Advice for Home Buyers

There are a lot of tasks involved in buying real estate.  Many people want to gloss over the grunt work and shoot right for the fun part, however, sometimes that can have a negative impact on your experience.  I have seen people lose houses that they loved because they did not do the necessary “pre-game” work to buy a house (like getting a pre-approval), and when they submitted an offer without it, they were passed up or otherwise rejected.

Markets are a factor, as well.  Currently, in Modesto and Turlock, there is less than a month’s worth of inventory.  This heavily favors home sellers because there are fewer homes on the market to choose from, they get multiple buyer offers and can pick and choose what price and terms to accept.

So the first rule of thumb is: Get a pre-approval letter from your mortgage lender.  Also, as a general rule, real estate is a really localized business, so it is best to work with someone in your general vicinity rather than an online bank who is headquartered across the country – the reason for this is, there still are many unscrupulous people out there trying to make money in the real estate “game”, and it is much easier for the transaction to proceed if we know who the players are.  As a listing agent, I will feel more confident in presenting your offer to the seller if your mortgage broker is local, and even better if I have worked with him/her before and am familiar with the way they do business.

Second, and this one is obvious: Choose a Realtor. This is important.  There are plenty of ways to do it.  You can ask friends and associates who they know that they can recommend.  You can scout them out at Open Houses (whether or not  you are interested in the particular house they have open is irrelevant, they will want to assist you in your home search), or you can call on yard signs, let them know what you are looking for and ask to meet.

There is generally no charge to a buyer for using a Buyer’s agent. Your agent will be paid at the close of escrow from the proceeds the seller agreed to pay to their agent.  Many Buyer’s agents will not require you to sign a contract, but some will.  The Buyer Broker Agreement is a great way to get on the same page as far as expectations you have of your agent, and knowing what your responsibilities are for hiring an agent. Working with a Realtor is still the most effective way of finding a house, and in this market, it is critical. Your Realtor has an eye on the market and is working closely among their fellow agents so they can let you know about properties as soon as they are available; sometimes even before they hit the open market.

After you have met with the agent, decide whether or not you want to work with them – and let them know your intention.  Real estate agents are usually paid at closing. Which means, your agent can do all the work for you now, search for your house, show you the house, but unless you sign the purchase contract with her name attached, your offer is accepted by the seller, your lender funds your loan and none of the contingencies are an issue, your agent is not compensated for their services. So you are really doing them a favor by letting them know you do not want to work with them.

Third, get serious about your criteria for a home. Got kids and a couple of dogs and want a big yard for them to run and play? Let your agent know that.  Do you absolutely need 3 bedrooms and 2 baths? Let her know. Must be a one story? Let her know. Anything that you can think of that you know is important to have in your house – let them know.  Your search results will start slow, and you might not get anything at all, but then you can decide what is worth adjusting in order to find a house that best meets your needs.  The last thing any agent wants is to help someone buy a house that does not meet their needs.

Valia Rasuli is a real estate broker licensed in the state of California (DRE #01865341) since 2009.  She is affiliated with PMZ Real Estate, the largest real estate firm in the Central Valley. Her business focus is on residential real estate, and she works actively with sellers, buyers, and investors (both local and foreign) in Modesto, CA and surrounding areas. This blog is a “Thank You” to all the clients and friends Valia has worked with over the years, they are her inspiration for all of the posts you see, and the many more to come.

How to Choose the Right Real Estate Agent

Real estate buying and selling is generally a long process.  You should be working with someone you like and trust, who should also be knowledgeable about your market area, its customs, and have ongoing relationships with the various other service-providers that you will need to come in contact with throughout the process. Regardless of what “side” of the transaction you are on, the agent you are working with has a great impact on your experience.

As a buyer, it is easy to keep in contact with the first agent that you meet.  They are friendly, upbeat, and enthusiastic.  They can make you excited about the idea of buying, and usually that process of searching for a home is pretty fun!  They might even be a referral, or a friend-of-a-friend, that makes them feel even closer to you.  I think this is a great way to start your search, but there are still some things to look out for:

