Today, Paula Christine is joined by Barbara Biskner of Synergy Realty Group to talk about how a realtor can help in the home buying process. We cover:
To reach Barbara Biskner, you can call her at 734 771 6950, or email her. Barbara@BarbaraBiskner.com
To reach Paula Christine about this topic or any other money questions, visit her website: https://paulachristine.com/
Or shoot her an email: Paula@PaulaChristine.com.
Paula: Hi, I'm Paula Christine, and welcome to Beyond the Paycheck. Living paycheck to paycheck and struggling to make ends meet really sucks. What if you could take control of your money and have the life you dreamed about? I know you're saying, "Yeah. Right." But it can happen with knowledge and commitment. That is my goal.
To provide you with the knowledge to take control of your money. It's up to you to make the commitment. So I was talking to my son yesterday and we were talking about buying a house. I'm like, well, what kind of questions would you have if you were to sit down with a realtor and inquire about how to buy a house?
So I jotted all those questions down and I've asked my friend Barb Biskner from Synergy Realty Group to answer those questions for us. Welcome Barb. First question he had is, what does a realtor do for me?
Barbara: Well, a realtor is really your facilitator and I think the public views realtors as just walking in and out of houses, showing houses, selling houses, buying houses, actually the role of the realtor is to negotiate for either the buyer or the seller, and to facilitate all those practices, the loan process to connect a buyer and the professionals that they're going to need to help them. If it be a home inspector, a loan officer, the title companies to connect all the moving parts and to make it as stress free as possible. It is as stressful operation at least. And there are always two sides to every transaction most always. So we're always concerned with trying to be as accommodating to all parties as we can, and still work within time constraints, realtors are resourceful. We usually find a way around obstacles.
Paula: That's great. I mean, cuz it is stressful to buy a house or even to sell one, but how do I choose my realtor? I know you're my realtor, but if I didn't know one, how would I choose one?
Barbara: I would think that a large majority of people do choose a realtor by referral from a friend, relative coworker, or acquaintance. And then of course everybody with media, these days, we are asking our clients to do testimonials written or on social media. And of course you can Google everybody these days. You can see how much business they're doing, what areas they're most proficient at.
Paula: I would believe too, referral is probably the number one way to find a realtor. But do you find, if you're, let's say living in one area and then you're moving to some place, say 50 miles away, would it be better to find a realtor that knew that area than to use maybe someone that's where you're at currently?
Barbara: Absolutely. As realtors we love our clients and we appreciate the loyalty when they come back to us. But when I have a client, you, for instance you moved to a different geographical area. That's not where I'm best at. We all are best in our own areas. We all learn to find nuances of move two blocks this way, it's a different marketing area, the school, whatever it is all about, we're gonna know those things. And that's why we do better in smaller areas. Many times I'll have clients that I've done more than one transaction with and they will ask me, gee, can I help them 50 miles away? I will help them find a realtor because I know their personalities that kind of know what they're after.
We've got a long time relationship. So it's easier for me to reach out to different people. Perhaps you want a female, perhaps she want an older person, perhaps you want veteran friendly realtor. All those kind of things I can help you with that. I would much rather make you a referral. And of course we get paid for those referrals.
I like to interview that agent myself and say, okay, here are the needs of these clients. I've worked with them many times. They're not impressed with the A, B and C, but they have real specific needs. Do you think that'd be a good
Paula: fit? So if I'm working with you or if I'm working with someone else, do I sign a contract?
Barbara: You would, you would sign a buyer broker contract with me, and there has to be a term. It could be for a single showing. I wanna show a 123 Maple one time. You're only committed to me for that one time, or I can set it up however, we both agree that I would represent you as a buyer's agent. For three months, six months, one year, both parties have to agree to dissolve that in writing.
Sometimes brokers do not release contracts until they're terminated by date.
Paula: Something you might wanna ask in advance about.
Barbara: Absolutely.
