5 Steps to Buying a Home in Palm Beach by Top Buyer's Agent
This is the Treu Real Estate 911 Podcast with Lisa Treu. Lisa will share up to date real estate information with you that you need to know.
Brian Mudd:
Welcome to Treu Real Estate 911. It's Brian Mudd with your local real estate pro, Lisa Treu with a five-step process on today's show to buying a home. If you get these five steps right, you' re going to be set up for maximum success. Lisa, she's going to bring it all to you.
Before we get started on today's show, if you' re not already there, go to TreuRealEstate911.com. That's TreuRealEstate911.com. Of course, if you need a real estate resource, whether you' re buying, selling or if you just want more information, you have questions, the Treu is ready to help you seven days a week at 561-972- 8326. That's 561-972- 8326.
Lisa, one of the most overlooked aspects of the entire real estate process, I believe, is buying because so often people think that the real estate agent doesn' necessarily make near as much difference as they really do. You see buyer errors every day.
Lisa Treu:
You know, I was meeting with somebody last night, and they were telling me that they had found a dream home a couple of years ago. Due to poor advice, they ended up not getting that dream home. It was completely inexperience by the agent of giving them poor advice. We see this all the time. It's not just buying the home. It's getting through the challenges that come along, and making sure that you are competitively represented so that all of those challenges are handled in a way that you' re happy with and satisfied with.
Brian Mudd:
One of the biggest mistakes that I've seen over the course of time is that people don't realize that until the closing paperwork has been signed, the deal isn't done.
Lisa Treu:
Right.
Brian Mudd:
Let's get started with the 5 Steps to Buying a Home. Step one, getting pre-approved. Let's talk about the intricacies of that seemingly innocent enough process.
Lisa Treu:
Yes, there's a difference between pre-qualified and pre-approved. Many people think they have a pre-approval and really what they have a pre-qualification. They call up their local bank. They give them what their income is, what expenses that they have, what debts they have, and they get a letter a few minutes later saying, "Great, you're our premium buyer. Here's what you can buy."
They haven't looked at tax returns. They haven't pulled credit. They haven't checked pay stubs to make sure that that income is not bonused, making sure that is it a base income. It all matters. Really what you need to do before you ever step into a property is to have a proper pre-approval, number one.
Number two, to have it by someone that is respected in the industry, so if you go up against multiple offers, which still happens in certain price ranges, that the agent that has the listing will be excited about that deal versus looking at it and going, "Oh my gosh, this bank is a nightmare."
Brian Mudd:
Because you want to have the credibility to be able to close, and the expectation by the people that you're buying that property from that they're going to get to the closing table without the runaround that you're talking about.
Lisa Treu:
Also, with the least amount of headaches that are possible. Many banks have a reputation for missing closing dates. It's just normal for them. It's not normal for anyone else in the transaction. It's not normal for the seller, who is packed and ready to go and often waiting to close on their new home. It's not normal for the buyer, who's also ready to move into their new home. Movers have been organized. They're living out of boxes at this point. It is important to make sure that the lender that you have has the greatest chance of closing and closing on time.
I really wish that they had like the airlines have, which is the on-time rating. Wouldn't that be great if you could say, "What percentage of the time does the lender actually close?" When we recommend lenders, there's a reason. The number one reason we recommend the lenders we recommend is because of their reputation, number one, and their results, number two. Because when they say they can do something, they can.
Brian Mudd:
The fall in rate has been upwards of 40% at times in recent years, right? Largely due to this problem.
Lisa Treu:
The fall through rate is pure of someone not doing a proper pre-approval. Just looking at it on its surface. Honestly, I could do that. Somebody could tell me their income and their debts, and I could say, "Yep, you can get that loan." That is not what you need. You need a very deep level process. You need to provide documents.
The other thing that that does is that sometimes there are errors that need to be fixed. Maybe there's something on your credit report you didn't even know it was there. If you start this process early, you have time to fix it and still buy your home in the time frame that you planned on.
Brian Mudd:
All right, pre-approvals, not pre-qualifications, with a lender that has a great track record for meeting its timelines and getting you to the closing table.
Step two, meeting for a brief consultation in advance. Tell us about this important step in the process.
Lisa Treu:
This is the part that people really resist the most. I think it's the most important part. What I really want to do is instead of show you 50 homes and ask you five questions, which is the basic questions people get asked. What price range do you want to look at? How many bedrooms do you need? How many bathrooms do you need? What's your square footage? What city do you want to live in? Those are the five questions that both buyers and the typical real estate agent would ask.
