Protect yourself: engage an attorney to represent you for your home purchase.

Have your attorney on your “team” before you get out there shopping for a home. It makes good sense to protect yourself in this way with the single biggest purchase of your life.

It is common here in New York to have an attorney represent the Buyer in a purchase transaction. I know elsewhere in the country this is not necessarily the case. Frankly, I can’t understand how anyone could proceed with signing important legal documents without an attorney present to review and advise.

I’ve recently encountered two situations where the Buyers were not represented by an attorney at contract or closing.

In the first case, the Buyer purchased a property in Florida. Until I reviewed their documents a year later, they had no idea a prepayment penalty existed on the mortgage loan for the Florida home. Their mortgage person was one of those, “Sign here! No Problem!” quick-talking salespeople who doesn’t bother to counsel, advise, inquire of, or explain the loan product.

Sure, the Buyers received a Truth-In-Lending statement for the loan prior to closing. But the TIL does not actually explain the loan terms. It provides only the fundamentals such as term (30years), Fixed/ARM, and the prepayment penalty box is way down near the bottom of the page and only says, “…may have to pay a penalty.”

That’s not much detail is it?

Had the Buyer been represented by an attorney at this Florida closing, their lawyer could have advised them right there at the table about the existence of the penalty, and the particularly onerous nature of this penalty (five years!).

That’s what the attorney does at closing: reads the documents before you sign and explains or questions those documents if there is something there that may be detrimental to your best interests.

The second case I heard of was last night. A Buyer signed a contract to purchase an apartment without an attorney representing her. The Buyer is not the least bit qualified for the mortgage loan. There is no way possible this Buyer can obtain financing to purchase this apartment.

Normally, you might think, “Well, alright, Buyer makes application to the bank, is denied for the loan, presents the denial letter to the Seller and gets the downpayment back.” Seems simple enough—and very common, indeed—but, not in this case.

The contract of sale has no mortgage contingency. And the Buyer put 10% of the purchase price down on signing.

If the Buyer had an attorney, at the very least the attorney would have made provision for a mortgage contingency in the contract. If the Seller refused to provide such a contingency, the attorney would have advised the Buyer of this deficit and the potential loss of downpayment. If the Buyer insisted on proceeding with the purchase minus the contingency, then an attorney could have advised the Buyer to be absolutely certain that mortgage financing was possible before signing the contract.

No attorney. No mortgage contingency. No mortgage loan approval. No way to get back the 10% downpayment.

Have your attorney on your “team” before you get out there shopping for a home. Your team of professionals should be at your disposal to advise you before you open up the paper to look at the “Homes For Sale” ads or contact a Realtor to show you homes.

It makes good sense to protect yourself in this way with the single biggest purchase of your life.

Buying Strategies: Prequalification Letter as negotiating tool

Two tools. Buyers use them to get what you want: your dream of homeownership at the price you’re willing to pay. Sellers beware!

I believe the prequalification letter is a negotiating tool. Buyers must use this important device wisely when making offers to purchase a home.

In today’s uncertain and changing market, a Buyer has only two fundamental advantages when bargaining with Sellers. Remember, Sellers are still holding all the cards on price and timing of a sale. Those Sellers who aren’t “real” Sellers, will just sit it out until they can get their price or they finally give up, take the sign down, and head for the backyard barbecue grill.

Too, there are many “real” Sellers who want to believe beyond all hope they can still get top dollar (read: Summer 2005) for their home. As such, they’re not willing to negotiate on price, closing deadlines, downpayment, financing, or incentives (tossing into the sale price that freezer in the basement they would otherwise sell you for $350!). They really do want to sell, but haven’t gotten it through their heads, yet how dramatically the market has changed.

If you’re a serious Buyer—that is, you really want to get out of the rat-trap of renting an apartment—you’re faced with the dilemma of breaking through this impregnable mindset of Sellers. I don’t believe we’re in a “Buyer’s Market” yet, and there’s no guarantee this market will become a full-blown “Buyer’s Market.” Therefore, you have to focus on the fundamentals if you are truly to accomplish your goal of homeownership.

A Buyer has two devices, tools, or “weapons” in the quest to make the dream come true.

The first is the ability to get up and walk away from the negotiating table. I’ve said it before, and I’ll say it again a thousand times, a Buyer’s power is defined by the willingness to get up and say, “No, thanks.” You have to draw the line, and force a Seller to negotiate. If they come running after you as you leave the table, great, you’re making progress. If they don’t, well, you’ve just saved yourself a whole bunch of aggravation and potentially financial distress.

