A couple of months ago we wrote a newsletter on The Benefits of using a Buyer's Agent. Many readers of this newsletter followed up with questions on - how do I choose a buyer's agent? So, in this newsletter we'll outline the top-10 questions you should ask a buyer's agent - we'll also give you the right answers!
Overall you want an experienced and busy buyer's agent; you want one who has a good understanding of the towns you will be looking in; and one who can explain the pros and cons of a home - both its resale potential and the systems within the home.
So, let's find out how you can identify whether your buyers agent is experienced and knowledgeable about the real estate market ...
A busy agent is actively looking at the real estate market. In general, the real estate agent community consists of two types of agent - full-time and part-time. You should only consider a full-time agent. The full-time agents are the agents who are active in the market on a daily basis. By this we mean they know what's on the market (current inventory), they know the characteristics of homes that will sell quickly and those that will not. If they have helped many clients, they will also know what makes a successful offer. Remember that if a home sells with competing offers that means many buyers agents were unsuccessful in helping their buyers write a successful offer. Your agent should have helped a minimum of 10 buyers in the last 12 months to be considered an agent who knows what they are doing.
Every home buyer and home owner wants to know "how is the market?" The answer given by agents varies considerably. What you need is a detailed answer backed up with facts. What you don't need is "great, are you looking to buy/sell?". Let's outline how MA Properties Online team might answer this question.
Overall the market in the lower price ranges (dominated by first-time home buyers is strong). Look at the sold price to list price ratio in Arlington - the average is over 100% so many homes sell for over asking price and that means competing offers. The ratio is shown by the orange line in the graph below.
If we look at another town, for example Wellesley, this sales price to list price ratio is consistently less than 100%, and on average is below 95%. This means that this town rarely has competing offers, so you would use a far different offer profile if you were looking to buy in Wellesley versus Arlington.
Does this matter? Yes - in a town where homes sell quickly and often with competing offers, understand that you will be required to make a buying decision quickly and often pay more than the asking price (more on price later).
There are many more statistical components that describe the health of the real estate market in a town. Your agent should be able to explain the market with factual data to back up their assertions regarding the state of the real estate market.
This depends in part on how you, the home buyer, wants to work. Before Zillow the real estate agent was the only person with details on homes for sale. After Zillow this information can easily be viewed by everybody. Some home buyers want to "be in control", whereas others "want the agent to be in control". So, let me outline a strategy that we have found successful - remember though that this is not a 'hard-and-fast' rule and it should be tailored on a client-by-client basis.
Many home buyers start wide with their home criteria - condos and single family homes, many towns (some close-in and some far-out), fixer-upper and new construction etc. About the only "no compromise" is the quality of the school system - they want it high! The candidate homes when there are very 'wide' criteria can often number in the hundreds - way too many for you to wade through and make any sense of and so we recommend taking a phased approach.
The MA Properties Online team will tailor this plan to suite your preferred way of working and communicating.
In this "hot" real estate market competing offers and bidding wars are often the norm. For every successful buyer, there are many unsuccessful ones. The answer to question 1 (How many homes have you helped clients buy in the last 12 months?) is obviously important here but it is also important to understand the details behind how to craft a successful offer. The MA Properties Online team have many strategies to help make offers successful. For example, many buyers ask "should I waive the inspection?" - in some circumstances waiving the inspection might be a winning strategy, but in others (perhaps where the house has some issues) the risk might be too high but we can advise on differing strategies with regard to the inspection contingency which will make your offer more attractive than others.
Make sure the buyer's agent can explain their strategy in detail and make sure they are knowledgeable enough to explain the risks associated with each component of the offer (see question 6 for the inspection contingency).
The process from Home Search to Closing consists of many steps (home search, offer, offer acceptance, inspection contingency, Purchase & Sale (P&S), mortgage contingency, closing etc.). A key role of the buyer's agent is to explain each step in thorough detail and guide you through the process once you have an accepted offer. A part of The MA Properties Online team's desire to educate buyers is that we have written a detailed "Guide to Buying a Home" which describes each step along the way in lots of detail. You can request this on our website (Buying/Selling Guide) or we can email you a PDF, or provide a hard copy printed booklet to you. If you need to sell a home, there's a corresponding "Guide to Selling your Home".
Hopefully the questions above will have given you some insights into the sorts of questions you should be asking of a real estate agent if you are considering them working for you, on your behalf, as a buyers agent. Buying a home is often the most expensive asset a person will buy - do you really want to use an agent who has very little experience or knowledge to guide you in this very important decision? I think not. Ask the questions we've outlined here will ensure you get a knowledgeable buyer's agent.
We'll cover questions 6-10 in the next newsletter.
If you would like an estimate of what your home would sell for in today's market I would be more than happy to come by, have a look at your home, and then provide a CMA (comparative market analysis) which will provide you with an estimate of what your home should sell for, along with a marketing plan to get maximum exposure for your home.
If you'd like to chat more about the topic presented here, or the Real Estate market in general, then please call me on (617) 997 9145, or email me at Dani.Fleming@MAPropertiesOnline.com.