Tag Archives: buyers

Where do the kids sleep?!?

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[photopress:dig_deep.jpg,thumb,alignright]Whether you are a buyer or a seller, you really need to dig a little deeper when determining the value of a home. One thing I noticed when I first started practicing real estate in the Seattle area, is that almost no one digs deep enough when determining value based on “buyer profile”. This is an old fashioned concept, I guess, that I learned many, many years ago when I was the Certified Corporate Property Specialist (CCPS) for a large real estate company on the East Coast. That’s a fancy name for someone who must quickly sell the vacant inventory homes of relocated executives whose homes were “acquired” via a “buyout” corporate perk. The very first question I had to ask myself when I went to the property before putting it on market was, “Who is likely to buy this house?” I needed to know if I had an expanded or diminished buyer “pool”.

Remember, the market is shifting from a “baby boomer” market to a “Generation X” market, and we have to change our thinking and valuing with the trends that are affected by this shift. “We” meaning anyone interested in the “value” of property, whether that be buyers, sellers or real estate professionals.

Here’s a simple scenario. Four houses. Each 2,600 hundred square feet per mls. Let’s say everything is comparable in terms of neighborhood, lot size, view considerations (all have a view) and improvements. The ONLY difference being the placement of the square footage, each being 2,600 square feet not including the garage.

House #1 – 1,400 square feet on the main level and 1,200 square feet on the second floor. 2,600 above ground square feet with 4 bedrooms on the second floor and none on the first floor. View from all “main” rooms, (kitchen, living room, entertainment spaces and master bedroom).

House #2 – EXACTLY the same house as House #1, but with views out the front door, not visible from main rooms and views from all children’s bedrooms only, when inside the home. In other words on opposite side of the street so front door faces the view instead of the rear of the house facing the view.

House #3 – 2,000 square feet on the main level with 3 bedrooms on main level and 600 finished square feet in basement level with one bedroom in the basement. All views from main areas on main “entertaining” level.

House #4 – 1,300 square feet on the main level with only the master bedroom on the main level and 1,300 on the basement level with three “children’s bedrooms” down in the basement. Another variation would be two bedrooms up and two bedrooms down.

What really concerns me, is I see people getting info from the internet regarding total square footage, and doing comps based on this total square footage. “The house across the street sold for $800,000, so this one is worth X on a “price per square foot” basis. Even if it is the house next door, PLEASE stop valuing property based on price per square foot based on TOTAL square footage. Clearly you can see that those four houses, all 2,600 square feet, have considerable differences with regard to value.

When a pregnant woman and her two year old walk into house #4, they have to walk right back out. Do you really think she is going to love her master bedroom with view, if her newborn baby and two year old are sleeping “in the basement”? Now, personally I love my kids being “in the basement”, as mine are grown. But I wouldn’t pay as much for the house with a huge master suite on the second floor and all other bedrooms in the basement, as I would for one with more bedrooms “up”, even though that suits MY “buyer profile“.

Diminished buyer pool means that the average family buying a home cannot live with that floor plan, and that affects value, even if that floor plan suits YOUR needs. If the answer to the question, “Where do the kids sleep?!?” is down in the basement, on a separate floor from “Mommy”….hmmmmm.

Investors be very aware of this concept, as what you are thinking is a “bargain” in the neighborhood, and buying as a flip project, may be the ones with this “floor plan flow” problem. You sink a ton of money into granite counters, etc. only to find the low price was based on these types of differences in square footage placement, and you get nailed on resale of the improved flip house.

If a house is not selling and the price is reduced below the prices of the neighboring properties, make sure you know WHY that is happening. Likewise, if a real estate agent prices a house with 3 bedrooms on the main level and views from main rooms like house #3, based on the price “per square foot” of the house next door like house #4 with the kids in the basement…THAT house may be a TRUE bargain.

