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Hiring a... August 13, 2024

How Do I Choose a Real Estate Agent?

Hey thanks for reading this. Great question!

There isn’t a single answer to this question so I will do my best to get to the point and cover the most important aspects in hiring a realtor. If you’re the type, grab a pen and pad to take some notes. We’re going to find out what is important – to You.

Time

The first question you should ask when interviewing agents is, “How long have you been doing this?” Speaking from experience, agents don’t know what they’re doing for the first couple of years – which is why we have managing brokers reviewing our contracts. Still, there is something missing when you’re dealing with a beginner vs a pro. The confidence of someone who is experienced will rub off on you. They will make you feel more confident about the deal which means LESS stress. Also, experienced agents have seen it all. There are few things that surprise me at this point (I’ve been doing real estate related work for over a decade).

Attitude

Do you like the person you just interviewed? Beyond being good or bad, do you like this person? The reason I ask this is you will probably be spending A LOT of time talking with one another in the current market. It takes buyers longer to find houses and sellers longer to sell them. Moreover, these might be difficult conversations. I’d love to tell you that buying and selling houses is easy – it isn’t. It’s an emotionally exhausting process. Therefore, have these conversations with someone you like talking to instead of looking at your phone when they call, looking at your partner, and saying, “Oh God, it’s them.

Professionalism

Does the agent you are speaking with present well or not? What I mean by this is how they dress, how they talk, how they carry themselves, what their social media looks like. All of this is called “Brand.” Is what you are seeing, hearing, feeling, smelling,  match or does something seem off?

For example, you meet a hotshot realtor. They drive a nice German car, their clothes are expensive, they have the $1,000 haircut – but they smell like they slept on the floor of a bar. Pay attention to things like this. I like to say, “Trust your gut.” Our brains are taking in more information than we can comprehend – literally. Our “gut” is our body giving us feedback that is nonverbal. It is ancient, it is there for a reason, listen to it. It kept your ancestors alive long enough for you to be here, it’ll get you through buying and selling real property.

Digital

I touched on this in the last section and allow me to elaborate. Check their entire digital footprint. What does this mean? Check their social media: Facebook, Instagram, TikTok, LinkedIn, YouTube etc. Do this because it will help you get a read on if you should hire the realtor. This is information and content that they are CHOOSING to put out there. Is it good, bad, ugly? You will learn a lot about a person doing this. The thing I would look for is professionalism vs not. If they just post jokes all the time or them drinking $200 bottles of wine, they might not take their job that seriously.

The other side of the coin in digital is search. When you Google someone, you will often find what OTHER people have to say about them. If I may get personal for a second? There are a couple of agents that I loathe. They are terrible AND do a lot of business. I feel sorry for their clients, they are NOT being taken care of. However, if you check out their Zillow or Google reviews, they are disabled. These specific agents I am thinking about have upset their clients so badly that they took the time to go on review sites and let them have it.

⭐️ Read the reviews ⭐️

Communication

How do you like to be talked to? What are your preferred methods of contact? For example, I prefer text for quick communication such as, “Can we see 123 Salisbury Lane?” Likewise for complicated topics such as the steps in reviewing or making an offer, that’s going to be a phone call or a face to face meeting. It can also be done with an email.

What I am getting at is find a real estate agent who will communicate the way You like. I know a lot of people who cannot stand text. If that’s the case, talk it over with any agent you may hire and ensure you are on the same level. If not, you will be annoyed throughout the entire process.

Compensation

Said another way, how do agents get paid? Generally speaking, sellers pay the agents, both sides. What this means for buyers is, Always hire an agent to negotiate on your behalf. It doesn’t cost you anything (usually) and a great agent is worth their weight in gold. If you have been paying attention to the news, there are reports on how the “real estate industry is being turned on its head.” It’s not. You can read more about it here and I strongly encourage you to do so.

Sellers, you will also get your own article here. However, here is a quick explainer.

