An (Awkward Truth) about Real Estate Agents as it Pertains to Buyers
I want to take a moment to talk about one of the biggest traps I see people fall into when looking for a real estate agent to work with.
Almost everyone who is thinking of buying a home will have this happen to them, so don’t be alarmed! It’s a right of passage for everyone on the market, and I originally left this element of real estate advice out of my guidance because I didn’t want to sound too harsh, but I’m compelled now to tell everyone due to seeing too many great people get burned.
This trap is the “friend or family real estate agent”.
Now I know if you have a good friend or family member who is a real estate agent, this might sting a little but know that I say this with only your best interest.
One of the reasons I began recommending real estate agents and lenders within the Military Millionaire community was because I hate seeing service members fall into this trap!
The Reason This Can Be So Devastating to Buyers
I am a licensed real estate agent, and have been since 2018.
In that time, I have sold exactly ZERO homes. Not only that, but I have never worked with a client once.
The most I have ever done is stand at two different open houses to help friends of mine who are real estate agents.
Let me ask you a question…how much do you think I know about the current real estate market in Hawaii?
Would you trust me to sell your house as well as a top real estate agent in the area? Even if I had your best interest at heart?
Hopefully, you were smart enough to say no. No is the right answer here: I do not know enough about the current market conditions to represent you as well as you deserve and the reason for this is twofold:
- When you get your real estate license, there is a required educational level to meet before you can practice. These courses are generally over 40 hours long, depending on what state you’re getting licensed in. That covers all of the laws and regulations you need to obey as a real estate agent.
- What these licensing courses – including the state and national exams – do not teach you are things like negotiations, current regional market trends, how to make competitive offers in a seller’s market, and more contemporary and working knowledge of facts and figures.
Real estate agents are expected to learn all of those things from education within their brokerage, experience gained by working in the real estate industry, and working directly with clients.
Why Does This Matter To You as a HomeBuyer?
When you work with an experienced agent like [agent name] you are working with somebody who lives and breathes real estate. They know the market trends and best purchase and sale prices for your area. They know what negotiation tactics are working, and which are not. They understand how to make competitive offers, and how to provide the best service to you because buying and selling real estate where you live is their livelihood.
Unfortunately, many people choose to work with a friend, or family member, of theirs who has a real estate license. We understand that and empathize with you – when someone close to you wants to help you, it’s hard to say no, and it’s harder still to make choices objectively, rather than emotionally.
Likewise, a lot of real estate agents get their license and think “if I can just sell one home to a friend or family member every year, this license will be worth it” or “I’ll just sell homes to friends and family for a little extra money”.
I know this is true because, as an agent, I have heard these statements frequently. To make matters worse, they are often what people say after they got their license, and realized that for all their drive and passion for the industry, real estate isn’t for them, and they muddle through providing bad service and doing so only to people who they can access – IE, friends, and family.
The reason you should not do this is simple; A person who doesn’t work full-time as a real estate agent can’t possibly represent you as well as you deserve, no matter how much they may have your best interest at heart. They simply won’t have the training, and experience, required to be a quality real estate agent.
- They won’t be caught up on local trends,
- They won’t be good negotiators, or know what is working in the market,
- They won’t have a track record for other agents to look at before deciding to accept your offer,
- They won’t know how to make competitive offers,
I know this isn’t the easiest thing to hear, but it could literally save you tens of thousands of dollars. There are countless scenarios that I have seen play out like this: for example, a friend I knew who worked with a family-connected agent missed out on $20,000 because their agent listed the house too low.
If you still want to work with a friend or family member, we understand of course! But please make sure they are an active real estate agent, and they are good at it. Look at their reviews online, and make sure they have a lot of experience.
The Bottom Line about real estate agents (for Buyers)
Work with the best agent for you. It really is that simple.
Buying a house, or investment is too big a decision to work with an amateur, no matter what your relationship with them is.
Should You “Rate Shop” Lenders as a First-Time Homebuyer?
We understand that shopping around for quotes from various lenders is normal. In fact, we often recommend it.
However, I think it is necessary to talk about the most valuable resource a person has…time.
If you are going to rate shop, please do so at the beginning of the process.
If you wait until a week or two into the process, after the lender has put hours and hours of their time into your pre-approval, application, and file in general, that is pretty crushing to the lender and can put you back in your buying timeline.
We have chosen to recommend these lenders for a variety of reasons, including customer service, rapport, and relationship building, how fast they can close, how consistently they close, how reliable they are, and their rate. We are confident that our lenders will be hard to beat, and will provide as much context as possible to their rate and why we think you are getting value for money.
Yes, sometimes brokers can provide lower rates, but they often have much longer closing time frames because they cut corners – like farming out their lending process – so they take less responsibility and do not work for you, but other lenders or financiers.
Please don’t rate shop them after two weeks of building your file and problem-solving!
Final Thoughts on Lenders
- Make sure you understand the ins and outs of fees that can be charged on a loan. You don’t want to go with a loan just because of the rate they quote. If you don’t understand the context of fee setting and loan particulars, that’s what we’re here for, ask us and we’ll provide objective advice.
- Do your due diligence, and make sure you’re making the best decision for you!
- Stick with your lender – you’ll benefit from a committed team and consistent work!
Let me eliminate this headache for you by introducing you to one of the many, recommended real estate agents and incredible lenders within the Military Millionaire community!