1.  Are they in business full-time? Or is this just a side-job? This is important, because it shows you how much time is dedicated to their business, and how easily they would be reachable and available if an urgent situation arises. Say you want to put an offer in on a property and the listing agent has a time limit in which to do it, if you’re agent is not on top of things, or worse, is not even available before the deadline, you could be out of the running.
2. Are they students of the market they propose to serve? Do they know how many houses are in your price range in your preferred areas that are up to your purchase standards? Do they actively go out and preview homes before taking you out for showings? Do they keep you up-to-date on market trends? An agent who knows her market, is an agent who can help you determine the proper price you should pay for the home you choose.  In this market where supply is so limited, an agent who misses something could cost you a good home at the right price.  Knowing this could save you a lot of time, headache and money.
3. Are they knowledgeable about the transaction process?  Do they seem to stumble when showing the various documents to you? Do you feel like everything seems hurried? There are proper timelines for everything in the real estate process, and many of these are negotiable (as is with anything in real estate, really), but the standard timelines are usually 3, 7 and 17 days, with loan contingencies lasting closer to 30+ days. Being familiar with these time-frames and staying organized, can keep you sane. (Shameless Plug: We, at PMZ, have a program that directs you through the escrow process, sending you emails and keeping you abreast of what will be required when. It’s a nifty tool for that time between the acceptance of an offer and closing.)

So you can see how important it is for your agent to really have everything invested in the services they provide you.  If they are not distracted by another job and completely focused on the field of real estate, their knowledge about the market and the process, should be an asset to you.

As a seller, you will be more discerning.  After all, you are signing a 90-180-day contract with whomever you hire, with a price attached to it, promising you will pay that agent if and when they secure a buyer for your property.  In many cases, you need to sell quickly, because you have a new home you would like to move into, you have to move for a job, your family is growing; whatever the circumstances may be.  You need to know a few things in addition to the need-to-knows of the buyers above.

1. Is your agent passive or active?  I once read this in a real estate training.  It said, most clients judge real estate agents based on experience, or how long they’ve been selling real estate, and this is the wrong approach.  You could have someone licensed since 1980, but if they are not actively working in the field helping buyers and sellers in the current market, that experience, does not apply to what is happening today.
2. Is your agent a strong negotiator? Buyer’s agents may come in with low-ball offers, or offers with added clauses in them that you may not agree with.  Instead of blaming or name-calling the prospects or their agents, savvy listing agents will find an acceptable compromise, or hold their ground on your terms.  This does not necessarily translate to being pushy or bossy, but it helps get the job done in a way that is acceptable to you (you did hire me, after all!).
3. Does the style of the agent mesh with yours? Some people like to know everything that is going on in the transaction, they like all the details, and if anything gets unhinged (which often happens), they might too.  Others really prefer a hands-off approach, and just want to know what actions they need to take to keep the process moving along.  You need to find an agent who will give you as much information as you need.
4. This is an obvious one: What will the agent do to sell your home? What are his priorities? Is he going to stick a sign in your yard, put the house in MLS, and wait for the flock of buyers to arrive? That  may work, but it also may not.  Find out what is important to him and how high you are on his priority list.

Now, this is, by no means, a comprehensive list. But I do want to mention one thing that I did leave out.  That is price.  While, “The amount or rate of real estate commissions is not fixed by law. They are set by each Broker individually and may be negotiable between Seller and Broker.” (Taken directly from CAR’s Residential Listing Agreement),  just because a Broker or agent is willing to cut their commission to get your listing, does not mean they are the right person for the job.  I understand how tempting it is to save a percent or two on a $150, $250, or $350+ thousand dollar home, but there are two issues I have with this:

1.  If you ask for a price reduction, and Listing Agent A says no, so you offer the same rate reduction to Listing Agent B, who accepts, you have just chosen the agent that would more easily give in when they are negotiating on your behalf, for the price and terms of the sale of your property.
2.  To put it bluntly, real estate is a business, agents are out there to make money. If you cut an agent’s commission, and they still take your listing, they have to go out there and find another listing to put food on table and buy nice shiny things.  They lose focus on your home, the service they might have invested at their full rate, kind of slips. One agent said it best when he responded to a rate reduction with, “Have you heard the saying, ‘You get what you pay for?’, and paused, ‘You get what you pay for.’”

I hope I have given you some ideas and things to think about in this process.  I think this should be an enjoyable experience for you on both sides of the transaction.  If you find that it is not working out, please feel free to be honest (but not mean), it is always best to give your agent an opportunity to address your concerns and see if you can come to an agreement.  Good luck!

Valia Rasuli is a real estate broker licensed in the state of California (DRE #01865341) since 2009.  She is affiliated with PMZ Real Estate, the largest real estate firm in the Central Valley. Her business focus is on residential real estate, and she works actively with sellers, buyers, and investors (both local and foreign) in Modesto, CA and surrounding areas. This blog is a “Thank You” to all the clients and friends Valia has worked with over the years, they are her inspiration for all of the posts you see, and the many more to come.

