Thursday, June 4, 2009

Rules of a new buyer's agent

I'm a fairly new agent. I'll admit my "hands on, beginning to end" experience is limited to my own purchasing and sales of eight different properties. Since getting licensed, I've been working with various buyers. My first closing is supposed to be next Tuesday. That's not looking so good.

I've also had the pleasure of searching for and showing houses to several other couples or people that haven't even gotten as far as putting in an offer. With this admittedly not vast store of knowledge, I've come up with a few questions to help save time, effort and money with my buyers.

1. Are you paying cash or financing?

2. If the answer to #1 is "financing", do you have a down payment?

3. If the answer to #2 is "no", are you eligible for a VA loan?

4. If the answer to #3 is "yes", do you have your DD214 readily available?

5. If the answer to #4 is "yes", let's go look at houses.

6. If the answer to #2 is "yes", do you have documentation of where that money came from?

7. If the answer to #6 is "yes", can you find the documentation?

8. If the answer to #7 is "yes", let's go look at houses.

Once we get through that mess, let's talk credit.

I'm not a finance person and I don't claim to be. But a little probing goes a long way towards not wasting my time.

"How's your credit?" is an arbitrary question. Some people say "It's bad" when it's under 700. Some people say "it's not too bad" when it's under 500. Apparently, people have differing views of what constitutes "bad credit". Banks however, do not. And if your score is under 500, there's not much anyone can do to help you buy a house today.

A client saying "I have a mistake on my credit report" followed by a long, drawn out explanation of how some company screwed them over by sending their account to collections by mistake is a red flag. I'm not saying that the credit company didn't make a mistake, one of them very well might have. But the other 19 collection accounts on their credit report are probably valid.

A client telling me that they are "pretty sure" they don't have any late payments is lying. Pure and simple. If you're on top of your finances, you know if you've been late on a payment. If you're on top of your finances, you most likely haven't been late on a payment.

If a client calls about a $300,000 home but then asks about homes under $60,000, they are probably not serious. If they then go on to say that their boyfriend and they "do a little investing in houses sometimes", they are full of it. You either invest or you don't, housing isn't a penny stock and it isn't liquid. It takes money and dedication to invest in it.

If your client, after riding in your car viewing houses for an hour, announces that they were in the er over the weekend for a migraine, got several shots of heavy duty painkillers and got a prescription for narcotics as well, be sure to ask if they took some of that prescription prior to getting in your car. When the giggle maniacally and tell you "Yup!", it's time to take them home.