Realtors know everything about homebuying. So we've got 7 lessons you can only learn from a realtor.

Between the dream of home ownership and turning the key to your new home, a lot has to happen—and a lot can go wrong. After all, real estate transactions take place between two imperfect parties: human beings.

When I started out as a Realtor, I made mistakes just like anyone. I also witnessed clients make mistakes, some that cost them tens of thousands of dollars and many that killed the deals they were trying so hard to close.

Based on those experiences, here are seven lessons that I hope will make your next real estate transaction a little easier.

What’s Ahead:


1. Do your homework.

Buying a home is a lot like writing a school paper…it takes some research, and it’s best not to procrastinate.

I once had a buyer make an offer on a property with the intention of building a guest house in the backyard. Although I offered him information about certain building restrictions in that county, a friend of the buyer had told her guest houses are allowed in the area and she continued with the transaction.

After I checked the zoning codes myself, I again warned her that what she wanted to do wasn’t allowed. About a week after she paid for and attended the home inspection, she decided if the guest house might not be allowed her would rather not buy the house. I was not disappointed that she cancelled the escrow, but more disappointed that she wasted $400 on a home inspection and didn’t heed my warnings about checking into the zoning earlier on. The lesson: Always work with your agent to research potential restrictions on the property you want to buy as early as possible—before putting an offer down or, at least, before sinking money into inspections.

Another note about additions, guest houses, etc.—if they were built without a permit, they can get in the way of getting certain types of financing like VA or FHA loans. It’s easy to ask a seller what was done with and without permits, but the best way to confirm is by going to the county building department.

2. A note about condos.

Condo buyers beware—there are more hoops to jump through to get a mortgage on a condo compared to a single family home. This common hang-up wasn’t an issue years ago, but today, underwriting guidelines are stricter than ever.

In my hometown of San Diego, most lenders won’t allow a buyer to purchase a condo unit with an FHA or VA loan if the complex is less than 51% owner occupied. This means if you want to buy a condo but you can’t put 20% down, it’s going to take a lot of extra time to find a condo that meets this restrictions.

Before I knew this, if a buyer liked a condo and was qualified for a loan, I’d go ahead and put in the offer for them. Then, my buyers and I found out after an offer was accepted that the loan wouldn’t be able to fund for a condo in the complex because of the owner occupancy rate. No one lost any money, but we did waste time. Now, when I have a VA or FHA buyer who wants a condo, I call up every HOA and/or management company to find out the owner occupancy rate before we even head out to see them. Again, the more research you do ahead of time, the less likely you’ll face a costly surprise later.

3. Patience is a virtue.

Do not be rushed into buying a home. Yes, you may want to lock in the best interest rate possible, but what’s a great interest rate going to matter if you’re unsatisfied with the home.

I worked with a couple that wanted to write up an offer on pretty much every house we saw, but after we saw the next house they’d say, “well, this one is better than the last, I guess we don’t really like that one that much.” Here’s where I could have done a better job of preparing the buyers that there are tons of houses on the market and, depending on what you can afford, you may be able to be picky! Don’t ever rush into buying a home because you think there’s nothing better, unless perhaps you’ve already seen 100+ houses with your agent. (In which case, you should probably also treat your agent to a free lunch if you want her to keep working with you!)

4. Make your list, check it twice.

In my first few months as a Realtor, I assumed that buyers knew exactly what they were looking for and would tell me what they liked and didn’t like about houses. Then something funny happened. I saw buyers who liked granite countertops in one house and hated them in another, who wanted a big backyard one day and a small backyard so that they’d have less maintenance the next. It’s fair to say that people’s wants change, this much is understandable. For that reason, I now recommend that before seeing houses, buyers create a list of things they need in a house versus things they want, and, finally if there are any things they absolutely do not want.

When touring homes, you can then weigh what’s most important to you. Because there is no such thing as a perfect house, distinguishing between needs and wants makes it easier to accept small compromises when getting the big things that will make you happy.

5. Whatever you do, DO NOT do this!

In the past, I assumed that each buyer’s lender would discuss the importance of keeping your credit score high when buying a home, especially during the escrow period. Now, I make no assumptions. It really is worth putting this in all caps: DO NOT BUY A NEW CAR OR MAKE ANY MAJOR FINANCIAL CHANGES DURING ESCROW!

Sure, there are exceptions to the rules. If you’re not going to need a loan for the house then it isn’t a big deal to buy a car simultaneously. If your credit is already very high, there’s a chance that the ding on your credit from financing a car or taking on a new credit card won’t affect your ability to qualify for the loan, but do you want to take that risk? What if one more ding on your credit means you won’t qualify to buy at all? Or what if it means you’ll qualify for a loan, but at a higher interest rate? This stuff happens all the time. You have been warned.


6. Honesty is the best policy.

When you sell a house, you’ll have to fill out a bunch of disclosure forms where you state what material facts you know about the property. For example, “Is the property located in a flood zone?”, “Do you know of any alterations that have been done to the property in the past 5 years?” and “Are any of the appliances not in working condition?”.

Because your real estate agent has not lived in your house, she typically won’t know the answers. That’s why when she provides the disclosure forms, it’s your job to fill them out…truthfully. If you don’t, and for some reason the buyer or buyer’s agent finds out, you can get in huge trouble! The punishment will be up to the courts, but let’s just say trying to pull the wool over a buyer’s eyes is not worth this risk.

