What Buyers Need To Do When Working With A Real Estate Agent

There are few things I like more than sitting in on a round table discussion with a bunch of wise real estate agents discussing a specific, open-ended topic. The only thing I like better is going one-on-one with a wise real estate agent regarding the same topic at some really good restaurant, like Pepin's in St. Petersburg.

Recently, I had an opportunity to sit in on both a round-table meeting and a one-on-one. The topic was what buyers need to do and not do when working with a real estate agent. I received some very interesting buyer guidelines from a group of agents at Coldwell Banker's Northeast office in St. Petersburg, and some very similar comments from Debbie Deeb, a highly experienced buyer's agent from Prudential Tropical.

Essentially, I proposed an open-ended question to these people: What is it that buyers need to do or not do to make their home hunting experience with their agent more efficient, enjoyable and effective?

Here's what came out of those discussions ...

• Buyers should never ask the agent to help them find a "bargain". Simply stated, in this market bargains are everywhere. That's because real estate prices have fallen some 46% since reaching their peak in the summer of 2006. For many years, I have felt that great deals are not made by the real estate agent finding the buyer a bargain priced property -- although that sometimes happens. More often, great deals are made when a qualified buyer and his agent take the time to research a property, make a written offer that they feel constitutes the price they are willing to pay, put some money in escrow, and negotiate logically and in good faith with the seller. In other words, the buyer has to make the first move by presenting the offer the way he wants it to be done. You can't put the entire burden on the agent to get lucky and find a great deal hidden away in the MLS files. That puts the agent in the position of having to guess at what a good deal is. What one buyer thinks is a great deal may not be such a hot deal to the next buyer.

• Debbie Deeb said that she thinks buyers -- especially buyers from the northern states -- need to be much more realistic about their price expectations in Florida. Apparently the media up north are carrying a lot of stories about how troubled the real estate market is in Florida, and that great properties are now available at a fraction of their former cost. Many buyers come to the Tampa Bay area believing that for less than $100,000 they can move into a totally updated home or condo that needs nothing. Many times these buyers are in for a rude awakening once they see the condition of the property -- especially foreclosures and short sales. "Properties are still valuable assets," said Deeb, "and sellers are not going to give them away for chicken feed." Deeb suggests that buyers look past the media hype and misinformation, look into a property's condition and location, and shop around with their agent to get a realistic idea about what their money will buy.

• Pat Lins, one of the old-pros (and I mean that in the best possible way) at Coldwell Banker, said buyers need to trust their agent more and let the agent do his or her job. In fact, several agents said essentially the same thing. Buyers need to determine what they want in a house, what it must have and what they can live without. Buyers need to determine their price range. If they can, buyers need to determine the location where they want to live. Then, Pat Lins said buyers need to communicate this information to their agent and let the agent find suitable housing that meets their needs. If the buyer does not like what the agent is showing, perhaps the buyer needs to revise the house hunting requirements. What the agents find troubling is when the buyer starts handing the agent MLS numbers on houses they found in one of the many search sites on the internet. Many times these buyer-generated MLS numbers are outdated and don't conform to what the buyer is really looking for in a home, so when the agent shows the house the buyer is further disappointed. This is a waste of time and often leads to frustration for both the buyer and the agent.

• The round table group at Coldwell Banker said buyers should make their first house hunting assignment the job of obtaining a letter of pre-approval from a mortgage lender. A letter of pre-approval is mandatory for buyers in today's topsy-turfy world of mortgage financing. Sellers want to make sure the offer for the house is being made by a buyer who can qualify for the loan and close the transaction. If the purchase will be made all-cash, the buyer needs to have a proof of funds letter available at the time the offer is made. And here's a little inside secret for all you buyers out there: If you refuse to get that letter of pre-approval or proof of funds letter, no real estate agent will take you as a serious buyer and likely will not work with you.

• All the agents I talked with said one of the most foolish things a buyer can do is try to work with several real estate agents at the same time in searching for a home. To the buyer, it may seem that having several agents trying to find a home is smart. Actually, it's not. When agents find out that the buyer is not being loyal to the agent, they often drop the buyer. Then, instead of having several agents working for you, you actually have nobody working for you. Buyers need to select one agent with whom they are comfortable and stick with that agent. If it doesn't work out, the buyer should select a new agent and start the process over.

• One of the agents in the round table at Coldwell Banker was Judy Clark, the firm's popular managing broker. Judy pointed out the problems that agents have when buyers start asking hypothetical questions -- and then worrying about the answers. Those kind of questions almost always begin with "What if ...". You know, "What if the roof has a leak?" "What if the air conditioner is broken?" "What if", well, insert the next problem. These kinds of questions make agents nervous because they aren't sure if the buyer will complete the transaction or if they will talk themselves out of buying. There is nothing wrong with buyers asking questions of their agent. But once the question has been answered or the problem solved, don't keep coming back to it and worrying about it. As Pat Lins added, buyers shouldn't dwell on problems so much. There's virtually nothing that can be corrected.

Here's one final point that Debbie Deeb and I discussed over lunch, and I think this is something to which all buyers should give consideration. Purchasing real estate should be treated as a serious business transaction involving large sums of money and to which you will make a commitment that may last a lifetime. Treat it as such. "Hire an agent who is experienced and educated in this market, not some other market," said Deeb. "Hire an agent who knows the current trends, not the way things used to be! After all, this is a big deal and needs to be treated as such."

Deeb said that buyers who hire a friend or relative as their agent may be doing themselves a dis-service from a business transaction standpoint. "That friend or relative may be doing real estate part-time or as some kind of hobby. There is so much money at stake with each transaction that buyers need to protect themselves by being represented by a full-time, qualified agent who is up to date with all their educational requirements and does real estate as a profession."

I think Debbie is spot-on with that remark.

I want to thank all the agents who helped me put this buyer's guide story together. Everybody had great insights and I appreciate their help very much. Debbie Deeb, Pat Lins, Judy Clark, Sandy Ewing, Joe Troy, Dawn Greenidge, Peter Harriss, Alan May, Bambi Cramer and Nancy O'Connell. Everybody's contribution was great. What a smart bunch of agents you guys are! If there's anybody I left out, sorry!

If you're a buyer, I hope this story helps you have a much better relationship with your agent while searching for your new home -- that was my intention in writing it.

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