8 Things Homebuyers Get Wrong
8 Things Homebuyers Get Wrong
My mother would admonish me on occasion, “Michael, 2 wrongs don’t make a right.” Imagine what 8 wrongs result in.
The National Association of Realtors surveys homebuyers annually. Below are the results of a question from that survey.
The survey answers are below, #’s 1-8. The respondents noted the importance of each by percentage (black bold).
My comments are below each, with my value noted in bold red. Helping over 1,600 people purchase a home, one learns a few things along the way.
The question posed in the survey? “What do you expect from an agent when working with an agent?”
1. Help me find the right home to purchase.
Consumer 53%; Homebuyer Assoc. (15%)
You will know the home when you see it. A good agent will establish search parameters to find a home to meet your wants and needs. We search for our clients based on what they have told us they want in a home but 53% is over valued. Finding a home does not put money at risk but steps 2, 3 and 4 do. Finding the right home to purchase is of little value if you purchase incorrectly.
2. Help me negotiate the terms of purchase.
Consumer 12%; Homebuyer Assoc. (70%) for 2,3,4.
3. Help me negotiate price. 11%
Consumer 11%; Homebuyer Assoc.
4. Tell me prices of comparables.
Consumer 8%; Homebuyer Assoc.
It’s not finding a house that will put your money at risk. In today’s market you must be more careful than ever. I see many articles that note buyers are paying over asking price. Consider this. The asking price, in behavioral economics, is referred to as the anchor – the price from which people move forward.
If you pay $10,000 more than asking (the anchor) and the anchor price is $10,000 over value, you’ve spent $20,000 more than the home is worth.
It’s why I rank pricing comparables (# 4 above) – what we call a market analysis – negotiating price (# 3 above) and terms of the Offer (#2 above) so highly at 70%. Get any of these 3 wrong and your money is at risk.
5. Help me with paperwork
Consumer 6%; Homebuyer Assoc. (10%)
6. Help me with lender
Consumer 4%; Homebuyer Assoc. ( 2%)
7. Help me with closing
Consumer 3%; Homebuyer Assoc. ( 2%)
8. Miscellaneous
Consumer 3%; Homebuyer Assoc. ( 1%)
Items can certainly arise post Offer acceptance, but with proper paperwork, most issues can be mitigated in the buyer’s favor as can lender or closing concerns.
There are 26 steps to a successful home purchase and each has a value, some more than others. The important steps are those that can cost you money.
The survey results tell me the consumer has it wrong. Contact Seamus (seamus.holloway@gmail.com); Mike Dupar (mddupar@gmail.com) or me if you want the right answers or if you have real estate related questions.
P.S. By opening this month’s newsletter you are in the drawing for my July bicycle give away, a Fixie from Fyxation Bicycles. The drawing will be held around the 16th of July.
Congratulations to past clients Zac and Amanda Wambold who were recently featured in the Milwaukee Journal-Sentinel. Zac and Amanda run Milwaukee Beer Gear.
The link is below and I suggest you check it out.
http://milwaukeebeergear.com/
Thanks for reading,
Michael D. Holloway