Paula: Okay. So if I'm ready to buy a house, I mean, there's some things that I need to prepare. I know one of the things that I always talk about is creating a budget and making sure everything's within your budget, but do I need to get prequalified for a mortgage? What do I need to do?
Barbara: Absolutely. And that can be through a mortgage company, a bank, a credit union people many times will start with wherever they do their banking. And you are free to look around without it punching your credit score because you're making credit inquiry. We tell people if you are actively thinking about initiating a mortgage application, do not go out... This is not the time to purchase a new car, make any big purchases make any large deposits, any large withdrawals. Everything needs to be a reflection of just your day to day expenses so that the lender can get a handle on what it costs you to support your household every month so that they can get a better take on that.
Paula: My daughter, she, she'd probably kick my butt for saying this, but when she was buying her house, I don't know, her boyfriend deposited a hundred dollars in her bank account and the mortgage company wanted to know where that a hundred dollars came from. It was just crazy stuff.
Barbara: And I think the lenders they have a bit of a check sheet when they start working with people.
The don't do this, don't do that. And I know that they always tell them it's kind of a little insider joke . Everybody buys the new house. So they run out to Best Buy and they order all the new appliances, all the gadgets and gizmos. And we're asking them, no, no, no, you do not do that. You do that after you purchase the day after, but don't make any kind of expenses, even though you are gonna purchase those things.
Everything has to be explained to that lender. Lending is very, very much controlled. The Fed's always looking at it. It is very precise process these days, not like it was a few years ago. There's a lot of oversight and it stops people from making poor decisions we hope.
Paula: As it should have been years ago.
Barbara: Absolutely.
Paula: So let's get into some of the jargon. So I'm gonna give you a word and you just give me a very simple answer for that term okay.
Barbara: Okay.
Paula: Buying agent.
Barbara: A buying agent represents just the buyer. You have no allegiance to the seller.
Paula: Selling agent would just be the reverse of a buying agent. So you would be working with the sellers and doing everything you can to help them sell the house.
Barbara: Right.
Paula: So Barb, what is earnest money?
Barbara: Earnest money is exactly what it sounds like. Earnest. Sincere. Means that you do intend to make a stab at a particular property, that you desire to purchase it. You're willing to put some money forward to show that you're not going around bidding on 10 or 12 houses at one time, and just hoping to get one of 'em. You have to get committed to that house, that property. And so you're gonna put up some money. And if that deal doesn't work out through no fault of the buyer, say it's a lending problem, an appraisal shortage, whatever the problem would be the inspection dissatisfaction with the inspection. The buyer's entitled to get that money back.
Paula: Okay. Let's go into inspection. So I would think everybody should get their home inspected. Correct?
Barbara: Well, I'm on the same page. I think that everybody should have their home inspected for undiscoverable things. Without an inspector, we don't know what's in the attic. We don't know a lot of things just by a walkthrough. And if nothing else, it just gives the new homeowner kind of a checkoff list, things to watch for, things to be diligent about.
Paula: Or even peace of mind that everything's okay.
Barbara: Absolutely. A lot of just education, good education on a home inspection. And of course it's always to discover the thing that you wouldn't know. The blocked sewer, the attic mold, that sort of thing. Those are game changers, but for the most part, it's just a nice check off list.
Paula: So I know that you can get a warranty on different things. Do you recommend a warranty or is it?
Barbara: I do. Those are great. They're affordable. And many times we just write it in on an offer to purchase that.
Especially maybe the inspection shows that the furnace is a little bit older, maybe nearing the end of its life. It just is a lot of peace of mind for both parties. And it's not a huge expense for the seller that gives the buyer one year from the date of closing. And it's a minimal cost to call somebody out and it has a lot of coverage and you can get simple, or you can add as many extras as you want.
Paula: So realtor commission, how do you get paid?
