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4 Demands you need to make of your Real Estate Agent

Are you thinking of buying a home? Are you dreading having to walk through strangers’ houses? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of buying. A great agent is always worth more than the commission they charge just like a great doctor or great accountant.

You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one.

Here are the top 4 demands you need to make of your Real Estate Agent when buying a home:

1. Tell the truth about the price

Too many agents just take your offer at any price and then try to ‘work’ both the seller and you while negotiating later. Demand that the agent prove to you that they have a belief in the price you are offering. Make them show you their plan to get both the seller – and the bank – to accept that price. Every house in today’s market must be sold two times – first to you and then to your bank.

The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. A recent survey showed that there was a challenge with the appraisal on 24% of all residential real estate transactions. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the original offer.

2. Understand the timetable with which your family is dealing

You will be moving your family into a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan.

This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. You agent cannot pick the exact date of your move, but they should exert any influence they can, to make it work.

3. Remove as many of the challenges as possible

It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

Remember: If you have an agent who was weak negotiating with you on parts of the purchase offer, don’t expect them to turn into a super hero when they are negotiating with the seller for you and your family.

4. FIND the right house!

There is a reason you are putting yourself and your family through the process of moving.

You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with purchasing. Do not allow your agent to forget these motivations. Constantly remind them that finding the right house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. rethinking price), insist they have the courage to inform you.

Good agents know how to deliver good news. Great agents know how to deliver tough news. In today’s market, YOU NEED A GREAT AGENT!

First Time Home Buyers Need Love, Too!

South Florida home sellers have become spoiled, and I am one of the guilty parties. The market is hot enough at the moment where we are seeing many sellers restrict the terms that they are willing to accept on their homes to conventional financing only, or cash buyers. In some instances, cash-buyers only!

I must admit, on my most recent listing, my sellers and I would only entertain cash buyers as well, but we justify our reasons because the property was a co-op apartment and it needed such extensive renovation.

First Time Home Buyers represent a significant portion of the market right now

As you can see above, right now, first time buyers want to get into the game! They can’t keep living in their folks’ homes forever 🙂 Note: 38% of the market right now represents first-time buyers!

And they’re willing to make sacrifices to get into their first home! The majority of them have stated that they will make lifestyle changes such as cutting spending on luxury goods, entertainment or even cancel a vacation or two to make their home buying dream a reality.

It makes perfect sense, although in the current market, so many over-eager sellers think that they’re in the drivers’ seat and can be as picky as they like. But it’s wise to keep in mind that if you restrict the terms you’re willing to consider, you MAY be cutting out 38% of your potential buyers.

I am officially declaring a moratorium on red walls when putting your house on the market

Nearly forever in the realm of Real Estate has the Red Accent Wall been the darling of would-be decorators and home owners that desire a little extra spice in their interiors.

Your Guide is officially declaring the era of the Red Dining Room and/or Red Powder Room over. At least when it comes time to sell.

Though the pop of color could be interpreted to “add some character” all too often it’s the wrong kind. Red isn’t everyone’s cup of tea. And it is VERY hard to cover up – or at least buyers perceive it as a challenge to cover up.

Invariably, these red rooms get passed on from homeowner to homeowner because no one has the courage or tenacity to apply layer upon layer of KILZ primer to undo the dastardly deed.

In the photo below, the third set of home owners is currently enjoying the sizzling red dining room (VHT did seem to go overboard with the color correction, nonetheless it is RED.)

Let’s all agree: Henceforth for a pop of color, we will add it with throw pillows, an accent blanket and a vase of roses!

Buyers becoming more frantic trying to compete with investors

From my monthly report from Credit Suisse and their survey of real estate agents nationwide on what they’re seeing in the marketplace, another solid indicator of how quickly the market has turned around.

Traffic levels exceeded agents’ expectations in the region during the month of May, and 88% of agents reported that home prices increased in the most recent 30 days compared to the previous month.

Some of the comments from agents…

People who qualify to buy want to right now as prices are going up. But there are not enough properties out there and they are being bought up by cash buyers, finance deals are hard right now.

Rentals are getting expensive and are hard to find in desirable neighborhoods.

Prices going up frees some owners who are above water and can sell now.

We are definitely seeing the supply of homes remain tight, which is in-turn leading to shorter times to sell. But the plus side is that the rising prices means that more home owners will be able to sell leading to (hopefully) some more inventory.

Low down-payment options for condos very limited in South Florida

It’s a common question during the first interview with buyers who may be seeking a condominium here in South Florida:

“So do you have a 25% – 30% down payment for your purchase?”

It seems to be lost on home sellers during the current frenzy of activity that is fueled by investors and foreign buyers that are flush with cash these days, but the predominant purchasers of condominiums used to be first-time homebuyers that may not have saved up enough cash to put down $30,000, $50,000 or even $100,000 on a new condominium home.

However, buyers who use FHA financing, however can purchase homes with as little as 3.5% down-payment.

There’s a hitch, though! You have to find a building that is already FHA, VA or Fannie Mae approved, and here in Fort Lauderdale, there are only a handful!

How does a condo get approved?

It’s a great question, and one we wish more Home Owners Associations would ask about.

It’s not that hard, but does have some cost. The fees typically run around $2,000 plus the cost of a consultant if you decide to use someone who is versed in the process to guide you through it.

Typically it’s the HOA and the management company that make the decision to get the condominium FHA approved.

FHA will look at a number of factors, and three are of critical importance:

the ratio of homeowner’s to investors – no more than 50% of homes can be investment properties.
the number of delinquent HOA dues – no more than 15% of homeowners can be delinquent.
the amount of money in reserves – typically FHA looks for an HOA to have an amount equal to a year’s worth of assessments in the reserve.
mixed uses – your HOA should not have more than 20% of the total space for non-residential uses.

Considering that first time buyers make up the majority of potential condominium purchasers, it makes sense to your association to undertake this effort.

Low down-payment financing is not just for low income resident – in fact it’s far from the reality of what can happen if your property is only attractive to investors! Investors are typically the kinds of buyer that are looking for the best deal available, and a preponderance of investors buying in your HOA can serve to hold values stagnant or even drive values down!

I’m hoping we all see your condo or HOA on the FHA Approved List one day soon!