Home Buyer Training 101
I have a great respect for training. To me, good training can eliminate future mistakes. When we are rookies at a job, a methodology, a process, whatever; if we have a good trainer, it makes everything easier. And so it is with Real Estate. As your agent, I will teach you what is going on in the market of the day and show you how best to navigate it. A relationship like this has to begin with trust and hopefully we reach that stage by the end of our first buyer consultation.
The other way you can learn is to make every rookie mistake as you go through the process of being “educated by the market” on your own. Instead of listening to a professional (me) when I try to explain this current “seller’s market”, you can get your home buyer education from the market itself, going online, finding properties and comps and formulating your own plan of action. This usually means you will lose out on several (or several dozen) homes before you conform your house hunting and offer strategy to reality.
It’s unfortunate, but it happens. And in a market like todays, it happens a lot. Here are a few of the most common ways buyers make their own dream homes disappear.
Do You Want a Deal… Or A Home?
It is human nature to love a bargain. Some people love the idea of getting more than they’re paying for almost more than the gratification of the purchase itself! And the internet era has encouraged this. Who doesn’t go on line a run a Google search to find a promo or coupon code, or just to check to see if the item is available somewhere else for less?
The problem is that this mentality simply does not apply to a real-time auction atmosphere marketplace like real estate. Real estate is not retail. Homes are not commodities like shoes and handbags. There is no such thing as a guaranteed “Buy It Now” price.
In fact, the list price is often more like the starting price in a multiple offer situation, like those that are so common right now. Plus, home sale transactions are much more complex, and involve many interrelated terms that impact the price to which a seller might agree; cash offers can often close faster and at a discount compared to lender- or seller-financed offers.
Those buyers who try to apply their promo code mentality to home buying, trying to get that standard 5%, 10% or even 15% discount rule of thumb in their offer prices, just have to learn the hard way. It just isn’t going to happen in this market. Sometimes, they don’t even care if the list price is already below market, or if there are a dozen other offers, they still want to make the lower offer thinking, “If they don’t like it, they can counter.” I have buyers who played this game for so long, they ended up paying more for less. Savvy buyers know that in an ascending market, one of the worst strategies is lowball offers. Your insistence in getting a discount will absolutely cost you more as home values continue to rise and more and more buyers enter the market as their credit and ability to make a down payment improves. Not to mention the very real possibility of a higher interest rate and higher taxes.
Know The Differences Between “Wants” And “Needs”
Especially when we are dealing with couples, this can happen a lot. There is a big difference between “must haves” and “nice to haves” and you definitely do not want to limit your search because you do not understand that difference.
The time to discuss what features are non-negotiable to you is at our buyer consultation. This is why we have you make separate lists of your wants and needs. Some just don’t belong on the list. We have a lovely couple we are working with now and one of the big “wants” for the wife is a fireplace. In South Florida, this can be a tough one. Yes there are homes out there with fireplaces but we really had to convince her NOT to make it part of the search criteria. We compromised by looking for homes that had enough wall space in the living room that would accommodate a fireplace.
How To Start Benefiting From This Home Buyer Training
If you want to get a head start on this process, take our Buyer Survey, each of you. Compare notes, discuss and prioritize what is most important to each of you. If there ever can be a designated “important first step” for home-buying, this would be it.