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By Tara-Nicholle Nelson | Broker in San Francisco, CA

5 Mistakes Buyers Make in a Hot Market

Note: This is Part 1 of our two-part 'Hot Market Mistakes' series. While home prices are nowhere near their peak of 6 or 7 years ago, the nationwide data is clear: the housing market this summer has been hotter than at any time since the recession:
  • The Census Bureau just revealed that new home starts rose 6.9% in June to their highest level in four years - up 23.6% from a year earlier.
  • In April, home prices rose for the first time in seven months, according to the S&P/Case-Shiller home price index.
  • The number of home sales pending rose 9.5 percent year-over-year from June 2011 to June 2012, as reported by the National Association of Realtors.

Given this rapid turn of the market, what’s a buyer to do? Maybe take a new approach to prepping for the hot market house hunt. To that effect, I submit that savvy buyers will find more pitfall-preventing power in learning what not to do. Inspired by the last time we had a market heated up by short times on market, low inventory and multiple offers, here are five hot market mistakes home buyers should avoid making:

1.  Acting out of desperation.  Deep inhale - aaaaaand exhale. It’s extremely easy to get caught up in the lightning-fast pace at which the great homes come on and off your local market, growing panicked and even desperate - especially when you see ‘just-right’ homes go from 'New' to 'Pending' status before you can even get an appointment to see them!

But know this: desperation has no place in a home buying transaction. Panic does nothing but cause people to make impulsive and otherwise unwise decisions, ranging from talking themselves into a home that isn’t quite what they really want, to paying way more than they can truly afford to spend (see #s 4 and 5, below).
If you’re in the market for a home, and your local market is so hot it’s causing you to feel freaked-out, panicked or overwhelmed, remind yourself that:

  • There are probably hundreds of homes in your neck of the woods that will meet your needs. When one goes off the market, another is on it's way on.
  • There is no ‘perfect’ home.  If you didn’t get that one that seems like ‘the one,’ then, by definition, it’s not ‘the one.’
  • Every home you see or make an offer on, and don’t get, equips you with a better understanding of the market, putting you in a better position to get the home that will eventually be yours. In life generally, I believe every experience is either a stunning success, or a successful education. Look at the homes you miss out on as an opportunity to get a successful education about the market.

Desperate is bad.  Urgent, however, is good. If you know, for example, that single family, 3+ bedroom homes, near downtown under $400,000 move very, very quickly, then act on that knowledge:
  • Ask your agent to notify you as soon as they hear of homes coming on the market that meet your needs - even before they are on the MLS, if possible.
  • Give your contact information to the listing agents at Open Houses similar to what you’re looking for and ask them to drop you a note if they get similar listings.
  • As soon as you see a new listing that seems like it might work for you, go see it - don’t wait for the weekend. And if you see a home and really like it, make an offer without further ado.  

2.  Hesitating. What’s worse than seeing great properties come and go before you can get out to see them?  Seeing them go into contract after you view them, but before you make your own offer. When the market is hot, often buyers who have been sitting on the fence or simply window-shopping for ages will stumble into a great Open House and decide that it’s time to make an offer, only to realize that their loan approval has expired and it will take a day or two to get a new one. At the other end of the spectrum, buyers who have just started house hunting can come across a home they love, but drag their feet in making an offer because (a) they’re used to a slower-paced market, so don't recognize the urgency and (b) they aren’t 100 percent sure something better won’t be coming right along.

On a hot real estate market, hesitation can be costly.  You can end up in a multiple offer situation where you would have been the only offer a few days prior, or can even end up losing out on a property entirely because another, more decisive buyer swoops the place right out from under your nose.

Morals of the story: Make sure you maintain a current loan approval in place at all times - in fact, I say you shouldn’t be out house hunting if you don’t have a current loan approval.  And, for those new to the house hunt, go Open House hunting even when you aren’t completely in love with the listings you’re seeing online. Once you’ve seen a good number of homes, you’ll have more material against which to compare every other home you see, making you less likely to dither before making an offer when you do find a good one.

3.  Ignoring the market entirely.  I’m not an advocate of making your decisions about whether and when to buy or sell based on what’s happening in the market. Rather, I recommend making your real estate decisions based on what’s happening (and what you forecast and envision will be happening in the next 5-10 years) in your family, your career and your life.  