New Construction Closing Dates

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Further to this string of three posts, I think we need to talk about new construction closing dates. I received a call about ten days ago from a former client whose brother was pulling his hair out regarding a new construction purchase. He was TOLD that the home would be ready in July or August, or at least that is what he heard. All of a sudden he got a call telling him that closing was in 2 days.

It was a very large, well known builder of moderate priced homes in this area whose contract stated they had about 60 days to build it and then the buyer had 2 days after that to close it. The buyer’s first language was not English and relied more on what he was told and did not read the contract specifics. I jumped in and resolved the problem for him. All worked out and I won’t give the details of how I did that, as that is not the point of this post.

The point is that buyers of new construction must know that builders ALMOST ALWAYS have a condition in the contract that the buyer must close within X days after the home is completed. Unless the builder takes a contingency on the sale of your home AND a contingency on the fact that the sale CLOSES, you are required to close within 10 days or less usually of the time the home is completed. Builders often do not put close dates unless it is a spec house already built. They do not want to carry that house after it is completed, they want to close. Read your contract carefully with regard to when you will be required to close and do not rely on “proposed completion dates” or verbal representations by the sales people.

Usually there is NO PENALTY to the builder if the home is built later than expected and there is a per diem charge to the buyer if the buyer does not close within the X days of the completion date. Also the builder does not have to extend the close date, so paying the per diem may not even be a viable option for the buyer. If you cannot buy unless you sell, you need to be sure you understand the complexity of meeting these builder contract requirements. Matching a sale to a new construction purchase is extremely challenging and ridden with potential pitfalls.

The YES, NO, MAYBE tour for relocating buyers

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I invented this back when I was doing a lot of relocation work for Coldwell Banker on the East Coast.  I thought Dustin and Anna might like to try it when looking at homes in California.  It comes in very handy when you are touring a lot of homes the first day in a new area.

It’s pretty simple.  You each have three little cards (kind of like Richard Simmons’ Deal a Meal – yes, it was that long ago when I came up with this.) One card says YES, one says NO and the other says MAYBE.  You can only use ONE card in each house.  Anna has a set and Dustin has his own set. 

At each house you are not allowed to say a word to one another until you make your selection from the three cards.  If you are touring homes with an agent, you hand her one of the cards as soon as you know your answer, not how you think your spouse will feel about the house.  Since there is a MAYBE card, this should be a fairly quick procedure for most people.  If the agent gets handed two NO cards as soon as they walk in the front door, you can all get back in the car.  Unless the owner is home, in which case you do a “pity” pass through.  Easier than saying we already know we hate this house.

If you have all NO cards played at the end of the day, what you don’t like is your price range, and you may have to go back to your new employer and say, “what you offered to pay me is not enough to live here”.  If you have three YES houses where you both said YES, you may as well toss out the MAYBE houses and go back at the end of the day to the three YES houses and spend more time in them.  I usually ask people to rank their YES choices as they go.  First YES, no ranking.  Second YES, you have to label one #1 and the other #2.  This way if you have 7 yes houses at the end, you can go back to #1, #2 and #3. 

Why did I feel the need to invent this system?  Can’t people know if they like a house without a little card? 

Here’s why. 

1) Sometimes the relocated spouse feels guilty about making the family move and says “Whatever my sweetie wants will be fine with me” until it is time to sign the contract and wants to offer 80% of asking price.  That’s called saying yes and meaning no.  It’s a passive/aggressive thing some people do 🙂

2) The wife walks in first and starts saying things like, “well, we could take this wall down over here and we could add a master bathroom…”, take it from experience, that’s a NO.  Before they start arguing over how they are going to afford the time and money to do all of that stuff…get a NO card and GET OUT!  Otherwise they will be crying and fighting before you get to house number 4.

3) When they both hand me a YES card and find out that the other party agrees, they can move through the house really evaluating whether or not they should actually buy it, instead of discussing whether or not the other likes it.  And you will be amazed at how happy they both are when you tell them they both said YES.  Sometimes one spouse is afraid to say they like the house because they don’t want the other spouse to buy it just because THEY like it.  It is a great moment when they both hand over a YES card.

