By: Sally Grenier, Broker Owner
Metro Brokers / Grenier Real Estate
Last month I wrote about 199 Things An Agent Does For Sellers. Here's a follow up to that, which details everything a Buyer's Agent does from start to finish.
With the increasing popularity of sites like Zillow, Trulia & Realtor.com, Colorado real estate home buyers are relying more and more on the internet as part of their home search. And many buyers feel they don't need a Buyer's Agent to assist them in finding a home.
(Helpful Hint: Do NOT use Zillow or any of those other sites!!!)
Buying a home in the Colorado real estate market is far from easy and is full of ups and downs and twists and turns. What people don’t realize it that there is a lot more to it than searching on Zillow and looking at a few homes. Searching for, and viewing properties, is the easy part! What happens after that is where buyers often get into trouble, if they don't have an agent working for them.
Buying (or selling) a home is actually a complicated legal transaction that has many different steps that need to occur before you even get to the closing table. Not to mention the unexpected snags along the way that you have to deal with. And if you don't have an experienced, FULL-SERVICE REALTOR working for you, it doesn't take much for a transaction to fall through. Buyers (and Sellers) can get extremely frustrated, not to mention the possibility of losing thousands of dollars in the form of forfeited earnest money and money spent on appraisals and inspections.
So, what does a Buyer's Agent REALLY do? Here are 175 things (it's actually more) I do to help Buyers from start to finish:
Buyer's Interview
1. Schedule meeting or phone call with the Buyer for a "listing appointment".
2. Determine if Buyer is a First Time Buyer, or has purchased a home before.
3. If Buyer is a First Time Buyer, explain the home buying process, from searching for properties, to making an offer to title search, inspection, appraisal, loan approval, etc.
4. If Buyer is not a First Time Buyer, explain the home buying process AGAIN.
5. Determine Buyer's reasons and motivation for buying a home.
6. Determine the Buyer's time frame for buying a home.
7. Explain the difference between a Buyer's Market and a Seller's Market.
8. Explain to Buyer if we are in a Buyer's Market or a Seller's Market and how it will impact them and what they can expect.
9. Provide Buyer with resources (websites, articles, & brochures) about the home buying process, market conditions, & neighborhood information, etc.
10. Explain to Buyer the pro's and con's of relying on sites like Zillow, Trulia and Realtor.com for market information.
11. Explain to Buyer the difference between online estimates of value (aka "Zestimate) vs. "Fair Market Value" (what homes actually sell for) and why online values should not be used.
12. Explain to Buyer the value of hiring a Realtor as a Buyer's Agent.
13. Provide Buyer with a Buyer Disclosure and/or Definitions of Working Relationships and a Buyer Agency Agreement.
14. Explain the difference between Buyer Agency and Transaction Broker.
15. Have Buyer sign a Buyer Agency agreement.
16. Determine if Buyer is pre-approved.
17. If Buyer is pre-approved, call the lender and verify it was an actual pre-approval and not just a "pre-qualification".
18. Ensure Buyer's lender / mortgage broker is a reputable company that can get a loan closed on time.
19. If Buyer is pre-approved with an out-of-state, online lender or a lender with a bad repuation, ask them to get pre-approved with my preferred local lender.
