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A Tail Of Two Buyers AKA How To Succeed Or Fail Buying A Home In A Sellers Market
Desi and Ozzie are brothers. They both wanted to purchase a home for the first time, but they decided to take two distinctly different approaches. Desi decided to enlist the help of a knowledgeable, professional Realtor to act as his Dedicated Buyer’s Agent, Ozzie decided to have a go of it on his own…
Front End Research-Understanding the process-Both brothers are smart and knew they would need to do research. After all, this is the single biggest investment of their life.
While Desi did a cursory amount of internet market research in his area, he focused his main attention on how he would qualify his Realtor. How long has he/she been in the business? Are they full time? What areas do they specialize in? What differentiates them from the hundreds of other agents out there? Desi knew that THESE would be crucial indicators that determined his own success. He would look for more advanced market assistance from his agent.
Although Ozzie had a very busy schedule, he felt compelled to research EVERYTHING himself. He watched reality TV shows about high end real estate sales and home flipping. He scoured countless websites to check their “estimates” on values in the areas he was interested in. Of course he also consulted his most trusted resource of all, his parents. It was in a different area and in completely different markets, but they too had purchased a couple of homes in their lives and that experience must still be relevant now, right? He also intended to use an on-line lender to obtain a loan when he was ready, after all his credit is absolutely impeccable.
Desi loved to looking at homes on-line and he especially loved the custom listings his Realtor Dave would send him based on his own preferences that they continuously discussed. He and Dave would go out touring homes together on DESI’S schedule. As they spent time together, Desi began to further appreciate Dave’s local area and market knowledge. Over that same time period they also developed a strong bond, based on trust and mutual respect. Dave also helped Desi get pre-qualified for a mortgage immediately with his trusted mortgage officer, Jenna.
Ozzie liked to look at homes on-line too. His primary resource for touring homes was Open House. He did try calling listing agents for access at times, but since they were mainly focused on their own client’s needs, half the time he didn’t even get a call back till after the property was sold and other times not at all. He missed out on more than one event he wanted to attend and several houses he wanted to tour and potentially buy because of the conflicting schedules. Ozzie’s wife, Harriet, was not pleased!
When Desi found a home he liked he felt totally comfortable and ready to place an offer. By this time, he had been given plenty of time to access as many homes in the area as he wanted. More importantly, he had developed a relationship with a trusted advisor. Dave thoroughly explained the process as they went along so that Desi had a comfort level in knowing that the price AND TERMS of his offer gave him his very best chance of getting the offer accepted without overspending. This was no easy task in such a competitive market.
Although Ozzie felt he was ready to place an offer and seemed confident, he wasn’t well prepared and soon began to struggle. He tried placing offers through listing agents because he had been told by someone with good intentions (dad), that it was the way to go. Unfortunately, he missed a home or two because the listing agent was busy fielding multiple offers and just didn’t have time to deal with him. He missed out on another home because he wasn’t pre-approved for a mortgage. Then he missed another because the listing agent decided to represent an all cash buyer instead of him. He had never seen that happen on TV, WTF…? Even once an agent did decide to help him, he often wondered if he was getting unbiased market information. The home seemed a little over priced but he was told it was spot on. He began to question how an agent that’s directly compensated by a seller could be “on his side”? Perhaps the estimates he saw on the internet aren’t that accurate after all? How would he know?
Getting into contract
It didn’t happen on the first try, primarily because of the hot market and the fact that Desi was a discerning buyer that didn’t have a great deal of financial leverage. But, both he and Dave were patient and they stuck to a proven strategy. Before long, Desi was in contract to purchase his first home! Although Desi was a little nervous, Dave helped him remain calm by carefully managing all phases of the transaction. Dave worked with the title company, scheduled inspections and regularly consulted with Desi’s lender to make sure everything was going according to schedule. When a couple of points of concern came up during the inspections, Dave helped negotiate a resolution that was favorable to Desi’s interests. He even found a reputable contractor to handle the repairs. Even so, they managed to close the deal on time.
Based almost solely on Ozzie’s determination, he finally got into contract. Although he wasn’t very confident he had offered the right price, or overly thrilled about the condition of the home, he had failed too many times to be denied! The property had been sitting on the market for a while and the listing agent, a close friend of the seller, had graciously agreed to represent him as well. Although the listing agent is a very nice person, he only does real estate sales part time and hadn’t closed many transactions. When inspections came in, there was a lot of work that needed to be done to the property. Ozzie felt that there should have been a price reduction or work completed by the seller if he was going to proceed forward, but the agent seemed hesitant to press his friend for anything that Ozzie wanted. Concurrently, Ozzie was also struggling with his internet lender. Although they promised an excellent rate, they were unable to process the loan in a time frame that was expected in his local market and time on Ozzie’s deal was running out… Ultimately the pressure became too much for Ozzie and without a trusted advisor to help manage these issues, he ended up backing out of the deal.
Christmas is nearly here and Desi is settling into his new home. He loves his new neighbors and is also pleased with how quick and hassle free the whole process went. He will definitely call his new friend Dave the next time he or one of his friends needs to buy or sell a home. He may even recommend him to his brother Ozzie, once Ozzie has decided to stop chasing his tail. :)