Of course the client that keeps handing me all three cards at every house drives me nuts 🙂  Some people just don’t like to be pinned down.

Seattle in Top Ten for Continued Appreciation- Want to know Why?

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We’ve talked alot on RCG about whether we’re in a bust or a bubble real estate market and we in the Pacific NW have been watching the rest of the country and wondering, Why all the gloom? Bankrate.com and today’s Seattle times have some explanation that can provide perspective:

Last week, Bankrate.com unveiled its forecast for the changing real estate market in the U.S. over the next few years – ten markets where housing prices and values will continue to remain strong, ten markets where appreciation will pretty much top out and the ten markets that are most likely to experience a decline. They talked to experts, studied public and private databases, analyzed market trends and examined the analysis of many others.

The ten “bubble blowers,” where appreciation should continue to grow, are:

  • Boise (ID);
  • El Paso (TX);
  • Albuquerque (NM);
  • Seattle (WA)/Portland (OR);
  • Salt Lake City (UT);
  • Raleigh (NC);
  • Philadelphia (PA);
  • Atlanta (GA);
  • Little Rock (AR); and
  • Cincinnati (OH)/Birmingham (AL) (they were too close to call).

Just why this is happening in the Pacific NW is the subject of this mornings Seattle Times article by Elizabeth Rhodes. She sheds light on why Seattle is breaking the national trend toward stagnating or dropping home prices. Her article notes that the average home prices have taken a steep hike in the last year and appear to be continuing the rise.

Citing the NWMLS statistics that came out on Thursday, median closed price of King County single-family homes has shot up almost 12 percent in the past year, reaching $405,000 last month (and up from $392,950 in February).

Interestingly, sales are down, but so is inventory. In March 2004, there were 7,156 homes for sale countywide. March 2005’s inventory was 5,244 homes. This March recorded a further drop, to 5,100. This is the pinch that causing the rise in prices.

At the same time, the local economy is growing and employers are adding jobs, bringing more potential buyers to the area. So the competition for available homes is strong and prices are reacting accordingly.

We agents have been experiencing this hot market all spring as we did through most of last year, possibly feeling the market fluctuations first. We’re out there in it, pricing homes to reflect the low inventory and coaching buyers for the best positioning in a multiple offer situation. I just watched the price of an Eastside condo jump $20,000 in a two week period!

I didn't get the house…WHY?

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When there are multiple bids, and the price of the property is bidding up over the asking price, the amount of downpayment is sometimes the reason why your offer is not accepted.

Let’s say a property is put on the market at $275,000 and the highest offer is $315,000. There is an offer of $310,000 with 50% down and an offer of $315,000 with zero down. Usually the seller’s agent will advise the seller not to take the $315,000 offer, because she does not expect the property to appraise. While one can buy a house with zero down, that does not mean that the seller is willing to take the risks associated with a zero down buyer.

It is the seller’s agent’s job to know not only what they can get in the open market for a property, but also what obstacles might get in the way of the sale closing. These days, when an agent lists a property at $275,000, it is likely a price higher than the last few sales in the area and a price that will appraise, with some effort. When it bids up over that amount, the seller’s agent must be ready for what will happen if and when it does not appraise. Often that means that zero down buyers will not get the house, if there are other offers with larger downpayments, even if the other offers are for less money. A common result will be that the seller will counter the 20% down buyer with the highest price offered, regardless of escalator clause considerations.

This points back to my post noting that the appraisal is done for the lender. If the property appraises at $300,000 and the sale price is $315,000, the lender does not participate in the shortage. If it is a zero down loan and the buyer has no cash, the buyer will need the seller to reduce the price down to $300,000 for the transaction to close. The lender will only give the buyer 100% of the appraised value, without regard to the agreed upon sale price. If the buyer is a cash buyer, often there is no appraisal at all, since the appraisal is ordered by the lender.