I would rather sit with you and ask you 50 questions and eliminate all of the non-fit properties and show you five. Now, isn't that more efficient?
Brian Mudd:
Makes sense to me.
Lisa Treu:
The other thing is we want to explain the process. The interesting thing that a lot of people who buy at a home say, "Well, I've purchased lots of homes." Yes, and the question is, "How long ago?" because the ings have really changed. The understanding the market that you're in and the process that you're in is really critical. I just find that the success rate dramatically goes up if we can sit down and meet and walk through that process.
The other thing that I think is really important is hiring us as a buyer's agent versus a transaction broker. Having us on your side to represent you. Remember, it's kind of like a legal analogy because it's probably the one that makes the most sense to people, is if you're representing the transaction, it's more like meditation. Where, if I'm representing you, whether on the listing side or the buy side, it's more like hiring an attorney to represent your best interest.
Brian Mudd:
Makes perfect sense.
Lisa Treu:
A meeting can be a lot of places. A meeting can be in our office, in your home. It can be at a coffee shop. It can even be online. For a lot of our clients, especially when they're coming down here and they're going to buy a home, we don't wait till they get here to do that consultation. We do the consultation before they even arrive in the State of Florida so that when they get here, their time is exceptionally valuable because they have to go back home. We can be flexible about where we meet. We're not all that flexible about meeting though. It's really important.
Brian Mudd:
It's in everyone's interests. It makes all the sense in the world to look at five homes and get to the same place rather than 50 homes to get back to the same place. And who knows? Maybe over the course of time to look at 50 different homes, the home you really are really most interested in already has activity. So, yes, that second step is very meaningful and makes a great deal of sense.
These are The Five Steps to Buying a Home. This is number three, selecting the right home. Well, the concept makes sense, but I'm guessing that there's a bit more behind that simplistic sounding statement.
Lisa Treu:
Yeah, so we take the information that we learned during the consultation and we select a handful of homes. Now, this is not for our person coming down from up North, where we only have a couple of days. But if you live locally, we're going to select a couple of homes, a few homes, and get you out into them and make sure that our picture in our head is equal to your picture.
Instead of showing you 10 homes that first day and you hating all of them, we're going to get you in two or three and you're going to go, "Yep, that's exactly the style I'm looking for. That makes sense." We can even encourage this even better by having people look on our website and saving their favorites because then we can see what they're liking online.
Finding the right properties to even get into really comes from a detailed consultation and also part of it is experience and instinct. Many times I've had agents in our office say, "This is their house," and you know what? It usually is. Because they really are great at listening, and the other thing is they know the product. My buyer's agents, they see 100s of homes. They study online 1,000s of homes. They're always understanding the market and also understanding, okay, the lifestyle that each area would give.
Because most people aren't buying bedrooms and baths. They're buying the lifestyle that they want. Just being clear on that and then modifying as we need to. But generally, that first time out, it just validates that we've listened well.
Brian Mudd:
I would imagine that especially when you're dealing with folks from outside of this area that it can be really challenging managing the expectations to find the right fit if people have done a fair amount of their own research because of everything that Palm Beach County does have to offer, and the idiosyncrasies of all 39 plus different municipalities we have here.
Lisa Treu:
The biggest challenge is that we have two types of properties that sometimes give an unrealistic value expectation out there. That is our active 55 and over condo market. Often those are very affordable. If you're not 55 and over, you can't live there. There's not a lot of other options in that under $100,000 price range, where if you're just looking online, it seems like, "Wow, look at all these great condos."
The other thing is the mandatory country club. Sometimes those are dramatically below value if you took that and moved it to another non-restricted community. That starts with the initial conversation when somebody comes to our website, and we reach out to them and make contact with them, and we see them looking at those type of properties. We're always going, "Is that what you're looking for?" If it is, great. If it's not, then we have to educate them even online so before they get here, they do have a realistic picture.
Brian Mudd:
Makes perfect sense. I've actually known two people. One of them happens to be on my street right now that ended up buying property sight unseen. Another time was in Savannah. And then realized that it wasn't going to be a good fit for them and their lifestyle once they did close on it. Selecting the right home means more than just looking and having everything seemingly check out online. This piece of the process may you end delivering to ensure that the expectation meets what the individual buyer is looking for, I know is a critical detail that can save a great deal of a headache later on.
Lisa Treu:
That is absolutely the goal. One of the things and we also have people buy sight unseen, and there's a way to do that which gives maybe a clearer picture in describing not just the house, but the area and letting them see. Facetime is great. We can show most things to clients from all over the world today.
