🏡 Getting it Right at Step 1
As a first-time buyer, you will rely on experts to help you through every step of the journey to your American dream. Owning your own home is such an amazing thing, so you want everything to be smooth and as simple as possible. To be successful, the three most important decisions you will make are choosing:
- The real estate agent who is right for you.
- The mortgage which will best meet your financial goals and current situation.
- The right home.
Most first-time buyers begin in reverse order, they look for a possible home, find a real estate agent to help them, then apply for a mortgage. In this article you will see why we at Bayou Mortgage advise a different and more effective way. We will focus on finding the right real estate agent. As you read, you will see how the other two decisions fall in place.
We want you to avoid inefficiencies, being disappointed, or having to begin again. This is a fairly long article, because we want to do a deep-dive into choosing the right real estate agent, so you, and all our borrowers, get a good understanding of the what and the why of it.
🏡 Some Background Information on Real Estate Agents in Louisiana
Let’s begin with the basics. We are going to use the term Realtor from now on because Realtors are held to a higher standard than someone who is only a licensee. To be a real estate agent, a person must hold a valid real estate license. All Realtors are real estate licensees, but not all licensees are Realtors. Licensees are governed by state law only. Realtors are governed by two things:
- Louisiana Real Estate Law.
- The Realtor Code of Ethics.
Louisiana Real Estate Law says how a licensee must perform their duties. They can represent a seller or a buyer. They can also act as a dual agent (representing both parties) or they can perform only ‘ministerial duties’ for a buyer while representing the seller.
That may sound complicated (laws usually are) but the bottom line is, when you choose a Realtor, make sure you are their client and not simply a customer. An experienced Realtor will explain it all to you and will make sure you know exactly how they will represent you, especially in negotiations with the seller. This is an important step in choosing.
The Realtor Code of Ethics covers in detail how a Realtor must treat buyers, sellers, members of the public, and other Realtors. This link takes you to the Code if you want to read it in detail. To quote the Code, the Realtor you choose as your agent must pledge themselves to protect and promote the interests of their client. The seller is not going to be their client, you are. That puts you in the driving seat when it comes to negotiating the price and terms of the offer you eventually want to make.
🏡 Finding and Choosing the Right Realtor
Some Realtors are experienced and successful full-time professionals, some are new and inexperienced, and some only work part-time. To begin your Realtor search, you may want to follow some of these ideas. They are not in any order of importance, so take the ideas in the order you prefer.
- Ask people you know about Realtors they would recommend, and ask why they would recommend them.
- When you have some names, search social media, primarily LinkedIn (for their professional side) and Facebook (for their personal side.) You will be spending quite a lot of time with your chosen Realtor, so you want them to be someone you will be comfortable with.
- Collect flyers and brochures about properties. You may not be interested in the property, but you may discover a Realtor who comes across as the kind of person you want to interview.
- Ask Bayou Mortgage. We have excellent working relationships with many Realtors, and we will be happy to suggest some names of people who meet your criteria.
- Successful Realtors will probably have their own website which will tell you a lot about them and how they work. Use the ideas below as a guide for online searching.
🏡 Ideas on Interviewing Realtors
When you have decided on potential Realtors to interview, we would suggest at least two, you want to see how they come across as people as well as professionals.
Ask them to describe what they specialize in. Some Realtors are experts in certain areas, such as Lake Charles, Lafayette, Pitkin, etc. Some may also focus on certain neighborhoods within a city. You may even find Realtors who have a lot of experience in, say, condos or new construction as well as existing properties. This can become important if you want to understand Homeowner Association (HOA) rules and regulations, or a new home builder’s reputation.
🔑 Experience and Competence
Ask them to describe how they will represent you so they can explain both their legal and personal responsibilities. This kind of question is not just about legal technicalities. If the answers you hear are in-depth and supported by reasons and examples, you will have met someone you can rely on.
If their answers sound unclear, then perhaps they may not be as detailed and careful when it comes to, say, HOA rules. Just as an example, some HOAs limit the number of pets someone can have, or whether you can operate a home-business.
🔑 Negotiating Skills
Ask how they handle negotiating offer price as well as other terms and conditions. You want to buy at the best price and on the most favorable terms and conditions. Negotiations can include timescale, whether the seller will contribute to your closing costs, how much a seller may be responsible for to pay for repairs or replacements following the home inspections, etc.
Each detail of a contract can become a negotiation issue. You do not want to lose your dream home because of “nickle-and-diming” but neither do you want to “leave money on the table.” A skilled negotiator will be able to advise you so you get the best deal on the best terms while keeping everything in place.
🔑 Solo or Team
Ask if they work alone or have a team to handle certain aspects of post-contract work. A lot of detailed, time-bound, and essential actions have to be completed, and you must be confident that everything that has to be done gets done.
Many Realtors handle everything themselves, and some delegate. There is no good or bad way, what matters is how it is controlled and managed, Buyers can suffer anything from having to spend more money to having the contract canceled because someone did not complete a task according to the agreed deadline.
What past clients say about their Realtor also tells you a lot. The more testimonials a Realtor has from buyers like you, the more you can rely on their advice, ideas, and actions.
🏡 How the Right Realtor Will Help You Find the Right Home
As a first-time buyer, you may have a good idea as to what kind of home you want, how much you can afford, and where you would like to live. Your Realtor will ask you detailed questions about your dreams, hopes, ideas, and plans to make sure you see potential homes which meet your criteria. It will help if you already have a list that you have grouped into:
- Must Have (size, number of bedrooms, yard size, age, condition, etc. if a condo must it be top floor, etc?)
- Would Like to Have (home office, hobby, nursery, or rec room)
- Must Not Have (on a busy road, close to loud noises)
- Would Prefer Not to Have but Will Accept if the Must Haves are Covered.
Your Realtor will also look for properties which meet other essential criteria, including:
- The price range based on your mortgage pre-approval and cash availability. You will need cash for closing costs as well as the down payment. you may also need some for any fix-ups the seller may not be responsible for.
- The right area. Do you want to live in an HOA or not? How close do you need/want to be to your place of work, schools, shopping, recreational facilities, etc?
- The style of home. Open plan or not, how many stories, do you need a home office or rec room?
🏡 The Takeaway
Buying your first home is exciting. Getting it right is essential. An experienced real estate professional will manage the big things and the small details. By choosing your Realtor carefully, you will save time, lower your costs, and avoid mistakes and disappointments.
Keep this article to hand, so you can find the right Realtor for you. If you have not already got your prequalification or preapproval for your mortgage, please click here to get pre-qualfied or give us a call on (337) 476 2623.