That said, when it comes time to execute your decision to buy, it’s foolhardy not to take market dynamics into account.  I’ve seen many a buyer over the years decide to stick their heads in the sand and their ears in their fingers, tuning out all of the market ‘noise’ as though it doesn't apply to them.  Unfortunately, in a hot market, this usually results in them getting beat out for 5 or 10 different houses, then having the emotional kneejerk reaction of throwing every single dollar they have at the next house they fall in love with - whether it’s the right house or not, and whether they can truly afford it or not.

You don’t want to fall under the panic-inducing spell of the market, but neither do you want to ignore it. Rather, ask your local agent to help you pay attention to neighborhood-specific information, like:
  • which types of properties move quickly,
  • how many days they generally stay on the market,
  • whether multiple offers are a reality you need to face, and
  • how much over-asking homes like the one you want are selling for.

Then, use this information to make strategic decisions about your home buying process, covering everything from which properties and areas you’ll focus on, how quickly you’ll need to get out to see listings and - most importantly - what price range you should focus your search on.  If you know homes are selling for over-asking, engineer your search price range to be low enough that you can be successful, rather than exclusively looking at properties priced at the top of the range you can afford.

4.  Financial fogginess.  Don’t run the numbers in your head.  Don’t ballpark your income, the big bills and such on a notepad, stick your finger in the wind, and decide you can afford X number of thousands of dollars a month for a home. Home buying is the big leagues, financially speaking, so you need to be sparkling, crystal clear on precisely what you can afford. This universal truth of home buying is especially critical in a hot market, where you may be faced with the need to make decisions about whether to increase your price range or your offer price on relatively short notice.

Either keep an income/expense journal, use an online money app like Mint or Manilla or sit down and do a deep dive into your last few months’ checking and other account statements to get a complete picture of what you can afford and to get conscious about what sacrifices might want or need to make.   It is not overkill to bring your tax advisor or financial planner into this conversation, so they can help you understand how your tax situation as a home owner may change, freeing up some extra monthly budget room for your mortgage, property taxes, insurance and HOA Dues or Private Mortgage Insurance (PMI), if applicable. Also, make sure you include line items for your savings, retirement investing, gifts, school tuition, travel and recreation - the sorts of things that lenders will not account for when they tell you what their guidelines say you can afford.

5.  Overpaying.  There are several ways to overpay for a home.  You could pay more than the place is worth, which is difficult to do if you are buying the place with a mortgage loan which requires an appraisal. You could pay more than you need to in order to get the property, which sometimes happens to buyers in multiple offer situations, and buyers who have experienced the trauma of losing out on home after home, and who just decide to make a high offer to get closure and secure a place they like. Whether any price meets this second definition of ‘overpaying’ is difficult to ascertain, as it would require us to know what would have happened in the hypothetical world in which they didn’t offer such a high price and so, might not actually have been the successful buyer.

The antidote to both these forms of overpaying is simple: pulling the comparables before you decide what to offer.  It only takes a minute, your agent will help you, and it’s just not prudent, in 2012, to decide on an offer price without a fresh pull of the sales data on the similar, nearby homes that have recently sold.  If your agent includes active and pending sales in their pull of the comparable data set, you may also find out useful information like whether several other competitive properties have just hit the market, or that all of the competition is now pending - things that might also inform your motivation levels or price strategy.

And there is a third, more insidious form of overpaying that haunts hot market buyers as well: paying more than you can truly afford for a home. It’s fine, even expected, that if you thought you were buying into a depressed market and instead end up buying in a hot one, you might have experienced some upward ‘creep’ in what you’re willing to spend for a home. But that doesn’t excuse letting that creep go beyond what you can truly afford, overextending yourself.  

This form of overspending is also more difficult to do now than it was before the housing market recession began, as lender guidelines a much tighter now than then. But it’s still possible - especially as lenders don’t account for what you should be putting aside for savings, for retirement, for your children’s education and other essential monthly budget items that impact what you can truly afford to pay for a home.  

The only cure for this form of overspending is for you to both know (see #4, above) and to set in stone what your actual, top-line maximum home purchase price is - even if you are the only one who knows this number, in your own head. Your mortgage professional can help you work backwards from the amount of cash you have to invest in the transaction and the maximum amount you can devote to your housing costs on a monthly basis, to arrive at your maximum home purchase price.

