Sometimes I wonder how I would be as a buyer.
If, for some reason, I moved from Richmond to another city far from here (Denver sounds about right…or maybe Austin, Texas) and I did not have a real estate license, how would I go about my search? Stated differently, what would my REALTOR self tell my BUYER self about the best way to go about buying?
Here is what I think I would say…
How To Choose a Realtor?
I would interview several Realtors and find one I like. It amazes me how many people feel obligated to work with the first agent they met. Do some research first into their background and figure out if they are buyer-based or seller-based and if they have area(s) of expertise. What I really want to know is if they have a bias towards a certain asset type or geographic location that could sway their advice. Most agents do specialize to some extent, but see if they can offer unbiased advice. If they can’t, find another one. I want opinion, but I don’t want bias.
Use the local MLS and Not Trulia/Zillow/Realtor.com
I would get set up IMMEDIATELY on the local MLS’s version of a Client Gateway or Portal. Richmond’s MLS service offers a direct link to MLS (we call it a Client Portal, and you can register here) which can only be set up by a Realtor. It gives immediate notification if a property falls within the set parameters. I want to know up-to-date info and not waste time chasing phantom listings on Trulia or Zillow.
Look Everywhere (within reason) Initially
Additionally, define your parameters broadly (features, price, location) AND set the MLS Portal up to include both PENDING and SOLD properties. I can feel my agent brethren cringe as I write this…but it is true…at least initially.
- Why define your search broadly? Because everything is related and knowing what is going on in other zones and prices points is important. Likewise, sometimes the best deals are ‘value add’ in some way and narrowly defined searches miss those opportunities.
- Why include Pending and Sold Inventory? Tracking how quickly properties sell when they enter the market tells you a great deal about the market strength. Follow this closely.
Ask Questions of Everyone You Meet
I would talk to everyone I could about the area. Is it schools? Is it history? Proximity to Downtown? Architecture? Near the public transportation? Near the office parks? Each person will have a different take and each one will try to convince you how they live in the best place. Let ’em try…there is a ton of useful information in anecdotal evidence. Use it to build your local market knowledge.
Study the Numbers
I would quickly find inventory graphs to better gauge the strength of the market (we use RBIStats and break down the different markets for our clients here.) Sold and pending properties are helpful, but seeing how inventory and pending sales are tracking will tell a lot about market strength. Your agent should have access to this info.
Raise Your Virtual Antennae
I would register for the local new feeds to get a sense of the local economy (such as the local RichmondBizSense.com). Neighborhood pages (like Fan of the Fan or Church Hill People’s News) can also give you a lot of quick local flavor. It is all a part of learning the ebb and flow of a new city.
Leverage (not Avoid) Your Realtor’s Relationships
Get a recommendation from the Realtor for a LENDER (and attorney) and make sure they are familiar with one another. As agent, I have fixed more last minute closing problems by knowing who to call than I have by knowing what to say. We (meaning Realtors) do not get the kickbacks market seems to think other than fabulous service for our clients.
While there are ways to compare lenders and keep them honest (more on this in a moment), generally speaking, Realtors use lenders and attorneys who know what they are doing. The paper is full of mortgage outfits promising ridiculous teaser rates (which are not true) and low closing costs (also false) in order to lure you in. Remember, when something goes a little sideways right before closing (they always do), your agent should know who to call in the relative organization to get it fixed. I also truly believe that when a lender chooses whose file to work on, they are going to work on the file that came from a great referral source first and all of the others second. Be a ‘priority’ file.
Hold the Lenders’ Feet to the Fire
Call three lenders on the same day and ask for a pre-qualification letter on an identical property using an identical loan product. Money is generally a commodity and if you ask all of them for the same loan product on the same home, then you will see whose fee structure is best. It also keeps lenders honest so tell them what you are doing. Lenders don’t really like it when people do this but that is not your concern. Regardless, I still say to use the one the Realtor referred you to unless the fees are outrageous…
And Pay Attention
Lastly, pay attention. Look at the new notifications immediately try to figure out if the new listing is likely to sell quickly or slowly to test your understanding of the market. If you are getting to the point where you can recognize which properties are likely to sell quickly, you are getting a feel.
Ultimately, the best advice is to use the best information available and surround yourself with a quality team who is used to working together. If you surround yourself with true pros and do your homework, a quality outcome should follow.