The Delicate Art of Home Pricing

The single most important aspect of selling your home, is choosing the list price.  This also seems to be a point of contention between sellers and their agents.  When selling our own homes, we see the home subjectively, with all the improvements we have made to it over the years and all the convenient features that we loved when we chose to buy the home ourselves.  Compared with the process that a real estate agent should use: they see the homes objectively, and use a comparative market analysis to price your home.  A comparative market analysis compares nearby homes with similar features and benefits to those on the market, pending, and recently sold.  This gives a pretty accurate account of what your home is worth in your neighborhood, accounting for the current market conditions.

On paper, a comparative market analysis is just a table of listings with their main comparative points: square footage, number of bedrooms and bathrooms, lot size, price per square foot and other features that affect home pricing. When an experienced real estate agent has this information, she can easily see what makes these homes similar, different, or about the same as your home, and therefore set the price of your home to something that will be competitive in your market.

Everything in real estate is negotiable.  Some sellers use this thinking to say, “We’ll price our home high, and negotiate with the offers we receive.”  I want to tell you, this is a bad starting point.   Think back to the time you bought your home:  you probably had a pre-approval for your mortgage, which gave you a good idea of how much home you could afford.  Then you searched for homes within that price range.  By overpricing your home,  you are eliminating a whole segment of the buyers’ market, that could afford your home if it were priced right, and are not even looking at it because it is overpriced and out of their range.

Another group, are the people who can afford the house as you priced it, but when they see your home and compare it to other homes in the same price range, it actually helps the other homes sell more quickly, because they compare your home to the other homes in its price range that have greater features and benefits. You do not want to be priced out for the buyers that should be looking at your home, and overpriced for the value to those buyers that are.

This overpricing scenario causes your home to sit on the market longer, which makes it even less appealing to prospective buyers.

A funny thing occurs when you price your home to sell… It does!  Homes that are priced effectively create an excitement about them, and opens up the opportunity for many more buyers to see the house (more people can afford it), and can create a multiple-offer scenario that can even cause the offered price(s) to go above the original asking price.  This is especially true in times when the inventory is tight, and there are many buyers out there excited about the opportunities that currently exist.

If you consider the information provided to you in the comparative market analysis and your agent’s knowledgeable use of that report, you will find that giving your home the appropriate price primarily depends on the transactions that are occurring outside of your door.  If you can understand and remember that while talking to agents about pricing, it will keep you more grounded in what to expect, and more satisfied with your home selling experience.

Valia Rasuli is a real estate broker licensed in the state of California (DRE #01865341) since 2009.  She is affiliated with PMZ Real Estate, the largest real estate firm in the Central Valley. Her business focus is on residential real estate, and she works actively with sellers, buyers, and investors (both local and foreign) in Modesto, CA and surrounding areas. This blog is a “Thank You” to all the clients and friends Valia has worked with over the years, they are her inspiration for all of the posts you see, and the many more to come.

Hello world!

Welcome to my WordPress blog!  One thing I hear from clients is that some agents “just don’t get it! ” or they are not communicating what they are doing to sell a client’s home, to help a buyer find a home to purchase, or to negotiate on offers that might be in the works… or they are just plain hard to reach!  I know how frustrating it can be when you’re involved in such an important deal, and someone drops the ball.

I write this blog to share my knowledge of the processes that are involved in real estate transactions.  I write because I get asked a lot of questions every day – all very good questions, and I’m sure others out there will have the same ones.  I write because I care about the business.  I write because someone out there is looking for the information, and I want to share it.  Lastly, I choose to write, because I love writing.

I hope what I have to share is useful and enjoyable.  If you have any questions, you can email me at vrasuli@pmz.com, or visit my website vrasuli.pmz.com.

Thank you for reading!

Valia Rasuli

 

Valia Rasuli is a real estate broker licensed in the state of California (DRE #01865341) since 2009.  She is affiliated with PMZ Real Estate, the largest real estate firm in the Central Valley. Her business focus is on residential real estate, and she works actively with sellers, buyers, and investors (both local and foreign) in Modesto, CA and surrounding areas. This blog is a “Thank You” to all the clients and friends Valia has worked with over the years, they are her inspiration for all of the posts you see, and the many more to come.