Question: I’m attempting to research the housing market, but I don’t want to even think about buying for at least a year because I am committed to a one-year lease. How can I efficiently do the research without a real estate agent?
I assume most agents would not be interested in working with a client who will not be buying a home for at least a year. I’ve attended numerous Sunday open houses, but I feel I may be missing valuable properties.
B.G., Bellingham
Answer: You are wise to get to know the local housing market before you make an offer on a house. In real estate, as in most areas of life, knowledge is power. You will not be able to recognize a good deal until you have done your homework.
At this point in your home search, Sunday open houses are the best way to research the market. You should also read the Homes for Sale ads in the newspaper every week. After a few weeks of touring homes and scanning ads, you should get to the point where you can drive up to a home and guess its price within $10,000 before setting foot inside. When you can do that on a consistent basis, you will know that you have a good feel for the true market value of homes in your area. So you are doing the right thing.
Once you know what a home should sell for, you will quickly recognize a bargain when you see one.
For example, if all of the three-bedroom homes in a given neighborhood have sold for $350,000 to $375,000 in the past three months, you’ll know you’ve found a hot deal when a nice three-bedroom home hits the market at $325,000.
These are the kinds of homes that sell in days rather than weeks or months — even in a slow housing market. We are now in a buyer’s market, which means there are more home sellers than buyers.
You can take your time because I think home prices will drop this year and then remain “flat” with little or no appreciation over the next couple of years. That’s when your research will really start to pay off. In a slow housing market, you can look for what we call “motivated sellers.”
These are homeowners who have to sell because they can’t make their mortgage payment, they’re getting a divorce, being transferred out of state, made a contingent offer to buy another home or for whatever other reason. These sellers typically price their homes low to sell immediately.
In addition to open houses, you can now access the public version of the real estate agents’ Northwest Multiple Listing Service computer system on the Internet. The Web address is www.nwrealestate.com.
This version of the MLS gives you most, but not all, of the information available to real estate agents. You can see pictures, prices, addresses and brief descriptions of homes for sale all over the Puget Sound region, and all over the state for that matter.
This is a great resource that was not available to the general public until a couple of years ago. It’s a fantastic way to be a “do it yourself” home buyer, searching for a home without the aid of a real estate agent.
However, once you get closer to being ready to make an offer on a home, it’s wise to interview a few real estate agents so that you can “hire” one to search for a home for you. Talking to agents at open houses is a great way to start looking for an agent with whom you will be compatible.
A good agent will be able to show you homes that you may not be able to find on your own. Many of the best deals are sold before a For Sale sign even goes up in the front yard.
At the big real estate companies, all of the company’s agents are paged the minute an agent signs a “hot” listing agreement. Those agents then contact the buyers with whom they are working and attempt to arrange a showing as soon as possible. It’s not unusual for the sellers to receive a purchase offer the same day if the home is very attractively priced.
When you’re working without a real estate agent, you miss out on these kinds of opportunities. However, you are right in assuming that a good agent will not want to spend a lot of time with you until you’re close to making a buying decision. Agents like to work with buyers who are ready, willing and able to make a decision immediately when they find a good deal.
You are not ready now, but you will be a prime prospect when you are ready to buy because you will have already done your homework so that you can act quickly when an agent shows you a hot deal. That’s the kind of buyer that agents love to work with.
Mail questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206, or e-mail to economy@heraldnet.com.
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