Long story short - if you’ve been pondering the prospect of buying a home for long, you might feel like you’ve been sitting in the economy section of an emotional rollercoaster. Prices fell so fast you might have doubted whether buying makes sense at all. Now, with barely a plateau, they’re on the upswing - and every other buyer in town seems to be dropping offers on the choice homes before you can even get out to see them.  Use these tools to avoid repeating the mistakes of the last generation of homeowners.
 

Next week - Part Two: 5 Mistakes SELLERS Make in a Hot Market

P.S. - You should follow Trulia and Tara on Facebook!



Comments

By Icarus,  Thu Aug 9 2012, 09:48
you are taking excessive liberties with the definition of "hot" in this post. ;-)
By chunxin_99,  Thu Aug 9 2012, 10:28
Some local markets in California maybe turn to "hot", where many young couples have family income more than $200k/year. The markets of the majority of US cities don't seem to be "hot".
By Larry Larock,  Thu Aug 9 2012, 10:33
I take exception to several of your points: first; a buyer needs to get and work with an agent and only ONE agent to find their home - NEVER give your info to an open house agent if you are working with another already -BAD ADVICE!! secondarily, this is a hot market - in my area prices are up about 10% over the past 6 months. Buyers need to get loan pre-approval BEFORE looking and be aware that loan appriasals are generally coming in low to sale price. this means that any appraisals deficiency will require the Buyer to pay the difference in cash at the close of escrow - working with an experienced agent can help buyers avoid the unexpected surprise. The key for a buyer being successful in their search is: define your exact must-haves from your want-to's, know exactly what they can buy and what the costs will be, work closely with a loan officer to ensure no credit surprises during the purchase. Lastly - don't be afraid to make offers on more than one home. Again, working with a good agent who understands your Needs from your like to haves will get you your dream home - be persistent!!
By Eric,  Thu Aug 9 2012, 10:40
The writer is right on for the Sacramento, CA market. Listed our home and received 21 offers within a week, 10 of which for all cash, and yes we made $ (not underwater). We just bought and had to overbid (117% of the listing price).
By Tara-Nicholle Nelson,  Thu Aug 9 2012, 11:06
@Larry Larock - I think we actually agree on the most important piece: once you've selected an agent, you should work with that agent unless and until you make an agent change AND communicate that to your agent. That said, there's nothing wrong with getting a heads up about new listings from listing agents in the area, in my opinion - though it's also fine to give Open House agents your own agent's contact information, if you already have an agent of your own.

Once you have an agent, best practice is to loop your own agent in on any 'coming soon' property information you receive from other agents, and ask them to show these properties to you. More importantly, the very best practice is to be honest at all times with Open House/listing agents about the fact that you are represented by your own buyer's broker/agent, if that's the case.
By Janice,  Thu Aug 9 2012, 11:10
Larry, I say work with one agent, but only if he is truly working for you. If your agent is sending you automatic email listings and not staying in touch otherwise, find another who is ready, willing and able to go to work for you. After sticking with a lazy agent, I ran into an open house agent that understood much better what I wanted and worked hard to find me the right house. Oh, and never sign a buyers agreement with anyone until you are sure you want to hire them.
By Justbranches5,  Thu Aug 9 2012, 11:11
Lucky you, California sellers...unfortunately, most of the rest of us are living in luke warm markets...at best :(
By Dina,  Thu Aug 9 2012, 11:26
Larry Larock, I have been told I can't make more than one offer.
By EPD00,  Thu Aug 9 2012, 11:59
People make the mistake of buying with their heart instead of their brain. This goes for houses, cars, boats, etc. You need to take the emotion out of it and treat the purchase like any other business transaction. If the numbers make sense, do it. If they don't, don't do it. Hot market, cold market, whatever. The surest way to lose money on a deal is to make a decision based on emotion.
By Dale Falkowski,  Thu Aug 9 2012, 12:00
In North Metro Atlanta the HOT is the move in ready 4 bedrooms. The buyers must be ready or they will not get a chance to make an offer.
By EPD00,  Thu Aug 9 2012, 12:03
The market is "hot" for decent homes well priced. Those go fast. However there are few of those around. Most are either garbage properties that have been in foreclosure for 2 years with 7' tall weeds growing in the backyard, or houses with asking prices at 2006 levels. So it's a "hot" market but it's really a sub-market that is hot in an otherwise till luke-warm to cool overall market.

