Hi MSM Readers! I’m Lily, I’m a millennial money blogger at The Frugal Gene. It is a spectacular treat that the kind Mr. MSM has allowed me, a wee one, to guest post! Wee! O.K., so I was born in a seaside village in Southern China. My parents never finished high school and they did everything they could to immigrate to America so I get a better chance at life. Me & my husband are the ultimate millennial super savers. We scrimp, save, and work our bums off to save over $100,000/year in the grandest pursuit of financial freedom. Hubby & I live our lives car-free and debt free. We moonlight as your coffee pouring hosts on AirBnB. It’s a total dance party @ thefrugalgene.com
TV vs Reality
I love binge watching HGTV home shopping. But when it comes to a home purchase of my very own – it only concurs up bad memories of walking on hot pavement, rushing from property to property, and waiting on the gut wrenching offer review period. If you are in a competitive seller’s market like we are in Seattle, consider yourself lucky if you get only a month of sleeping on pins and needles.
The partial checklist for the mental anguish goes:
“will they respond to us or let our offer expire?”
“what if the appraisal goes for much lower?”
“what if the inspection fails to find something?”
You know on TV the couples sometimes bicker about what they differ on in terms of houses? It’s always something like location, price, size what have you but no one fights about how you should choose a real estate agent. A proper real estate agent can make or break your entire home shopping experience. The median purchase price for a house in our neck of the woods just hit $700,000. Trust me, home buying is not something you (and/or your spouse) would want to go through alone. But that is exactly what we did.
A house is undoubtedly the most expensive purchase most American will make in their lifetime and me and my husband had the ‘good’ fortune of doing it twice! We bought two houses within a year of each other. Our first home is a modern 3 story townhouse in a sleepy suburban neighborhood. Our second property is a rental property. It is a small unassuming cottage near a gigantic pristine lake in one of Seattle’s most beloved neighborhoods.
On our first home purchase we went with a traditional full-stop real estate agent from a well known and well respected local firm. Let’s call her Ms. Traditional! Ms. Traditional was a no-nonsense realtor. She knew we were in a rush to buy since our apartment lease downtown was ending in 2 months. Ms. Traditional knew I detested looking at houses and being disappointed when none of the overly-shopped photos accurately depicted the size or maintenance of the actual properties. She zeroed in on our taste and we toured her recommendations.
Now Ms. Traditional Agent was far from the perfect real estate agent. Perhaps it’s her Nordic mannerisms that rubs off in her communications but whoa, she was so cold and so collected. It might just be because she’s just a Seattleite, born and raised. She rushed us through many of the houses and we felt like an inconvenience standing next to her. But to her credit, she knew what properties we liked and what we didn’t liked within minutes. Ms. Traditional had either a lot of experience or we’re stock characters that she has pin pointed down to a science but the important thing was…she knew.
Ms. Traditional conjured up a full list of houses for us to scope. Running around town was normal to her but exhausting for me and my husband who were regular 9 to 5 desk rabbits. We found and settled on our first ever house in 3 days. Yup, 3 days! I, honest to God, told Ms. Traditional – “this is good enough, I’ll take it. Please don’t make me look at anymore.”
The negotiation process was uneventful. How can high stake negotiations be uneventful?
Easy. Traditional agents earned a percentage of the total commission so Ms. Traditional didn’t exactly have incentive to fight tooth and nail for us. The seller’s agent also shared the same firm as Ms. Traditional. The seller’s agent and Ms. Traditional were actually friends and have worked together before! Hmmm… This was something that annoyed me. We didn’t feel like we got the best price but we were only off by $2,000 and the sellers covered at least $3,000 in repairs for us after the inspection. They even included a welcome home basket for us when we first moved in. And yes, we were under a 2 month time crunch so it was probably good that no one rocked the boat :-)!
Our second purchase was through Redfin, the well known nontraditional online realtor. I love the Redfin mobile app. We have tried apps like Zillow (inaccurate since they’re not an actual MLS), Trulia (owned by Zillow), and Realtor (decent). Redfin has a home estimator that it is dead-on. Since we were consistently using it as a home shopping tool and more than impressed by the accuracy, we thought we would give a real Redfin agent a try with our second property. Plus, that Redfin commission rebate sounded sweet! After our first property, we assumed we had garner enough experience and knowledge to know what we were doing. We could forgo a full-stop agent for some extra green in our pocket, right?
This is where our troubles began…
On the Redfin website, after you have chosen a Redfin agent you would like to work with, it’s only natural to assume you would be working the most with that person right? Nope.