This issue has come up in the last two offers I have presented. In fact, I lost a client who did not get the property because another offer at 20% down trumped her zero down offer. When she asked me to be more aggressive in getting her offer accepted, I explained that the seller’s agent made it clear that the 20% down buyer was going to get the property because they had 20% down and the agent knew the property would not appraise. There was just no way to get the seller to accept a zero down offer, with the costs included in the price, no matter what I did.

Buying your first property with zero down and the seller paying the closings costs is clearly possible, and is done every day. But often the zero down buyer, with no cash to pay their own closing costs, is excluded from purchasing the most popular house in the most popular neighborhood that has multiple offers.

Offering the highest price is of no consequence to the seller, if you can’t close.

Should You Leverage Your Home or Pay it Down Rapidly?

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There is a great debate within the inner-mortgage circles these days. Should we, as loan professionals, encourage clients to borrow as much money as possible? Or would consumers benefit more if we helped them to understand the advantages of 15-year amortization schedules and pre-paying principal? Let’s examine the pros and cons of both strategies.


Leveraging Your Property. In order to understand why you’d want to borrow as much as possible for your home purchase, you must first grasp the concept that equity has a zero rate of return. Here’s an example:

If Consumer “A” buys a home for $300,000, and puts 20% down, then they have $60,000 in equity. Over the next 5 years, the property appreciates $100,000 in value. Consumer “A” now has $160,000 in equity.

Consumer “B” buys a home for $300,000, and puts no money down. At the end of 5 years, that same home is now worth $400,000. Consumer “B” has $100,000 in equity, which is the same appreciation as Consumer “A”, a net $100,000.

As you can see, your down payment has nothing to do with your rate of return. What becomes important is how you choose to manage the $60,000 you didn’t use as a down payment. If you use it for frivolous activities, such as buying toys or going to Las Vegas, it would be more prudent for you to use that money as a down payment. Especially since this will enable you to obtain a lower interest rate.

However, if you were to invest the $60,000 in a vehicle that can out-earn the cost of that debt, then this could be a formula for success. This is why some lending professionals suggest putting as little down as you possibly can, maximizing your tax write-off, and investing the rest. This principle has been applied for many years in the life insurance game. The old saying goes, “Buy term and invest the rest.” The key component is taking the money you would have used as a down payment and creating an asset accumulation account. This account should earn a significant enough rate of return to enable you to pay your mortgage off entirely and achieve the ultimate goal of being debt-free.

Paying Your Home Down Rapidly. There are very few times over the course of my career that I have seen a client with zero debt and no financial difficulties. Choosing to pay off all of your debt can reduce stress and help you to gain freedom of cash flow for investment opportunities. A 15-year mortgage or a bi-weekly payment strategy provides structure. It can also put you on track to have your mortgage paid off within a set timeframe. Simply put, it contains built-in discipline.

It’s important, however, to understand that regardless of how rapidly you pay your home off, you’re not getting any greater rate of return on your investment than if you paid it off slowly.

Conclusion. So how does one determine which scenario is best? The choice depends entirely upon the individual. Savvy consumers who are disciplined, and are comfortable taking chances from an investment perspective, would do well with the first scenario. Over the course of time, it’s been proven that your rate of return over the long-haul will be far greater than the rate you’d pay for a mortgage in today’s rate environment. It’s important to seek the advice of a skilled investment advisor to ensure success with this strategy.

The second scenario is best for those who have a difficult time managing their money or who’ll sleep easier at night knowing they have a plan in place to pay their loan off more rapidly. Be sure that your budget can handle accelerated payments. When consumers “bite off more than they can chew” with a 15-year mortgage, they frequently end up having to refinance back into a 30-year schedule.

If you find this subject intriguing and would like to know more, I recommend that you read a book titled, Missed Fortune 101, by Douglas Andrew. It’s an outstanding read that is very simplistic and goes into far greater detail than I can cover in this column. Douglas is a financial planner who advises safe-structured investments such as whole life policies and tax-free fixed income instruments.

