For those of you out there who have yet to take the plunge into home ownership, here is a few things to consider. Renting vs Buying is something that can be researched ad nauseam as everyone seems to have an opinion on what is best for you. I am going to go on the assumption that you have decided to buy and that is why you are reading this. What I want to talk about is a few of the biggest, and most common mistakes first time buyers make. Hopefully this will help you avoid these pitfalls and make you home buying experience a good one.

Contrary to popular belief, the first step once you have decided to buy is not to go look at houses. Shocking, I know. The first step in every home search is to talk to a lender. Actually, talking to two or three is even better. And when you do this, ASK QUESTIONS. Failure to ask enough questions of their lender is the #1 buyer mistakes. They don’t come away from talking to lenders with all the information needed to make a sound decision. You know at the very least know how much how you can afford, not how much the lender will give you. There is a difference. Know the monthly payments, with taxes and insurance included. How much of a down payment will you need? How much will closing costs be? With financing options, most people believe the end all be all is the rate. While the rate is an important component, it is just one part of the entire equation. Compare the fees, Private Mortgage Insurance (PMI), the type of loan compared to others, etc. There is a lot to take in, but find a good lender who will walk you through all of the parts and help you understand. If you understand and are comfortable with the financing, it will make the process of looking more fun.

The second thing piggybacks off the first, RESEARCH. First time home buyers typically do not do enough research. This can cause some buyer’s remorse after the fact when they end up in the wrong loan, wrong neighborhood, or wrong house. Working with a good Realtor can alleviate much of this as they will bring the information to you. You then just need to use it to make the decision.

Know what you want and need. That seems obvious, but too many times buyers come in to the process having not thought much beyond the number of bedrooms, baths and garage spaces within the amount of money they can spend. As you can imagine, that is a pretty broad search criteria. Creating an overwhelming number of options. On the other hand, some come in with a laundry list of “needs” shrinking the pool of potential houses down to roughly one, and it sold last week. Leaving them frustrated that they “cannot find anything.”

Sitting down and making a list of wants and needs is a good start. But let me put a twist on it. Instead of going about it as most would, “Ok, we have to have 4 bedrooms, 3 baths, and 2 garage spaces…” and listing off all of the needs first. Instead, try having fun and first listing all of the awesome things you WANT. No holds barred. You think a pool would be nice? Write it down. Underground Batcave? Sure, why not? Bowling alley? Hey, the White House has one, why not your pad? Write it down. This should help you open up and be creative. Fill that sheet of paper up. Use more than one sheet if need be. Now that you have done that. Go back through it and circle the things that you absolutely will not buy a house unless it has it. This will help you really focus on what is important, and what is really just something extra you hope to get. Now, you have your wants and needs identified. And hopefully narrowed the pool, but not eliminated it entirely.

Next on this list is something your Realtor should help you with, and that is doing enough to make your offer an appealing one to the seller. This goes beyond the numbers. What do I mean? Sellers want the buyer to be ready, willing, and able. What does that mean? Ready. Means you have done the work up front, know what you want, have identified their house as it, and are committed. Willing. You are in a place where you will be negotiating seriously on the house. This is not a time to just be “trying it out” or only wanting to throw very low offers out there to see if you can get a deal. In other words, you are willing to work to reach a fair deal. Able.  This here is the money. You are able to bring the money agreed upon to purchase, at the time the purchase is to take place. If you don’t meet the criteria for all three of these, you cannot be considered a serious buyer and a seller is not likely to accept an offer you may present.

Lastly, many times buyers become excited by the idea of getting a deal and not thinking about resale. They have seen the advertisements boasting the idea that you can get a house for no money down, and 50% off asking price, etc. Not understanding that in most markets, something like this is just not reality. There are deals out there. But think about, why is it a deal? There is probably a reason for it. Is the house priced low because it was poorly maintained? This can bring about problems with financing. Banks are not going to lend money on a house that could fall apart the next time the wind blows. And your insurance guy is probably either going to tell you to take a hike, or laugh all the way to the bank with the over-inflated premiums you will now be paying. Does the design, function or location of the house demand the low price to overcome these downfalls that cannot be fixed? You know, that house next door to the Wal-Mart might be a steal. But guess what, when it is time for to sell, it will be a steal again. This time with you on the short end of it. Many people like to shop at Wal-Mart, but very, very few want to be their neighbor.