The second tool is the prequalification letter. Never show a Seller your maximum loan qualifications. If you’re negotiating down a price of, say, $425,000 to your offer of $387,500, and your prequalification letter says, “$500,000” the Seller has absolutely ZERO incentive to bargain with you. After all, according to the letter from your Lender, you can handily afford the price the Seller is asking. Boy! You’ve got nerve trying to bargain that Seller down when you’re obviously well-off enough to afford more than the asking price! The nerve!

Your letter should reflect only the price you are offering. If you increase your offer, have your mortgage person increase the prequalification letter. If you have to do this three or four times to get what you want, then so be it!

I have always customized my prequalification letters based on the offers my clients are making. Since
I specialize in 100% financing, the offer and the letter are usually the same amount.

But, there’s more to the use of this important tool. The letter is just a piece of paper, and you want the Seller (and their Realtor) to truly have confidence in you. You want to present yourself as the one and only Buyer for this home, so, “Take my lower offer NOW!”

The prequalification letter should be delivered immediately you make the offer. If you made your offer on a Saturday afternoon at 3:30p.m., the latest the prequalification letter should be delivered to the Seller is 10a.m. Monday morning. I usually send mine within hours of the offer, even if it’s a Sunday evening. Yet, too often, I hear from Realtors how they’re still waiting for a prequalification letter the following Wednesday! Frankly, I think that’s ridiculous.

This delay only serves to dilute your credibility in the mind of the Seller. And if you’re trying to get the home for less than asking price, if you’re strong enough to use option one in bargaining (walking away), then why would you knock yourself down a few pegs by working with a mortgage person who isn’t as aggressive as you are? The speed with which you—and your team of professionals: mortgage person, engineer, attorney—work puts action ahead of words. As the old saying goes, “Actions speak louder than words.”

Two tools. Buyers use them to get what you want: your dream of homeownership at the price you’re willing to pay. Sellers beware!

How To Buy a Home: Strategies for a Changing Market

Buyers need new strategies to help them accomplish their goal of homeownership. You can make your own buying opportunity.

Buyers need new strategies to help them accomplish their goal of homeownership. The market has changed. While I don’t believe it’s a “Buyer’s Market,” as yet, certainly the prices have leveled off.

Buyers may still be stymied by intransigent Sellers and Realtors who are living in the past and pushing Buyer’s offers higher, higher, higher.

My advice to Buyers: prepare for War. First, get all your ducks in a row. Get prequalified, have your mortgage person available and ready to act quickly to send out a customized prequalification letter with each offer you make. If you make an offer on a Saturday afternoon at 4p.m., that letter should be faxed to the Seller or their agent within two hours. It’s complete nonsense to wait until Monday.

If you do this, you set yourself above the crowd. You also set a tone of seriousness in the negotiations. You get the high ground. That makes it easier for you to set the price you want to pay (not what the Seller or their Realtor wants to get). It also prepares you for hard bargaining. You’re hot, you’re ready to buy and close. This preparation raises your confidence level to Herculean strength.

Buyers can seek out opportunities. Identify a house that has been on the market for a while. The house might be on MLS or it might be a local FSBO (For Sale By Owner) that you have noticed in your travels the past three months.

A house that isn’t sold quickly is most likely not priced correctly. Take your Herculean confidence, set your price and make your offer. Keep it simple.

You can make your own buying opportunity this way. It’s so easy. Don’t fall in love with the house. Fall in love with the numbers. Put your offer out, give the Seller just enough time to consider it. If the Seller doesn’t move (counter offer or accept) you move on.

Find another house. Repeat. Buy your first home. Tell tales of your Herculean adventures over cool lemonades and hot steaks on your back patio years from now.

I live on Long Island. There are several FSBO’s in my immediate neighborhood—within two blocks in either direction. All of them have been “on the market” for a minimum of two months, probably longer (I’ve lost count).

These folks seem to think the way to sell a home is to just put up a cheesy red “For Sale” sign with a phone number scratched in on the bottom in Scripto black. Yah. Right.

We checked on the price of one. Ridiculous. Absurd. Ludicrous. And the guy was in the habit of running two open houses every weekend for about six weeks. He would make sure there were no cars parked out front and he’d spend two hours Friday afternoon with his visor down, and his weed-whacker going at full throttle trimming to perfection the edges of the lawn. Yah. That’s going to sell a house. Right.