I recommend focusing on how much money you will net or, how much you make after expenses. This is the most important conversation to have when interviewing agents. Why? While a little hyperbolic, this conversation will allow you to know if an agent knows what they are talking about. Seriously, try it. It will mess them up.

Now we could talk about commissions that are 2.5% vs 3% vs Redfin’s 1% which is really 5%…

But let’s not do that to ourselves now. The bottom line is YOUR bottom line. How much money are you going to walk away with? Figure out that number and it will take care of most of this.

Negotiations

If I may have your permission to be blunt?

For this section, there are three kinds of agents:

  • Good
  • Greedy
  • Wimps

Good

A good agent will negotiate on your behalf. Firstly, they will find out what is important to you. What •really• matters. When you’re going back and forth with an inspection response, it can be stressful for the clients as well as the real estate agent. You need someone who has a clear head and keep track of everything. They will calm you down if you need it and they will blow up a deal of that’s what you want. For example, I worked as an acquisition specialist. Negotiations are routine now. I don’t get emotional over them. A great real estate agent will do this AND have your back at the same time.

Greedy

Greedy agents on the other hand will not. People like this deserve their own series of articles but I will keep it simple. A greedy agent only cares about their payday. They will do, say, or be anything to get that paycheck. “Pushy” is a good word for real estate brokers. “Car salesperson” is a better one. (Unless you’re in auto sales and want to hire me. Love you guys! 😘)

Here’s an example of what this may look like:

You need an additional $10,000 to make the deal work for you, buying or selling. An offer comes in that doesn’t work and they tell you, “Don’t worry…We can handle this during the inspection. Let’s just get them under contract!” You enter a mutual acceptance and it doesn’t work. The other side isn’t willing to give you that extra $10,000 you •need• to make this work.

You explain this to your agent over and over and they don’t listen. They talk about anything other than the money and try to push or manipulate you into moving forward with the deal.

“Won’t you feel so much better when this is over?”

“Image what it will be like when you are in your new home – you won’t care about that $10,000!”

These are the kinds of things they say, trust me, I’ve heard it.

You tell them that this is a deal breaker and they won’t advocate on your behalf because they just want a paycheck. These are the kinds of people I am warning you about. It’s a little abstract however you’ll feel it in your gut. They will feel just a little too “sales-y.”

Wimps

Good Lord these poor souls. A wimp will not tell you the truth, the other agent the truth, anyone the truth. Not because they are bad people. They just don’t want anyone to get upset. These are people pleasers who fall apart durning inspection responses. Their greatest fear is rejection so sticking their heads in the sand is the easiest way to deal with problems.

In Conclusion

There are a lot of things when looking to hire a real estate agent. This isn’t an exhaustive list however I think it’s a good start. Is there anything you think I missed? Comment or shoot me a message. I’d be happy to update this article. Further, if you’re looking for a great agent, let’s talk.

Best,

Jacob

 

Mortgages August 10, 2024

What is a Mortgage?

Hey thank you for reading this. It means you care about being informed!

Mortgages Explained

Simply put – A mortgage is a loan someone gets to buy a property: Typically a house or condo.

Picture this. You just started the home buying process and you found the perfect property for you. It’s the neighborhood you want, it has the finishes you love, it even has your favorite flowers growing in the front yard. You check your pocket for money to buy it, but there isn’t close to enough in there. It is time to get a mortgage loan.

👉 A mortgage is a financial device that allows you to buy a property over time – typically 30 years.

Let me give you a simple example to explain the mechanics of this:

Your perfect property cost $100,000. To buy this property, you need to make a down payment. Generally the minimum down payment requirement is 3% of the purchase price. Cool, that means you need at least $3000 in the bank to buy this property.

How to Get a Mortgage

The first step would be to speak to a mortgage broker/lender/banker – basically the same thing. Your money person. They are going to do is look at your financial situation. These are things like:

  • How long have you been at your job or in your field?
  • What is your credit score?
  • Do you have any existing loans?
  • What is your income?
  • How much of a down payment do you want to make?

