Cleek's Ten Commandments for Home Buyers

Real Estate Agent with Keller Williams Realty Diamond Partners Inc

There is an old saying that, You can't make a silk purse out of a sow's ear. It is equally difficult to turn a home buying mistake into a stable and secure mortgage, particularly when you encounter the perfect storm of a bad economy and record low home prices.

Dealing with the existing mountain of at-risk mortgages is one thing (the subject of another blog post), this blog deals with stemming the tide of new mortgages that could end up facing the same fate. I offer the following Ten Commandments for Home Buyers as my contribution to reducing the risk that today's home buyer will find themselves at risk of losing their home three to five years outl

I. DO: Choose a Buyer's Agent you trust and feel comfortable with and let them guide you through the process.

The general public is inadequately informed about the specialized roles of real estate agents. In every transaction there should be two agents, one representing the seller and the other representing the buyer. Contrary to popular misconception, a Buyer's Agent does not involve an added expense for the Buyer. Most listing agreements call for the Seller to pay a commission to both agents at closing.

II. DON'T Start looking at homes before you know what you can afford.

If you start looking at homes before you know what you can afford, you risk setting your expectation level so high that none of the homes in your affordable range will be acceptable. Never let a buyer's agent convince you to buy more than you can afford! When the mortgage payments start, you'll be on your own. Your Buyer's Agent will help you find a loan officer who will work with you to determine what price home you can afford and provide you with a pre-qualification or pre-approval letter before you start looking at homes. Keep in mind however that just because they will loan you the money doesn't mean you can afford to spend that much on a home. The question is: Can you handle the month to month cost of the home you are considering?

III. DON'T Call the Sign Agent for information about a home.

Although over 90% of home buyers today go online to look for homes, most still want to drive around and see what homes are on the market. When you see a sign in the yard of a home that looks interesting the logical thing to do is to write down the name and phone number of the agent whose name is on the sign. You should know however that the agent whose name is on the sign is the exclusive representative of the Seller and by law in many states cannot act as the representative of both Buyer and Seller. Your Buyer's Agent will have access to all pertinent information about all listings in the area. If there is a need to contact the listing agent, your buyer's agent will do this for you. In addition to the name and phone number of the sign agent, be sure to write down the physical address of the home. That's all your buyer's agent will need to obtain complete details about the listing for you.

IV. DON'T Visit Open Houses without your Buyer's Agent.

If you visit an Open House without your agent, be sure to give the host your Agent's business card. Otherwise they will be calling you back seeking to become your agent. This can create conflict between your buyer's agent and the listing agent who is hoping you don't have an agent and will consider letting him/her represent you in your home search.

V. If you have an existing home to sell, DO place it on the market before you make an offer on another home.

There is no worse feeling than to lose the perfect home because your present home didn't sell in time (unless it is making payments on two homes at the same time.) Consider asking your Buyer's Agent to list your present home. This keeps both parts of the buying and selling process coordinated. It also puts your Buyer's Agent in a stronger position in negotiating with the Seller's Agent for a home.

VI. DO Be clear on what you need in a home versus what you want in a home.

If you can afford to include some of the items from your WANT list, that's great, but not if it means you are so over-extended financially that you can't enjoy the home you purchase. By all means don't sacrifice QUALITY for FRILLS. Granite counter tops or a hot tub may be nice to have but they are not as important as a solid foundation or a dry basement in terms of long range value. If you doubt the wisdom of this advice, have a chat with some of the homeowners who are facing foreclosure.

VII. DON'T Hesitate to make an offer when you find the home that meets your needs; but DON'T act so quickly that you fail to engage in due diligence.

If you spend enough time at the beginning to clearly define your needs, determine what you can afford, and arrange for financing, you can act quickly before someone else buys the house you want. Visit the house several times, drive through the neighborhood at different times of the day, take different routes to get there, locate key services such as supermarkets and schools to make sure you are comfortable with the neighborhood. Meet some of the neighbors before making your final decision. It is people that make life enjoyable and you should make sure you are comfortable with the people around you.

VIII. NEVER negotiate out of fear, but never fear to negotiate.

A corollary is: Never fall in love with a house you don't own. If you do, it is virtually impossible to negotiate a favorable deal because you can't imagine losing the house you feel you must have. It is through the process of offer and counter-offer that a mutully acceptable deal is achieved. If you do your homework and frame your offer realistically based on the market, you will be negotiating from strength.

IX. NEVER talk directly to the seller's agent or the seller about your plans, interests, financial ability, motivation, urgency, etc.

You'll find self-styled experts who will tell you that negotiating for a home is too important to leave to an agent who may be more concerned about earning a commission than securing the best deal for you. If you have an agent you don't trust to make a good deal for you, you have the wrong buyer's agent. Your Buyer's Agent is a professional, trained to negotiate the best deal for you. Don't complicate the process by accidentally revealing information that makes your Agent's task more difficult. What the other party doesn't know, can't hurt you.

X. DO employ licensed professionals for all inspections.

Inspections serve three very important functions: They identify problems that must be corrected before you close on a house. They identify other problems that you will want to correct either before you move in, or shortly thereafter. And, they may provide your Agent with items to be used in negotiating a better deal for you. If you are buying a used car you are going to want to test drive it, and perhaps take it to a mechanic you trust to determine if it is a good buy. Home inspection is an important part of your due diligence. After you close escrow and take title to the home, it is too late to discover problems that could have easily been discovered by employing a qualified inspector.


If you have selected the right agent and followed your agent's advice, you should now be able to start packing and prepare for moving into your new home. And even more importantly, you can look forward to enjoying your new home with a reduced risk that you might lose it should another Perfect Storm be encountered in the future.

John Cleek, Author, Seven Steps to Home Ownership


Comments (1)

Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Very well done and soo correct.  These are the things I had to learn along the way and here it is in concise form.  Well done.

Mar 27, 2010 02:09 AM