If I show up at the farmer’s market with a batch of potatoes and the going price is 20 cents a pound, why on earth would I price it at 35 cents a pound? What, I think I’m going to sell my potaters by cleaning and polishing and trimming off the nasty bits? I Don’t Think SO!

I’ve been doing mortgages for seventeen years, and looked at FSBO’s for three years before that as I shopped for my first home. The single common denominator with ALL FSBO’s: highest price, largest greed factor, Most Cluelessness, and stubborn refusal to pay a professional to SELL the home.

Homes don’t sell themselves: salespeople do it. Their incentive? Profit, plain and simple.

These homes are prime opportunities for Buyers. Show up, make your offer and either buy your first home or walk away and go down the block to the next FSBO.

Negotiating an offer in a changing market

There are plenty of houses out there. Keep going until you find a Seller who really is serious about selling their home.

Negotiating an offer in a cooling market.

Okay, so there is a general consensus that the market is cooling off. Houses are sitting a bit longer on the market; some prices have been reduced, but not all. New houses come on the market, still priced at zany “summer of 2005” prices.

What’s a Buyer to do?

Let’s assume you are past the whole “housing-head” “bubblehead” thing. Let’s assume you believe the investment in a home involves much more than just some silly investment pricing strategy. You understand the intangible benefits of owning a home, you’re tired of paying rent, and you want your own “piece of the rock.”

Right, so you are heading out there in this “cool” market and you’re shopping for your first home.

I have some negotiating strategies for you that may help you “shake the trees” and “turnover some rocks.”

1. Know your market. You must create a personal pricing sense; you must do an appraisal in your mind of the home you wish to buy. For that, there is no substitute for going to see as many houses as you can in your chosen neighborhood.

You have to learn the prices of the homes so you know almost instinctively what a house is worth by comparing it to the 23 similar houses you’ve seen over the past six weeks.

When you walk into the home you want to buy, you will know the right price to offer. You will know the maximum price you’re willing to pay for that home.

2. Your Prequalification Letter is a Negotiating TOOL. You should not be walking around with a blanket prequalification letter stating the maximum loan you are qualified for. Rather, your letter should be customized for each offer you make.

This way the Seller never knows your maximum price. If you have made an offer and the Seller counter offers, and you wish to increase your next offer, have your letter updated to reflect the higher amount.

And when you make your offer be sure your prequalification letter is faxed over immediately. I can’t tell you how many times I have heard from Realtors the reason they accepted one of my client’s offers is due to the alacrity with which we submitted our letter. Realtors relate stories of offers that come in on a Sunday afternoon, and the Buyer is still trying to get a prequalification letter the following Tuesday or Wednesday from their Loan Officer!

I send out my letters the same day you make your offer, even on weekends. I followup with a phone call to the Realtor to support your qualifications verbally.

If you want to buy a home for the price you are willing to pay—-not what the Seller wants to receive—you must show the Seller how serious you are. Sending over the prequalification letter right away is an important part of that.

3. Offer less, Offer more. When you make your offer, it doesn’t have to be for full price anymore. Summer of 2005 is long gone. The market has changed. While many Sellers may still be asking outrageous prices, that doesn’t mean they are getting it.

Since you are an educated Buyer who has researched your market, set a maximum price you are willing to pay for a particular house and create a pricing strategy. You should have an opening bid, then one or two counter offer positions ready. These counter offers raise your price, but do not exceed your maximum price. Start with your opening bid and your prequalification letter for that amount.

The Seller will do one of three things. First, the Seller may accept your offer. Bully for you! Second, the Seller may not respond, or refuse. Third, the Seller may counter.

If your offer isn’t accepted, or countered, the next step is up to you. If you like the house enough to move up your price, then step in with your next position and a new prequalification letter.

If your offer is still not accepted, it may be time to move on. If you decide to increase your price, that’s fine. Just don’t go over the maximum price you decided originally you would pay for this house. The heat of the moment of a negotiation quickly becomes emotional and you may lose all sense of reason.

Remember: you want to buy the house at the price you’re willing to pay for it, not the price the Seller wants. Don’t go over the maximum price you set before making your first offer.

4. Serious Sellers. Oh boy there are a lot of houses on the market. Don’t let that fool you into thinking they are all ready for the taking by smart Buyers like you.

Assume there is a percentage of Sellers out there who are not serious about selling their homes. They still think it’s last year and the prices are still mega-millions. Note to Sellers: the market has changed!

You want to discern who is serious about Selling and who is standing there thinking their homes are cash cows waiting to be milked by an unsuspecting Buyer. Note to Buyer: that’s not YOU!