20. Explain to Buyer the importance of getting pre-approved vs. pre-qualified.21. Explain to Buyer the importance of using a good, reputable LOCAL lender and how Listing Agents/Sellers are going to require that, not just me. 22. If Buyer is NOT pre-approved and says "It won't be a problem because I have good credit and income. You don't need to worry about me qualifying," then INSIST they get pre-approved.23. If Buyer refuses to get pre-approved, politely say "Thank you for your time. Good luck to you!" and move on to the next Buyer who is. 24. When Buyer agrees to get pre-approved, refer Buyer to several of my preferred lenders and have them start a loan application.25. Obtain pre-approval letter from lender. 26. Determine what Buyer's maximum purchase price is, and what their preferred purchase price is. 27. Determine what type of loan the Buyer is pre-approved for. 28. Determine if Buyer has money for down payment and closing costs.29. Determine if Buyer's loan type will eliminate certain areas or types of properties due to loan limitations.30. If Buyer's loan type does eliminate certain properties, determine if Buyer can qualify for other loan types that won't have those restrictions (which may involve getting pre-approved from another lender). 31. Ensure lender will be available to speak with listing agents about Buyer's qualifications when writing an offer.32. Make sure you have lender's cell phone # so you and listing agents can contact him/her at night or on weekends. 33. Have Buyer complete a “Buyer Questionnaire” about buyer's wants, needs, or "must-have's", desired price range, etc.34. Review Buyer's responses to the questionnaire and clarify answers if necessary.35. Be available to answer Buyer’s questions or concerns 24/7 (or at least from 7:00 am to 10:00 pm, 7 days a week).
Property Search
36. Create a property search in the MLS based on Buyer's search criteria and answers to the Buyer Questionnaire.
37. Ensure Buyer receives listings and knows how to save properties as "favorites", "maybe", etc.
38. If there are a lot of properties available, narrow the search if necessary.
39. If there are not many properties available, expand the search if possible.
40. As Buyer views properties online, get feedback as to whether they are what Buyer is looking for, or if they are not what they want at all.
41. Adjust search criteria in the MLS as necessary.
42. When Buyer calls and asks about 123 Pine St. which they saw on Zillow, explain why that property did not come up in the MLS search. (Hint: It's either under contract or not in their price range).
43. Be available to answer any questions Buyer has about the properties, neighborhoods, home buying process, market conditions, etc.
44. When Buyer calls and says they saw a sign at 789 Aspen Street, and they want to see it asap, explain why it's not available to see. (Hint: It's either under contract, or not in their price range).
45. Schedule a day and time to see properties on Buyer's "Favorites" list.
46.Call Listing Agents to confirm properties are still available and not about to go under contract.
47. Find out from Listing Agents if there are any showing restrictions on the properties.
48. Find out from Listing Agents if there is a deadline for writing offers.
49. Print out MLS sheets for the Buyer for each property we're going to see and one for myself.
50. Contact listing brokerages and/or showing service to schedule showings for each property.
51. Print out any additional info for Buyer such as maps, school info, neighborhood info, etc.
52. Show properties to Buyer and take notes about each one along the way.
53. As we're viewing properties, listen to buyer's comments, and answer questions.
54. As we're viewing properties, explain to Buyer why the house at 123 Pine St may still have a sign in the yard, but it's still NOT available to see. (Hint: It's STILL under contract, or STILL out of their price range).
55. Ask Buyer to "rate" each property or compare it to the others we've seen that day.
56. Get feedback from Buyer about which properties they liked, didn't like and why.
57. Ask Listing Agents questions Buyers may have about the property.
58. Provide feedback to Listing Agents.
59. If Buyer didn't find "The One"...keep searching and keep showing properties until you do find "The ONE"!
60. Adjust the search criteria as necessary.
61. Be available to answer Buyer’s questions or concerns 24/7 (or at least from 7:00 am to 10:00 pm, 7 days a week).
The Offer!
62. Once Buyer finds "The One" at 567 Spruce Street, and wants to write an offer, contact Listing Agent and find out if there are any other offers.
63. When Buyer says, "Zillow says 567 Spruce Street is only valued at $300K, but they're asking $350K, so I want to offer $290K," explain AGAIN why they should not rely on Zillow's "Zestimates" and what "Fair Market Value" is.
64. When Buyer says, "But that house isn't worth $350K, let's offer $10K less," explain AGAIN the concept of a Seller's Market, Fair Market Value, and how in this Seller's Market there will be at least 5 other offers at list price or above.
65. When Buyer says, "But I don't want to OVERPAY for a house if it's not worth it," explain to Buyer the reason for an APPRAISAL and how it ensures the buyer will not "overpay".