Everyone talks about the 17 offers in 12 hours stories. But for every one of those, there are 10 stories of a house still for sale 6 months after the initial listing.
By Robert Dispenza,  Thu Aug 9 2012, 12:13
South Florida market continues to rise in price and limited availability- Especially beach front condos.
I have been steadily busy going on 2 yrs now and have seen our market getting better for sellers, and choices becoming limited for buyers and the prices for quality beachfront properties continue to rise.

Contact me direct if you wish to buy now! I will find you the best deals...If selling I continue to achieve the highest sale prices for my customers.

Bob Dispenza Regency Realty Services- serving Palm Beach to South Beach
bob4u@comcast.net
By Priscilla Madan,  Thu Aug 9 2012, 12:14
I agree with Larry on this one, although I certainly would NOT recommend making offers on multiple properties. The buyer could end up having to purchase more than one home if he were on his own doing that! Although there are a lot of good points in this article, I think the buyer needs to know and be educated by a good buyer's agent who knows the "ropes" of the area, market values, etc. Most buyers really don't have a clue. I was going to pass this article along to my buyers but no where does it emphasize working with and STAYING with a buyers agent vs going with whatever agent the buyer meets here and there. Not fair to a hard working buyer's agent!!! (Been burned!)
By Brian Mayer - (443) 624-9398,  Thu Aug 9 2012, 12:20
The biggest mistake I see is hands down not trusting the team you have entrusted to help you (Realtor and Lender.) Too often I see people who want to offer what they think something should be worth or want to use their lawyer for settlement or refuse to budge on minimal issues.

Once pride gets in the way and someone draws a line in the sand its very hard to go back...
By biganene,  Thu Aug 9 2012, 12:56
Tara, Being a 1st time buyer, I always look forward to you articles and the discussions they promote. I need all the experienced advice I can get. I did lose "the perfect" place due to multiple bids. I also panicked and made a 2nd offer of more than I could really afford and I still lost the bid. Thank you for all the lessons, information and encouragement. My broker works hard for me, but I fear that another co. has the lions share of the listings in the market I'm interested in and suspect that I lost that 1st property because the other broker pushed the seller toward one of their buyers. Can't prove it, just a hunch. I would feel disloyal leaving my broker, but I may in the future, in order to find the right property and to have a real chance of my bid being taken seriously. Wondering what you think.
By Troy Sage,  Thu Aug 9 2012, 13:02
@Brian Mayer. Well said!!!!!! Here in Temecula CA we are continuously dealing with buyers that think the current market is going to drop again. Then the want to offer what they THINK the property is worth. So, after running current comps we show the buyer the lack of inventory, and what people are paying for such a home. Real Estate is supply and demand mixed with Location, Location, Location. Since supply is very low, sellers are getting higher prices than in the past 18 months.

It's such a waste of time working with buyers that simply don't get the market. Reality is a home is worth what someone will pay for it. If cash buyers are paying above market value, then the value of homes in the market will increase. Low-Ball offers don't work.

Also, buyers need to get their ducks lined up. Some buyers think of Realtors as cab drivers. They want agents to drive them around town day after day without the buyer being qualified to purchase. Again, what a waste of time. I'm not blaming just on buyers, I also blame the agents that act out of desperation, and show potential buyers homes before the buyer is ready to purchase. This kind of business model as an agent makes it very difficult to teach the buyers in today's market how to honestly treat an agent, and how to reduce the stress of a buyer be being prepared.

This is also true for lenders whom honestly do not get the buyer Approved. We are still seeing pre-approval letters send in on our listings where the lender has not honestly ran credit, verified employment, and have not asked for proof of funds. Yep, this make life very hard when trying to help a buyer purchase a home and they honestly are not qualified.

Just my two cents.