We saw our actual agent, let’s call her Ms. Redfin, a total of 3 times in a span of an entire month. She was never, ever available on any of the weekends and her 3-day weekends “trips” were frequent. We were bounced back and forth by her support team.
There is no consistent right of contact. Every time you want to see a property, it’s automated to a touring agent whom you most likely have never met and knows nothing about you. Bad idea.
We found one awesome Redfin touring agent who was upfront with us and showed up how much he care by staying late and talking to us about the property. I was charmed! I wanted to tour with him and only him! My husband and I kept contacting Redfin to set us up again with that specific touring agent but he was never, ever available. We never saw him again! 🙁
On all the other home tours, we were stuck with touring agents who were simply there to unlock the door. They didn’t give us any insight beyond the superficial. None of the touring agents were experts in any of the neighborhoods we saw.
Usually a traditional agent picks you up and go from house to house but at Redfin there is no buddy-ing up. You need to drive separately to the same destination over and over, which is super impersonal. This is a cost cutting measure, I suppose, due to the liability associated with carrying passengers.
Ms. Redfin was not really involved until we already submitted an offer. If you request your Redfin agent to do anything more and it’s the busy season – forget about it. There is no supervision. You’re on your own.
She rushed on the paperwork. We had to contact her constantly. I’m counting 8-9 times there were big obvious mistake like date, our names, price, date to respond etc. These are super important things on a super important document! How can you screw up that many times and still call yourself an agent? What is Redfin’s hiring process?!
We caught all but one mistake the final time. She forgot to change the old date to the new date so when our mortgage lender saw the old date, he thought we were in a rush to close. Our lender charged us a $250 fee for rushed service that we didn’t need. Thanks a lot Ms. Redfin.
I wish Redfin was upfront about services they do provide and don’t provide. I recall one day I asked Ms. Redfin, “Okay, so what service do you guys have and what are we supposed to do? What is a reasonable thing to request of Redfin compare to a traditional agent?”
She didn’t even know.
Redfin agents who not work off a percentage of the home sale. I thought this concept was brilliant! My incentive was for there to be no incentive in real estate negotiations! Except…it was like Ms. Redfin was afraid of giving me an actual recommendation. She kept saying “what do you think?” and “it’s up to you.” So at that point I’m thinking…well what am I hiring her for? How about giving me some more recent neighborhood comps? How about scoping the sellers and seller’s agent on the situation? Does Redfin offer that or is that part of the cost cutting?
First time home buyers will probably lose more money with Redfin.
This is a HUGE purchase and negotiations are critical. Fortunately for me, I did my own research and I was also able to feel confidence in driving the price down after stalking researching the sellers in depth. They were over leveraged and I wanted to play hard ball. I talked the price down quite a bit and the seller’s agent was very curt with us afterwards.
Had I mellowed out like Ms. Redfin, we would have had to pay almost $5,000 dollars more on the house. Our Redfin rebate was only $3,500 dollars. That could have been a $1,500 mistake going with Ms. Redfin!
Our seller’s agent was spectacularly difficult. He was so passive aggressive and I learned after we closed that his industry reputation was not an earnest one. Professional integrity anyone? A traditional agent with detailed neighborhood knowledge would have known our seller agent’s reputation. A traditional agent with neighborhood experience may have advised us to be more careful around a ‘snake oil salesman’ disguised as a realtor.
Neighborhood familiarity is important and even if Redfin claims their agent specialize in that neighborhood – it doesn’t matter! Your agent won’t be there with you or even tour with you. Their support team does the paperwork and you are on your own for the rest of it.
I find most Washington home inspectors are generally inexperienced. In the state of Washington for you to become an inspector all you need is a contracting background and a 8 hour training course.
Yup, 8 hours to review everything you need to know about a house. I don’t think so bub. Our Redfin home inspector was nice but he missed some big things. Just like our Redfin agent, he was superficial and impersonal. He didn’t tell us that our sink plumbing was illegal installed! He noted that the roof gasket was gnawed by a rodent but not the fact that the entire gasket was incorrectly installed!
If you want to be smart about your inspection: hire a general inspector, a structural engineer, a licensed electrician, a licensed plumber and (depending on your area) pest control specialists too. These degrees of specialization will cover the most expensive oopsie-daisies 🙂
Phew. I honestly thought I would hate writing this up but that was actually therapeutic. Gee…how I wanted my first guest post on Mustard Seed Money to be a positive piece, aw well 😉