is where a seasoned Realtor® can help you.
Success in selling your home still requires planning, preparation, evaluation, negotiation, and the careful shepherding of a ratified contract to and through closing. Make no mistake, even in today's overheated market things can, and likely will, go wrong. There's a reason that most Realtors® can count on one hand the number of "perfect deals" they have been party to over their careers.
Here are just a few examples of problems that can and often do arise:
Appraisal - Just because someone is willing to offer $50K more than asking in order to have their offer accepted doesn't mean the bank will agree to lend them that amount. If the property doesn't appraise for the agreed amount of purchase some concession will be required by the seller, the buyer or both. The deal could also fall through leaving you with wasted time and opportunity, since other purchasers may have moved on or purchased other properties.
Financing - Not all offers are created equal. Some buyers are pre-approved for their loans, others are pre-qualified, still other have cash. Which offer do you accept? Cash offers are less risky, but often for less than an offer depending on a loan. Sometimes it's wiser to accept the cash offer and sometime the offer for a higher purchase price if you can live with the risk that the loan may not be approved. If you offer cash, you have to prove that you have the cash available to go to settlement. In the absence of a cash offer, each buyer's financial abilities will need to be evaluated and understood. Again, time and money are always hanging in the balance.
Home Inspections - While many buyers are waiving the option to negotiate repairs based on a home inspection, most are still requiring one with the ability to void a contract if substantial problems are found. Does it make sense to do a home inspection of your own to avoid unknown issues from arising? Maybe, maybe not. Even if the buyer waives the home inspection completely, this doesn't protect the seller from the possible scenario of a dissatisfied buyer claiming that the seller failed to disclose issues in the property disclosure required by law. The buyer could claim that the issue was known or "should have been known" by the seller at the time of sale.
A buyer who has cold feet or simply saw another property that he or she would rather purchase, or a seller who has received better offers after the fact, may try a variety of claims to exit a contract, which is why it is often best to allow a qualified Realtor® to guide and advise both clients, not only through the ratification process but all the way to and through the closing.
Remember, there are always better ways to accomplish a goal, and these are usually known by those who accomplish that goal on a regular basis. Most important, when selling a home, a deal is never done until the sellers receive their check and the buyers get their keys.
Regional Real Estate Stats from the Northern Virginia Association of Realtors
6. FINAL THOUGHTS: Referrals – Not Just Icing
If you are receiving this newsletter, it is probably because at some point, I was able to help or guide or advise you with an answer to your real estate questions. Maybe it's because we are friends and as such I would like to be able to help you or someone you might know realize their real estate dreams.
Like all my colleagues on the PJ Team, I am guided by a desire to do well by doing good on behalf of my friends, my clients and my community. My ability to do good is often limited by how much I earn, and how much I earn is entirely dependent on the volume of high-quality service I am able to provide.
This is why every referral you provide translates directly into my ability to care, not only for those I cherish and call family and friends, but also for those in our community who need our support. If you think that giving a few dollars to worthy causes when you shop for food and checkout at Safeway or Giant will positively impact our community, imagine the good that you are doing by simply recommending a highly qualified professional, who has successfully helped others define and realize wealth creation through real estate.
More than a one-time gift of money, you give them the tools to create more money, for themselves and for the good they will do with it. You also do the same for me.
Here's an article that explains what a person starting a career as a real estate agent earns.
Whether you or someone you know is thinking about a career in real estate, investing in real estate as a means of creating other revenue streams in their life, simply finding that first home, or selling one they may no longer need, please have them reach out. We are all here to help one another succeed in the areas in which we have some expertise.
Until next time, wishing you and yours the very best in health, happiness, and wealth in all its versions.
Oh! Before you go, check out this upcoming property in McLean.