Posted by Jane O'Reilly, RE/MAX Results
Visit her web site at www.results.net/jane.oreilly
If I were a first-time buyer in this market, I would have a lot of questions for my realtor, especially if I am bombarded by advice from my family and friends, and the dire news in the media. As a first-time buyer, I would want to be in sensible hands knowing that my questions would be taken seriously and answered thoughtfully.
Many of my questions would relate to financing, such as, “Why do I need a down payment?” or “Is there funding available for me?” Although I defer specific questions on rates, products and ability to a qualified lender, in this economic climate I believe it is important for every realtor to be informed on the changing lending requirements and loan products available to first-time buyers, to be able to judge how likely a vacant or even damaged property is to qualify for FHA, and to be able to explain what “seller-paid closing costs” really means...and the fact that some property-owning banks no longer pay them.
In this world of foreclosures and short sales, realtors need to be able to answer questions such as, “What does As-Is mean?” so they can adequately answer a question like this one, “If I buy a house with a leaky roof, the bank will fix it, right?” But even before this, a realtor must be able to explain to the buyer the difference between a short sale and a foreclosure. Be able to describe the roller coaster ride buyers will be on when they write an offer on a foreclosed property and the bank takes three weeks to respond, or are lucky enough to negotiate a price, but the property manager does not turn on the water for the inspection and the delayed closing, if the sale closes at all, carries a per diem fee. (Who pays that?) Or what happens when a buyer writes an offer on a short sale property just as the redemption period ends and the house disappears from the market without warning.
And then the myths! “It’s a buyers’ market, right?” The truth is, multiple offers are more prevalent than ever in this period of uncertain pricing. The old adage still holds true, “A good house priced well will sell.” And when good houses are priced very well, they still sell in multiple offers, compounded by the fact that a bank may look at several offers on a foreclosed property at one time.
Then there are the questions no one can really answer such as, “Will my house appreciate?” or “Will foreclosure happen to me,” or “Will interest rates come down even more?” which recently led to a well-employed, well-educated client’s conclusion, “I think I’ll rent and wait until the market settles down.” To avoid losing a good buyer, a realtor should be able to respond to all of these questions and statements with sound guidance.
And, of course, all the other questions from every market condition remain: “Will I have to plug in my car in the winter,” or “Can I fence in the yard?” or “Is the house in a good school district?” or "Is that mold?" or “How much will my house be worth in two years,” or “Why do I have to pay for the inspection?”
Of course, every realtor’s favorite question is this one: “Why do I need a realtor?” Whether you are a buyer or a realtor, the answer to that question has never been more important than it is right now. If you are a realtor, make yourself the best answer to that question you can be.