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.