Working With A Real Estate Agent(s)

Working With A Real Estate Agent(s) To Find Your Home
Buying a home can be a daunting process especially if it is your first time, there seem to be so many unknowns. Buyers wonder who can they trust.  And they often start the process without knowing about real estate relationships. It's important to enlist the help of a professional whom you feel confident with but also know your options.

During the course of looking for homes, it is very likely you will meet dozens of real estate agents. Many times buyers call individual ads and the agent's that list them, to have them show them the home, and in one weekend they can meet 8 or even 10 different agents..

While you can find a home using this approach, it is not the best.

A real estate agent has many tools and experience that buyers simply do not. And by working with one real estate agent, you can develop a relationship that will educate you, and also put you at an advantage by locating the best homes that meet your specific criteria, and being one of the first to know about a home before others. They work by searching the Multiple Listing Service, and they also preview multiple homes on a weekly basis. They have experience about specific building issues, location issues, property management company experiences, along with insider information that they will share with their loyal buyers in an effort to find you the best home and keep you as a client for life.

Am I Bound To One Agent?
The short answer to this question is yes and no.
In NJ, unless you sign a "buyer's agency contract" with an agent that you meet with on first consult, you are free to work with any agent you see fit. However, if you visit properties with an agent and discuss pricing and possible motivating factors that lead to an offer, then there is such a thing as procuring cause..

For example, if you have been working with a real estate agent for a few weeks and you happen to walk into an open house that you love, and discuss an offer or you request an appointment with that agent, then the agent that met you at the open house and took you back to the home, is entitled to a commission under this clause.

To protect your agent, if you care to, you should never see any homes without your agent accompanying you.

Can I Visit Open Houses On My Own?
Yes. Agents hosting open houses are required to let you in. However not all agents will honor the relationship you have with your real estate agent which could leave you working directly with the listing agent, who represents the seller.

To be safe, before entering an open house, you should announce that you are working with someone, and either A. hand him or her your agent's card, or B. sign in with your real estate agent's name. If the agent hosting the open house gives you a hard time, you may want to leave and contact your agent to schedule an appt with you ASAP.

What If My Agent Is Unavailable Or On Vacation?
Most agent's leave a colleague they trust in charge to take over for them so you can contact them. If your real estate agent say, is off that day, and you absolutely have to see the home like yesterday, then I recommend you calling the agent's office directly, explain the situation, and they will very likely have another agent help you, or even possibly the broker can take you in.


Read Before You Sign
Before you sign anything that an agent presents you, always make sure that you read it at length, and ask questions about what it is you are signing and why. Some agencies will tell you that a form is "required" or "standard" and that unfortunately is not true. You are not obligated to sign a contract that binds you to an agent, you can if you choose to, absolutely, but don't let anyone tell you, especially someone you don't know, that in order to see homes you must sign a contract.

Top 10 Tips For Buying Real Estate!! #9

Tip #9: Get A Quality Home Inspection

Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives - their homes. Paying for a qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of dollars for repairs.

Your professional real estate agent will have a list of approved vendors they work with on a day to day basis. My suggestion would be to ask them for a referral, and also ask friends and family for a referral. Remember, buying a home is a huge decision and a large investment, probably the biggest you'll make in your life. So, just as I say no to using your uncle Joe for a mortgage, or as your attorney, the same rings true here. Use an objective party, someone who is licensed, has plenty of experience, comes recommended and who charges rates in accordance with what others currently charge in your market.

You will receive a written report of your inspection, sometimes on the spot if your inspector has the capability and you will then go over this report with your attorney to address any outstanding issues.

Till next tip!!

Top 10 Tips For Buying Real Estate - #7

Continuing with my series of successful home buying real estate tips - here's number 7.

Tip #7: Put Yourself In The Seller's Shoes

You are about to make one of the most important decisions that will affect both your life and the life of the seller. If you take time to understand the reasons the seller bought the home, their reasons for selling, and the home improvements they have or have not made, you'll be in a better position to evaluate the home and negotiate a better deal. In the end, the home buying process excludes the professionals and comes down to the individuals buying and selling the home.

A closer look at the seller may help you in deciding whether and for how much to buy a particular home. While the price a seller paid for a home is irrelevant in determining market value, understanding their position will help you negotiate better. For example, if you know that a seller bought his or her home for $460,000 and is currently on the market for $409,000 you can understand that the seller is losing money on the sale of their home. This can help you be more sensitive in your position, so when you and your real estate decide on a fair purchase price, you can present your offer in a way that doesn't offend the seller or make him or her shut down. Remember, you want to open the door for negotiations, not close it. Being sensitive and understanding can help you negotiate a better price.

Till next tip!

Top 10 Tips For Buying Real Estate - #6

Continuing with my top ten tips for buying real estate series here is Tip Number 6.

Tip #6: Sign A Contract That Protects You

This tip requires a sub-headline, if you will

- Work with a reputable, experienced real estate attorney

Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Ensuring that the contract you sign will minimize potential legal battles will allow you to enjoy your new home without the headaches and strain of legal battles. In Hoboken and Jersey City for example, most licensed real estate agents use a standard contract created by the New Jersey Association of Realtors. This contract is written to protect both buyer and seller, and has special contingencies built in to allow a home buyer to secure financing, feel good about the home inspection and conduct a survey or title search to name a few items covered. So don't worry too much about the language in the contract, this will all be changed shortly. Here's why:

In NJ there is what's called a three day 'attorney review period'. This means that any contract you sign is not binding until your real estate attorney has reviewed and accepted the terms put forth. When the time comes, and you sign a contract you will turn it over to your attorney who will make many changes to it. In fact, most real estate attorney's have their own addendum ready to go that's been tested many times to include the changes they are comfortable with.

