What You Need To Know Before Buying A Home
Choosing the Right Real Estate Agent
Did you know it takes 12 months to get a license to cut hair in Louisiana and it only takes 2 weeks to get a license to practice Real Estate?
Yes, that’s correct!
To become a licensed Cosmetologist in Louisiana requires 1500 credit hours and most students take a little over one year to complete the course. To become a Realtor the state requires a 90-hour course that takes the average full time student only two weeks to complete.
So, now we know why everyone has a Realtor somewhere in the family!
Ever heard of the 80/20 rule?
Simply put, it’s a current theory in economics commonly credited to the turn of the century Italian economists Vifredo Pareto that states 80% of consequences are derived from 20% of actions.
80% of your daily productivity results from only 20% of your daily activities.
80% of our nations wealth is held by only 20 of our nations wealthiest families.
80% of all home sales are made by 20% of practicing Realtors.
That’s why it’s important to choose the right Realtor when you decide to buy a home!
I know in-laws and relatives want you to use that distant family member or, you don’t want to stress that relationship with your co-worker or business partner, but this is quite possibly your biggest investment. Don’t get stuck with a part time agent, it could wind up costing you thousands.
At Watermark Realty, LLC we only employ full time licensed Realtors to work with our buyer clients. You will never have an unlicensed secretary, personal assistant, listing manager or closing processor call you or attempt to show you property.
You should interview agents before choosing to work with just any Realtor.
So, Ask hard questions!
How many transactions have you closed this year?
This tells you how much time they are devoting to the business, and if they are full or part-time agents.
How many customers are you currently working with?
This will let you know if you are going to be dealing with a personal assistant, office manager, team member, or closing processor. You want to deal with the agent you hired not some third party office personnel.
Will you outline the buyer process from start to finish?
Your agent should go over the buying process and the paperwork in detail. If they seem rushed or frustrated they probably aren’t going to be a good fit. They should give you an outline of the process so you know what to expect during the transaction.
Your Realtor should provide you with a copy of a purchase agreement and property disclosure so you will be familiar with the document prior to writing a purchase agreement or negotiating. Brush up on negotiating strategies in real estate transactions. Your Realtor should be able to give you guidance and act as a source for referral material if not you might have the wrong agent.
Will you require me to get pre qualified?
To conduct an initial assessment of your needs and explain the process you don’t have to be pre-qualified. But, if you want to start looking at property it is a must to get a pre-approval before you began the process.
It’s simple you need to know how much you can afford before you start looking at homes.
If you go to a car dealer and you want to look at automobiles they will pre-qualify you to determine what car you can afford based on what you want to spend. Then they will show you automobiles that are in your price range so as to effectively manage everyone’s time. If your Realtor is not doing that they may not have a good idea of how to affectively manage time. You should choose a Realtor who is organized, and has a formal process that they can explain from start to finish.
How much paperwork is involved in a transaction?
When you first meet a Realtor in Louisiana they are required to present you with an Agency Pamphlet or Agency Acknowledgement, which is designed to explain an agent’s role is in a transaction.
If your agent does not present you with this form at your first meeting then you need to find another agent.
There are a number of forms that your Realtor will need to prepare before you can make an offer on a home. You should ask them to give you an overview of those documents and explain how a transaction works prior to writing an offer.
Will you provide me with a Comparative Market Analysis (CMA) just like a person selling a home?
The quick answer is YES!
Your agent should run numbers on any home you consider buying. Your agent should never just rely on the other agent’s market analysis or their past experience. The market can fluctuate dramatically and what is correct today may not be the case three months from now.
I once had a real estate broker and company owner tell me never to run comps for a homebuyer! He said it was like walking around with rocks in your shoes.
Obviously, some Realtors will plan on giving bare minimum service its your responsibility to demand full service and weed out the sub-prime agents.
Do you work by contract or can I switch Realtors during the process?
In Louisiana there is no requirement for Realtors to contract with a potential buyer, but if you choose there is a buyer brokerage contract available for your protection.
Most Realtors won’t bring the subject up with a potential buyer because it is an industry standard to operate without a contract. Generally, Realtors fear that introducing a buyer brokerage contract will scare off would-be buyer.
Its unfortunate, because when one enters into a contract the performance of both parties is clearly defined in writing. Sure you may limit your ability switch Realtors mid stream but odds are you won’t change Realtors once you establish a relationship. At that point you don’t have a written document outlining what your Realtor is expected to do during your transaction. As they say the door swings in both directions.
Choose your Realtor wisely, conduct an interview, ask questions, and consider a buyer brokerage contract.
Do you endorse any particular lenders, title companies, or service providers?
Some real estate companies endorse particular vendors and even attempt to steer buyer customers to their particular service providers. In most cases this can get the real estate company and the vendors in trouble with Housing Urban Development (HUD) for violating the Real Estate Settlement Procedures Act (RESPA). If your Realtor is insisting that you use a specific lender, or title company you need to consider finding a new agent and reporting the incident to HUD.