Hope you all have a wonderful day.
Troy
By Linda Takach,  Thu Aug 9 2012, 13:19
By Linda Takach, 201 914-7116 After 25 years as a Realtor, I have found that there is no one way to view any situation. However, the market in Bergen County, NJ is like a frozen soup in the begining stages of a microwave, with some very cold spots, others luke warm, while other areas are very hot.
I am seeing multiple offers on some homes, moving very quickly (those that are priced right) and others simply sitting due to sellers being stubborn or condition issues beyond what a buyer can except. I agree, finding an agent that understands not only your desires, but your actual ability to perform is key. I have been quite succesfully in helping many sellers, sell and buyers buy. Call me direct @ (201) 914-7116 or text me if you would like to work with a Seasoned Dedicated Professional, like myself. Linda T
By Elizabeth Ching,  Thu Aug 9 2012, 13:24
Biganene, I believe even if you work with the dominant broker/agent in the area that you want to buy, the conditions and terms and price in your offer has to be better than any other competiting offers for you to get the right property. If your offer is anything less in price or not as good as in terms, even the dominant broker/listing broker cannot blind the seller to accept your deal. At the end of the day, all terms and conditions have to be aligned for you to get the house. It does not matter whether it is your buyer agent or the dominant agent that you plan to work with in the future. The most important thing to bear in mind is to find a hard working , trustworthy, knowledgeable agent to work with you. Then be LOYAL to your agent. A hot shot agent will not be able to have the time to give you the kind of attention you need, especailly you are a first time home buyer. Most of them prefer to be the listing agent than the buying agent anyhow. By Purple Crystal
By Ryan Jennings,  Thu Aug 9 2012, 13:27
This is a great real estate market!! Finally, good news is spreading thru-out on the housing market heating up!! South Florida is for sure...inventory is way down in most communities.
By biganene,  Thu Aug 9 2012, 14:20
Elizabeth Ching, Thank you for your advise. I feel better now, knowing a little more about how it all works. And I won't be leaving my broker. I trust her and her advise has been very good in the past. Thanks again
By Jaime,  Thu Aug 9 2012, 15:10
Tara..this article is right on target. I hesitated on buys thinking the prices would go down and that more homes would be available. I didn't realize that every bee was out looking for a hive. The investors.... forget it--they are inhaling the choice homes..agents are buying homes, lots of flipping going on.. a lot of 2006 tactics at play and i predict 2006 like return because of that hysteria and investors who frankly have a stake at driving up the prices...i am convinced they blindly buy homes to drive up the market..in fact over the past year have watched the business do its dirt. At least the banks are not lendng wildly, which will control the hype to some extent, but the cash buyers and foreigners who have money to blow off, don't care if their neighbor just sold for 150,000 they are gonna buy the next listing that some agent already has pumped steroids in for 250,000. In a blink the homes are going for 250,000 with that one or two sales...its sad for most middle class americans who just want a home to live in. I have seen it happen in communities time and time again. Real estate at its dirt, instead of letting the market resolve itself. If you are desperate for a home--buy it while the interest is low..the interest rates are good, but don't overpay and stick to your bottom line.
By Sukh Sagar,  Thu Aug 9 2012, 16:27
Be aware of government interventions. When government intervenes and makes the market hot ,say government gives $10000.00 people quickly increase the prices to $20000. So instead of gaining
the buyer loses $10000.00.If you haven't bought one in thirty years don't rush to buy it in one month.
Sagar.
By Peter Zavatsky,  Thu Aug 9 2012, 16:28
All of these comments illustrate an important point - All real estate (like politics) is local. If you are a buyer shopping for a home in a specific market, make sure you are working with an agent who really knows that market. Here in Long Island, some really hot markets with multiple offers can be within a couple of miles of a market where it's hard to give a house away. The local agents know the difference and a buyer's bidding strategy should be very different from one neighborhood to the next. If you are looking for info on buying in Huntington Town (northwest Suffolk County) feel free to give me a call (631-944-8843).
By Tom,  Thu Aug 9 2012, 16:56
Things are definitely heating up in S Florida. One way to guage the market is get a competent realtor and have them suscribe you to LISTINGBOOK. It shows each day new listings sold homes and more importantly a record of all area sales date and price asked and sold. Some are selling over ask price. I pd 10% over ask on a highest and best bid situation but home was easily 20000 under market and I could easily pay cash (a good situation I worked hard to be in and I LIKE it)