If you are curious:

  • A two year minimum of work experience and at least six months in your current job or position are generally needed.
  • The absolute minimum credit score one can have is a 500. This would be for a Federal Housing Administration (FHA) Loan with a 10% down payment. For a conventional loan (most likely you) a minimum credit score of 620 is needed.
  • Existing loans would be car loan, boat loan, student debt, credit card debt etc..

Side note: Talk to a lender even if you are concerned about your finances. They can help you get on track! My lender helped me boost my credit score by 100 points in one year. Totally serious.

What it Looks Like in Practice

Back to our example of the $100,000 home: I used this mortgage calculator to figure out payments.

On face value, the loan amount would be $97,000, at an interest rate of 7.467%. This would give you a monthly payment of $676. However – you will be paying more than this.

A common mistake people make when looking at homes and figuring out payment is they only consider the cost of the home. They do not factor in the cost of taxes and fees. When you add these, the payment jumps to $867 a month! Below is a screenshot of what I used. The mortgage calculator link will take you to the same page. Make sure to click “Include taxes & fees.”

The government wants their fair share! I don’t make the rules, I just report them.

In Conclusion

That’s the simplest explanation I can give you of a mortgage. Of course, there are many other factors that might impact your personal situation such as are you veteran? You could qualify for a 0% down home loan. That’s amazing! Another thing that could impact your loan is are you going to be getting an agricultural loan? There’s great programs out there for those.

At the end of the day, the most important thing for you to do is to find a lender you like. You can message me to find one or read this article right here.

Hiring a...Mortgages August 10, 2024

How to Find a Mortgage Lender

Hey thanks for reading this. It means you care!

Finding a mortgage lender is going to be one of the easiest steps in your real estate journey. This article will tell you what to do and things to look for.

Where To Start

The simplest way to find a lender is to do an Internet Search for one. Type in “mortgage lender near me” and watch what populates. Afterward,  make a list of companies or individuals that pop out at you. You can also ask the people you know who they used and if they liked them. By the way, here’s a secret sauce of real estate by the way:

ALWAYS TRUST YOUR GUT

If someone seems shady, keep looking. There really are fantastic lenders out there. Moreover, trust your gut in general through this process and in life. If a house, a realtor, some guy on the street, gives you the heebie jeebies – run.

Back to Your Search

My recommendation is to pick three lenders that you are interested in, which would be at:

  • A mortgage company
  • A credit union
  • A bank

They all have different programs and you should see what they are about.

The next step after picking them is to FaceStalk them. This means checking their social media accounts, Google reviews, and anything you can find online. If this feels strange to you, let me quote Elsa from the Frozen movies:

“Let It Go”

Basically, if someone is going to make a bad impression with their social media, there’s a good chance they could do a bad job with your loan.

There are a few things you are looking for:

  • Are they responsible?
  • Do you like them?
  • Can you trust them?

If you see red flags – next!

What To Do Next

Once  you have finished this research, schedule meetings with everyone. They might ask you for personal information or to bring in some forms like pay stubs. This is so they can pre-qualify you. Simply put, they take a quick look at your finical situation and see what you qualify for. In other words, what your price range is. Here is how I would go about meeting with them.

First, I would go to the Credit Union. They generally have great rates and don’t mess around. There are a handful of options and that’s it. No horse trading. Ask for a copy of their loan offer. This will include rate, insurance, payments etc. Subsequently, I would go to either the bank or mortgage company. Use the offer from the Credit Union to “rate shop.” Rate Shopping is going to different lenders and finding the best offer. Part of what the best offer is, is up to you.

Do you care about monthly payment or total cost of the loan more?

These kinds of things can affect the deal you get.

Another thing to consider, and just so you know I told you, each lender is going to do a soft pull on your credit: You will get a small ding on your credit. It is stupid, awful, and don’t even get me started on the credit agencies…

But I digress–you will get a ding. Still, it can save you money.

Personally, we saved over $10,000 over the life of our loan doing this. I STRONGLY encourage shopping around.

That is it in a nutshell. If you have any questions, please send me a message.