You don’t always know what you’re buying.
Have you ever wanted to buy a TV, but didn’t know which one to get? There are so many crucial features you could overlook, and so many ways the salesperson could dupe you into spending too much money, that you didn’t feel comfortable dropping a few hundred/thousand dollars without expert help. So naturally, you called your nerdy friend–we’ll call him “Trent”–and had him go to the store with you and tell you what to get. As you’ll recall, when you got there, you began making your way–like a moth to the flame–toward the enormous, blaring panels on the back wall, all playing The Emperor’s New Groove in perfect sync. Some sales guy named Vinny gave you a wolfish grin and sauntered your way, the light from the nearby flat screens glinting off his gold chain and gold tooth.
Ask about our super-low-rate fixed mortgages.
Thankfully, Trent shoved you to the side and out of harm’s way, muttering “you don’t want those” through clenched teeth. The rest of the story isn’t worth telling in long form, but basically, Trent expertly juked and jived around Vinny’s assaults like Muhammed Ali, prescribing precisely the resolution, display technology, and refresh rate that would make you the happiest. And by the time Vinny–thoroughly fatigued from his many failed attempts to do you the dirty–just wanted to sell you what Trent wanted and shove you out the door, Trent busted out his price comparison sheet and Vinny was down for the count. Thanks to Trent, your TV gives you a little endorphin high every time you watch a Gilmore Girls rerun. Even after all these years.
It’s like that…
…only about a thousand times more. A good real estate agent is supposed to be your Trent for the single largest purchase you’ll probably ever make: your home.
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Helping you find the right home
Your agent will seek out homes that match your needs and fit your price range. They’ll help you narrow down a stack of listings to a manageable few that suit you best, based on the criteria you give them. They’ll drive you around and use their special Realtor key to get you inside all the homes, personally reviewing each and every option, feeling out your reactions, sniffing out issues, researching the neighborhood, and assessing things you might never think of on your own, like resale value and cost of upkeep. Like Trent did, they’ll negotiate pricing, and finagle creative ways of compromising so both the buyer and seller feel like they got a fair shake. Aside from the size of the building and lot, the floor plan, and curb appeal, a few of the less obvious things an agent will help you narrow down might include:
- Are there any easements or setbacks?
- Are there deed restrictions that will limit your activities?
- Will you have to pay any homeowners association or municipal fees?
- Are you in the right school district?
- Does the house have the right utilities available?
- Are there any impending maintenance needs?
- Are you near any establishments you might find undesirable, like rendering plants or nudey bars?
See? Most people would never think of all this stuff, but it has the power to make you very, very happy, or very, very sad.
When you’ve found the one
That’s when the real fun begins. Whereas Trent simply told Vinny “My research indicates that the shop down the street has this same model for forty dollars less than you. We’ll give you $x,” the official offer to buy a house is a long, boring contract that you would never want to write by yourself. Vinny may have been a bit peeved at Trent’s capacity for savvy and tenacious negotiations, but that was nothing compared to someone selling the home where their children grew up–few people are greater slaves to their emotions, and homeowners can take a low offer very, very personally. On the other hand, a well-negotiated deal can save you thousands of dollars, so haggling is where you’re going to want all the help you can get.
Paying for it
Once you’ve FINALLY agreed on a price, you need to have money to buy the property. If you’re like the vast majority of people, you don’t have the cash, so you’re going to need financing (that’s where you borrow money from a bank to buy a house, and pay it back over the next several decades in small, monthly installments you can afford). Your agent can line you up with a mortgage professional, and help you navigate the funding morass, which also includes inspectors, appraisers, and often, additional insurance.
The contract to close on a house is so thick you probably couldn’t tear the whole thing in half all at once. Agents use software and their expertise to compose this epically long, dull document, and make sure that all the bases are covered.
One particularly critical thing to verify is that the seller actually has the right to sell the property. It’s not very common, though also not completely unheard of, for a squatter to occupy and try to sell a vacant house, and theoretically, disappear with the funds. What’s more likely, however, is that the property has a shady title. That means that ownership is in dispute, possibly due to an inheritance dispute when the previous owner died, or that long ago, the developer built on land without exclusive rights to do so. Your agent will line you up with a title company, who will research the deed and make sure you won’t get any nasty surprises, at least not from someone contesting ownership of your house.
With you every step of the way
Your real estate agent is generally the one to stand by your side every step of the way. From browsing those first listings all the way to hosting a housewarming party when you move in, a good agent knows the process inside and out. They’ll also get to know you very, very well.
Real Estate Agent
A bad agent can cost you lots of money. They could talk you into buying a house that winds up needing expensive repairs immediately after moving in. You might pay a high price for the property because they failed at negotiation, or didn’t shop around enough. They might connect you with a bad lender, and you could wind up with an excessive mortgage payment, or worse, a creative loan that winds up costing you an insane amount of money, or even your entire home. Aside from simply being competent, a good agent must avoid the myriad conflicts of interest that might temp them to get a little bit ahead at your expense. Like your home, a good real estate agent is worth shopping around for.
What’s a “Realtor”?
Basically, it’s a real estate agent or broker. Just about every agent in the USA is a member of the National Association of Realtors, a trade group that provides training, licensing, and myriad other resources to help grease the wheels of property transactions. The NAR has trademarked the word “Realtor” to refer to real estate professionals who have active membership. Most of the time, the terms “realtor” and “real estate agent” are used interchangeably.
Note: Some people like to pronounce it “reelator”. It’s the same thing.