Author Topic: Should we find a new real estate agent?  (Read 8293 times)

DougStache

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Should we find a new real estate agent?
« on: July 27, 2013, 06:31:54 AM »
Hey all!

My wife and I are starting the process of buying a house.  Of course, we have a 20% down payment and even have 13k left over to cover closing costs / etc (which I do not expect to spend a large portion of).  This is in addition to our 6 month emergency fund.  The point of stating this is to show that we have worked hard to get the financial side in order, and we don't want to blow it.

A good friend of ours recently bought a beautiful 2300 sq ft house for 150k, which appraised for 170k.  When he gave me the contact information for his realtor, I decided we would try her out since they had such a great experience.  We had our first meeting with her last night and I'm already having second thoughts.  She stresses her job is to "make sure we're making informed decisions" but I feel like I'm taking advice from a car salesman; I can pick out the big lies, but I'm having trouble discerning the rest.

For example:

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Buying is always better than renting!  Equity! Tax deductions!
Honestly, I expected this one.  Its her job to sell houses.  But please don't lie to my face.

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You should use as much purchasing power as you possibly can.
I expected this one too, but this is where she lost me.  I probably even laughed at her even though I tried not to.  Isn't this the same shit that caused the housing bubble?  I fully intend to keep our pre-approval amount close to the chest, because I'll be damned if I give her an edge on pushing the price higher than we want.

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You really should consider title insurance.
This struck me as selling based on fear, which automatically turns me off.  I had never heard of it before.  Is this a ploy for more money, or actually a good idea?

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Don't use online banks; even if their rates are better, the reviews can't be trusted.  They're too slow, and real estate happens FAST!  Only use local banks, because we have contacts there and can get things taken care of more quickly.
I do see the merit in using a local bank.  I value shopping locally, and keeping my money in the local economy.  For those reasons, a local bank could be worthwhile.  However, I still felt as though she was trying to push me towards local banks because she gets some sort of kick back for the business.

So, is this all general real estate snake oil I would expect anywhere?  Or should I bike as fast as I can away from this real estate agency?

jambongris

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Re: Should we find a new real estate agent?
« Reply #1 on: July 27, 2013, 06:55:57 AM »
I have limited experience with real estate agents so I can't tell you if she is better or worse than any others. Ours took us for a flight over our house and the surrounding area in his plane after we bought our first house (buy with me, fly for free!).

That being said, she may actually believe that "Buying is always better than renting" etc.

I don't know which is worse though, a lying real estate agent or one who isn't informed enough to know that buying isn't always better than renting.

Winter's Tale

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Re: Should we find a new real estate agent?
« Reply #2 on: July 27, 2013, 07:01:09 AM »
It was important for us that our real estate agent was someone we felt we could trust, even if we didn't agree 100% with what she said.   We felt that she did have our best interest at heart. 

It sounds as though you do not feel a sense of trust with this person already.  Could you ask around your friends and family for other recommendations?  Maybe that agent was a great fit for your friend but isn't for you.

Good luck.

fiveoclockshadow

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Re: Should we find a new real estate agent?
« Reply #3 on: July 27, 2013, 07:41:50 AM »
I'll echo Winter's Tale's thoughts that you want to have a good relationship with your real estate agent.  However, for a buyer it is probably a bit less of an issue than for a seller. 

I consider the first point a bit of a red flag.  I've worked with a few realtors and they've all understood that if your time horizon is short renting is a better option and are upfront about the high transaction costs with real estate.  Yes, I expect a realtor to want you to buy but not to the point of giving bad advice.  In our area realtors will even represent renters - they do this at nearly no financial benefit to themselves (it is almost pro bono work) but they view it as the potential for a longer term customer relationship should the same person want to buy in a few years.

The second point is laughable.  There is one valid argument for this position - if you have rising salaries and expect to have a family then you should buy a home for the long haul.  Again, transaction costs are high so if you need space for the kiddies go ahead and buy with that in mind assuming you expect to be in the area for the long term.  Besides that one case remember real estate is not an investment and more is not better. 

