Picking A Real Estate Agent


A real estate agent is simply a salesperson, much like the movie/stage play ‘Glengarry Glen Ross’ portrays. Agents have no allegiance to anyone but their own bottom line, so there may come situations where they are presented with the option to gain money through the misfortunes of their client (i.e. asking sellers to lower their listing price for a quick sell to meet monthly quotas).

Don’t assume an agent has your best interests in mind.

Agents are working on commission from closed sales, and as such will do whatever it takes to make the biggest deal. This means buyers should never tell an agent how high a price they’re willing to pay for a home-make sure to give agents the lowest offer the seller might consider before anything else, and stick to that amount. Otherwise you can put yourself in a situation where the seller was at first willing to accept a lower offer, but the agent advises them to play hardball.

Use agents for what they’re good at.

Realtors excel at finding properties for buyers that match specific criteria (i.e. communities near schools, houses in a certain price range, etc.) Aside from this, avoid giving the realtor too much influence over your housing situation-do not let them choose your property attorney, and in general just allow them to unlock the front door for you when touring a house (as a buyer).

Use a successful, full-time agent.

The best way to measure an agent’s success as a seller is to check their current listings. Agents with many listings are an ideal choice to become a client of, as they will most likely be closing several houses a week. Part-time and less-successful realtors will have few homes listed, and will otherwise not give you as much attention or expertise as the full-time agents will.

Avoid the ‘tricks’ of shady agents.


Some agents will betray themselves as unprofessional when creating a house listing. Agents who use overly superlative language when describing a home should be avoided. Also the ‘insider agent tips’ like saying “Another buyer is interested in this so you should make an offer today!” should send red flags to any buyer as well. Remember that agents are first and foremost working to close the sale, and not trying to ‘help you out’ with useful info.

Be aware of signs your agent is working against you.

A real estate agent that continually shows you homes that are several thousands of dollars higher than your specified price range is clearly trying to earn extra commissions by closing a higher sale. On the same token, an agent that says there are ‘zero’ homes in the area at the price you are looking for could be guilty of a similar ulterior motive-try searching for homes by yourself to confirm or deny the agent’s claims.

Do not pay an agent up front.

Agents should never be paid any money up front. They only get paid when they close a sale for a seller and/or a buyer. If an agent asks you for money before completing any sale, fire them and find a real agent.

Do not sign up with an agent for more than 90 days.

As a seller, it makes sense to give agents a short leash in order to spur their efforts into finding a buyer. If you sign a 6 month contract with an agent, they can delay selling the home for a few months (forcing the seller to pay mortgage and interest in the meantime) before getting serious about selling the home. Limit their marketing efforts to 90 days to get them to give you 100% effort from day one.

Tips On Dealing With Home Loans


Do not take a loan on homes you cannot afford.

The buyer will assume an exorbitant financial burden when they cannot put down at least 25% of the total purchase price. Most banks and lenders will only give mortgage loans in these cases if the buyer agrees to PMI (private mortgage insurance) to cover the lender’s financial risks.

Know the mortgage brokers’ strengths.

A mortgage broker gets commission from the lender (bank) off a percentage of the buyer’s mortgage loan. They are best used to secure the loan, and can often wind up giving buyers a better deal on a mortgage than going to a bank’s own salespeople for loan initiation.

Avoid bad mortgage brokers.

Buyers who borrow to pay for their new homes need to be savvy about dealing with brokers, as some of them are unscrupulous. Always make sure you completely understand any loan agreements before signing a contract, as some brokers will trap you into a mortgage without an early termination-meaning you are locked into a regular payment cycle even if you can afford to pay off the full amount of the mortgage loan at once.

Know the advantages of fixed-rate mortgages.

Buyers who want steady, identical monthly payments without any unforeseen rate-hikes in the future (via interest rate changes) might be interested in fixed-rate mortgages. The best time to secure such a loan is when the rates are expected to rise, so that you can lock in a low FRM for the entire duration of your (long) mortgage repayment period.

