Home Buyer’s Offer Always Beaten
August 16th, 2012
Reader Question: Monty, we have put offers on five houses and have had no luck. Our agent says that people are buying them for cash and more money than we offered, yet she says she cannot tell us what to do or what to offer. All she does is show us the houses and fills out the paperwork. We are tired of searching and losing all the time. What can we do? LH - Tucson, AZ
Monty’s Answer: This is a good question. There are several actions you can take almost simultaneously. These steps involve taking time to learn more about key points in real estate. You become a better judge of what to expect from various service providers you will encounter throughout the process. In reading your question, I get the sense you are quite dependent on the agent. Here, is how to change your circumstances.
Step 1. Make an appointment with a lender after you have read this article. It gives you the information you should know about how to find a good lender and what you will need to bring with you to the appointment. A pre-approved letter to present with your next offer would be very helpful to you. Another benefit in talking with lenders is that you will learn about what you can actually afford to offer. While you are speaking with lenders, ask them this question: What percentages of the homes that are being sold in town are to cash buyers?
Step 2. Read this article about how to hire a real estate agent. Either you and your agent are not communicating well, or you may consider interviewing other agents following the suggestions provided in the article. Then, read this article about agency. Once you have learned more about how real estate agency works you may want to express your frustration directly to your agent. I suspect your agent can and should be doing more for you than you state they are doing. As an example, they could bring sold comparable data sheets with them to the showings or email them to you that would give you a sense as to what to offer. This assumes that the properties are actually comparable.
Step 3. Learn how to evaluate a home on your own. You do not have to depend on your agent. Here, is an article to understand there is more than one right price for every home. Here, is an answer written to a seller to demonstrate how to evaluate a home, but the advice will also work for you. Here, is another that demonstrates how to make adjustments between comparable properties. It is also possible that your fear of overpaying causes you make a low offer. Yes, you will have to spend some time reading this information, but I suspect it may be less time than you have already spent looking at homes and writing offers.
Step 4. Gather all the data sheets on the properties you have viewed together in a binder or folder. Organize them by the date you viewed them. You should do this to take advantage of the time you have spent looking at the properties and use the sale price information to get a sense of what similar homes you have been viewing are selling for. This article will help give you confidence to know what to offer on the next home you see that you want to pursue. Your agent will be able to provide you with the sale prices of these properties and their specifications assuming the transactions have closed and reported to MLS. One important trait of a good real estate agent is the sharing of relevant sales data that are easily obtainable in the MLS.
There are many other articles on DearMonty.com that will quickly help you gain the knowledge and confidence to identify and negotiate for the home you have been working hard to obtain. The key to a successful real estate transaction is applying the knowledge you obtain here into real life situations where you have the information to make informed decisions.
Good luck in your home search. When you have other questions, just ask me. Let me know how this all turns out.