Have you ever seen those fun memes where you get a subject and then divide it by “expectation” – usually a great hopeful one – and “reality” – a grim, exaggerated one?
Well, we believe the joke greatly applies to first-time home buyers and home sellers, usually so confident and innocent, clueless as to what does a real estate agent do, and romanticizing the home buying process as a whole. We’re not saying there are hidden truths and secrets when working with real estate agents; we’re saying there are preconceived notions on the first-time home buyers part, and we’ve made this article to terminate them.
Expectation: The real estate agent will do everything for you
Reality: The master fattens the cow
A real estate agent is fundamental if you’re selling or buying a house, we are strong advocates of not going the For sale by owner (FSBO) route. By all means: find a local real estate agent and hire him/her. But you can’t let him/her do all the work. You need to actively get involved in the process if you want to get things done faster and better. Not because you’re the bomb but because the deal needs to please you, so being present will make things easier. So, when working with real estate agents, don’t try to run the show - this is your first rodeo and those guys have been around long enough to steer you away from danger - but be available, get interested. Call your agent, ask questions, find properties you would like to see. At the very least, by doing this, you will motivate the agent to push even harder. But the overall goal behind your work here is preventing something that does not fit your taste from happening, and speeding up the whole process: sometimes the little time the agent takes to consult you on something is enough to see the deal go awry because the home buyer (or home seller) got a better deal elsewhere.
Expectation: You will do this on the weekends
Reality: It becomes your full-time job
While there are rare times when it’s easy breezy, the normal is having no “work hours”. Whether you are a first-time home buyer or home seller, if you want to get the best deal you will have to deal with your real estate agent bringing deals (but also questions and problems) at all times. Being ignorant as to what does a real estate agent do is not the real problem.
It’s not knowing your own part in this whole transaction.The good news is that the answer is pretty simple: being available. That’s all a first-time home buyer or home seller needs to do. When working with a real estate agent, they are the ones doing most of the lifting, but you have to be available to help them help you. Pick up that phone and answer that e-mail as soon as possible!
Expectation: The whole thing will take a couple of months and you will move-in right after
Reality: Six months later you haven’t even put your house on the market yet
Wait, I intend on working with a real estate agent, and I’ll do my best to be 100% available… but you’re telling me that, still, it might take 6 months to even put my house on the market?! What does a real estate agent do, really?!
Yes, we’re telling you that. Just because you think people will be interested in your home, that doesn’t mean it is ready to sell. Listen, sometimes you might have heard a lot of “hey, whenever you think about selling that house, call me first!”, and that’s fine; people are used to buying a home that is not 100% “ready” and then investing some money to make them perfect. But you want to sell the house for the highest fair market value you can, right? So, it’s all about having the arguments to ask for more. A good agent might ask for a house inspection beforehand to see if everything is in order with the house’s structure so you don’t have to spend more later and lose the seller, who cannot wait for much longer, or the appraisal might bring a lower value than the ideal and he/she recommends you try to increase your home value with a couple of DIY Home Improvement ideas… and then, when you notice, some time has gone by. It’s okay; be patient! Deep breaths. Your team can only join the tournament when it’s ready to get the trophy; we don’t want just to participate, do we?
Expectation: The open house will make you drown in offers
Reality: Things rarely change after open houses
Hey, sorry to break you the ugly truth about open houses, home seller. Don’t give up on doing it, though. You should do everything in your power to sell your house; just lower your expectations. Not to mention that this is your first rodeo, so you should experience everything because... why not?
Expectation: All I need is the money to make an offer on the house
Reality: Brace yourself for closing costs, insurance costs, costs, costs, costs…
Since the last one was exclusively for home sellers, this one is for first-time home buyers. When buying a home, there are a lot of hidden costs. Don’t have just enough for the down payment; a lot of times you will have to deal with closing costs, not to mention home insurance. Calm down, don’t hyperventilate. Check our First-Time Home Buyers Guide to Home Insurance and you will see that is possible to go through all of this without going bankrupt. A lot of people do. We’ve got your back. Not to mention that you might have money for the down payment and even those other hidden costs, but don’t get qualified for a mortgage, and then you won’t even run the real race. So, no; if you think all you need is money, start learning what is a credit score and how does it impact real estate.
Expectation: I will get a millionaire offer for the house!
Reality: Are you sure you didn’t forget to add a zero here?
There’s no precise math in real estate. Unfortunately, we see a lot of stories of success going around - and they are all true; people do become millionaires and billionaires through real estate – but to every one of them there are also sad stories; they just don’t make the news that much. There are many many factors that affect this outcome of a first-time home buyer and home seller. The house itself, the area, the supply and demand ratio, the economy, and even luck! So, that’s why – whether working with a real estate agent or flying solo with a For Sale by Owner (FSBO) - it is super important coming to it with a reasonable expectation of the reality of how things go. Reach for the stars, but always have your feet close to the ground.