All of this might seem overwhelming. However, picking the right Realtor can ensure that none of this will be an issue. They will help guide you through the process and help you be prepared and make the best decisions for you. Seek out information and help. It is out there. And it is free. No reason not to use it.

Seriously. Ok, let me rephrase that. I am not a salesman in the typical sense that you are thinking of. You will never see an abnormally LOUD commercial of me trying sell you a car for just $199 down, 0% APR  for 36 months, followed by a really fast, imperceptible statement that basically says, “you won’t qualify for this deal anyway, but come on by so we can sell you on something that isn’t quite as good.” Nor will I be ringing your doorbell asking if I can bring my state of the art vacuum cleaner into your house for a free demonstration and 3 hours of your time. Likewise, I will not be calling you (probably because you are on the national “No Call List”) to let you in on the latest deal of the century for life insurance, get rich quick scheme, etc. I am sure some semblance of the examples above popped into your head when you see the word “salesman.” Don’t feel bad. I think of those things too. That is why it is important for me to distinguish REALTORS as different.

For some people, this might be splitting hairs. But stay with me here. What I am selling is a great customer service experience and relationship. Relationship? Sounds weird. Actually, if you think about it, your REALTOR is someone who will help you through what is in many cases the biggest financial transaction you will ever have in your life. Isn’t that worthy of having a relationship? You are trusting them with your biggest asset. They are giving you their skills in negotiation, contracts, and knowledge of the real estate world. Sounds a little deeper than just deciding on whether you want the subscription to Sports Illustrated or TIME doesn’t it? I certainly believe it to be true.

The point? Don’t be afraid to engage a REALTOR with questions. We are in the business of helping you, not selling you. Or at least that is how your agent should be. Our advice and information is free. FREE. No strings attached. You can’t even call your cell phone provider for a billing answer without them pitching you an add-on or something. And they already have a hand in your pocket. We want to build that relationship with you so that when the time comes for you to make that transaction, we are the expert you call. Don’t be shy.

Here is looking at you, For Sale By Owner (FSBO). You have decided that you are going to go about trying to sell your house all on your own. And why wouldn’t you when you could potentially save thousands on commission costs of a Realtor? So you go to FSBO.com, or any one of the number of do it yourself sites and spring for the, “Full Meal Deal” MLS package for $350. I mean, if you are going to do this, you better do it right. You notice that you must disclose Buyers Agent Commission in the MLS listing. You mean I have to pay the Buyer’s Agent?  I didn’t know that. But you figure most buyers are probably going to use agents, and you don’t want agents skipping over your house if they won’t get paid, so you offer 3% assuming that is the going rate. But hey, you are still going to save 3-4%. Sweet.

You buy a few signs and use up all of the color ink in your printer making some great listing flyers for people to take from your yard.  A couple Zillow, Trulia and Craigslist posts later and you are in business. Let the flock of buyer’s descend on your front door with full price offers in hand!

Soon the phone starts ringing off the hook. But wait, it is nothing but Realtors calling to see why you are selling on your own rather than with them. Not to show my house. The very people you wished to avoid are now all you are hearing from!

So, you decide you need to have an open house to some see actual buyers. But then find that you have just burned 2-3 hours of your day showing your home to people who statistically speaking, 99% of the time have no intention or means of buying your home. So you wait, and wait, maybe fielding an extreme low ball offer or two every so often. And meanwhile the perceived value of your home is going down the longer that “For Sale” sign is in your yard.