66. Create a CMA (comparative market analysis) to determine what "Fair Market Value" is for that property.
67. Explain to Buyer the entire Contract to Buy and Sell, and how it's not just about price.
68. Explain to Buyer the different ways to take title of a property (Joint Tenants, Tenants in Common, Tenant in Severalty, etc.)
69. Determine how Buyer wants to take title to the property.
70. Confirm with Listing Agent and public records the legal property description.
71. Confirm with Listing Agent the legal names of Sellers or selling entity (such as a trust or relocation company).
72. Confirm with Listing Agent what's included/excluded, and if any items are negotiable.
73. Explain to Buyer the Dates & Deadlines section and what happens if deadlines are not met.
74. Determine what key dates & deadlines work for Buyer and Seller (such as inspection deadline, closing date, possession date, etc.)
75. Determine if there are any particular Due Diligence Documents the Buyer wants to ask for, such as warranties, receipts or permits for work done on the property.
76. Explain to Buyer the concept of an Escalation Clause.
77. Explain to Buyer about title Insurance, who pays for it, and what to expect.
78. Explain to Buyer the importance of doing an inspection.
79. Explain to Buyer what happens at the inspection and what Buyer's options are.
80. Discuss with Buyer the option of waiving an inspection.
81. Explain to Buyer the requirement for an appraisal by the lender.
82. Discuss with Buyer the option of waiving an appraisal or including an "appraisal gap" clause.
83. Explain to Buyer what happens if the property does not appraise for the contracted price.
84. Discuss with Buyer the benefits of a home warranty.
85. Discuss with Buyer any Additional Provisions to be added to the Contract (such as waived appraisal, waived inspection, escalation clause, etc.)
86. Explain to Buyer what Earnest Money is, when it is due, how you get it back, etc.
87. Explain to Buyer the option of increasing the Earnest Money and why that might make the offer stronger.
88. Together with Buyer, write a competitive Contract to Buy,including price and terms that will give Buyer the best possible chance of having their offer accepted.
89. Once the offer is submitted, explain to Buyer that Seller could accept, reject or counter the offer.
90. If Buyer's offer is rejected, find out why.
91. If Buyer's offer is rejected, discuss the possibility of submitting a revised offer.
92. If Buyer's offer is rejected and another offer has been accepted, discuss submitting a Backup Offer.
93. If Buyer's offer is countered, negotiate with Listing Agent on price, dates, terms or additional provisions, if necessary. (This could go back & forth several times).
94. Be available to answer Buyer’s questions or concerns 24/7 (or at least from 7:00 am to 10:00 pm, 7 days a week).
Under Conctract!
Title Work, HOA Docs, Due Diligence Docs
95. Once Buyer’s offer is accepted, provide Buyer with a copy of executed contract and have Buyer sign disclosure documents.
96. Explain to Buyer and answer questions about the Seller's Property Disclosure, Square Footage Disclosure, Source of Water Addendum, Mold Disclosure, Closing Instructions, and any Affilitated Business Disclsoure.
97. Get Earnest Money check from Buyer and deliver it to title company.
98. Send fully executed contract and EM receipt to lender.
99. Obtain and review title documents from title company. Ensure there are no unusual liens, judgments or “clouds” on title.
100. Assist in solving any title problems such as boundary disputes, easements, liens, judgments, obtaining death certificate, etc.
101. Answer any questions from Buyer about Title documents
102. Obtain HOA documents (if applicable) from Seller/Seller's Agent including bylaws, covenants, financial reports, etc. and provide to Buyer.