7. Use your agent.

If you’re under contract to sell your house, you don’t want to make alterations on the property that could affect the value. But did you know, in certain cases, even simply moving out could throw a wrench in the closing process? Well, if you’re selling your house in a short sale and trying to get it approved under the HAFA (Home Affordable Foreclosure Alternatives) plan, which allows you $3,000 in moving expenses at close of escrow, you do NOT want to move out halfway through the process. One requirement of HAFA is that the home needs to be owner-occupied, unless the borrower can prove that he was required to move at least 100 miles away for work. If you just move out while negotiations are being done because you feel like renting a bigger place, you might be losing $3,000.

This is an extreme example, but the point is when you’re selling your house, don’t just assume anything…check with your agent!

What about you? Have you made any mistakes buying or selling a home that cost you time, money—or at least your pride? Share your story in a comment.


Related Tools

About the author

Total Articles: 37
Sarah Davis is a real estate broker in San Diego, Calif. She enjoys helping both buyers and sellers and was voted one of the top 10 best real estate agents in San Diego in 2013 by Union Tribune readers. In her spare time she talks about real estate on a local radio show and manages her website

Article comments

We invite readers to respond with questions or comments. Comments may be held for moderation and will be published according to our comment policy. Comments are the opinions of their authors; they do not represent the views or opinions of Money Under 30. Comments have not been reviewed or approved by any advertiser, nor are they reviewed, approved, or endorsed by our partners. It is not our partner’s responsibility to ensure all posts or questions are answered.
xtine says:

I know this is off-topic but here are a couple of things to keep in mind when you are working with a realtor:

-They work for *you*. If you are not happy with your realtor, move on and find another one. My fiancé and I had a realtor who was very judgmental about some of the homes we wanted to see. She also did not respect our wish to NOT see condos. We fired her quickly.
-NEVER share a car with your realtor. It may seem like an inconvenience (and Earth-unfriendly) but that way, when you are ready to stop shopping, you can stop immediately. That way realtors don’t try to take you to see “just one more home.”

Back to the article, I really think it’s important for buyer(s) to find out what their priorities are when buying a home. My fiancé and I wanted to continue living in an urban environment, despite having to move to a less urban city. We could have bought a larger house in a more car-dependent neighborhood. Rather, we felt it was worth trading some space to have access to a *safe* neighborhood filled with bars, restaurants, and reliable public transit to work.

One other thing it keep in mind: Realtors are not known for being the smartest bunch on the block.
Get second opinions to look out for yourself!

Dave says:

Based on my experience, I don’t trust real estate agents at all. Despite what some may tell you, they are NOT looking out for your best interests, they are looking out for THEIRS. I wish I knew that the first time I bought a place. While I did do my homework, I placed my trust and faith in her, and believed all the BS hype about “your best protection is a qualified Realtor.”

I have worked with 4 different agents over the years, and not one of them truly had the best interests of their clients in mind. If they did, half the houses would go unsold, and nobody would buy in a sellers market and vice versa. It’s all bullshit folks, designed to enrich everyone BUT you.

I’m currently house hunting and doing research is key. And looking at lots of different houses and styles has been really helpful in helping me figure out what I want in MY dream home.

LarryPeters says:

The Banks use a different company to run your FICO. Sounds like a Jedi Mind-Trick, but You can run your Fico fight after you get the bad news that it is down. and itwll bewhat ithas been during the re-fi process. Then you are informed that there aresome small changes in what you are agreeing to.
What to do. Get FICO up as far a possible because you’ll lose 5% at least.

Sarah Davis says:

“When it comes to selling someone else’s house, they’ll try to push the sale as fast as possible because keeping the house on the market longer for a higher price may not be a large enough financial incentive.”

While this is true for some agents, it’s definitely not true for all agents. Real estate agents are like people in any field – some are great, some aren’t so great. But the more knowledge you have about what should be taking place, the better prepared you are to get a good one and/or fire a bad one, if necessary.

Colin says:

While I can’t paint every RE agent with that brush, people will respond to incentives.

Is there a place where sellers can look to determine an agent’s rating based on prior sellers? If so, maybe you can include it in your article.

If said site exists, is it rating the agent based on their enthusiasm & personality or the agent’s ability to sell a person’s house at the maximum price? The seller probably will never know if a higher price can be had by waiting longer, but the proof is in the data (as mined by the researchers in the book) that real estate agents selling their own homes kept them on the market longer & sold them at a higher price…it’s the information advantage that they have over the sellers.

All I’m really saying is that don’t trust the agent so much when they say you should take an offer right away…seems kind of obvious but a person with a charming and warm personality may seem truthful and people put their trust that the agent is telling the truth when a 10-20 more days on the market may yield a more favorable sale for the seller.

Course in this market, it may be a different story where buyer’s have the power & a much larger inventory to select from.

Colin says:

For sellers: Do watch or read “Freakonomics” and realize that your agent may not always be looking out for your best interest. In the book, they detail that agents selling their own homes keep them on the market longer and sell them for more. When it comes to selling someone else’s house, they’ll try to push the sale as fast as possible because keeping the house on the market longer for a higher price may not be a large enough financial incentive.

Real estate agent’s commission is often split between their employer and the buyer’s agent, so theoretically, an extra $10,000 the house may be sold for kept on the market a week or so longer would only result in them getting an extra $150 in commission..hardly worth the opportunity cost of moving onto the next house to sell).