Brian Mudd:
That is pretty neat. Your use of technology is outstanding. Lisa teaches me new things constantly. All right, the fourth step to buying a home, now negotiating and getting the outcome you want, that is certainly a critical part of the process. Something that I've been frequent to mention is that 1%, just 1% variance on the average property in our area, you're talking about 1,000s of dollars, let alone when you're talking about percents larger than that.
Lisa Treu:
You make your money on a property when you purchase it, not when you sell it. Especially we're finding a lot of mistakes right now from people in the investment game, especially those that have gotten into it recently. Because they're kind of buying into the hype, which kind of is a concern when people start buying into the hype.
Negotiating really is about helping you get as the buyer what you want, or the seller, in a way that still accomplishes your financial goals. It is important to understand the exit strategy, and why you're buying and what the goals are. A lot of times, I think agents come in and they think that what the buyer wants them to do is play hardball and negotiate that deal that is a great killer deal. Now, if you're an investor, that may be the case. Yet, when you ask buyers, all the studies say that the buyer wants you to get them the home. That's number one.
Obviously, we're very proud of our track record for negotiating on both price, but also terms. Having things like favorable closing dates, having closing cost credits, having re-negotiations when there are things that were unforeseen on inspections.
I'm excited to share when our most recent, probably our best re-negotiation that we've ever done closes. I honestly couldn't believe what we were able to re-negotiate for our buyer. I think we upset the agent. We represent, remember the buyer. We don't represent the deal. We kept reminding her of that, that we are a single agent. We represent this person. She said, "Well, you're doing it very well," which I took as a compliment.
Negotiation, to sometimes I attribute it to a tennis match. The buyer's going to initiate the serve. Okay, they're throwing the offer out there first. Depending on how you serve the ball, depends on how it's hit back. Often, the reaction that somebody gets from a seller is because the service was bad. Bad serve, bad return.
Brian Mudd:
Or I'm just the person that's supposed to be returning, in which case all you have to do is make sure it's in.
Lisa Treu:
Perfect. I always want to negotiate an offer at a price where a seller hesitates and says, "Should I counter it or should I take it?" To me, that's a good offer because that's when you get the best deals when they're hesitant and they really want to counter it, but they're afraid to.
Brian Mudd:
Well, the other thing you're getting into as well is psychology. This is something that I've seen firsthand how you really excel at being able to manage your buyer and seller psychology to the advantage of whom you're representing. Because there are emotions involved. There is a strategic element to the negotiation itself, given that there is the knowledge that there's likely to be one to take place at the onset. Managing all those expectations and details, and being able to do so in an unemotional way has traditionally been a real strength to those that you served.
Lisa Treu:
We love negotiating. It's one of the ... There are two passions that I personally have. That's marketing and negotiating, those are the two things if I could just do that all the time, which mostly I can, so I'm pretty fortunate, then it's a great day. I think that negotiations on ... There's really nobody in our company that doesn't love negotiations. I think that it doesn't have to be intense. It just ... Once again though, we are single agents, so we are going to look and see how we can position it so that everything really comes to our client's favor.
Brian Mudd:
Now we're up to the fifth step, the final step in the buying process. I like the way you put this, "Now the fun starts." The contract to close, details, tell us about this.
Lisa Treu:
Contract to close, people always say, "What is that?" That is once we have a contract signed and the seller's accepted your offer or you've accepted the buyer's offer, the contract to close is, in my opinion, one of the most challenging parts. I think it's the part that probably gets the least amount of attention, and yet it's probably the most important in the process.
This is where all the challenges come through, where there are financing issues. There are appraisal issues. There are inspection issues. Talk about emotions. This is the time where we get emotional. Not as buyers and sellers. This is the time when as a buyer or a seller, it's the third biggest stressor in life is buying or selling a home. This is the time where we start to have that breakdown.
Having somebody on your side, at Treu Group Real Estate, we have a dedicated person that's all he does, 40 to 50 plus hours a week is walk alongside our clients and make sure they're going to be okay, and make sure that all the details are being covered. When things come up, he's the one that says, "This is a little deal or a big deal." It is one of the reasons why past clients come back to us over and over and over because of that comfort that they've had with the contract to close part, but also the expertise.
Knowing once again, when something is like, "Oh, this is nothing." Then knowing when to say, "Okay, we have an issue. Here's how we deal with it." During contract to close, you have a whole group of people working together to make sure you get what you want, which is closed on time and with everything being as you expected.
Brian Mudd:
The Five Steps to Buying a Home, all available to you with the Treu Group. Again, they're a resource that's there for you seven days a week at 561-972-8326, 561-972-8326. If you're not already there, get started right now at TreuRealEstate911.com.