103. Review HOA documents and point out any issues of concern to Buyer.
104. Answer any questions from Buyer about HOA documents.
105. Obtain any Due Diligence documents requested in contract such as survey, warranties, permits, receipts, etc.
106. Review Due Diligence documents and point out any issues of concern to Buyer.
107. Answer any questions from Buyer about Due Diligence documents.
108. Be available to answer any questions from Buyer/Buyer’s Agent about title, HOA, due diligence docs, etc. NOTE: If Buyer objects to any of these items, contract TERMINATES and Buyer and Buyer's Agent start all over and search properties, view properties, and start a new transaction from the beginning.
Inspection
109. Provide Buyer with a list of inspectors OR schedule the inspection with my preferred inspector myself.
110. Work with Listing Agent / Seller in scheduling the inspection.
111. Order & schedule a Radon test, if requested by Buyer.
112. Schedule a sewer scope, if requested by Buyer.
113. Schedule any other inspections or tests, if requested by buyer (i.e. well, septic, termites, mold, asbestos, etc.)
114. Verify with Listing Agent/Seller that inspector will be able to easily access the home’s crawl space, attic, sump pit, furnace, water heater, roof, etc.
115. Arrange to meet home inspector & Buyer at the property.
116. Coordinate with Listing Agent/Seller any additional testing that is to occur.
117. Obtain inspection repport and test reports from inspector and review with Buyer.
118. Discuss inspection items with LENDER and get their recommendation on what
119. Explain to Buyer that every home will have issues (even new homes), and that some are more serious than others.
120. Explain to Buyer they shouldn't be concerned about minor cosmetic issues with the home, such as a broken blind or a dented appliance.
121. Explain to Buyer they should focus on more serious inspection issues such as structural problems (cracked foundation), or major systems issues or issues that pose a health or safety hazard (leaking roof, faulty electrical panel, gas leak, or plumbing issues).
122. Discuss with Buyer what items they want the Seller to replace, repair, or provide a credit for.
123. Write an Inspection Objection Notice and send to Listing Agent with copy of inspection report and test results.
124. Negotiate with Listing Agent on inspection items. (This could go back & forth several times). NOTE: If Buyer & Seller cannot come to an agreement, contract TERMINATES and Buyer/Buyer's Agent has to start all over and search properties, view properties, and start a new transaction from the beginning. (And Buyer will have to pay for a new inspection, testing and a new appraisal).
125. Review Inspection Resolution notice from Listing Agent and discuss with Buyer what Seller is or isn’t willing to correct.
126. Provide fully executed Inspection Resolution Notice or Amend/Extend to Listing Agent/Seller, title company and lender.
127. Recommend or assist Listing Agent/Seller with identifying and negotiating with trustworthy contractors to perform any required repairs.
128. Order Home Warranty if Buyer requested one, and if not previously ordered.
129. Be available to answer Buyer's questions or concerns 24/7 (or at least from 7:00 am to 10:00 pm, 7 days a week).
130. Always promote the interests of Buyer with the utmost good faith, loyalty and fidelity.
131. Act as Buyer's therapist, marriage counselor, psychologist, friend, confidant, and shoulder to cry on, when needed.
Appraisal
132. Work with lender on scheduling the appraisal.
133. Meet with appraiser at subject property and/or supply them with the most recent comps and a list of all upgrades to the home.
134. Follow-Up with lender on appraisal results.
135. If appraisal comes in low, negotiate with Seller, Buyer/Buyer’s Agent on how this will be resolved. (This could go back & forth several times). NOTE: If Buyer & Seller cannot come to an agreement, contract TERMINATES and Seller/Listing Agent has to start all over and search properties, view properties, and start a new transaction from the beginning. And Buyer will have to pay for a new inspection and testing).
136. If VA or FHA appraisal identifies items to be corrected, work with Listing Agent/Seller to have these items corrected in a timely manner.
137. If Seller/Listing Agent is unable to correct these issues, go out and do the work yourself. (I have been known to scrape & touch up peeling paint and make deck repairs per FHA requirements).
138. Once FHA/VA appraisal items are corrected, work with lender to get appraiser back out home to re-inspect for final approval.