Understanding Credit Score and Credit Repair

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Credit remediation is a subject consumers often face with fear and trepidation, and for good reason. With the exception of recognizing that the best score wins, the average home shopper knows very little about the whole credit scoring process. Sub-prime borrowers who are eager to move into A-Paper territory often find themselves at a loss when trying to find ways to upgrade their credit history. The good news is there are ways to improve less-than-perfect credit scores and obtain a loan for the home you really want.

The first step in the process is making sure that you have a current copy of your credit report. Congress recently amended the Fair Credit Reporting Act so that consumers may now receive one free credit report annually. There are three major credit bureaus: Equifax, Experian, and Transunion. Since entries can vary across bureaus, you’ll want to request a free report from each of the three companies. (Go to www.annualcreditreport.com)


It’s also important to know just what a good credit score is. Most A-Paper scores generally begin around 680, although this number may differ slightly among lenders. Don’t despair if you come up shy, there is always room for improvement. Increasing your score just 5 points can save a significant amount of money. For example, if your score is 698 and you increase it to 703, then you could save yourself thousands of dollars over time as a result of a slight improvement to your loan’s interest rate.

While credit repair is necessary for some, it’s not the only way to increase your credit score. Even if you have stellar credit, you can enhance your score through these steps:

  • Evenly distribute your credit card debt to change the ratio of debt to available credit. Let’s say you have a credit score of 665. If you have debt on only one card, and four additional credit cards with zero balances, evenly distributing the debt of the first card could move you closer, and possibly into, that ideal bracket.
  • Keep your existing accounts open and active. The average consumer is usually anxious to close credit card accounts that have zero balances, but doing this can cause them to lose the benefits of a long-term credit history and increase their ratio of debt-to-available credit. The bottom line is don’t close those old accounts!
  • Keep credit inquiries to a minimum. Each inquiry into your credit history can impact your score anywhere from 2-50 points. When it comes to mortgage and auto loans, even though you’re only looking for one loan, multiple lenders may request your credit report. To compensate for this, the score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry, so try and stay within that time frame.

Remember, credit scores don’t change overnight. Improving them requires time and diligent effort on your part, so it’s a good idea to get the ball rolling at least three to six months prior to submitting your application for home financing.

If credit repair is what you need, you can either begin the process yourself or seek out a repair service. If you decide to make your own improvements, visit as many websites as possible to get information regarding credit laws and consumer rights. Diligently search through them and educate yourself to ensure that you don’t sustain any self-inflicted wounds. A good place to start would be the Federal Trade Commission’s website, which contains a wealth of helpful literature.

If you’re facing severe or complicated credit issues, then you’ll probably want to enlist the assistance of a professional credit repair company. Before you do, be sure to familiarize yourself with the FTC’s regulations on credit repair. With over 1100 credit repair companies to choose from, it’s important to be certain you are dealing with a reputable firm. Examine the FTC’s information on fraudulent practices to avoid falling prey to credit repair scams.

Addressing credit issues can be uncomfortable to say the least. But by taking these steps now, you’ll be that much closer to obtaining the home of your dreams.

Additional Resources:

To order your free credit report, go to:
www.annualcreditreport.com

To read the Fair Credit Reporting Act, go to:
www.ftc.gov/os/statutes/frca.htm

For the Federal Trade Commission’s information on consumer credit, go to:
www.ftc.gov/bcp/conline/edcams/credit/index.html

Interest Rates: When is the Best Time to Lock?

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I always advise my clients to lock in their interest rate at the earliest opportunity. Gambling with a client’s interest rate is never advisable. In my business, I have a standardized system in place that we adhere to for all of our clientele. A mortgage loan cannot be closed without locking in a rate, and there are three
main elements to take into consideration:

  • Interest Rate
  • Points
  • Length of the lock

Locking in on a rate does not obligate the client to commit to the loan until the loan is actually closed. The lock simply eliminates any risk of the borrower being exposed to market volatility. It provides the security of having time to complete the mortgage and Real Estate transactions with some sense of order. The lender must disburse funds to complete the transaction within the rate−lock period, or else the original commitment to provide a loan at a certain interest rate will expire.