The third point can be quite valid.  I think some lenders even require this.  It usually isn't a high cost and if the title is screwed up well there is a whole lot of pain associated with it.  Like all insurance it is some what based on fear and the cost and value of it is very opaque.  That said, it is essentially a form of catastrophic insurance - you really can't afford to pay for a house and then not actually own it.

The fourth point may be valid depending on where you are.  Some markets are quite hot right now with only cash buyers having any luck.  So if you do get into escrow and then your lender screws up the seller may instead of extending escrow for your just say "Nice knowing you, I've got five cash offers higher than yours lined up and waiting".  So you want a reliable lender that will move the loan.  Now - is that a local bank or an online bank?  Good question. 

I've dealt just with the pre-approval process with an online bank and "inept" would be the kindest word I can think of to describe them.  I've known others that have worked with non-local banks and been very happy.  However, there are other good options.  I've used independent mortgage brokers twice.  You either pay them a direct fee and any kick backs from the lender come to you or else they get paid from the lender but disclose their payment to you.  The benefit is that you have exposure to the full mortgage market, they will look at everything available from all sources and bring the best deal to you.  The second benefit is they know what the hell they are doing unlike some drone at an online mortgage house.  Case and point, when we bought our house a few years ago during the home inspection the comment was made the roof might have five years left and perhaps a roof inspection should be done.  We were putting that into the inspection statement going to the seller.  Both real estate agents were fine with that.  Our mortgage broker immediately red flagged it as he knew that paper work would go to the lender and that at that time lots of lenders were freaking out about bad roofs on houses and we'd get caught in a multi-week screw up if the lender even saw the word "roof" on a piece of paper.  We changed the documents and had all parties sign again after leaving the roof comments out.  Both real estate agents were very impressed with our mortgage process, they of course were having nearly 1/3 of contracts fail because of the mortgage (early 2010).

So I understand your problem.  How can you trust any advice from someone who says both crazy things and sensible things?

willn

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Re: Should we find a new real estate agent?
« Reply #4 on: July 27, 2013, 08:28:04 AM »
Yes to title insurance.  The rest doesnt matter much.  She's your buyers agent and so she just needs to relate well in your interest to other agents. Sure, use a local bank for preapproval but once you ratify contract get five other quotes from different mortgage companies, use one as leverage against the other you'll be surprised how much you can get a better interest rate. Your loan will be sold anyway.

arebelspy

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Re: Should we find a new real estate agent?
« Reply #5 on: July 27, 2013, 09:18:41 AM »
Title insurance is a one time cost at buying that you definitely want, and is quite standard.

We went through several agents until finding one we liked that was consistent.

The first one was so salesman-y, we still joke about it over 6-years later.

Go with your gut on this one.
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AlmostIndependent

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Re: Should we find a new real estate agent?
« Reply #6 on: July 27, 2013, 09:21:40 AM »
Just don't let them talk you into anything you're not comfortable with. Do your own research an do what is best for you. Remember: realtors are NOT real estate experts. They are real estate salesmen.

DougStache

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Re: Should we find a new real estate agent?
« Reply #7 on: July 27, 2013, 09:38:33 AM »
It's great to know title insurance is an expected part of closing; it was a part I hadn't heard of yet.

I believe we're going to proceed cautiously with her for the time being.  We are in no hurry to buy (lease isn't up until March), so there is no trouble in spending a few weeks working with her and then switching to a different agent if she really rubs us wrong.

Thanks for the input all!

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Re: Should we find a new real estate agent?
« Reply #8 on: July 27, 2013, 10:08:04 AM »
This agent is too pushy for me to use.  In your shoes, I would ask around for other references and start going to open houses in the area where you want to buy.  This is probably the largest financial transaction of your life so far, and you want everyone involved working in your interest.  When you are interviewing agents, find out how many transactions they closed in the last year and if they represented the buyer or the seller. 

You should also start loan shopping and get preapproved by a bank or broker.  A good broker will shop many banks and get you a good deal.  If you have a good relationship with your bank, I would chat with them to see if there is any discount for working with them.