Some folks don’t need to move. The job is not relocating to Arizona; it’s not time to retire; they don’t need to buy a bigger house to accommodate the elderly Mom who is moving in with them. Some folks just have this idea they can sell their home and make tons of money. That’s not “serious about selling” in my book.

You can ask a lot of questions to get at the “truth” behind a Seller’s motivations to sell. You may not get answers to your questions, or the answers may reveal nothing of the Seller’s intentions, or, worse, you may be lied to.

In my long experience I have found the best way to get at the secret of whether or not a Seller really wants to/needs to sell a home is to make an offer.

The person who doesn’t respond to an offer probably thinks he’ll just sit tight to get his price. That’s fine, but if the house isn’t worth that price anymore, then you, educated Buyer, will be moving on to greener pastures.

If your original offer is seriously low, and there is no response, try raising it. If still there is no reaction—a counter offer from the Seller is what I consider a reaction—then this Seller probably isn’t serious.

Time for you to move on. There are plenty of houses out there. Keep going until you find a Seller who really is serious about selling their home.

These are just basic suggestions to help you chart the mysterious waters of a cooling market.

You really must be out there looking, looking, and looking some more, making offers, and making more offers in order to develop a good sense of where the market is going and how you can achieve your goal of homeownership.

FSBO’s: For Sale By Owner

Two important rules you should remember when shopping for a FSBO

People have long asked me about “For Sale By Owner” houses. These are commonly referred to as “FSBO’s.” No real estate office is involved in selling the house; the Seller has undertaken to sell the house. You find FSBO’s advertised in local newspapers, the local Pennysaver, or just a sign on a lawn or in a window as you drive around home-shopping on a Sunday afternoon. Lately a new industry of real estate services has sprouted up offering Sellers assistance in selling in the form of marketing materials, signs, and even MLS access. These services are offered at a flat fee to the Seller; no real estate commission is involved.

These are the typical questions my clients have about FSBO’s:

Should we consider buying a FSBO?

Of course you should consider buying such a house! Any house on the market that fits your needs, your wish list and your price range is worth considering for purchase.

Are they a good deal?

That’s hard to say. The definition of “good deal,” is different from one person to the next.

In terms of general market price, only you can know if it’s a good deal. As I am wont to say, “Know your market.” If you know your market area, have a pretty good idea what the prices are in your target area, and feel confident of your knowledge then you approach a FSBO from the perspective of being an educated Buyer. You determine the market price for the house when you agree on a price with the homeowner.

Therefore, if you get the house that is acceptable to you based on your knowledge of the market then you surely are getting a good deal. The good deal is the house you want at a price you’re willing to pay.

Now, if you mean good deal as in, “Wow, I got this suit at 75% off and no tax and free tailoring!” then, well, that’s really a whole other ballgame and in my opinion has no bearing on the idea of buying a home to live in. Homes are not pork bellies, used cars, or shares of Google. Or cheap suits for that matter, either.

Aren’t FSBO’s priced lower because there’s no real estate broker involved?

Ahh! Now we get to the crux of the problem with FSBO’s. Do not make the dangerous assumption that a FSBO is priced lower just because it’s not listed with a real estate office. Remember there is that word hanging in the background of any real estate transaction, “greed.”

A Seller who doesn’t wish to pay a real estate commission is not necessarily lowering the price accordingly.

No. More likely the Seller wants every possible dollar for the house in a sale. Therefore the price might be higher than market or the Seller refuses to negotiate with you once you try to “discount” for the real estate commission. Worse, the Seller might not give you any price reductions after your engineer tells you certain items in the house need to be replaced immediately.

Remember, these are the same people who will negotiate with real estate offices for lower commissions. Assume the worst case: the Seller wants top dollar (maybe even more than the house is worth). If you walk in the door of a FSBO with that worst-case scenario firmly lodged in your mind, then you can negotiate more sensibly, or make a quick decision that this house just isn’t going to work for you.

Two important rules you should remember when shopping for a FSBO:

1. Know the market prices of your target area. Negotiate based on market price, not on what the Seller tells you is so amazing about the house.

2. Input the “greed-quotient” into your shopping equation. Assume the Seller is not really interested in selling the house as much as getting the highest price for the house (and this price might be absurd).

We check FSBO’s on a fairly regular basis. My wife, The Realtor, does that to target potential listings. Many FSBO’s convert to real estate offerings before long: it’s hard work selling a house. My wife indicated to me this morning, based on the this week’s research, the number of FSBO’s in our area has dropped.