When a lender permits an extended lock−in period, the borrower will usually see either a higher interest rate or more points associated with the loan. The lender does this to minimize their own exposure to market volatility; hence the borrower pays for the lender to take on this risk.

For example, a 30−day rate lock commitment may cost the consumer one−half point, while a 60−day rate lock commitment could cost 1 full point. If the borrower needed an extended lock period, but did not want to pay points, the lender could make up the difference in the interest rate. In this case, typically, a 60−day lock would have a higher interest rate than a 30−day lock.

In my business, our standard procedure is to lock in a rate as quickly as possible once we have received the loan application. My team and I let our clients know that while interest rates fluctuate daily, most lenders do not want to lose any business. We know that in many cases, if there is a significant rally in the market that causes interest rates to drop .25% or more, we can ask the lender to renegotiate the rate. or understand that we will take the loan to another lender.

Often the lender allows for a renegotiation of the rate to avoid losing the loan to another lender. If we allow our clients to sit on the fence and not lock in a rate quickly, we would leave them exposed to market volatility. Then, if rates do increase, the borrower may be unable to qualify for the loan they want, which is a situation we try to avoid at all costs.

By knowing our clients’ needs and working intimately with them to make the right decisions, my team and I are proud to say that we have many clients who are raving fans.

I guarantee you’re going to get this mortgage, I think.

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donna's homeWhy does the mortgage business seem so insane and unreliable?

Well, there are a couple of reasons. One reason is there are a tremendous number of loan officers who have no experience but who are pretending they do. As loan officers, our job is to make your loan work. When we look at a loan application, we examine all possible reasons we can find that could be a problem. These are things like properties under construction, borrowers who are out of work, too much debt, not enough income, complex income situations, low credit scores, title problems, and much more. Loan officers with lots of experience have seen so many different situations with such complex problems they know how to evaluate a new loan and spot potential problems. Where we run into trouble is with the underwriters. These folks work for the lenders and they review all of the information sent to them from the loan officer. They have guidelines and matrices which tell them what’s acceptable and what’s not. Underwriters will ask, or what we call “condition

10 Questions for Home Buyers to ask a Real Estate Agent

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I pulled these ten questions from a handout that the national Realtor organization published. There are good questions and, if used by a buyer, they should definitely give you a feel for the quality of the agent. So as not to be above the fray, I’m planning on adding my response to each of these questions as time permits.

1. Are you a full-time professional Realtor? How long have you worked full time in real estate? How long have you been representing buyers? What professional designations do you have?

  • Knowing whether or not your Realtor practices real estate on a full-time basis can give you a piece of the puzzle in foreseeing scheduling conflicts and, overall, his or her commitment to your transaction. As with any profession, the number of years a person has been in the business does not necessarily reflect the level of service you can expect, but it is a good starting point for your discussion. The same issue can apply to professional designations.

2. Do you have a personal assistant, team, or staff to handle different parts of the purchase transaction? What are their names and how will each of them help me in my transaction? How do I communicate with them?

  • It is not uncommon for high real estate sales producers to hire people to work for them or with them. They typically work on a referral basis, and, as their businesses grow, they must be able to deliver the same or higher quality service to more clients.
  • You may want to be clear about who on the team will take part in your transaction, and what role each person will play. You may even want to meet the other team members before you decide to work with the team overall. If you needed help with a certain part of your home purchase, who should you talk to and how would you communicate? If you have a question about fees on your closing statement, who would handle that? Who will show up to your closing? These are just a few of the many important considerations in working with a team.

3. Do you and/or your company each have a website that will provide me with useful information for research, services, and how you work with buyers? Can I have those Web addresses now? And who does the emails? Can I have the email address now?