If you are in a competitive sellers' market, you need everything in place before you go house shopping.  A good agent in this situation is one that is experienced representing buyers in this type of market.

I would never buy a property without title insurance.  The lender will require it for the amount of the loan.  An owner's policy is for the purchase price.

DougStache

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Re: Should we find a new real estate agent?
« Reply #9 on: July 27, 2013, 11:21:07 AM »
You should also start loan shopping and get preapproved by a bank or broker.  A good broker will shop many banks and get you a good deal.  If you have a good relationship with your bank, I would chat with them to see if there is any discount for working with them.

If you are in a competitive sellers' market, you need everything in place before you go house shopping.  A good agent in this situation is one that is experienced representing buyers in this type of market.
We just went in for a pre-approval before lunch at a local bank that had decent rates.  It was actually pretty entertaining, I got the impression they don't have many 27 year olds come in with a networth of 130k :)

Our plan for now is to just get pre-approved somewhere so we can start looking at houses.  We want to make sure we like houses similar to the ones we've seen online when we go to see them in person (i.e. we're actually going to be happy with a house at ~110k).  We'll shop rates more when we get past this phase.  I can't see it biting us unless some "deal of the century" comes up, in which case we won't care about a small rate difference.

The area we're looking at is a total buyer's market.  There are a ton of houses for sale.  Largely (I believe) because people are upgrading to other neighborhoods as this one is deemed a "bad location" since there isn't much shopping or restaurants around it.  However, it has a bus route and safe bike routes to get to work and the grocery store so it's a great location for us!

CorpRaider

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Re: Should we find a new real estate agent?
« Reply #10 on: July 30, 2013, 07:01:25 AM »
Seems like she's no worse than most agents.  Just remember you're the client and she's just your agent.  You tell her what you want to see as far as price and that you're looking for something with some likely built in equity.  You could certainly let her show you some houses she wants to first to let her get a feel for what you're looking for.  TI will almost certainly be required by the lender.  If your online lender has good reputation for closing on time (in a period of rising rates you might actually want your rate-lock not to expire) and not surprising people with fees, I don't see any reason to pay more, unless you're going with a really small bank that might hold onto your mortgage it will be sold by whomever originates it in any case, so its not like you're going to get "local service" over the life of the loan.
« Last Edit: July 30, 2013, 07:03:40 AM by CorpRaider »

cynthia1848

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Re: Should we find a new real estate agent?
« Reply #11 on: July 30, 2013, 07:26:52 AM »
If you are comfortable calling listing agents yourself, then no special reason to use a buyer's agent.  If you come in and look at a property by yourselves, the seller's agent will see you as a double commission (because they don't have to split with another agent) and may put your offer above others to the seller, or offer to reduce their commission with the seller in order to make the sale.  I would only recommend a buyer's agent if you don't want to do any legwork yourself, or if the market is so hot that the agent may know of properties coming on the market before the general public.

MrsPete

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Re: Should we find a new real estate agent?
« Reply #12 on: July 30, 2013, 07:45:43 AM »
I don't have a problem with her saying that buying is always better than renting.  For most people, in most situations, buying a moderately priced house in a good neighborhood IS better than renting; this is more of an exaggeration than an outright lie, and it'd be hard for her to work at selling houses if she wasn't completely sold on the concept of home ownership.

She's totally being pushy when she says you should use as much "purchasing power" as possible, but this is just what salespeople do:  Doesn't the shoe salesman always suggest a second pair?  Doesn't the waitress always offer dessert?  Doesn't the car salesman push upgrades?  Buy what you can comfortably afford, and nothing more.  It isn't important whether she agrees with your decision or not.  When my husband and I were engaged and searching for a house, we purposefully bought something small and inexpensive that we could cover on just his salary -- and we were never sorry for that decision.  We were young and had lots of "what ifs" in our mind at that time, the biggest ones having to do with future children and my salary:  What if I decided I wanted to stay home?  What if we had triplets or a special needs child, and me staying home wasn't even a choice?  Decide what you're comfortable paying, and refuse to look at houses that're significantly above your comfort level; if you fall in love with a too-high house, you'll always remember what you "could've had". 

