Q: I heard that the best way to choose my real estate agent was by getting a reference. So I asked around, and got a referral to a friend of a friend. He’s been a great guy to hang around with, but something is wrong. He’s late all the time, and one time he even called me at the exact time we were supposed to meet to say he was sitting down to get his hair cut so he’d be a couple of hours late! Also, he’s showed me a couple of places I like, but for the most part the homes he shows me have none of the features I asked for.

The last straw was when I got into contract on this house, and after I paid for $5,000 of repairs that the city required to be done before letting us close the deal, he told me my loan "fell through." I don’t even really know what that means, but after a year of house hunting, I’m moving on to another agent. What did I do wrong here?

A: It’s true, in my opinion, that the best way to find a real estate broker or agent is via referral. However, getting a "referral" doesn’t mean asking around to see if anyone knows a real estate agent. To get a good referral, you ask your family, colleagues and the members of your social circle if they can recommend an agent that they worked with and loved. You’re going for rave reviews here.

The long and the short of it is that everyone knows someone with a real estate license. But experience has now taught you that you’re looking for more than just any old licensed agent. Now, if your friend has a way to know that her friend, who is an agent, is also exceptionally good at what he or she does, great. But otherwise, the referral you seek should be from someone who has worked with the agent in the context of a home purchase and is willing to vouch for their professionalism, promptness, respect for their clients’ time and money — all the things that it seems like your agent, who is undoubtedly a great guy to hang out with — appears to lack.

So, in terms of what you did wrong, first off, I’d say you went about collecting your agent reference the wrong way. Next time around, figure out who you know who has bought a home recently — ideally in the same general area and price range as your purchase will be. The goal is to find an agent who has a track record of success in this current market climate and in your area.

And again, make sure that the referral source is a raving fan of the broker or agent before you call. Keep asking until you find a gushing former client, and I promise at the other end you’ll find an agent you’ll be much happier with.

Your second action or, rather, omission that gives me pause has to do with your mortgage situation. Were you preapproved for the loan before you got into contract? If so, you need to get much more clarity on what on earth happened to cause it to fall apart! It would make sense to me that, if you go far enough into the transaction to do that level of investment in repairs, the only thing that should have stopped the deal from closing at that point would have been a low appraisal — something neither you nor your agent would have had much control over. …CONTINUED

If a low appraisal was the problem, the proper next step was to attempt to negotiate a lower price with the seller. It doesn’t sound like you’re even clear on what the problem with the loan was, or what, if any, steps were taken to overcome it. Not getting, and staying, clear on where your interests stand at every step in your transaction was a big mistake — one I urge you not to repeat the next go-round.

Do whatever it takes, including asking the same question multiple times until you get a clear understanding of what’s going on, why, and what options you have going forward.

While neither you nor your agent had any influence on the outcome of an appraisal, what you did have control over was the timing of your repair investment in the property.

It was a $5,000 mistake to do any repairs to the property. Actually, I’ll go so far as to say that generally it’s a mistake to do anything more than inspections to a property before your loan and appraisal have the lender’s underwritten, final approval.

Even then, the only repairs I would advise anyone to do to a property prior to close of escrow would be those that were required by the lender as a condition of closing. And even then, I would be very cautious as a buyer about extending much cash for repairs on a property prior to closing.

On your next transaction, if the lender requires more than minor repairs, see if the seller will complete them, ask for them to be billed as a closing cost to escrow, or consider whether you’re OK with the risk of the deal not closing and you being however many thousands of dollars poorer — and without the benefit of the repairs — if something happens and the deal falls apart.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.


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