If you’re planning to purchase a home in the Washington area this spring, you may face competition from other buyers for the still-limited inventory in the market.
Homes that are in good condition and priced appropriately may garner multiple offers, so the better prepared you are as a buyer, the more likely it is that you’ll be scheduling movers sometime later this year.
The first steps in your house-hunting journey are finding a lender, getting prequalified for a loan and determining your budget. If you’ve done that and know how much you can spend, you’re ready to begin your search for a real estate agent who will represent your interests and help you become a homeowner. Some buyers choose an agent before finding a lender — either way, it’s important to line up a team of professionals as soon as you’re ready to buy a home.
“A good Realtor can help guide you through the financing part of buying a home by recommending a good lender,” says Karen Brown, an agent with Long & Foster Real Estate in Reston. “In fact, a prequalification from a lender that your Realtor can vouch for can be an asset during the buying process, especially if you’re competing with other buyers for a home. I work with a lender who I know will answer calls on the weekends and evenings and make sure the transaction gets to closing, so that’s something I can share with the listing agent to make my buyers’ offer stronger.”
Brown recommends lining up a lender and an agent at least six months before you buy a home. She sometimes works with buyers for as long as a year.
“Some people think they can buy a home without a Realtor, but this is a challenging market with lots of moving parts,” says Suzanne Des Marais, an associate broker with the 10 Square Team at Keller Williams Capital Properties in Washington. “You need a Realtor to help you manage it. You need someone who’s invested in educating you about how to buy a home and can help you interpret the local market while giving you some nitty-gritty advice like making sure you have some liquid cash available before you start looking at homes so you don’t have to wait to make an offer.”
Des Marais says that buying a home is a three-part process, including looking for property and arranging financing, negotiating a contract and then getting to settlement. She says an agent can provide advice and insight during each of those phases.
Says David Bediz, an agent with the Bediz Group at Coldwell Banker Residential Brokerage in Washington: “Realtors can sometimes show buyers properties that they didn’t think they wanted to see but that work for them. Realtors have the knowledge and connections to push an offer or to make sure it’s written strongly enough to compete with other offers when there’s competition. When there isn’t competition for a property, an experienced Realtor can make recommendations about how much to offer formulated on evidence of the actual home value.”
Bediz points out that because agents’ commissions are paid by the sellers from the profit of the sale, buyers get the guidance for free.
“There’s almost never a reason to buy a house without the representation of a Realtor,” he says.
Des Marais says experienced, full-time agents see so many properties that they can help buyers understand the value in different homes and be realistic about the condition of the property and potential repair costs.
“If you’re looking at a For Sale by Owner, it’s even more important to have an agent representing you because you need to know whether the house is priced appropriately,” she says. “You need someone to coordinate the appraisal and the contract contingencies and the closing. D.C. is a very agent-driven market, unlike some other places like New York, where attorneys write real estate contracts.”
If you plan to buy a new home, Brown recommends working with an agent who’s experienced with new construction and familiar with local builders to represent your interests.
“The sales agent on site works for the builder and your own agent can help you with negotiations, inspections and choosing options,” she says.
Although the details of the laws vary slightly between D.C., Maryland and Virginia, all three jurisdictions require a signed buyer-agent agreement to be in place for an agent to write a contract for an offer on a home. Agents are expected to explain agency rules to buyers at their first consultation so they understand when and how their interests are being represented. Many Realtors work as buyers’ agents and as listing agents for different transactions; some work with a team on which some agents work only with buyers and some work only with sellers.
An exclusive buyer agency represents only buyers and never lists homes for sale.
“Our company only represents home buyers, which eliminates any conflict of interest for the company and the agents, since there’s no possibility that the company will represent the seller and the buyer in any transaction,” says Mary Richeimer, broker/owner of the Buyers Best Realtors in Urbana, Md. “Traditional agents sometimes represent buyers and sometimes represent sellers, but I always represent buyers.”
In Virginia, Brown says, all agents technically work for the seller unless a buyer-agency agreement has been signed.
“For instance, if you’re showing a house to a buyer you’re not supposed to disclose any adverse things about it to the buyer unless you have a signed agreement,” she says. “If a buyer is uncomfortable about signing the agreement, we always explain that the buyer can cancel the contract at any time. We’ve never had anyone cancel the agreement, but buyers need to understand that if they’re unhappy they can end the relationship.”
Before signing a buyer-agency agreement, be sure you understand your responsibility under the contract and how either you or the agent can cancel the agreement.
Agents say the best way to find someone trustworthy to represent you is to ask friends and colleagues for recommendations.
“You need to find someone you can trust and someone who’s smart and understands the local market,” Bediz says. “It’s important to do some legwork and research on agents even if they’re recommended by a friend, because you don’t want to choose someone who’s a nice person and a fun drinking buddy who may not be a great agent.”
He says you should check out the agent’s Web site and ask for references.
Says Richeimer: “Some agents are better at listings or at representing buyers. When you get a recommendation you should find out whether the agent was representing the buyer or the seller.”
Des Marais recommends looking for an agent who’s very familiar with neighborhoods where you want to live and your price range.
“You can look for open-house signs and ask people who live in the area for names of Realtors,” she says. “You need someone who understands how to interpret the market and how offers work in different areas.”
An open house can be an excellent place to meet an agent and ask questions, Bediz says, but he says buyers should do their homework and find out more about the agent. The agent at the open house represents the seller of that property, but if you aren’t intending to make an offer on that home, you can hire the agent to represent you.
Once you’ve identified a few potential agents, you should interview them over the phone and then meet one or two in person. You’ll be spending a lot of time with your agent and trusting that he or she will represent your interests, so it’s important to take your time to find the right person.
Brown suggests meeting a prospective agent at his or her office so you can look for awards and meet the agent’s team members.
Says Bediz: “You should treat choosing a Realtor with the same perspective as if you’re the boss and you’re hiring a new employee. Find out the agent’s qualifications compared to other applicants and then do some interviews.”
Your agent will be key to the success of your home buying experience, so it’s important to take your time to choose the right one.
Lerner is a freelance writer.
●How long have you been in business? How many transactions did you have last year?
●Are you experienced working with first-time home buyers? Can you explain the buying process?
●Can you tell me about state, local and federal programs for first-time home buyers?
●What neighborhoods do you specialize in?
●What price range do you usually work in?
●Can you provide me with a list of references?
●What is the fastest way for me to reach you if I have a question or think I have found a home to buy?
●How often should I expect to hear from you while I am looking for a home?
●Will you be able to give me advice about future home maintenance or improvement projects that could help my house retain its value?