When my husband and I readied to buy our first home, we were excited and naive about the process. What was supposed to be an exciting experience that would end with us living in our dream home, turned into a hellish nightmare with pitfalls that could have been avoided.
Naïveté led us to trust a friend to be our realtor. That was our first mistake. Not only was he our friend, but he was also very new to the business. Nonetheless, we thought we could kill two birds with one stone: buy our home, and help a friend earn a hefty commission.
Our house hunt was in 2000, when the housing market was booming. It was a seller’s market, so lollygagging around as a buyer was a sure fire way to lose out on a house.
Our realtor wasted a lot of time because he was still learning. Even the basics escaped him. The document wasn’t properly formatted; the printer wouldn’t print; the fax wouldn’t fax; and the list went on. By the time he got an offer to the other realtor, the house would already be under contract.
Finally we came across a house I deemed perfect and our realtor managed to get the offer to the other realtor before the house went under contract with someone else.
We reached a deal with the seller and signed the contract only to receive a call from the seller’s realtor saying her client wanted to sell the house to someone else. I laughed, thinking how ridiculous. “That’s funny,” I told my husband, who responded by saying, “I know…we have a signed contract.”
The joke was on us. We learned that the seller was trying to weasel out of the contract because they’d been offered that was just $2,000 more than our offer. It was a $190,000 house and these people were trying to back out of the contract and risk being sued to have the issue settled! Fuming, I said, “Bring it!” My husband’s rational said, “This is not worth it.”
So we let it drop, and set out to look for another house. During that process, our realtor had stepped up his pace, and things seemed to be moving along well.
Or so we thought. Over dinner with the realtor and his wife, he announced proudly, “We’re buying a house too; it’s one of the ones I showed you guys. We’ve already put in the contract.”
He was grinning from ear to ear and it was all I could do to keep from reaching across the table and slapping him silly. We are no longer friends.
We learned our lesson, and here are some tips:
– Avoid working with friends. This is a business transaction, not a way to help your friends and family line their coffers.
– Check your realtor’s experience; you want a realtor who’s closed several transactions. Also request to contact their previous clients.
– If you find a home you like, immediately make contact with the realtor to let them know you are interested in buying it.
– Consult with a real estate attorney.
– Secure financing before you begin your house hunt. Don’t just pre-qualify or be pre-approved.
– Research the home buying process through reputable organizations such as the Federal Housing Authority and Freddie Mac.