A good buyer agent can guide you through the intricate process of finding and purchasing a house.
In a previous article on this subject, we talked about the advantages of having your own buyer agent when buying a home. Here we will build upon that, and describe the things that a GOOD buyer agent should do for you throughout the entire process.
At the very beginning, a good buyer agent is going to first LISTEN carefully to what you need, want, and do not want in a house. We ask questions and find out as much detail as possible. Looking for a house is largely a process of eliminating those houses that do not meet your needs, budget, etc. It is NOT about finding the first house that seems to work, and getting a quick sale. We take your list of criteria, perform a detailed search based on those criteria, and then screen the results. Agents who devote themselves to their buyers know which subdivisions are declining in value or lie below Base Flood Elevation, etc. Specific houses with major problems are known to us too. We apply our expertise and knowledge, coupled with background research, to weed out the many homes which would simply be a waste of your time. Only then do we send you a list of possible candidates.
Recent improvements in MLS software allow us to send this to you via a website interface, which also gives you control over your search results. After we’ve filtered them, and as new listings come to you automatically, you can evaluate them further, marking them as Rejected, Possible, or Favorites. We are immediately notified, and follow up by getting you in-depth background details on those you deem worthy of a closer look.
In addition to value, condition, previous sales, and disclosed defects, we research flood zoning and much more, including clerk of court and tax records wherever possible!
Here are a couple of actual examples when our research saved our buyers money and major headaches:
1. Our buyer clients had very particular needs in a house. After searching for them a long time, we found one that seemed to fit those needs perfectly. However, during our thorough research, we discovered that the owner had $300,000.00 in personal judgments filed against him, AND that his ex-wife was technically still on the title! This title was clouded beyond all hope, and the house should not have even been listed for sale. The listing agent had no clue whatsoever that these issues existed until we showed them. We were able to halt the purchase process before our clients lost a dime. Normally problems like this would not be discovered until late in the purchase process, after inspections, appraisal, etc. The buyers would have spent a lot of time and money, only to see everything fall apart when the title work was done. By our being extremely diligent and proactive, we were able to prevent that disaster. And, a week later, a much nicer house came up for sale in the same neighborhood, and we had it under contract for our buyers literally within hours, and they successfully closed on it.
2. We took a longtime buyer client of ours to view a foreclosure which had just come up for sale. It was a large house on beautiful acreage, all in flood zone X (the best “no-flood” classification.) It turned out to be very nice, so we researched it in-depth. The house had been “bought” by the bank at sheriff sale about 2 months prior, for about $180K. (The amount of the sheriff sale is almost always meaningless, since the bank holding the mortgage is usually who takes possession of a foreclosed property at sheriff sales.) In this case though, the amount was important. The property was listed on the open market by the bank for about $260K. Our research revealed that the previous owner had a large IRS lien against him. Not everyone knows this, but IRS liens are NOT truly cleared by a sheriff sale. For 120 days after the sale, the IRS has the right to show up, present the new owner with a check for the amount of the sheriff sale, and take possession of the property! For this and other reasons, we didn’t pursue this house any further. We told the listing agent about it, and they said flat out that it wasn’t their responsibility! (This response disgusted us…) I followed it in the MLS, and saw that someone else soon bought it for around $250K, before the 120 days was up. This means that they risked losing $70K, and the house! Their agent either had no clue about the potential disaster, or simply didn’t care. There is no way we would ever put a client of ours in jeopardy like that.
Once the right house has been found, the duties of a good buyer agent are far from over. Our responsibility is to negotiate to get you the best possible deal, while protecting your interests above all else. There are procedures and timetables to follow, and some agents play fast and loose with those rules. Doing so can easily jeopardize your offer, therefore it is important to have a buyer agent who does things the right way.
After a contract is successfully signed, the clock really starts ticking, and many vitally important steps must take place before the sale is ready to be closed. They include: Termite inspection, home inspection, followup inspections if necessary, appraisal, and title work. Each of these is critical in its own unique way, and most can open up new back and forth negotiations with the seller. All must be handled correctly and in a timely manner.
The sequence of all these events is absolutely crucial. These days, appraisals cost about $450. The appraisal should come only after the termite and home inspections have been passed. Do not let a pushy agent or loan officer convince you to order appraisal and/or title work early on in the process! If you were to prematurely spend the money for an appraisal, only to then find out that the house has major defects causing you to back out, you will not get that $450 back. When representing buyers, we always take a very methodical, conservative approach. We never forget that you have money on the line. We start out with the least expensive item, then move on from there. That way, if the sale falls through for some reason, our clients have spent the smallest amount possible. Do understand that there is risk involved with buying a house, and that it is indeed possible to lose some money if the sale doesn’t close. However, that risk can be minimized if your agent gets things done in the right order.
(As a side note, we always recommend getting a thorough home inspection. Spending $300-$400 on a home inspection to find out if a house is full of problems is small change compared to buying those problems for $150,000.00 or much more, and dealing with them for many years.)
Finally, when everything is ready for closing, a good buyer agent will do a final walk-through of the house with you, get you a copy of the preliminary settlement statement showing the monetary details, and make sure you know exactly what to bring to the act of sale. They should also be there beside you at the closing to handle anything which might come up, to answer all your questions, and to review the documents you are signing.
A house is probably the largest purchase you will make in your lifetime, so choose your buyer agent carefully.