West Seattle Jonathan » First time buyers

What you should DEMAND from your real estate agent before you buy!

jonathan — Wed, 28 Nov 2007 20:00:11 +0000

It is so important that you have an agent who is willing to WORK for you, DEMAND that they do. All too often I meet people that tell me horror stories from their previous real estate agents. Like when it seemed that the real estate agent only showed them houses that were out of their price range, or when the real estate agent showed only one nice home and three gross ones and then said let’s make an offer. These are stories of real estate agents working for themselves not for their clients. This is why it is important that you choose a real estate agent that you feel comfortable working with, not just the first agent that answers to phone or whomever is sitting at the front desk at your local Realtors office. Choose one that you have researched and know how they work for their clients.

Your agent should have the statistical knowledge of the area you are looking in.
They should know the inventory and have seen the properties before they show you. This way they can weed out the junk and only show you what is worth buying.
Your real estate agent should do their best to work with your schedule.
Questions, Questions, Questions, your real estate agent should be asking you a lot of them.
By actually listening to your answers during the intake process, your agent should have a good understanding of what you are looking for in a home.
If you have questions about a home you have seen, your agent should be able to get that information for you.
While your real estate agent’s opinion may be one you value, you’re buying the home not them, your agent should not pressure towards one home or another, unless there is a definite reason. All too often, one person’s tastes are different from another’s and this can lead to a biased opinion.
Guilt and shame are not emotions that you should feel when working with your real estate agent. Your not buying a house because of them, they’re assisting you in YOUR purchase.
Once you have narrowed the field to a few homes, your real estate agent should take you back to compare them a little closer, so you can make an informed decision.
And finally before you make an offer, your real estate agent should perform a CMA, or Comparative Market Analysis, on the home you want. This way you have an idea of how it compares to what has sold nearby, and structure your offer based on that.

The Guide to Seattle Real Estate

Why you should NEVER call the sign in the yard! Part Two

jonathan — Tue, 20 Nov 2007 01:22:01 +0000

This a continuation of an earlier Post, I hope this increases your value of the use of a buyers agent. Rather than calling the listing agent (the agent who represents the seller) you should have your own representation. It is much like going to court without a lawyer, you just wouldn’t do it.· Free to the Buyer: The buyer very rarely pays for the agent’s services. The seller at the end of the sales process generally pays the agents that are involved in the transaction. The agent that the seller chooses usually has an agreement with the seller on their commission on the property. In return, the agent selling the home usually splits the commission with the buying agent. So, you should take advantage of a free experienced Seattle real estate agent because the seller, in reality, pays for both agents anyway. If you are dealing with a For Sale by Owner property, the buyer can choose to pay their agent’s fee or the commission can be negotiated with the seller. · Experience: Great Seattle Buyers Agents look at houses all the time. They know the industry, the market, and what it takes to get you your dream home. They are involved in purchasing and selling homes all of the time. For you this may only be your first, second, or even third home purchase. But for your agent it is a regular part of their daily duties. · Market Knowledge: The buyer’s agent is knowledgeable of the market in the area you are looking. The more you know the better educated offer you can make on a property. · Your Advocate: Knowing you have an agent that you can trust when it comes time to negotiate and someone who is looking out for your best interest is vital.

Please before you make that call, get in touch with a Buyers Agent that will look out for your best interests.

The Guide to Seattle Real Estate

Negotiate! What are you AFRAID of?

jonathan — Mon, 19 Nov 2007 20:12:33 +0000

In my university negotiations class we practiced negotiating every day. The information and experience that I gleaned from the class was awesome. I had never been a negotiating type of person. I just shopped around until I found the right price then I bought. Persuasion and communication have always fascinated me, the art, the style, the technique, the power, when used for good of course. Every class period we were assigned a “role” and a position to “play” from. In reality the students had nothing to lose so they should have held their ground. I mean why not, it was just role playing. I held mine and made out like a bandit come voting time. Being a real estate agent I work on my negotiating skills and use them often. But negotiating with other real estate agents can be just like class, easy. Sometimes they are so removed from the situation, or just want to earn their commission that they don’t hold their ground for their clients either. Now I wouldn’t recommend a home owner trying to negotiate the sale or purchase of their home either. Emotion and too much at stake can be such a deal killer. What you need is an agent that is willing to work for you, but that is not what we are going to talk about today.   There are three basic techniques of negotiation that I would like to explain: Puffery, the Hidden Table, and of course Silence. I recently sold an old car that we weren’t using anymore, private party, no agents acting for principles. Now there was some real negotiation. Puffery

