Before I became a real estate agent, I bought four homes. I made a lot of mistakes when I bought those homes.
The first was a high-rise condo unit. The second was a four bedroom, four bathroom house in a good school zone. The third was a condo townhouse as an investment and the fourth was a single family home as another investment. By the time came to buy my fifth home, I had become a realtor and I knew that I had made some serious mistakes in my first four real estate purchases.
I should have got my real estate license sooner. That was my first mistake.
Mistakes, I’ve made a few
I might not have ever known all the things I did wrong if I had not become a realtor myself. Here are some of the other mistakes I made:
The unrepresented buyer
I made four mistakes with the purchases of my first four houses.
The first home I bought directly from the builder. I had no representation.
The second home, I bought from a private seller. I had no representation.
The third and fourth, I bought from the listing agents. I had no representation.
My four mistakes were actually the same mistake four times over. I was an unrepresented buyer.
My mistake was thinking that the selling agent was working for me. He wasn’t. If the salesperson is working for the builder, getting paid by the builder, then he is certainly going to put the interests of the builder ahead of the interests of someone like me who just walked in off the street.
The same is true for private home sellers. Their motto is “buyer beware”.
The same is true for listing agents. They work for the seller. They have an established relationship with the home seller. They have known them a lot longer than they have known me. I just showed up at an open house or called off of some advertising I saw.
Further, the interests of the listing agent is to ‘double end’ the sale. He wants the whole commission. He loves the unrepresented buyer. What is the noise an unrepresented buyer makes? Ka-ching!
Contracts are boring
As an unrepresented buyer I didn’t know what I was signing. “This is the standard agreement of purchase and sales. Sign here, here and here and take it to your lawyer”. The problem is, even if you read it, you don’t know what you don’t know. Contracts are like learning a foreign language. You either know it or you don’t. You can only fake it so far.
Being an unrepresented buyer lead to my other mistakes.
Contracts are time bound
I didn’t make this mistake, but many do. People sign Buyer Representation Agreements and Listing Agreements very casually thinking they can cancel anytime. Wrong. A contract is a contract and a contract for real estate service usually has some sort of time period attached to it. To get out of a contract early, both parties have to agree
Money talks, but you can negotiate near everything
Like most real estate novices, I thought negotiation was all about the money. It mostly is, but there is more. Time is important to most sellers. They either have somewhere to go at a certain time or they have already gone there.
Conditions are important to. Buyers need time to do their due diligence.
Now, the principle I use is, “if you don’t ask, you’ll never know.”
Listening to the media
December is the best time to buy a house. No, January is the best time to buy a house. Prices float up in the spring time. There is a real estate bubble. Home prices are expected to rise by 10% next year. Canadian real estate is over valued by 20%.
Contradictory reports and opinions about real estate abound. If you are working with a professional full-time agent, he’ll be able to tell you what is really going on. If not, then you will have to decide what to decide and read only the news that agrees with your beliefs.