House after snow storm

Successful real estate agents are the ones who always give advice based on their client's best interest over their own financial interests.

However, this success depends upon your agent's taking the long view of his or her business rather than in trying to make the biggest dollar on each project.

You may not know the difference between these two approaches as a client, because often you only meet an agent when the action is about to happen: you're about to buy or sell a home. In many cases, the interests of all parties are aligned, and there's no problem.

But what happens if you make a bad decision? Will your realtor stop you if it's not in his interest to do so?

If he's taking the long view and he wants what's best for you, he will tell you these things. He knows that keeping your good opinion after the deal is done is worth more than what he makes on your transaction.

Here are five things your realtor may not tell you if she's just in it for the money:

#1: Staying Put Is Often The Best Option

A good realtor will ask you why you are moving. Often, moving isn't the best option.

For one thing, it's expensive. There are transaction fees, the cost of moving itself, new furniture and all that goes along with maintaining a new house. It's a better strategy to move as few times as possible in your life.

For the first few years of a new mortgage, you are paying off interest, primarily. The longer you hold a mortgage, the more of your principle you pay. Not only does staying put save you money in the short-term, but it also saves you money in the long-term.

#2: A Bigger House Almost Always Creates More Problems

A family looking to upgrade to a bigger, more expensive home does look like a good client to most realtors. There are plenty of legitimate reasons to upgrade.

However, your realtor should tell you to find the most modest house that will fit your needs and advise you to try to adjust your expectations accordingly rather than to buy the most house your budget will allow.

Homeowners find out the hard way after they buy that big, expensive house: the more money you spend on a big house, the more you will continue to spend on upkeep.

It's especially unwise to spend money on space you won't use. If your realtor has your best interest in mind, he or she won't steer you toward more home than you can use.

#3: A Great Deal and a Great House Are Mutually Exclusive

The truth is, the better a house is the less room you have to negotiate. And if you are considering whether to buy a house based on getting a good deal, you may be stuck with something much harder to sell in the long-run.

Your realtor should not play up his or her ability to negotiate to your disadvantage. He or she should be honest and tell you that if you want that great house, you probably won't get a good deal.

He or she will also tell you that what you paid for a house is public record. If you got a good deal, your prospective buyer down the road would also expect to receive that same "good deal.” It doesn't matter why you got it, whether your seller was motivated, or your realtor was skilled.

#4: Buying a House Won't Fix Your Life

Of course, it isn't the job of your real estate agent to get into your personal business or to be your counselor. But he or she should be advising you that when you purchase a new house, it's a long-term investment.

All real estate appreciates in value given enough time. Your chances of getting caught trying to sell in a down market increase significantly the fewer years you own the house.

If you aren't thinking long-term - in other words, if you're making a big decision about a new home thinking it's going to solve all your problems. Your agent should be the person letting you know the risks.

#5: Buying a House Isn't an Investment

Clients want to know whether the particular home they are considering is a good investment. Your agent should be able to tell you how well it will sell when it comes time to sell it, but it's best not to think of a new home as an investment at all.

Investments generate cash flow, whereas a house will be a constant source of expense for as long as you own it. The larger or more desirable your home is, the more of an expense it will be. It doesn't mean your house isn't the right purchase for your family; it just means you shouldn't consider it an investment.

Bringing it Home

There are many unpopular truths about real estate. A trustworthy agent will be able to be transparent about all of them, and about any potential conflicts, he or she has between your needs and financial gain. This is what makes for a long-lasting business.

If your agent won't tell you these things, it's time to think about finding someone who will. As always, we are honored to help you with any part of the process. Please don't hesitate to call us if you have any questions and we can serve your needs in Southeast Michigan!

248-348-7200