Q: How would I find an agent motivated to help me? A while ago I was thinking about buying a house, but the agent kept showing me houses out of my price range. She did not provide information on first-time homebuyer programs, etc. Help! –Daphne W.
A: Agents have long had a bad rap for showing people more expensive properties than they could afford, hoping the whiff of granite and rubbed bronze would intoxicate buyers into spending more than they planned.
The fact is, the recent market dynamics have educated all real estate players — buyers, sellers and agents — with a hard reality check, and lending guidelines are so tight that most agents know buyers don’t have much wiggle room.
The last thing they want to do is set you and themselves up for failure by getting you into contract on a home you can’t afford and the bank won’t let you buy.
On today’s market, it’s much more common to see one of four reasons why buyers end up in situations like you’ve described, where they’re working with an agent who is nice, but totally off-target in terms of the information and listings they offer.
First is that some agents are clueless. (Before the agent haters of the world rejoice, though, I should point out that this is the source of a very small percentage of the agent-client "issues" I see.) More often, there’s just an agent-client mismatch.
Second is that the client is not being clear with the agent about their wants and needs. Did you ask her for first-time-homebuyer program information? Were you just expecting her to offer it because you knew she knew you were a first-timer?
Perhaps the first-time homebuyer programs available in your area are like those in mine — inferior to financing programs that are available to everyone!
Did you tell her what your hard stop on prices was? Does she know what your mortgage approval limit is? Did she tell you she thought you could buy one of the more expensive listings she showed you for less than the list price, or was she hoping you could come up? I know some brilliant real estate agents, but I know very few who also possess the skill of accurate mind-reading.
Third, there are sometimes just good agents and good clients who are a poor fit for each other — who seem to miscommunicate on everything about which it is possible to miscommunicate. This, too, is rare, but it does happen. You can avoid this by finding your agent by referral — from a friend, colleague or family member who was in a similar homebuying situation to you.
If you are a barely solvent first-time buyer wanting to buy an entry-level palace and you decide to ping one of the agents you’ve seen on "Million Dollar Listing," you’re setting yourself up for problems.
And this can be related to the fourth — and most common — issue that causes the kinds of problems you’re experiencing: unrealistic buyer expectations.
If you’re telling your agent that you must live in X neighborhood, must have X number of bedrooms and bathrooms, must have X number of thousands of square feet, minimum, and must have a three-car garage, the best school district, and so forth, your agent may be showing you only homes that meet that criteria — which happen to be outside your price range.
I see this happen all the time: Buyers are stressed because they’re not seeing homes they can afford, but their list of must-haves and deal-breakers inherently sketches out only homes they cannot afford.
I had a communication glitch like this with some relocating buyers years ago. They were moving from a very affordable area in the Midwest, where they had a sprawling home, with acreage in an area of beautiful tree-lined streets and award-winning public schools.
And they were moving to my town, which has been known to have million-dollar shacks, some of the worst schools anywhere, and where a few hundred thousand bucks buys you an entry-level, 2-bedroom, 1-bath, 900-square-foot pad — even now.
So, I kept showing them what they could afford. And they kept hating it all. Then, finally, a switch flicked in my brain, and I said, "I think you think I’m not hearing you. So, let me take you to the home I think you want."
And I drove them over to a neighborhood similar to what they were used to and pulled them up to the curb of a home for sale that met their every criteria. They gasped with delight — yes! this was it — exactly what they’d been looking for! (Subtext: Why did it take you so long to show us this house?)
The list price on that home was more than two-and-a-half times what they were preapproved for.
Your agent might have been trying to tell you that your expectations were unrealistic, or trying to show you exactly what it would cost to get the home you said you wanted. You don’t mention whether you ever found suitable listings at the right price range online and requested to see them, but that’s certainly one way to get on the same page with an agent.
Moving forward, I’d urge you to be more aggressive in locating a suitable agent by getting a referral from another entry-level, first-time homebuyer who had a good experience with his or her agent; use any of the many real estate listing websites to conduct some proactive research into what listings are available and what you can get in your local market for the money you plan to spend; and do some investigating on the Web into first-time buyer programs in your area as well.
Before you contact agents, collect several referrals, then search for their names online to see if you can find any reviews from past clients, their own website or their participation in real estate Q-and-As online from which you can ascertain that they are first-time-buyer-friendly.
Then, walk into your first meeting with your next agent prepared with your mortgage preapproval paperwork, intelligent questions about specific listings, your local market, and what assistance programs they can help connect you with, and you’ll likely have a better outcome the next go-round.