One may ask, what is the difference between a real estate agent and a realtor? A real estate agent is not a realtor.
A realtor is one who is authorized by the Realtors’ Association on a national level. A good agent will still follow all the same rules and virtues as a good realtor. It should not make a difference.
As well as with authorization, agents must also fulfill some other conditions like:
· Ethical and moral behavior towards the client.
· To maintain and carry on the standard of the whole association.
· Obeys rules and regulations of the state in which they are serving.
For example, they must follow the property right rules, taxation policy etc.
· An agent is also caring towards the client rights.
How to Hire a Good Agent?
Since we’ve discussed who an agent is, there is another question to answer.
How do you hire a good agent who meets all the criteria and has the right qualities?
A real estate agent is one which deals in house, property buying and selling. These agents are aware of properties in the area that are available for sale.
They will be informed of everything you need to know about the property. The first step to finding a good agent is to contact one. Doing an interview will help you find the agent you are looking for.
The purpose of interview should be to check all the qualities of the agent. Is this agent the right fit for your home buying process? Do they have the qualities you are looking for in an agent?
The agent must have qualities like ethical behavior, moral aspects, working capabilities, ideas, and motivation toward the work. Another important factor to consider is the agent’s experience. Do they have positive feedback from previous clients?
Also ask how many properties/houses were closed by them. This will be a key step in learning the expertise of the agent. If the agent has never made a deal, you may want to keep searching for a more qualified agent.
A simple way to review everything before signing or hiring an agent is checking these things:
· Previous deals and hiring (portfolio).
· Working hours, capabilities, skills, motivations, ideas and loyalty.
· Ethical exams certifications.
Interviewing a Good Agent
After confirming the agent is legitimate and ethical, it’s helpful to list the qualities and downsides of the agent.
This will be helpful in making a final decision. If the agent meets your demands and requirements for the work, then you should schedule a meeting. Construct a contract with the agent concerning your policies and then hire them for your house search.
Contracts are an important step in the agreement between you and the agent. The contract will protect you from any violation of rules or regulation on the agent’s part. It will also allow you to void the deal if your needs are not met according to the contract.
After these steps, tell your agent about the requirements of the property you wish to purchase. The things which are important to a buyer can be:
1. No. of bed rooms.
2. Kitchen, washrooms, TV lounge, car parking etc.
3. Location of the house.
4. Most importantly, the range of your budget.
Giving your agent certain housing requirements will allow them to find the perfect home for you.
Do’s and Don'ts in Negotiations when Buying a House
You visited dozens of open houses and met with builders and sellers. You looked for the ideal neighborhood and searched for the best available offers. Now you have finally found the property you are willing to pay for.
Or maybe you were lucky. It was a love at first sight and now you are eager to close the deal as soon as possible.
In any case, welcome to the most valuable and challenging process of the home buying, the price negotiations. First of all, start with your financial status estimation and available options of financing.
If you are a first-time home buyer, there will be federal programs and state loans to help you with down payment and mortgage interest rates.
Usually you know how much money you wish to spend. Considering all of the opportunities will give you flexibility during the negotiation process.
How to Make your First Offer the Best Offer
Making your first offer is an important step which needs a significant amount of preparation and analysis.
A lot of components should be considered when submitting the proposal to the seller.
One of those components is a comparative market analysis, which is a mathematical model to find out the value of your future home. It calculates the basic conditions, such as number of bedrooms, bathrooms, existence of the yard, or swimming pool. Then it compares your potential home to similar houses on the market in your area.
This model will give you an idea of the average basic cost, which will be fundamental for your offer.
After the approximation, you add or remove the components that increase or decrease the value respectively.
For example, you know that the current owners have recently changed all the plumbing in the house. Or the opposite, their plumbing is fifteen years old and will probably start breaking down soon.
Then research the market trends: is the market going up or down? Do people buy or sell more? Are there any houses being built that will soon be on sale?
All of those calculations and forecasts may take quite a lot of time, but they will leave you with several options to consider and choose from.
For these cases, the real estate agent's services will be very helpful. Besides, he is a professional.
It will not take as much time for him to evaluate all the pros and cons and come to you with a proposal.
Your real estate agent must assist in this process and normally helps to decide on a few things. He will help you figure out how much money you should offer and which factors may or may not be in your favor.
After you agree on a price, the agent will send the proposal to the seller or seller's agent. The seller’s agent will either accept it, or present you a counter-offer. Then, negotiations will go back and forth until you settle and reach an agreement.
After that, the home buying will move into the escrow.
Remember that all the agreements must be in writing, as your accepted offer will become a part of the purchase agreement.
Negotiating the Price: Which Tactics to Choose
The goal of your negotiation is to buy a house for the amount of money you are willing to pay.
Think of the highest maximum bid that you can afford and do not ever offer more. It is also good to research why the owners are selling the house.
Do they want to sell it because they are moving for a new job?
Has the property price been reduced due to an extensive time on the market?
In both cases it is likely they will want to sell quickly. You can stand your ground if they have a counter-offer.
If the house has been listed several times with a stable price, it is a sign the home owners are taking their time and may be waiting for the highest offer.
Depending on what kind of market you are in, strategy and tactics will vary.
In a buyer's market you have more possibilities to succeed. You can make a less than reasonable offer, demand for some house improvements, better closing date and even closing fee payment by the owner.
In a seller's market you have less leverage, as you are not the only one in line. You are most likely to succeed by offering a seller's price. If he does not get it from you, he will receive another offer very soon.
It is vital to understand that both the buyer and the seller may forget the final goal: to buy and to sell. Sometimes the parties get carried away in a battle of negotiating. Lock your eyes on the ball, but at the same time be realistic in your expectations of the situation. The following tactics will hopefully help you to stay focused.
#1. Use the Middleman
Your real estate agent can be your middleman to negotiate with your seller's representative. He should be your middleman and have a big influence in it.
Using him as a buffer will save you time. He may also provide useful information concerning the sellers, their intentions, etc., which the other party will not disclose to you directly.
#2. Play Good Cop, Bad Cop
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