Barbara: In the state of Michigan, and this does vary around the country, the seller pays the commissions, and then we split that with the buyer's agent that is stated in the MLS and the listings it's stated upfront how much the buyer's agent will be paid.
The buyer's agency, I should say it is always paid to the broker. Those divisions inside the brokerage in the state of Michigan, the sellers do pay the commissions.
Paula: Okay. So I found the house that I want. We walk out the door and I'm saying, okay, Barb, I want it. We're gonna put in an offer. Now I know in Michigan, there's a bidding war.
And I think that's going across the country, because there's more buyers than sellers. So if I want to make sure that my offer is even considered, what are some of the things that I should do?
Barbara: Higher down payments? Say you could increase your down payment. If you had more available monies, sometimes we don't even have the highest offer. Sometimes it's just, we've got the better terms and the terms meant much of the time on bigger down payment that lets them know that you probably are gonna have no problem making that come to the closing table. Sometimes you can give the seller occupancy at no cost that helps them to make their move. And they're not trying to pay your new mortgage payment in the meantime, makes it a little easier for them.
I'm seeing this more and more. I don't like it, but I do see it where people are passing on the inspection. I personally think that is playing a little bit of Russian Roulette. I would not ever advise a buyer to pass on an inspection, possibly make it a pass or fail inspection.
And that's more to cover those big items. A furnace fail, a bad roof. some mold in the attic type thing. And you can walk away, you get your earnest money back, but we're not going to go through a 40 page report. Repair or negotiate for routine repairs, fixing a storm door, a burner on the stove doesn't work, that sort of thing, but I would still want a limited. I would always advise at least a limited inspection, but to enhance your chances, a bigger down payment and obviously price. The price increase.
And I guess you'd have to you have to be very careful on those. You can get caught up and people are paying a lot for houses. If it's a long term purchase. You can probably afford to increase that purchase price a bit more, but if it's you're anticipating a family size change in the next few years or a job transfer or something need to be really careful that we don't overspend for these properties because they're adjusting and we're seeing it every day. They're adjusting backwards.
Paula: That's crazy. We sold my house when I got divorced. Well, first of all, we chose the offer with the largest down payment because we need wanted it to make sure that it went through. But just that people were offering more than I would've paid for my own house, so it was surprising how much people want something and that they're willing to pay.
Barbara: They are, and they I've had so many people say we wanna bid on this. It's my job, if I'm representing the buyer to advise 'em of all of those things that you don't intend to stay that long. This is the average price.
I do see a downturn coming. Sometimes you need to evaluate how desperate are you for a house? If you're in a safe place and you can commute to work or whatever, it's not the right time for everybody to buy a house. Perhaps, if you sit back and wait a half a year, you can save more money.
Paula: I always look at it like not everybody's meant to own a home. You don't need to get yourself in a situation where you're gonna end up not being able to make the payment or something down the road. So you just have to make sure that it fits in your budget. And that it's a good decision for you. Great. Because you're right. If you can save more and buy it another year or so down the road it might be a better solution for you.
So we're gonna take a close right now, Barb. So I wanna say thank you. Thank you. That's very helpful. How can somebody get ahold of you if they wanna reach out?
Barbara: Well, my cell number is 734 771 6950 . And I answer that most all the time. I tell people if I don't call you back in two hours, call me because I never turn it off.
And then my email is Barbara@BarbaraBiskner.com. And I answer both all day long and I've been doing this 20 plus years and I love it and I don't expect I'll ever retire. As long as I'm physically able. It's a great job. And I make a lot of friends along the way.
Paula: But you gotta retire someday, Barb. It's just saying you gotta retire someday.
Barbara: Someday, maybe, but you I'm glad I just keep it to refer and repeat. I'm not out there looking for new people because we have a lot of great return clients, so it's awesome.
Paula: Okay. Thank you so much. I appreciate it. If you'd like to get ahold of me, you can reach me at paula@paulachristine.com. Or you can check out my website at paulachristine.com. Thanks again, Barb.