Reader Question: Monty, I am pre-qualified by a lender for a mortgage loan for $200,000. I work in one of the country’s largest cities and commute to work. I have a good and secure job. I want to look at cost, safety, neighborhood amenities and convenience to public transportation, as they are different in every suburb. I would like a two-bedroom home, condo or co-operative. The city is very expensive to live downtown. I have approached several agents who all seemed very nice and offered to help, but now they will not return my phone calls. I cannot understand why. Can you help me? Heather S.
Monty’s Answer: Hello Heather, and thanks for your question. Your desire to investigate different locations and housing options is smart. The reason the agents are not returning your calls is they have concluded it is not in their best interest to do so. The structure of the industry creates an environment where the agent and the consumer are both determining if they should invest the time in developing a relationship. They should have explained this to you, and suggested how to fix it.
Today, residential real estate markets in most big city suburbs are quite robust. Buyers are abundant, and a $200,000 budget is at the entry level. Many real estate agents restrict their practices based on geographical limits, price points, housing type and more. When sharing your expectation of a multiple suburb search combined with your price range, they saw multiple agents being necessary and their chances of making a low level sale drop substantially. For example, if working in New York City, agents sometimes write 3 to 5 offers on different co-ops before the HOA will accept a prospective owner. Here is an article about what real estate agents are expected to do every day. It may be helpful to review this to add insight to your circumstances.
Employ tactics to benefit from the situation
Locate a new agent in each of the suburbs being considered. Call each of them directly. When calling, ask them if you can buy a two-bedroom property for $200,000 in their neighborhood. Set an appointment to view the agent’s opinion of the best example of what $200,000 can buy, with the required features and neighborhood amenities. During or after the showing, ask them to explain the benefits of living there as opposed to any other suburbs around the city. Why are others moving here?
Repeat this process in each suburb you are considering. Keep the property data sheets and take notes about the property. Here is an article about viewing a home that may be helpful. Agents will be happy to show property in their domain. An agent who will show all the suburbs may surface, as some big cities are easier to navigate. Those suburbs are usually connected with an efficient highway system. If an agent suggests they can handle all the suburbs, be very careful and ask for specific examples and references. In New York City, with its high density, diverse neighborhoods, rivers and sprawling geography, even finding a volunteer is unlikely. As the price point rises, more agents will appear.
In a city where 3 agents are required, if buyer agency is the common practice, be careful to have a cancellation provision in the agreement tied to performance in a particular suburb. Do this to avoid having a misunderstanding over how and when an agent is compensated.
Just a little more work on your part
After viewing properties in three or four suburbs, and a data sheet on each in your possession, you know the property taxes, HOA fees, room sizes, features and more. You will have a better sense of where you want to live and you can then focus your search to one or two markets. In corporate relocation situations, this process is called an “area tour”.
Another approach may be to start looking at open houses in the suburbs to be compared. An open house can be viewed without an appointment. There is no type of commitment to go inside and look around. Some agents may ask you to sign a guest register for security purposes, which is a legitimate request.
This may be the best way to navigate through the maze and get the information needed to make an intelligent decision. Having agents competing for your business in their community is a good place to be.