Q: 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. Why is it that the public is not allowed direct access to the Multiple Listing computer system?
– B.G., Everett
A: 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 conduct research. 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.
Once you know what a home should sell for, you will quickly recognize a bargain when you see one. In today’s hot housing market, there aren’t a lot of steals out there. But if you keep your eyes open, you may be able to buy a home for less than fair market value. For example, if all of the three-bedroom homes in a given neighborhood have sold for $220,000 to $250,000 in the past three months, you’ll know you’ve found a hot deal when a nice three-bedroom home hits the market at $199,000. These are the kinds of homes that sell in one or two days rather than weeks or months. You’ll find them in any kind of real estate market, even when the market is fairly slow as it is now in many parts of the Puget Sound region. Typically these are homeowners who have to sell so they price the home to move quickly.
There are many reasons why the sellers may be in a hurry to sell. For example, they may have made a contingent offer on another home, or they may be moving to a new job out of town. These are known as motivated sellers in real estate parlance.
Often these homes are sold before the listing agent can even get a sign up in the front yard. Many of the large real estate companies have paging systems that allow them to immediately notify every agent in the office the minute that an agent signs a hot listing agreement. The other 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 that 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.
That’s what you have to do when you run across a bargain like the $199,000 house described above. You have to be willing to write a purchase offer on the spot, not “think about for a few days.” But you can only do that if you already have a good knowledge of home values in the neighborhood in which you are shopping, so that you’ll know whether the agent is telling the truth when he or she says, “You better make an offer today!”
The computerized multiple listing system is one of the primary benefits of working with a real estate agent. Many agents will give you a computer printout of the homes for sale in your price range. You can also ask your real estate agent for a comparative market analysis, which is a computer print-out showing all the active listings, pending sales and closed sales in a certain area. This information is extremely valuable because you will know exactly what homes in your area have actually sold for compared to their asking price. When you are armed with this information, you are miles ahead of the average homebuyer.
If you have access to the Internet, you can visit Northwest Real Estate at www.nwrealestate.com. That is the public access Web site of the Washington Information Network, which is an association of multiple listing services in the Puget Sound region. It offers a searchable database of homes for sale that includes a picture of the house, the asking price, number of bedrooms and bathrooms, the square footage of the house and whether it has a view.
However, this database does not include all the details of the listing, because that is proprietary information available to member real estate agents only. When you find a property you like, you have to contact the listing agent for more information, such as the property address. When you’re ready to actually make a purchase offer, you’ll want to work with a real estate agent for the reasons I’ve described above.
As a landlord myself, I applaud your commitment to honor your one-year lease. However, if you find a deal that’s too good to pass up, it’s probably worth breaking the lease to buy it. If you are cooperative and allow your landlord easy access to show your home, they will most likely charge you only for the advertising costs and the amount of time that the property sits vacant. You can soften the blow by finding an acceptable replacement tenant who will move in as soon as you move out.
Mail your real estate questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206. Fax questions to Tytler at 425-339-3435, or e-mail him at
Steve Tytler is a licensed real estate broker and owner of Best Mortgage, Inc. You can visit the Best Mortage Web site at www.bestmortgage.com.
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