139. Draft an Amend/Extend if necessary and obtain signatures from Buyer and Seller.
140. Submit fully executed Amend/Extend to Listing Agent/Seller, Buyer, lender and title company.
141. Be available to answer Buyer's questions or concerns 24/7 (or at least from 7:00 am to 10:00 pm, 7 days a week).
142. Always promote the interests of Buyer with the utmost good faith, loyalty and fidelity.
Final Loan Approval & Closing
143. Contact lender on a weekly basis to ensure loan processing and underwriting is on track.
144. Contact Listing Agent agent on a regular basis to update them on Buyer's loan status.
145. When Buyer complains about having to supply 2 months of bank statements, and provide letters of explanation for large bank deposits, explain why this is required for loan approval.
146. When Buyer says they are shopping for a new car/boat/truck....say NO!
147. When Buyer says they want to hire a contractor to start building a deck on the house...say NO!
148. With the help of Listing Agent, provide lender with any necessary documents such as HOA insurance documentation, owner occupancy data, etc.
149. Ensure that Seller has completed the work required under the Inspection Resolution and provide receipts to Buyer. If Seller has NOT completed inspection repairs, find out why and make sure it gets completed prior to closing. Assist in finding a contractor (again) if necessary.
150. If loan approval is not obtained by loan approval deadline, find out why.
151. Create an Amend/Extend to push loan approval and closing date out, if necessary. (This could happen several times). NOTE: If Buyer cannot obtain loan approval, contract TERMINATES and Buyer/Buyer's Agent has to start all over and search properties, view properties, and start a new transaction from the beginning.
152. Act as Buyer’s therapist, marriage counselor, friend, confidant, and overall shoulder to cry on (again).
153. Once final loan approval is obtained, ensure lender submits Buyer’s Closing Disclosure in a timely manner (under new TILA-RESPA guidelines).
154. Utility Transfer -- Remind Buyer to contact utility companies to have service put in their name effective on closing date.
155. Remind Seller/Listing Agent to call utility companies to have service taken out of their name.
156 Review final Buyer's Settlement Statement and Closing Disclosures from title company.
157. Schedule a closing day & time with Buyer, Listing Agent, Seller, lender and title company.
158. Coordinate with Buyer, Listing Agent, Seller, the Buyer’s Final Walk-Thru prior to closing.
159. Ensure the Buyer is satisfied with any inspection repair items made.
160. If there are any outstanding issues, work with Seller, Buyer and Buyer’s agent to arrive at a mutually agreed upon resolution.
161. Confirm Seller & Buyer know when & where closing is to occur.
162. Possession -- Ensure that Seller will be able to give possession to Buyer at agreed upon possession date.
163. If Seller cannot give possession to Buyer on Possession Date, help negotiate an alternative resolution.
164. Do whatever it takes to help Seller get packed and moved, even though this isn’t necessarily your job.
165. Make sure all parties know to bring photo ID to closing.
166. Make sure Buyer brings cashiers check or wires funds required for closing.
167. Confirm with Listing Agent/Seller that they'll bring house keys, garage door openers, mail keys, etc. to closing.
168. If keys or garage door remotes are not made available, work with Seller and Listing Agent to arrive at a mutually agreed upon resolution.
169. If Seller/Listing Agent cannot provide keys at closing, call a locksmith and have the house re-keyed for your Buyer.
170. If Seller/Listing Agent cannot provide garage door remotes, go down to Lowes or Home Depot and buy them for your Buyers.
171. Provide Home Warranty documentation to Buyer at closing.
172. Attend closing with Buyer, sign necessary documents and be available to answer questions.
173. Ensure title company provides copies of all signed closing documents to all parties.
174. Ensure Listing Agent updates MLS status to Sold, enters correct sale date, price, selling broker and agent’s ID numbers, etc.
175. Follow up with Buyer after closing to make sure they are happy in their new home!
For more information about Buying (or Selling) a home in the Colorado real estate market, please do not hesitate to contact me!