Top 5 Home Purchasing Mistakes. What Your Realtor Won’t Tell You. Part 5

In my line of work I have the opportunity to observe many real estate transactions and have found what I feel are the top 5 purchasing mistakes made by both novice and experienced home buyers. Please enjoy our final instalment of this series:

5.    Finding the best support team. You deserve the best

When purchasing a home you will require the services of many industry professionals including a realtor, mortgage agent, lawyer and insurance provider. The hard part is finding the best people to help you through the process. So where do you start? Who is the most important member of your team? In my mind it is a tossup between the realtor and mortgage agent as to who is most important. A realtor can find you the perfect home but if you can’t finance the purchase then the realtor’s efforts are for not. I have an obvious bias towards the importance of the financing, but for this purpose I will give the edge to the realtor as your most important team member, followed closely by your mortgage agent.

The Realtor

There are about 1500 realtors in our city alone so finding the best one for you could be an exhaustive search. In a perfect world you would interview all of them but who has time for that? The key thing to remember is that the skill set required of a realtor representing the buyer is completely different than the skill set required if the realtor is representing the seller. An exceptional selling agent may be a lousy buyer’s agent and vice versa. Here are some tips you can use to find the very best.

1. Are they a good listener? If you present your realtor with a list of the “must haves” for the property you are seeking and a second list of the “would like to haves” then any home they show you should contain all of the “must haves” and some of the “would like to haves”. Your time is important. If your realtor has listened well to your requirements they should be able to show you the “perfect” home quite early in the process.
2. Do they understand your needs? If one of your must have requirements is a Colonial style home and the realtor says “what’s that”, you are going to have issues.
3. Are they experienced? Being 20 years in the real estate industry does not necessarily mean 20 years of experience. It could be one year of experience, 20 years in a row. The point is if you have a specific need then look for a realtor with expertise in that area. For example; if you know the part of the city you want to locate in, find a realtor that works predominantly in that neighbourhood. They will have a good understanding of the property values, amenities, and may even know many of the neighbours. Look for the realtor with the most lawn signs or who advertises exclusively in the area.
4. Are they recommended by their colleagues? Here is a trick you can use. Call up a larger real estate office and talk to the receptionist or the broker of record. Explain your situation and ask them to recommend an agent. They will tell you who is good as it is their reputation on the line. If they can’t/won’t give you an opinion, then move on to someone who will help.
5. Talk to others who have purchased recently through your social contacts. Who had a great experience? Talk to your mortgage agent, lawyer and insurance provider. Who would they recommend?
6. Does your realtor work with For Sale by Owner listings? If not you are not being exposed to all of your housing options.
7. Do they require you to sign an exclusivity commitment? If there is no benefit to you in signing then don’t, but please be fair to the realtor. If you find the right one, you only need to be working with one.
8. Are they available on your schedule? A full time realtor should be flexible enough in their schedule to meet you 24/7. If they work as part of a team then the fact they take a vacation does not impact the ability to proceed on your timetable.

The Mortgage Agent

As in any industry there are good and bad mortgage agents. Here is what to look for:

1. Do they have multiple lenders available? How can your bank be unbiased if they can only sell you bank products. Find someone who only works for you and is committed to finding you the best available financing.
2. Do they do this full time? Financing is too important to be left to the inexperienced.
3. Do they specialize in a specific area? For example if you are purchasing a commercial property do they have experience with this type of funding?
4. What is their education? Do they have an education/training in financial matters? Can they find creative solutions on difficult deals?
5. Do they work with a team? Can they work to your timetable?
6. Do they charge you an upfront fee? They should be no direct fee to you, or a direct fee which only applies with the arrangement of successful financing.

The Lawyer

Real estate transactions are the bread & butter of many law firms and are relatively simple to complete if all goes as scheduled. Here is what to look for:

1. Do they work with a team? Can they work to your timetable?
2. What is their base fee and what are their disbursement fees. Get a quote in advance as the disbursement fees vary greatly from law firm to law firm.
3. Do they do litigation work? Real estate transactions are simple until a problem occurs? How experienced are they in seeking remedies?
4. Do they specialize in a specific area of real estate? Purchasing investment properties for example brings a host of other legal considerations from proper licensing, liability issues, revenue and expense verification etc. Do they know what to include in an offer to purchase? 

The Insurance Agent

A real estate transaction requires both property insurance and ideally some form of mortgage insurance. Finding an agent that does both is a bonus. Here are some considerations:

1. Can your agent provide both a residential policy and either mortgage or a term life insurance policy?
2. It is a lot easier to apply for insurance on-line in today’s marketplace. Comparisons are being driven strictly on price. What do you give up in terms of claims assistance by not dealing directly with an agent? Cheap insurance is no insurance if it is a hassle when you need to submit a claim.

We trust you have enjoyed our 5 part series and that we have given you some things to think about the next time you purchase a home.

We welcome your comments.