Buying a House? Don't Let Realtors Pressure You

The lower Alabama real estate market continues to boom. That 46 houses sold in 72 hours seems to be a bit unbelievable for a metropolitan area of only 90,000 people. But it did happen - just not like you may be thinking.

After doing a quick run through the county records for August of 2007, 109 homes were sold in Houston County. This has been about the average for the last 14 months. So after a little digging, 72 of these houses were found to have been sold by real estate companies and the other 37 were for sale by owner, foreclosure sales or government auctions. With the help of a local Realtor, the 33 agents who sold these 72 homes were identified and a survey was developed. A survey for the new homeowner was also developed.

The survey was designed to find out how much actual time was spent on the sale of these homes. There have been 15 responses to the Realtor survey at this time and 26 responses to the homeowner survey.

The homeowners spent an average of:

30 minutes searching on the Internet.

1.5 hours spent searching in the classifieds (most reported looking everyday for a month).

20 minutes interviewing Realtors (most used the first one they spoke too).

35 minutes actually viewing properties (Driving time was not added to this number. The average number of homes shown was 3).

(Average number of homes shown was 3)

1 hour speaking to loan officer and gathering documents.

1 hour at the closing table.

The realtors spent:

25 minutes per client searching Multiple Listing Services.

15 minutes speaking to other Realtors about other listings.

10 minutes before agreeing to work with client.

(On average each realtor who responded spoke to 12 prospective clients.)

25 minutes interviewing client after the initial meeting to determine property preferences.

1 hour showing homes (each Realtor who responded included their travel time to each property).

35 minutes writing and faxing offers and counter offers for each deal.

20 minutes speaking with the loan officer.

45 minutes at the closing table.

This survey was not a scientific sampling of what goes on in the real estate and mortgage industry. But it is a short study in what is actually happening on the street. The total time spent in actually looking at homes tells me that most homeowners may have felt pressure to buy the first or second home they saw. Especially since the actual interview time with the Realtors was so short. It seems that the Realtors who responded were able to get good feel for their clients very quickly and then were able to match those clients to homes that were already listed. The one glaring thing that pops out was the last question I asked of the Realtors. "Did any of the clients you sold to this month buy a house listed by an agent other than yourself?" The answer to that question was 100% no. Every house sold by a responding agent had been listed by that agent.

After reviewing the results of this informal survey, prospective homeowners should spend more time looking at houses and probably a little more time interviewing agents and discussing their needs. None of the homeowners were displeased with their purchase but 6 of them did say they had found other homes they liked as well or better within 2 weeks of signing a contract on the home they purchased. The other item that stands out is the lack of time spent discussing the financial ramifications of a home purchase with a professional loan officer. It would seem that the largest purchase most people will ever make is being made in less time than it takes to watch a movie. Scary isn't it?