I’m not surprised. The market is cooler than last summer.

I have said it many times: it’s easier to sell a house in a “HOT” market. Thus, Sellers get greedy, decide to sell on their own, and avoid paying a real estate commission. Then those new breed of real estate offices sprout up. You know the type. They offer Sellers MLS listings, signs, and other “services” for a flat fee. No real estate commission involved.

That’s all well and good in a busy market when Buyers are knocking down the doors. When the market cools, however, folks pretty quickly realize (or maybe not so quick!) that the business of selling a house is complicated, difficult and requires a lot more than just an ad in the local Pennysaver or a lawn sign stating, “Open House Sunday 1-4 p.m.”

If you notice fewer FSBO’s, you are not crazy. It’s symptomatic of a cooler real estate market. The hard work of selling in such a market is undertaken by real estate professionals.

Negotiating an offer: Craigslist

Advice about how to negotiate an offer in the Housing Forum at Craigslist

I have found a few instances in the Housing Forum at Craigslist where we have given advice about how to negotiate an offer.

Here’s the link from the latest thread, and included in that, a link to a previous thread:

http://forums.newyork.craigslist.org/?ID=39038926

Negotiating an offer

Let’s look into the offer process from a negotiating standpoint to see how Buyers can improve their offering skills.

I believe in making offers. I believe the only way a Buyer and a Seller can get to the “nuts and bolts,” of the purchase/sale of a house is through the offer process. Too often the Buyers delay on this most important tool. When you make an offer in New York, it doesn’t commit you to anything. You’re not legally obligated to complete the transaction until you sign the contract. Up until that moment—I have always advised—Buyers should use the offer as a negotiating tool.

On the other side of the table, Sellers could behave better with offers, too. Problem is, the Buyer has no way of knowing what’s going on with the Seller in regards to an offer because there is a “middleman:” the Realtor.

Let’s look into the offer process from a negotiating standpoint to see how Buyers can improve their offering skills.

1. Make offers early and often. If you see the house Thursday evening and you “kind of-sort of-maybe-possibly” like it, make an offer anyway. This will give you some time to change your mind. The offer doesn’t commit you to buy the house (more on that below).
2. A NYS Licensed real estate agent must present all offers. The agent can’t say things like, “Oh, no, I can’t possibly present that offer, it’s too low,” or, “The Seller will never accept this,” or, “You’re going to have to come up some more in price for me to present your offer.” The fact is, even if you offer $1.00 for a house, the agent must present your offer. Mind you, the offer won’t be accepted, but still it must be presented.
3. Make offers in writing. Yes, I know the offering form says, “This is a Legal Document. You should consult an attorney before signing.” I know it says that. But the legality of the document has all to do with the real estate agent protecting a potentially earned commission from the Seller and nothing to do with binding the Buyer to the purchase transaction. You can sign 32 offer forms for 32 different houses on a Sunday afternoon and you don’t have to go through with a single one of those purchases until you sign the contract.
4. Be prepared to act quickly after you make your offer. There are two ways to move. First action is away from the house if they don’t accept your offer and you really don’t think you’re willing to pay more than you offered. The second action is to offer more than your opening bid. If the Seller counter-offers, have your backup or next-step-price ready to go. You can choose to meet the Seller’s counter offer or raise your bid somewhere in between your open and their counter.

This backup plan is very important and requires your careful consideration, to wit:

5. Set a Maximum Price you’re willing to pay. What you want to do is realize the maximum price you are willing to pay for a house. That shouldn’t mean it’s your opening bid. This is the price you set and negotiate towards. DON’T COMPROMISE ON YOUR MAXIMUM! If you are getting tossed around in a bidding joust with the Seller, the transaction can get you heated and emotional. That’s the worst time for a Buyer to make pricing decisions. You must have a maximum number in advance (before you present your opening bid) and adhere to that price. This will help you remove as much emotion as possible from the negotiating process (you can’t eradicate emotion: it’s what homebuying is all about, but you can control it!).

6. Timing is everything. No, you don’t want to appear too eager. Yes, you want to appear enthusiastic, prepared, and paint the portrait of the best possible buyer for that house. You’re better than all those other Buyers! Yes, you KNOW you are!

When the Seller counters you have to decide how long you will wait before increasing your offer. If you are the diligent buyer who shows up on time for the appointment, returns the Realtor’s calls in a timely manner, and has your prequalification letter lined up, then you can be sure you look pretty good in the eyes of the Realtor and the Seller. Remember that as you consider how long before you raise your offer.