Know your market get your financing (or bankroll) ready and when one pops up jump it. Homes listing here are typically under contract within 48 hrs if they're competitive. She's right about one thing. You do NOT have time to look at a home then "think" about making an offer. You'll be choking on the dust left by the buyer who WAS ready.
By Michele Allison-Elwell CBR,  Thu Aug 9 2012, 17:38
Neighboring towns can be so different from one another. Buyers sometimes just don't realize it . Tara, great advice again. After a slump, we have a rise in price with limited inventory. Not exactly 2006 prices but a lot of the multiple offers, over asking offers etc... Here on Cape Ann (Boston's North Shore) Rockport and Gloucester are night and day. Size wise, price wise and many other ways very different. Together we are a wonderful place to live. A great vacation destination .You can buy under $300,000 in Gloucester and have a pick of shortsales and bank owns. Rockport is a different story. Less inventory , higher prices and demand from residents, investors, vacationers, retirees and first time buyers. Advice to buyers with or without an agent- Go look at it now (asap) if you can afford it and you like it,. Waiting for an open house or for the price to drop a little , is too late.
Buyers not loyal or under commitment to an agent, why should someone bend over backward for you if you are not loyal and committed to them? I am done with that. Too trusting and burned too many times. We all have access to mls . As a committed agent to a client- we search for fsbo's and can target mail homes to fit your needs. I treat my clients ( under contact) with loyalty and trust . Help get them approved, identify property and good resale locationsand work hard to get them into a property with 24-30 hours if I know it fits their bill and just hit the market. Customers(not committed to me) Clients needs will always come first - customers will be put second. I am sure I am not the only buyer representative that works like that.
By John Fischer,  Thu Aug 9 2012, 17:57
It is OK, and sometimes necessary to switch agents- or go without. If your agent does not understand your needs, or has high volume clients that get first choice, you will only get the leftovers- that nobody wants. Worse yet, watch out for an agent that is buying homes for themselves. You will never get great deal, or any deal when you are 2nd in line.
You (usually) don't marry the first person you date-- "sticking with", or showing "loyalty" to the wrong agent will not help you find the home, or investment you are looking for.
By Sunita Trehan,  Thu Aug 9 2012, 19:23
I listed my properties with one big company agent. She was very nice and caring until she got the listings. She took some of my original documents and promised to return to me either by mail or leave at the front desk at her office. When I went to drop a POA document as reqested by her and pick up my papers, they were not there. Then she said she will mail them to me, it's more than two months and no mail yet. I can put listings in the MLS for les than $500, why pay her hugh commission if she can not find solutions- mailing or delivering documents and visiting the listed properties? She wants me to go and put a flag at two of my lots so someone can put the sign but she doesn't want to go personally to she the location of the lot! How can she market the properties if she doesn't know the location or anything about the property? BTW the properties are not located in far off desert or swamp, they are in DC area-Montgomery and Howard counties. So the bottom line is shop for a better agent who can find solutions and not create problems or give excuses.
By Sunita Trehan,  Thu Aug 9 2012, 19:33
I listed my properties with one big company agent. She was very nice and caring until she got the listings. She took some of my original documents and promised to return to me either by mail or leave at the front desk at her office. When I went to drop a POA document as reqested by her and pick up my papers, they were not there. Then she said she will mail them to me, it's more than two months and no mail yet. I can put listings in the MLS for les than $500, why pay her hugh commission if she can not find solutions- mailing or delivering documents and visiting the listed properties? She wants me to go and put a flag at two of my lots so someone can put the sign but she doesn't want to go personally to she the location of the lot! How can she market the properties if she doesn't know the location or anything about the property? BTW the properties are not located in far off desert or swamp, they are in DC area-Montgomery and Howard counties. So the bottom line is shop for a better agent who can find solutions and not create problems or give excuses.
By Alan Gregg,  Thu Aug 9 2012, 20:37
In the Market here in the Bay Area I'm surprised that your listing agent has not tightened the contracts to shorten the amount of time that any buyer can "tie up" the property. Low inventory has created multiple offers and most Listing agents are not accepting contingencies and requiring 3% earnest money. Becomes expensive for a buyer not to perform and close the deal.
Hope it works out soon Bikefor1
By Blake McDonald,  Thu Aug 9 2012, 22:32
John Fischer makes the most important point of all. So many people enter the market scared to death because they don't take the time to educate themselves. I have been in a hot market for eighteen months (giving myself 24 months research time before I purchase) and have been treated as such by many agents. Some of these have been in the business for 20+ years and are doing business as if it were still 1990. The internet is a tool that can bring you to their knowledge level, or at least have you asking intelligent and relevant questions. Choose an experienced agent during the shopping process, but keep looking and do your homework. Know as much as you can about the whole process. The information you need is available to anyone who can type. After all, it's your money!