As several others have said, title insurance is a standard part of the house closing.  Similarly, pay for an inspection before you buy.  This isn't always required, but a smart homeowner wants to have a professional go through and check out everything before closing.  Closing fees are awfully high, and you may be tempted to try to get out of them -- ask the real estate agent and/or the attorney who handles your closing to explain anything about which you're not crystal clear.  You can ask the seller to pay a portion of the closing costs; this is a part of your negotiation, just like whether he's leaving the refrigerator or not -- he can say yes or no. 

I strongly suggest that you go with a local bank.  If you ever have any trouble with the mortgage, it is so much better to be able to walk into the office and get it straightened out.  The mortgage on our first house was an absolute nightmare, and the fact that the company was in a far-away state only complicated matters.  You never think these things'll happen, but they do.  In our case, they put together the whole package, we'd all agreed upon it . . . and literally three days before our closing (which was also five days before our wedding), they discovered that our house was not located in the county they thought, and they raised the interest rate!  We hadn't kept the location a secret, but they'd assumed it was in a more populated county.  We tried to fight it, but with the wedding and no place to live if this fell through . . . in retrospect, we gave in too quickly.  A couple months later, they discovered yet another mistake in the paperwork.  They determined that they'd not collected enough downpayment.  We said, "Sue us."  And they did.  They faithfully collected escrow payments from us every month . . . but didn't bother to pay our home owners' insurance and taxes with that money.  They were a total and complete nightmare!  And what made it more difficult was that we were forced to deal with them over the phone.  The house was our first major purchase as a married couple, and we agreed that we would never again finance anything with someone if we couldn't walk into their office anytime we wanted.  In our whole married lives, we only ever financed that house plus the first three cars we bought, and now we're at the point that we expect never to borrow again . . . but after that mortgage experience, we did borrow only from local people.  We did have a problem with one car payment once; it was a clerical error, and when I went to the bank, it was cleared up (in my favor) in only minutes. 






SunshineGirl

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Re: Should we find a new real estate agent?
« Reply #13 on: July 30, 2013, 09:01:57 AM »
Find a new one - no need to go with her.

However, you DO need title insurance. You may want to find a good real estate lawyer first and ask for a referral to an agent. I'm sure they know good ones. You could probably do this over the phone - say you're looking for a lawyer for an upcoming purchase, can he recommend a couple agents?

You spend a lot of time with your agent, and a lot of things can be messed up on everyone's end, so if you're not comfortable from day one, that feeling is only likely to increase. 

salmp01

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Re: Should we find a new real estate agent?
« Reply #14 on: July 30, 2013, 10:59:24 AM »
Go get your real estate license.  The commission you get on purchasing your new home will probably pay for all your expenses obtaining the license.  In many states you can do it all online and it's fairly easy. 

N

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Re: Should we find a new real estate agent?
« Reply #15 on: July 30, 2013, 11:40:59 AM »
yes.
there are zillions of agents. interview some or go to open houses and talk to some before you choose.
choose someone you feel comfortable with and trust.

I was a Realtor for several years so this is from my perspective:

I think its really uncool to work with an agent for months and months and then blow her off. You know she doesnt get paid until closing, right? I cannot imagine you would want someone to do that to you.

There are slimy agents. There are slimy buyers and sellers. Dont be one.

I think there are plenty of advantages to having a buyers agent, unless you become an agent.
Relying on the sellers agent to represent your best interest is a mistake, imo.

Frankly, most agents want to CLOSE DEALS. they dont care if you spend 1k more or 7k more or 100k more. they want to CLOSE THE DEAL. They want you to pay whatever the other side will agree to accept.

You want an agent is who very good at negotiating, who returns phone calls asap, knows exactly what you are looking for, who keeps up their education (gets extra credentials), who is involved in their communities and knows their markets.

Before you get to an agent, get pre-approved. Know exactly what you want to spend.
If you dont want to close before March or April, its probably a waste of time to look at houses now. Wait until Oct./Nov.

my two cents.