Know the disadvantages of fixed-rate mortgages.

You’ll be required to make higher initial payments with a fixed-rate mortgage than you would with an adjustable refinance mortgage rates. Also, the fluctuation in the market’s interest rates will have no effect on your monthly payment even if rates lower drastically.

Know the advantages of adjustable-rate mortgages.


ARMs give you a lighter financial burden initially by letting you ease into your monthly mortgage payments with small amounts at first. The rates will also be capped per year, and per the lifetime of the loan, which will limit the amount that monthly ARM payments can increase to. ARMs are very useful for those who plan to only live in a house for a few years, as the lower rates will kick in just when the buyer plans to resell.

Know the disadvantages of adjustable-rate mortgages.

Higher interest rates will dramatically increase your monthly payments for the duration of your ARM. There are many clauses to watch out for with ARMs that can suddenly increase your yearly/lifetime interest rate caps, which is essentially the impetus behind the recent subprime lending economic crisis affecting the entire world.

Pay attention to important factors before signing a contract.

Take into account the future plans you have with the property (whether you plan to stay for decades, or are only going to be living in the home for a few years before moving). Your financial stability is also a factor in the kind of mortgage you need to look at-if you earn a steady salary that is guaranteed you can immediately pay points towards lowering your total interest rather than dragging out payments with more affordable (lower point) payments with a less-stable salary.

Eight Useful Tips For First Time Home Buyers


Get a credit score.

When you are in the market to buy a new or used home, one of your first acts should be to receive your credit score. You’ll need this if you’re planning on qualifying for mortgage loans or any other kind of money lending/credit.

Exercise the advantages of the ‘buyer’s market’.

Thanks to the recent housing market crash that has effected lending, borrowing, and real estate sales in general worldwide, the current market has seen an across the board reduction in housing prices to spur business. Real estate agents are accepting drastically lower prices for properties today that are probably half as much (or less) than the closing prices of yesterday.

Maintain a ‘seller vs buyer’ mentality.

A real estate agent or a seller is not your friend, point-blank. You would do well to use this advantage while shopping for a new home, as a seller who thinks they can get $300K for their property will quickly realize that nobody will be willing to pay more than $100K in today’s market due to depreciation in the housing market.

Stay focused and plan ahead.

There is no worse position to be in as a home buyer as a person who waits till the last minute (days before their old house/apartment lease is up) before looking to get a new property. When a buyer is desperate to find a new home, sellers can almost ‘smell’ the buyer’s lost advantage (as the seller can simply play hardball on a high price and wait for the buyer to run out of time and be forced to accept the higher price).

Take risks (wisely).

It may sound odd, but many first-timers who are buying a home will over-think every aspect of the home-buying process. There are times to be cautious, and there are times to go ahead and dive into securing a new real estate property. Often times first timers will lose out on their dream home from imagining that something is ‘too good to be true’ when it’s actually a legitimate bargain.

Buy in the winter.

A rarely used tactic for home-buying involves waiting until the ‘off-season’, so to speak, to secure the best bargains. Most home-owners buy their homes in the summer time, when demand is at the highest (mostly from transferring children into new school systems). Sellers will not often get buyer interest in the winter, and as a result there is less competition, and more willingness for the seller to accept a lower offer.

Talk to potential neighbors.

There are quick and easy ways of finding out whether a neighborhood is ideal to move into. When shoddy neighborhood housing construction issues, illegal chemical dumps, or social problems are rampant in a community, the neighbors will be only too happy to talk about it to new potential home owners researching the area.

Be wary of foreclosed homes.

Many times a reduced-price foreclosure home might seem like a good deal. But upon inspection there could be thousands of dollars worth of damage to fix (offsetting any price reductions you’d enjoy when buying). Always get an inspection before making an offer on a foreclosure home.