By rgonzalez5150,  Fri Aug 10 2012, 00:58
me and my fiance are buying a lease to own home.paying about 50,000 more than homes on our block.weve had several agents since we have been here for 10 mnths.our lease doesnt say anything abt having to pay the first 1000.00 for certain things that need fixed.i was told that the first agent shouldnt have fixed minor things-those were things that should have been in working order like the plumbing under the kitchen sink that was just a random pipe laid over the existing pipe.that was just 1 of the many scandalous coverups.now our air conditioning has stopped working-i was told its our problem up to a 1000.00.in the beginning we were told that they were still responsible for upkeep bcuz its not our house yet.there are other issues also.Please i need to talk to someone who is knowledgable about lease to own properties.pls help
By Nancy Sheehan,  Fri Aug 10 2012, 01:18
I like Linda T's analogy of the market in a given area ("like frozen soup in the beginning stages of a microwave, with some cold spots, some warm and some hot"). Here in Northcentral Florida, the market is always hot in The Villages; go 5 or 10 miles outside its perimeter and the situation is quite different. As a Realtor working this area for 15 years, I know that finding the right agent is key not only in understanding a buyer's wants and needs but also assisting them in the process (from obtaining a loan through to the closing). Some Realtors can lose patience with today's buyer and feel abused - running them around only to find they weren't serious at all. Experience definitely counts, but beyond that, understanding, patience, and a passion to do your best for your customer is what it's all about.
By Peter C. Fyler, CRS,  Fri Aug 10 2012, 05:00
I liked this article but it did push one of my buttons. I think the recommendation to "Give your contact information to the listing agents at Open Houses similar to what you’re looking for and ask them to drop you a note if they get similar listings." should have been further explained or left out all together. This only applies to buyers who are not being represented by a buyer agent through written authorization. If they are being represented any information coming from a seller agent should be directed to the buyer's agent. I always instruct my clients to immediately disclose the agent conducting an open house that they are being represented by my firm and I have been or will be in touch with that agent on behalf of my client. I think your recommendation is misleading and problematic.
By Novalee,  Fri Aug 10 2012, 05:19
Hot Market, Cold Market? Only ONE thing matters...CAVEAT EMPTOR, "let the buyer beware". Let's not forget what got us into this mess in the first place. Banks hungry to make money, Realtors hungry to make money and Buyer's who thought they could afford ANYTHING. This is a good article of mistakes to consider with mistake #1 being the MOST IMPORTANT. Buying a home is often clouded with emotion. Keep your emotions in check. Logic and hard math are the most important things here. Of course things happen that none of us can predict. But things that are not the "norm" should always be looked at with a jaundice eye....it's not reality, tread cautiously. And all the buyers out there, remember NO ONE is REALLY looking out for you. YOU must look out for yourself. Everyone else has an interest in what you do and it's largely a financial interest. All of them make a living on YOUR decision. Don't do something stupid that you will regret for the rest of your life. The decision stays with you forever. All of those other people are gone forever on the second after closing. Take your time, Check the property out thoroughly, Get advise from everywhere, Research everything connected with the house. A "quiet" neighborhood at 3 pm in the afternoon might be a different "hood" at 3 am. How about barking dogs all night long who sleep during the day? Good luck with your house hunting and BE CAREFUL. Protect yourself and you protect everything!
By Scotty,  Fri Aug 10 2012, 05:47
I THINK YOU ALL MISSED IT........ HOW EXACTLY DO YOU PUT YOUR EARS IN YOUR FINGERS?
By Carmen Hunter,  Fri Aug 10 2012, 07:45
The Charlotte, NC market has a variety of markets and it all depends on the area. We have it all!
By Helen Oliveri,  Fri Aug 10 2012, 12:08
Great post.
By Nathan Diones,  Fri Aug 10 2012, 13:40
Buyers should always have the right representation! U wouldn't use 1 attorney to negotiate both sides of a divorce right? Sometimes it may work against you by calling the listing agent direclty. Remember, its not what you know, its who you know.
By Davidm,  Sat Aug 11 2012, 06:09
Always get someone to represent you.
I didn't have one and when we were finally buying the house the lawyer had a few sheets of paper that we had to sign that required money but no copies for us. When I asked if I could go and make copies he said "If you don't trust us we aren't going to sell you the house." We got the house but it seemed to us something fishy was going on.
By Joseph Mark,  Mon Aug 13 2012, 01:59
While there is nothing wrong with the article, the reality is the housing market will be turning down once again. The question is when. I'm sure a massive QE is coming with several weeks. This could help to buoy the housing market. The problem is The FED failed horribly is trying to re-inflate the housing market......instead other asset classes experienced inflation where the FED didn't want it. There are well over $300 trillion in derivatives from the 10 largest US banks.