7. Walk away. Harvey Mackay in his book, “How To Swim With The Sharks Without Being Eaten Alive,” says, “Lesson 24: The Single Most Powerful Tool For Winning A Negotiation Is The Ability To Walk Away…” This is so difficult to do when you’re negotiating on a house. The homebuying experience is so emotional that a Buyer gets wrapped up in the momentum of buying the house. That emotion makes it really tough to walk away when you have to.

Harvey goes on, “…walking away from the table is not just for when you don’t want to deal. Sometimes it’s the only way you can make the deal you want. If you have to have a deal, then all the other side needs to do to win the negotiation is to outwait you.”

I can’t emphasize enough how important this tool is for a Buyer. It works. It gets results. I know because my clients do it and we have seen the results time and again.

How To Buy a Home: Preparing to go “out there”

Getting prequalified helps you make better decisions about the house and the Realtor you choose to work with to buy that first house.

Before you go out into the field to search for your home, before you make a phone call to a real estate office or a Craigslist ad, know your mortgage qualifications. To my mind, not preparing in this way is a recipe for disaster.

1. You can make better decisions. When you are prequalified you know your “limits.” This helps you decide if a house is right for you based on monthly payment. Just because it has sufficient bedrooms for your needs, the two car garage and the fireplace you desire, doesn’t mean it’s the right house for you.

If you can’t afford it, you can’t buy it.

Your mortgage professional should be guiding you in advance by providing benchmarks to help you determine the monthly payment on a house. Better still, your mortgage person should be available to answer questions and calculate monthly payments when you’re most likely to be out and about: evenings and weekends. My clients know they can call me while they’re standing in the kitchen of a prospective house to ask me to run the monthly payment/downpayment figures.

When you are prequalified you know how much cash you will need to buy a particular house: both for the downpayment and closing costs and for the monthly payment. If you find the “right” house, and you know your financing information, you will be certain it is the house you can buy.

2. Experienced Realtors will work with you. It’s true you can call forty-seven different real estate offices, speak to twenty-three different real estate agents and make appointments to see twelve houses next Saturday. That’s easy to do.

Consider how much of your time you might be wasting making those appointments if you’re not qualified.

You’ll look at houses that you’re not qualified to buy. You’ll fall in love with the huge living rooms and the formal dining room and the finished basement. Then, two weeks later you’ll discover you’re not qualified for the loan to buy that house. How discouraging will that be? That’s huge! You might not even want to go out and look at homes again! A letdown like that can really ruin your day and make this homebuying experience more difficult and heartbreaking than it needs to be.

Inexperienced real estate agents probably won’t even ask you if you’re prequalified. The agent is happy to have a customer. If you’re not prequalified you’ll waste your time and the agent’s time.

An experienced agent won’t make any appointments if you’re not prequalified.

Don’t take it personally, in fact, you should mark it as a sign of professionalism. Further, that’s an agent you WANT to work with! That’s the sign of an experienced agent who will listen carefully to your requirements of the house you wish to buy. This agent won’t waste your time showing you homes that you’re not the least bit interested in. How do you know this? Because she has already demonstrated her unwillingness to waste your time.

This is an agent who wants to spend her time carefully. She wants to sell you a home and earn a living!

When you are prequalfied and you call real estate offices, this is the kind of agent you need to speak with. Use your mortgage prequalification as a test. If an agent doesn’t ask you that most important question, “Have you been prequalified?” hang up the phone. Your time is too precious to waste; this is the biggest purchase of your life! Buying your first home is too important to you and your family to waste time dealing with inexperienced agents.

It is not only the home-searching which can be frustrating when you work with inexperienced agents. There’s so much more that’s invovled in buying a home, and so many things that can go wrong. Experienced agents watch out for problems from the beginning.

Ask yourself, “Do I want to spin my wheels working on a home purchase that might never actually happen?” Just because you found the house, agreed on the price, and had a good engineer’s report doesn’t guarantee you’re getting the keys to the house. What happens if the agent calls you up one day and says, “Oh, I have some news. The Seller can’t close for another three months because their house down in Florida isn’t ready yet.” WHAT?

An experienced agent would have asked these questions from the get-go. Why? She doesn’t want to waste her time!

So, before you make that call to a real estate office, get prequalified for mortgage financing. Getting prequalified helps you make better decisions about the house and the Realtor you choose to work with to buy your first home.