Mistakes to Avoid

🔴 Don’t start the home search before securing mortgage preapproval.

In the wild, most co-buyers violate this rule. It’s understandable because they don’t know better. Searching for homes before mortgage preapproval is a colossal waste of everyone’s time. You’re not ready. Taking it a step further, as co-buyers, you absolutely need to have built consensus around the key issues outlined in phase one of this course: planning & building consensus.

🔴 Don’t use a friend or relative as your RE agent unless they’re a co-buying expert.

It causes problems, and it doesn’t work well. Would you choose your buddy to perform heart surgery simply because you’re friends?

🔴 Don’t try to time the market.

Timing the market is when you decide to schedule when you will purchase a home based on predictions about home prices, interest rates, or other exogenous factors. It’s a bad strategy. The best analysts at hedge funds and global investment banks aren’t great at predicting market swings. A risk is that you get it wrong, markets move the other way, and you are eventually priced out of a purchase. We’ve seen it happen. The bottom line is that the best time to move forward is when you feel confident and ready as a group.

🔴 Don’t treat your RE agent like shit.

Some buyers approach the agent relationship the wrong way. They’ll lean heavily on their agent, be extremely demanding and still treat them poorly or discount their expertise. If you want a professional services person to be your representative and knock it out of the park, treat them accordingly.

🔴 Don’t rely on your agent for anything outside their remit.

We covered this regarding loan officers, and the same applies to real estate agents. A skilled real estate agent can outperform to guide the search, negotiations, and transaction. They aren’t experts in co-ownership, and you shouldn’t depend on them to help you solve challenges related to Title, structuring ownership, risks, or anything that happens after closing.

🔴 Don’t make assumptions.

Mistakes happen, people forget things, and emails get sent to the spam folder. If you don’t have evidence of communications or events, speak up and check on the status. Likewise, if there’s something you don’t understand or something seems “off,” take action. Errors are common. Common sense is a great risk detector, and there are no stupid questions. It’s your money, relationship(s), and home on the line, so don’t be shy about asking your pros what’s up.

Advice From The Field

To recap, here are tips to follow during the Search, Negotiate, and Transact phase.

✅ Be transparent and build trust

It goes without saying for you and your co-buyer(s). You also want to build trust with your agent since their job is to get you the best deal possible and to see it through. Remember the human element. This may be a financial transaction, but people are people.

✅ Be flexible

Nine in ten buyers have to compromise during their home search on price, location, size, state of repair, amenities, or another axis. Aim high, but be ready to calibrate your expectations as needed.

✅ Resist deal heat

Build structure into your strategy, establish your criteria and goals, and avoid the temptation to let emotion guide your decision-making. When you need to adjust your strategy or tactics, be intentional about it.

✅ Read your Purchase and Sale Agreement

Get a head start by reviewing the sample purchase and sale agreements in the resources. As you receive documents, specifically those that require your signatures, you must review them. Hold your co-buyer(s) accountable, and ask them to do the same. If you have questions, ask. This approach will help mitigate risks down the line. At a bare minimum, you’ll gain confidence and peace of mind knowing you’ve done the work.

✅ Anticipate competition

Reproduced from the last section because it’s damn important!

Throughout the process, your RE agent will represent you. You want your agent to be in a position to represent you well if and when you’re in competition for a home with other buyers. Fact is, attractive homes at good prices generate demand—so anticipate competition.

You’ll need your Loan Officer and your RE Agent to work together to sell the Listing Agent, who represents the home seller(s), on you as buyers and on your offer. What the Listing Agent wants to hear is, “These co-buyers are golden; they have financing, and if my seller accepts their offer, it will go through without a hitch. My seller will get paid, and so will I.”

The more orchestrated your side, the better. That means you want your Loan Officer + RE Agent team to be convincing, prepared, and to have clout in the (local) market. In a competitive scenario, these factors will determine your success.