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These are some of the most common real estate agent secrets that they won’t tell you during the home buying process.
4 Key Secrets Your Real Estate Agent Won’t Tell You
While most real estate agents are going to do their best to guide you through the home buying or selling process, they probably won’t divulge some of the tricks of the trade or share their secrets with you.
Agents need to earn a living just like you and me, and while some do pull in huge commissions, the industry is very competitive, with the average salary for a real estate sales agent less than $46,000 a year, according to the US Bureau of Labor and Statistics.
Depending on their location, that may not even be enough for an agent to buy their own home.
When they earn a big commission check, most not only have to divide it with their brokerage but pay their own expenses, from the sign that goes up in front of your house and the lockbox to association membership and much more.
Realtors play an integral role in helping individuals address their housing needs, whether helping someone find their dream home or simply downsizing to something smaller.
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None of this would be possible without the assistance of a quality real estate agent. The real estate market is full of honest folks who want to get the best possible deal for their home but beware the underbelly of the business.
How to Deal with Real Estate Agents
Keep in mind that real estate agents don’t have a crystal ball into your financial status, social status and needs from your new home purchase.
If you want to have an effective efficient process with your real estate purchase, then you should do the following:
- Set up a pre-meeting to get to know the agent and what they specialize in
- Have a discussion on your goals, financial situation and ‘wants vs needs’ in a house
- Conduct a walkthrough appointment even if properties don’t fit your criteria; state what you like and don’t like about the properties
Be transparent. There’s nothing better. Use a free tool like Personal Capital to bring your total financial picture into perspective.
Personal Capital is completely free and it will help immensely during the home buying and selling process.
Also, it helps if you choose a real estate agent that has a similar social standing or you can relate to. You want to keep a friendly relationship throughout the process.
Questions to Ask Your Real Estate Agent
While you are participating in the buying process of a home, you should ask the following questions:
- What is the current state of the market for real estate in my area?
- Are there any particular deal considerations that are special this year relative to historical?
- How many houses do your clients typically see before putting in an offer?
- Are home warranties common for homes in this market or area?
These types of questions are a great way to start the conversation and fact-finding on if your real estate agent is credible or not.
Things that Real Estate Agents Won’t Tell You
Not everything is sunshine and roses when it comes to buying or selling your home. Here’s what real estate agents won’t tell you (but you should know anyway).
Arm yourself with information about the business and you’ll have a powerful weapon when it comes time to sign the paperwork.
Agents Prefer to Work with Pre-Approved Buyers
Real estate agents don’t necessarily divide their time equally and they’re almost always working with multiple buyers at the same time. Pre-approved buyers have a written commitment from a lender for a certain amount, conditional upon underwriting and a home appraisal.
Agents usually put the priority on the buyers who are already pre-approved for a mortgage loan to avoid wasting time for getting their Charlotte real estate.
This can also eliminate showing interested buyers properties that are out of their price range since they know the amount they are pre-qualified for and know that they are credit-worthy enough to get a mortgage.
Get pre-approved by following the below steps:
- Check your credit score with a free tool like Credit Sesame (get FREE identity theft insurance if you use my link)
- Find the right lender through a tool like Lending Tree and get pre-approved instantly (if you have the right credit)
- If not, ask your realtor what banks are reputable and seen favorably by sellers
Be Wary of a Seller’s Agent Who Overestimates the Selling Price of Your Home
A good agent knows that overestimating how much your home is worth is a bad idea. You may love your home, but that doesn’t mean it will sell for what you hope it does. An agent who encourages you to do this or doesn’t push back when you ask them to might be simply hoping you’ll choose them over another agent who will price it more realistically.
Agents refer to it as “buying your listing.” What it means to you is that your home is likely to sit on the market for a long time.
This can cause problems down the road.
Many buyers are wary of purchasing a home that has been on the market for an extended period of time, often low-balling on their offer.
Sellers will want to get a realistic appraisal to better understand the value of their home and to be prepared when it comes time to put their house on the market.
Renting Might Make More Sense
A real estate agent probably isn’t going to tell you that buying isn’t right for you, but they may be thinking it. In some cases, you may be better off financially by renting as it usually costs less and allows you flexibility if you need to move quickly for a job opportunity or for another reason.
Plus, you won’t have to shell out large amounts of cash for repairs when things break. Think of it this way–when you rent, if your hot water heater goes, you’re not the one shelling out the cash for a new one, or going through the hassle of installing it–someone else is.
If you do not have enough of a down payment or are not sure you’d qualify for a mortgage, save time looking into buying and instead continue renting.
This will put you in a better position to buy in the future and may help you get into a better property overall when you are finally ready and able to buy.
You are the lowest in the capital stack as an owner of the home. If things go south, you can lose it all.
You Should Check Agents History and References
No agent is going to outright tell you if they have a shaky history that includes unsatisfied clients. Even if they’ve had their license for several years, they could be moonlighting while working a full-time job, and yours might be the first home they’ve tried to sell in years.
That’s why it’s a must not only to Google the agent’s name to see if it comes up on real estate websites and forums, but to specifically ask how many transactions they’ve completed in the last year and request a list of their three most recent past clients whom you can call for references.
Simply asking for references doesn’t go far enough as they aren’t going to give you names of people who might speak poorly of them. If you cannot get this information directly from the agent, contact the agency they work for and request it there.
The real estate market is a cutthroat one, with many agents willing to do anything to sell a property and make a commission. Buyers and sellers need to do their research to ensure that they are working with a professional real estate agent, one who only has their best interests in mind.
Make sure you know who you’re dealing with up front before you get into a situation that is difficult to get out of.
The process of buying or selling a house can be stressful. Don’t let a negative encounter with the wrong real estate agent sour your entire experience.
Keep these pieces of advice in mind for a smoother, better real estate experience, whether you’re buying or selling.
Conclusion on Real Estate Agent Secrets
Most real estate agents mean well and are trying to help you find the right home. There’s sometimes the tough questions and barriers that come up during the home buying and selling process that you need to know.
Real estate agents know what they are doing. I doubt any of them would recommend a timeshare or something similar. However, just like any other profession, there are good ones and bad ones. Ask the right questions to gauge if your realtor is the right fit for you or not.
You can avoid some of the lack of communication with a real estate agent by:
- Ask the tough questions up front
- Staying transparent and communicative
- Tell them your financial situation upfront
- Show you are committed to buying (if that’s true); if you are undecided, let them know and see if they can guide you in the right direction
You can learn more about real estate by reading different real estate books. These can help you find the right market that will protect your financial stability over the long-term.
The real estate purchasing process can be stressful. It shouldn’t be though.
Have fun with it and know the risks associated with real estate in advance.
Once you buy your house, use these energy saving products to improve your home AND lifestyle.
What are your favorite secrets of real estate agents that they aren’t telling you?
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I started Millionaire Mob as a retire early blog to help others learn from the success (and mistakes) that I made along the way to financial success. I’ve been tracking my net worth through Personal Capital…. I love the platform.
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