If you need a place to live and you can pay cash.....or mostly cash.....I say go for it. ....if you can wait, I do believe you will be able to buy housing much cheaper down the road. Best of luck to all.
By Bill Ferellec,  Mon Aug 13 2012, 10:08
One of the aspects of our job is to help the buyer take some of the emotion out of the offer stage and provide them with current market information to make informed decisions. All parties must treat this as a business transaction. Let the buyer have the emotions, we’re there to help keep them on an objective track. If the buyer and agent are in sync the agent and buyers will know when the right house comes along.

As to Larry’s advise that it’s OK to put in an offer on more than one home at a time. In this state the offer to purchase is a legally binding document. Doing so would commit the buyer to legally purchase any home they get an accepted offer on.

Ethically, it’s just not right either. Put yourself in the seller’s shoes. They think they have a deal, but 3 other sellers have an accepted offer from the same buyers. That’s one of the reasons RE agents get a bad reputation.
By Jacoma Properties,  Tue Aug 14 2012, 07:13
New home buyers are very emotionaly involved in the process. I find it important to make them see the rational side of the event or they tend to skip over some major details leaving them unsatisfied later down the road.
By Conniesol,  Wed Aug 15 2012, 08:43
There is some great information in this article and in these comments. Almost all of the people I've helped at http://www.consolidatedcredit.ca that are in trouble with their mortgage are there because they rushed in too quickly, and didn't take the time to really run the numbers. Following the advice in this article should save a lot of people a lot of heartache.
By Michael,  Wed Aug 15 2012, 12:59
I think the recommendation to "Give your contact information to the listing agents at Open Houses similar to what you’re looking for and ask them to drop you a note if they get similar listings." should have been further explained or left out all together. This only applies to buyers who are not being represented by a buyer agent through written authorization.

http://villagesofparkwood.com
By Ellen,  Wed Aug 15 2012, 14:08
I agree with this, especially with hesitating. My fiance and I lost a "perfect" townhome because we wanted some time to think about it. I think this is a good article for first-time homebuyers.
By Kathy,  Thu Aug 16 2012, 11:19
I am bothered by the guy who suggests realtors should not be considered to be taxi drivers. It appears that most of you on this thread are realtors, you forget that buying a home is one of the most important and life changing decisions one can make,. If I require seeing a lot of houses and the realtor is too lazy to do that,considers him/herself a taxi service, they should get another job. Yes is IS the banks, brokers and realtors that helped cause the crash, so I hope you all consider your fellow human beings first, before lining your own pockets.
By Miami Beach Exclusive Homes,  Thu Aug 16 2012, 14:18
This is a great blog.
By Peter Zavatsky,  Thu Aug 16 2012, 18:13
Kathy, I agree that you should see as many houses as you need to before making such an important decision, but you also need to understand that a lot of buyers will let a Realtor drive them all around town for months at great cost to the Realtor in time and gasoline only to end up not buying a house at all or buying at another agent's open house. Do you like to work for nothing? At the very least, you should be willing to give your Realtor an exclusive Buyer/Broker Agreement so he or she knows that they will eventually get paid for their efforts.
By Teribithia,  Fri Aug 17 2012, 03:01
I agree with u.
By Lisa Rothwell,  Tue Aug 21 2012, 13:01
What should a potential buyer do if they lost their home and the rest of their investment resulting in a short sell. A government/ Congressional freeze and hire a vet programs prevented me from being employed. I am hoping a rent or lease to own. or possibly a direct deposit with a doubled monthly payment would be considered viable options.
By bellsteve2002,  Sun Oct 21 2012, 16:15
my broker wants to charge me 500 dollars - when I buy something -- it is in the agreement -- and I signed it - is this ethical? I thought the sellers paid all the brokers fees.
 
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