Sound familiar to those who have ventured down this path before? Of course it does, unless you are part of the lucky 10% of FSBO sellers who actually sell their house without the help of a Realtor.  Don’t feel bad you other 90%, even the Founder/CEO of ForSaleByOwner.com was unable to sell his New York condo using his own site (http://realtormag.realtor.org/daily-news/2011/08/09/forsalebyownercom-founder-uses-agent-sell-home).  It is hard.

With that story in mind, here are 7 main reasons why you should always enlist the help of a licensed Realtor whenever selling your home (and buying a home for that matter). There are many more, but to keep it simple, let’s stop at 7.

1. Higher sales price vs. FSBO
2. Marketing strategies = More money
3. The longer it sits for sale, the more money you lose
4. Buyers shop FSBO listings to save commission
5. REALTORS are trained to separate the lookers from the buyers
6. Center of Influence (people you know) sells homes
7. Third party negotiations save time

I am going to expand upon a couple of the more important ones. If you want more information on the others, feel free to contact me and we can discuss them further.

The first is Center of Influence sells homes. According the National Association of Realtors, 43% of home sales are done through Center of Influence. In short, you have to know someone willing to buy the property. Duh…right? Not groundbreaking stuff. Buyers don’t just fall out of the sky. But what it means is that using a Realtor gives you higher mathematical probability that your home will sell because they have LARGE Center of Influences.

Next, and one that few FSBO sellers understand is that buyers shop FSBO because they want to save on commissions too. But wait, how can both the buyer and seller save on the same commission? The answer, they can’t. Buyers believe that with FSBO’s they can get a better deal because the commission has been eliminated, therefore the seller can take more money off the price because they are not paying an agent. No buyer is going to pay you the money you are saving on commission.

Last is that using a Realtor doesn’t cost you money, it makes you money. According to a study by the National Association of Realtors, using an agent on average nets the seller 17% more than FSBO. So the math here is that FSBO’s typically take 17% less on their house to save what is now 3-4% commission. Does that make sense?

In the end I hope all of this will help you know that the next time you are thinking about selling your home. Let the experts help you sell it faster, easier, and for more money!

While this is a real estate blog, often times I find things we learn apply to our everyday lives as well. Today is one of those instances. It comes in the form of Monkey Maintenance. What is Monkey Maintenance, you ask? Well, it comes from real estate motivational speaker Terry Watson (www.terrywatson.com). I had the pleasure of hearing him speak at the annual ReeceNichols kickoff ceremony in Kansas City. If you have a chance to witness him in person, do it. Well worth your time. He is incredibly entertaining and funny. So what is Monkey Maintenance and why is it important? In short, as Terry says, Monkey Maintenance is the simple act of saying the phrase, “THAT’S NOT MY MONKEY!”

Monkeys are the things that other people try to take off of their backs and put onto ours that simply do not belong there. For us in real estate, this is the buyer that cannot qualify for the house of their dreams. Or the seller that cannot get their asking price in a down market. In both cases, somehow their agent needs to be able to overcome this. Things that might apply to you could be someone at work doesn’t complete their task in a timely manner, but then expects you to work late to meet a deadline. Or your child refuses to eat what you make for dinner, but then complains of hunger. The examples can go on and on and on. People continually try to take their monkey and place it on to your back. Unfortunately, in many cases, we willingly take on that monkey. Well…no more!

“THAT’S NOT MY MONKEY!” Learn this. Use this. Believe this.

Now, there are certainly times in your life when someone needs help with their monkey. You know these times and understand that they are different than what we am talking about now. This is not a license to be greedy with your time, money or effort. Don’t be a jerk, but know the boundaries.

It seems like such a simple concept, and it is. We just don’t employ it enough. Start small, but with conviction that some things are just not your monkey. Take that monkey and return it to the back of the person who is trying to give it to you. That is theirs to deal with. Once you start making this a routine in your life, you will find that you will be less stressed and have more time for doing the things you should be, and want to be doing.

Good luck!