Ah yes the sticker price. Most people think of negotiation as finding common ground, the middle between two points. This is often the case, so if you are going to sell something set the price high and the middle ground will be near what you actually what for the item, and hey who knows maybe you’ll make a little extra. So for the 1995 Infiniti J30 that blue books for 3200 and we wanted 3000. We started out at 4200. We placed ads on craigslist and Autotrader, the usual places to find buyers for a car. Nuthin, Nada, zilch, we received absolutely no response. It was awful, three weeks we waited. Ok so we lowered the price to 3500. A few bites but when asked about the condition of the car, we lost ‘em. We weren’t out to trick anyone or misrepresent the car. It had some cosmetic issues, but ran great, what do you expect for a 12 year old car.   Ok so the sticker prices on most cars at the lot are high but the advertisements in the papers are for low prices. In today’s technology driven world we weren’t the only 12 year old car on craigslist. People weren’t calling because other cars were priced lower and why call on an over priced car when there are cheaper options available. So we lowered the price to 3000 and Bam! My phone rang off the hook, people wanted this car. But of course the negotiations were just getting started. The first words out of most of the callers mouths was what is your bottom line, no really how much is the car, what is my price, how much for cash, like I would take anything else. My immediate response wasThe Hidden Table

When you’re at a dealership and you make an offer to the salesperson, their response is “Let me check with my sales manager?” And of course your offer is a little low and they counter with a higher price. Now how come the sales manager is always somewhere else and never comes to talk with you? They are playing the hidden table; the salesperson is still your friend that has asked about your kids and what you do for fun on the weekends, while the absent manager is the one who wants more of the green in your wallet. For me it was my wife. I would say that it was my wife’s car and she needed to get 3000 for it. I couldn’t negotiate over the phone but if they wanted to come and test drive the car then we could talk. I would say that this weeded out half of the prospective buyers, but that saved me the time of showing the car to someone who wasn’t even slightly willing to pay 3000. The hidden table saved me time and kept the price firm at 3000, and I was still able to be a “nice guy” when talking on the phone. I bet I showed the car to 5 or 6 different people. Here is where I used what can be the most effective negotiation technique ever realized. Silence

Either used when making an offer or when answering an offer, silence can get you to where you want to go. After test driving the car a prospective buyer offered 2500 all he had to spend on a car. I deadpanned him. Nothing, not a word came out of my mouth. 10, 20, 30 seconds past and he said how bout 2700. Can you believe it, all he had to spend? He moved towards my price by 200 dollars just in response to my silence. I then responded with 3000 not a budge from me. I lost him, 2700 really was his top. But that was OK I wanted 3000. The right buyer would come along. And he did, again I used the hidden table over the phone, and after test driving the car he offered 2600. Silence from me. How bout 200 dollars off the list price, he said. Not to be rude and overuse the silence technique I reverted back to the hidden table and restated that my wife needed to get 3000 for the car. He said ok and a deal was made. Now I didn’t rip anybody off. Everyone got what they wanted. He a car and me 3000 bucks. But I was able to use three very valuable techniques of negotiation. Even though puffery in this situation didn’t work, it is still a commonly used and effective method. The hidden table is one that I use all the time. “Let me take your offer back to my clients and see what they have to say.” It is so powerful. And Silence, the power house of them all; who would have thought that just being still and not doing anything would work so well. Basically you’re using the motivation of your counterpart against them.   So now you know a few of the basic principles of negotiation. Give it a try You would be amazed at what you can negotiate, Phone Bills, Cars, Salary’s, Hotel Bills, even some entertainment venues. It just takes a little practice and it can be really fun, see what you can get.

Why you should NEVER call the sign in the Yard? Part One

jonathan — Mon, 19 Nov 2007 14:44:20 +0000

We are often asked why a person should use a buyer’s agent. Why not just call the agent with the sign in front of the house I want to buy? Hopefully I will be able to answer this in the next few posts.

Save Time: Without the help of a professional Seattle real estate agent, the search for buying or selling a home can be very time-consuming. A good real estate agent is proficient at sorting through multiple listing properties and finding the results that are tailored to your wants and needs. Agents are subscribers and members of the MLS (Multiple Listings Service). This organization has lists of properties that can be searched by different needs, as well as wants in a home. The listings on the MLS are more detailed and advanced than what is accessible to the general public. By using an agent and having access to the MLS you can save a tremendous amount of time because your agent is better trained to do the looking for you and find the properties that fit your specific needs.
Get the Keys: Imagine if you actually had to call every seller anytime you wanted to look at a home. You would have to set a time that would be convenient for the seller as well as juggle your schedule to meet the seller’s availability to every house you wanted to see. Agents have keys to almost every house that is for sale. Your agent can show you numerous houses in one meeting that meets your schedule.