AlmostIndependent

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Re: Should we find a new real estate agent?
« Reply #16 on: July 30, 2013, 02:25:37 PM »
If you're unhappy switching sooner rather than later is definitely the right thing to do. There are lots of realtors out there, pick someone who you get along with and is responsive to you.

crowstache

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Re: Should we find a new real estate agent?
« Reply #17 on: July 31, 2013, 09:57:01 AM »
Ditto on the title insurance.  When my wife and I bought our first house, we found out (after the fact) that the seller owed the county back taxes.  Having title insurance meant that we didn't have to deal with this mess.

SunshineGirl

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Re: Should we find a new real estate agent?
« Reply #18 on: July 31, 2013, 10:11:30 AM »
Go get your real estate license.  The commission you get on purchasing your new home will probably pay for all your expenses obtaining the license.  In many states you can do it all online and it's fairly easy.

Hey, good idea!

arebelspy

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Re: Should we find a new real estate agent?
« Reply #19 on: July 31, 2013, 10:21:05 AM »
Go get your real estate license.  The commission you get on purchasing your new home will probably pay for all your expenses obtaining the license.  In many states you can do it all online and it's fairly easy.

Hey, good idea!

I ignored that, but since it has a comment now: No. Not a good idea.  (IMO.)

A license costs you money to keep up, beyond the time and energy and money spent getting it.  Doing so to save 3% on your primary residence is short sighted (you won't know everything you need to know until you've had more experience) and likely cost negative.
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Hunny156

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Re: Should we find a new real estate agent?
« Reply #20 on: July 31, 2013, 11:56:28 AM »
I'll echo some of the responses made above.  Plenty of agents out there, find someone who doesn't make your skin crawl at the first meeting!

I wouldn't get a real estate license, and I've bought and sold many properties.  Some I've used realtors, most of the time I have not.  Depends on your experience level and how comfortable you feel with contracts and doing your own research.  First time out, a good realtor won't hurt you.  The hard part is finding a good realtor.

I totally feel for you when it comes to listening to the worthless comments many of these agents make.  We are in the process of shopping around for a smaller home, and should be able to use the proceeds of that sale to buy this home in cash.  We've been very upfront about our budget and our goal of buying cash.  Hubby almost stormed out of one office when the agent commented that "you can still have a small mortgage, it's OK."  Just the increase in closing costs alone would make that statement ludicrous, but hey, why bother dealing in facts? 

She then proceeded to insist we look at a model home selling for 30% more than our budget.  We walked out.

DougStache

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Re: Should we find a new real estate agent?
« Reply #21 on: August 11, 2013, 08:17:49 PM »
We ended up finding a new agent, as the other one was very unresponsive.  We "shopped" for real estate agents by going to several open houses today and looked for one who clicked with us.  This one is much more down to earth and doesn't have that fancy air about him that we disliked in the previous realtor.

Thanks for the push in the right direction!

arebelspy

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Re: Should we find a new real estate agent?
« Reply #22 on: August 11, 2013, 08:21:38 PM »
We ended up finding a new agent, as the other one was very unresponsive.  We "shopped" for real estate agents by going to several open houses today and looked for one who clicked with us.  This one is much more down to earth and doesn't have that fancy air about him that we disliked in the previous realtor.

Thanks for the push in the right direction!

Awesome.  Well done.
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Another Reader

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Re: Should we find a new real estate agent?
« Reply #23 on: August 11, 2013, 08:29:14 PM »
The transaction will go more smoothly and you will be more satisfied with the result if you work with someone that listens carefully, makes suggestions but doesn't push, and finds you what you really want.  Sounds like you found someone that will do that for you.

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Re: Should we find a new real estate agent?
« Reply #24 on: August 11, 2013, 08:58:21 PM »
I'm glad you found someone you got along with better.

The buyer's agent we used was great, he said his job was paperwork and negotiating, not selling houses, because the houses sell themselves.  He was great.

Good luck on your search!

 

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