  • Many homebuyers prefer to search online for homes and home buying information. There are certain privacy and comfort levels that you might appreciate in starting a preliminary search this way, and often it is just a matter of convenience, having 24-hour access to information. By searching the Realtor’s and the company’s Web sites, you will get a clear picture of how much work you would be able to accomplish online, and whether or not that suits your preferences. When I have a question, how quickly do you respond to emails?

4. Will you show me properties from other companies’ listings?

  • Some real estate companies do offer their buyers’ agents a higher commission if they are able to sell “in-house” listings. In such circumstances, there can be added incentive to show you a more limited range of homes than you might consider. If this is the case with your Realtor, you should be very clear on how this will impact your home search, if at all. You also should determine it this affects how much your buyer agents fee will be.

5. Will you represent me or will you represent the seller? May I have that in writing? How will you represent me, and what is the direct benefit of having you represent me?

  • The goal here is to ascertain to whom the Realtor has legal fiduciary obligation, which may vary from state to state or even locale to locale. In the past, Realtors always worked for sellers. Then the listing broker was responsible for paying the agent or sub-agent that brought a suitable buyer for the home. And even though the buyer worked ‘with’ an agent, the agent still represented and owed their fiduciary duty to the seller.
  • An additional situation in some states is dual agency. This is where the buyer decides to have the listing agent prepare the offer for him. A knowledgeable buyer may elect this situation which should be fully disclosed to all parties. In some states it also affects the broker’s/agent’s fiduciary responsibilities to the seller.
  • Although Realtors today almost always have a sense of moral obligation to buyers, this original type of seller agency still exists in certain areas. In other areas, a formal method of buyer representation called Buyer Agency exists to protect buyers. Find out what is available in your area and make yourself comfortable with the extent to which you will be represented.

6. How will you get paid? How are your fees structured? May I have that in writing?

  • This is an issue that can also be related to agency. In many areas, the seller still customarily pays all Realtor commissions through the listing broker. Sometimes, Realtors will have other small fees, such as administrative or special service fees, that are charged to clients, regardless of whether they are buying or selling. Be aware of the big picture before you sign any agreements. Ask for an estimate of buyer costs from any agent you contemplate employing.

7. What distinguishes you from other Realtors? What is your negotiating style and how does it differ from those of other Realtors? What geographic areas to you specialize in?

  • It should be important to know that your Realtor has unique methods of overcoming obstacles and is an effective negotiator on your behalf, but most importantly that your Realtor can advocate for you in the most effective ways.

8. Will you give me names of past clients who will give references for you?

  • Interviewing a Realtor to help you buy a home can be very similar to interviewing someone to work in your office. Contacting a Realtor’s references can be a reliable way for you to understand how he or she works, and whether or not this style is compatible with your own.

9. Do you have a performance guarantee? If I am not satisfied with your performance, can I terminate our Buyer Agency Agreement?

  • Understand that, especially in the heavily regulated world of real estate, it can be increasingly difficult for a Realtor to offer a performance guarantee. Sometimes you may find a Realtor who is willing to guarantee that if you are dissatisfied in any way with their service they will terminate your Buyer Agency Agreement. If your Realtor does not have a performance guarantee available in writing, it is not an indication that he or she is not committed to perform, but rather that he or she is willing to verbally promise some kind of performance standard. In fact, Realtors at Keller Williams Realty understand the importance of win-win business relationships, and that the Realtor does not benefit if the client does not also benefit.

10. How will you keep in contact with me during the buying process, and how often?

  • It’s a good idea for you to set your expectations reasonably in accordance with how your Realtor conducts business. You may be looking for an agent to call, fax, or email you every evening to tell you about properties that meet your criteria which are new on the market. On the other hand, your Realtor may have access to systems that will notify clients of new properties as they come on the market (which could happen several times a day or several times a week). Asking this extra question can help you to reconcile your needs with your Realtor’s systems, which makes for a far more satisfying relationship.