During the review period the contract is not binding to either party. This means that should you change your mind you can decide not to go through with the sale, however, remember that the seller can also continue to receive offers, therefor this means that until the 'Attorney Review Period' is over, no one is locked in. Something to keep in mind, and good to know, especially if you really want your home and want to make sure you get it. You can give your attorney a heads up to move the review period along.

The three day review period does not end per say in three days. If you read a real estate contract you'll see that it's three business days, and that the review period can be extended. Attorney review is officially over, once both parties come to an agreement and sign off and all changes.

Till next tip!

Top 10 Tips For Buying Real Estate - #5

Tip #5: Fixed vs. Adjustable Rate Mortgages

Which type of loan fits your particular needs? If this will be your first home or a "transitional home" -- one you plan to own for a short time, an ARM may be the best type of loan. If it's going to be your dream home or one you plan to raise a family in, then you may want the stability of a fixed rate mortgage.

If you do choose an ARM, the index should be based on the Cost of Funds Index if rates are increasing, and Treasury Bills if they are decreasing. The COFI's are less volatile over time than T-Bills; make sure the teaser rate is understood and what the real rate would be. Personally, I would advise to avoid ARMs whenever possible. From experience many buyers end up staying longer than initially anticipated and get caught in the ARM scare.. In a soft market this can be troublesome when refinancing options aren't available. In today's market for example, where seller's aren't able to sell for what they had hoped, many are turning their first homes into investments. Sometimes this can work out well especially in the condo market. However, with fluctuating interest it can cut into potential profits. A locked in long term rate can prove to be better than an ARM.

Whichever loan you choose; make sure that you scrutinize all the closing costs. Typically in Hoboken, closing costs can be about 2 points of the purchase price. This can vary however depending on taxes, capital contribution, fees and a number of other factors. If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures (your Real Estate Agent has publications to assist you). Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.

Always look for referrals or recommendations of mortgage brokers/lenders that your friends or professionals have used. It doesn't hurt to share a Good Faith Estimate with your Real Estate Agent for some advice. I've been able to pick up excessive fees in some cases for my buyers and have referred them from their 'family' friend to a professional I trust.

Till tomorrow's tip!!

Top 10 Tips For Buying Real Estate - #4

Continuing on with my 10 Tips for succesful home buying series.. Here's today's - this one should be easy.

Tip #4: Create A Top 10 List Of Amenities

When shopping for a home, list the features (wood burning fireplace, private yard, new appliances, etc.) that are most important to you in deciding on which home to buy. Establishing "your criteria" early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim. As detailed in Tip #3, your top reason for buying a home should be the value you are getting. Some of your top 10 amenities should logically be sacrificed if an incredible value is available. Remember, it's nearly impossible to find a home that has all of your items on your wish list, unless of course you're building a custom home. Know that there will come a time where you'll need a little give and take. Some buyers will sacrifice location for more space and nicer features, others will sacrifice space for location and proximity to shopping or transportation. Until that time comes, starting with this list, and sharing with your enlisted professional realtor, will give she or he a good idea of what you're looking for and your desired lifestyle.

Till next time!

Top 10 tips for buying Hoboken real estate - #3

Continuing with our successful home buying tips!

Tip #3: Value, Value, Value

The days of 10-30% annual appreciation have passed. Home buyers in the 1970's and even 90's to early 2000, benefited tremendously from what seemed like ever appreciating home prices. Nowadays, we will most likely be looking at slow steady growth while guarding against the possibilities of falling prices, skyrocketing ARM rates and corporate layoffs that can dramatically affect your home values. The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price.

Many times I'll show a buyer two similar units one is a higher price - the one that has the granite counters, and one has a lower price, the one competing with the granite counters. Sometimes buyers will see this and think, this place needs a lot of work! I'd rather try and get the one that's already renovated.. In a softer market this might not always be the best approach. If there is a $20,000 price difference and it would only cost you $8000 to renovate the kitchen then which is a better value? Plus remember, the unit that needs to upgrade the kitchen knows buyers want a newer more modern look and should therefore be a little more motivated on their price. Then, if you successfully negotiate a fair purchase price, your value instantly grows.

More on negotiation in the future..

Top 10 tips for buying real estate! #2

Hello ladies! I am back from a much needed weekend with my family and future in laws and I apologize for not bringing my laptop with me to give you a tip for Saturday and Sunday! However I'm hoping you had a nice weekend as well, and although today is holiday - it's back to business for me!

Happy Columbus Day!

Tip #2: Make A Plan And Get Pre-Qualified
Every important decision needs to be clearly thought out. From investing in a pair of expensive shoes to starting a new job or career and buying a home!

Developing a home buying plan can help you focus on the important factors and organize the entire process. It's a great idea to purchase a binder with sections on house hunting, home financing, service providers, etc. (More on service providers in the future).

Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. In most cases today, you will not be able to submit an offer without a prequalification letter, and some real estate agents require that you bring your letter during your first buyer consultation.

A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of the panic mode and allow you to take advantage of opportunities. Plus you will be able to make an informed decision instead of acting on pure emotion. Buying a home can be exciting! Especially if you see a place that has everything you want..

A thorough plan will save both time and money!

Remember, a prequalification letter does not commit you to working with that particular lender or broker. And the same is true the other way around. Just because a bank or broker provided you with a prequalification letter it does not guarantee that they will approve you for that amount or even approve you at all. Many things can change while you're shopping for a home including lending restrictions and not to mention your credit! It's important that during the process you keep tabs on your spending and on your bills. Make sure to pay everything on time, and hold off on major purchases until after you've bought your home.

Till tomorrow!