So Your Buyer Found a House they Like...Now What??
Woo Hoo! As a new agent you can almost hear the sound of a cash register yelling ‘Cha-Ching'! You breathe a sigh of relief that you will soon have a paycheck...ideally in 30-45 days.
But wait just a second! Do you just jump into writing a contract after doing your giddy school girl happy dance?
No, no, no...like the 12 years you spent in school, you must do some HOMEWORK!
You must do some digging around before you even sit down at the table with your client to get their signatures. A good buyers agent will always research the following 4 things: the County Appraisal website, MLS Archive, Comparable Market Analysis & don't leave out the Listing Agent!
1. County Appraisal Website
- Pull up the address on the county appraisal office website and print out the information. Why?
Unless the listing agent tells you otherwise, the name of the current seller is listed here. You'll need that for the contract.
You can see the date the current owner bought the property.
If they've owned for less than 3 years, they might not have a lot of equity. This could be a red flag so make sure they haven't overpriced their home to compensate for little to no equity.
You might be able to see who the original builder of the home was.
This could be handy if the home is newer than 10 years old. In the North Texas area, most homes come with a 10 year foundation warranty. Knowing who to contact for foundation problems will be helpful.
Perhaps a builder in the area has a somewhat less than stellar reputation and you want to know about it and inform your client. Maybe the builder is bankrupt. Or maybe a client really LOVES a certain builder.
Finally, look at the current ASSESSED VALUE OF THE HOME. I like to say ASSESSED value, not APPRAISED value. Why?
Appraised indicates that someone has actually walked into a home to see the location, condition and upgrades. It implies that care has been taken to establish a value.
Assessed values are just that - the value of a home that has been arrived at by some formula the county uses.
So why look at it at all? If the county has the home valued more than 25% off, either up or down, try to find out why. The assessed value gives you a BALLPARK figure. Make sure your buyers understand this! Plus, if it's valued LOWER than what they are buying it for...then bonus! They will pay less in real estate taxes...and that's a very good thing!
2. MLS Archive
- Past MLS History
If the home has been listed on the MLS in the past, then doing an "Archive Search" will bring up a few key bits of info, like: HOW MUCH the owner paid for the home and WHEN. It may indicate WHAT TYPE of financing they did (100% financing, cash, etc). Was the home a flip? Was the home ever in foreclosure? How long have they been trying to sell the home?
3. Market Analysis
- Comparables - do your Market Analysis! Now, this topic requires a training all to itself, but ideally make sure you can stick to as many of the following guidelines:
Use only SOLD homes. Sold within the last 6 months. Located within a 1 mile radius (ideal if in same neighborhood or school zone). Within 150 square feet of the subject property (if less than 3,000 sf or within 10% if larger than 3,000 sf. The age of the home is within 5 years +/- the subject home. The sales were NEW LOANS - not cash or assumable or owner financing. No distressed properties (foreclosures or short sales).
4. The Listing Agent
- Contact the Listing Agent! Try to ask a lot of open ended questions to see what kind of information they offer up, like:
Why are the current owners moving?
What is their time frame for moving? Do they need time to find a new property?
Can you please send me a Seller's Disclosure Notice?
Do they have a copy of the survey you could see?
- Try to have a very cordial first conversation. This can set the tone of the relationshiop if you end up working on a transaction together. Let them know that your client might be interested in their listing, but never give away any negotiating power ...don't say, "My clients LOVE this house and told me they'd pay LIST PRICE for it!", or "They're not looking at any others cause this one is just perfect and the wife would DIE if she couldn't get it." Not only are you giving away negotiating leverage, but you are VIOLATING YOUR AGENCY CONTRACT WITH THE BUYER! Remember that "Confidentiality" clause??
By having your Homework done prior to meeting with your client, you'll appear ready to tackle the negotiating process for your buyer. Information = Power. The more research you do, the less nervous you'll feel when discussing your negotiating strategy with your buyer and you'll be able to answer most of their questions! Your buyer will be able to tell if you're unsure of yourself or your abilities. But if you're armed with the right ammo, you'll be confident and ready to snag that dream home for your client!
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If you're looking for a home in the McKinney, TX area then search for homes on my main Collin County real estate website at www.ServinginCollinCounty.com.
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