Negotiation Experience: A great real estate agent is experienced at negotiating prices and conditions for properties, whether you are buying or selling. The negotiation process is important and can mean the difference between buying your dream home and your second choice. Agents can also give great advice to increase your odds in a competitive bid situation.

Closing Knowledge: Closing the deal can be a very complicated process with a lot of important details. Using a professional Seattle real estate agent will insure that your closing process is completed correctly and on-time.

More to follow in Part Two
The Guide to Seattle Real Estate

The Benefits of Owning a Home, Part Three

jonathan — Fri, 16 Nov 2007 21:34:20 +0000

This is part three of the benefits of home ownership series.

Forced Savings

Many people are not very good at saving money; fortunately, a house is an instant savings account. There are two different ways you grow your savings:

Each month as you pay your mortgage a percentage goes towards your principal. The amount that accumulates in your principal is called your equity. During the early years of your mortgage, it will seem like there is not much equity but it is better than nothing when compared to renting. It will continue to grow the longer you own your home.
Your home will appreciate. You can also make home improvements to your home that will also raise the value of your home. Many studies have shown, throughout history that the best financial investment for most Americans is their own home.

More Space

Inside or outside, you will generally have a lot more room if you own your home. You will often have your own laundry space, parking space, bigger rooms, bigger yard, and a lot more storage space.

Pride

Owning your home brings a sense of pride as well as reflects responsibility. It feels great to know that you are working towards something that will be 100% yours someday. The Guide To Seattle Real Estate

The Benefits of Home Ownership, Part 2

jonathan — Fri, 16 Nov 2007 21:29:40 +0000

This is part two of the benefits of home ownership.

Freedom & Individualism

When renting you are restricted to what improvements you can make to your home. You not only have to get permission, but it doesn’t make sense to improve someone else’s home, benefiting the homeowner and not you. By owning your home you have the legal right to do what you want to improve your home. If you want to paint, add new carpet, put on siding, remodel, or even own a pet it is entirely up to you. Owning your own home gives you the freedom to make your own decisions and create an atmosphere that you enjoy living in, as well as receiving all the financial benefits from your improvements.

Stable Monthly Costs

While being a renter, you can count on your rent to consistently go up every year. By getting a fixed rate mortgage, you know exactly what your monthly payments will be for the next 30 years or how ever long your note is for. No surprises! If you decide to get an adjustable rate mortgage your rate will stay within a certain range for the life of the note. Who knows how much rent will be ten, twenty, thirty years from now? By owning your own home and knowing exactly what expenses you have for the next thirty years you can make concrete investment plans with out being concerned over the housing market.

Stable Housing

Renting your home will always give you the uncertainty of where you will live when your lease is up. Landlords can kick the renter out when their lease is up. Just like that, you are looking in the newspapers for a place to live and reliving the moving nightmare all over again. By owning your own home you get to decide when it is time to move on. The Guide To Seattle Real Estate

The Benefits of Home Ownership, Part 1

jonathan — Fri, 16 Nov 2007 21:27:44 +0000

This is part one of a three part series on the benefits of home ownership. If you are considering making the move from the renting phase of your life and would like to transition to the home ownership phase then I hope this helps you make your decision.

Leveraging Your Money

One of the financial benefits to buying a home is the leveraging of your money, especially in Seattle. Basically, leverage gives you the benefit of using a small down payment to make a big investment. You can yield huge profit on a small front-end investment. For instance, if you purchased a $600,000 home with 5% down, you leveraged the $30,000 down payment to purchase an asset worth 40 times that amount!

Real Estate Appreciation

The advantages of leverage really become obvious with appreciation, or the increase of net worth of a property. For example, if you paid $30,000 down, on the same home from the previous example, and occupied it for 5 years and had a modest appreciation of 3% a year your home would be worth over $694,000. By only investing 5% down, you can still indulge yourself in the full appreciation value. That is a gain of $94,000 on your initial investment of $30,000. That is just a modest appreciation, while yes we are bound to have a couple of flat years approaching, here in Seattle we have experienced 10% and even higher in some areas.

Tax Savings

You may constantly hear many people complaining of how their mortgage payment consists of so much interest. In the beginning this is very true. You must keep in mind that interest, as well as property taxes, are tax deductible and will directly reduce your taxable income. In Seattle, the average homeowner pays around $2,000 a month, $24,000 a year in interest and property taxes, in the first few years of owning their home. At a 28% tax bracket, that is $583.34 a month or $7,000 a year saved on income taxes. The Guide To Seattle Real Estate