Oct 29, 2024
Although the U.S. housing market isn't quite as red-hot as it was in 2021 — when mortgage rates fell to record lows — home prices always have a few irons in the fire.
The median existing U.S. home sale price this past August was $416,700, marking a 3.1% increase from a year prior, according to the National Association of REALTORS (NAR).
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It’s not the worst market to buy a home in, however. Mortgage rates are gradually dipping, and they’re likely to retreat further in the coming months as the Federal Reserve makes additional interest rate cuts.
Additionally, housing inventory is finally improving. In August, there was a 4.2-month supply of available homes on the market, up 22.7% from a year prior, per the NAR.
If you’re in the market for a new home, you should know that teaming up with the right real estate agent could make the process much smoother. But it’s important to temper your relationship with them accordingly, and that means knowing what information to keep quiet.
Here are three things you should never say to a real estate agent when you’re buying a home — and what to do instead.
1. What your paycheck and savings look like
Do you know the unwritten rule about asking someone about how much they make? Well, with real estate agents, all you need to disclose is the budget you’re working with. If you don’t share that, they won’t be able to help you find a home within your price range.
While it's important to tell your agent your budget, you don't need to disclose your income or savings. It’s simply better to keep those details to yourself. Real estate agents make money by selling homes or helping buyers purchase homes. So, the higher the price of your home, the larger the commission your agent gets.
As a general rule, it's more efficient to keep your monthly housing expenses to 30% of your income or less. That should ideally include your property taxes, homeowners insurance and other recurring expenses.
You may decide to keep your housing costs to an even smaller percentage of your income. You may want to set a maximum budget of $300,000 when you can easily afford $600,000 based on your income and savings. If your real estate agent is aware of those numbers, they might push you to buy a more expensive home or only show you homes on the higher end of your budget.
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The only involved party that needs to know what your savings look like is your mortgage lender. They'll require that information to approve you for a loan.
At the same time, make sure the budget you’re sharing with your real estate agent is realistic. If you can only afford a $250,000 home, stay within that limit. Not only is that going to waste your real estate agent’s time, but it’s going to waste your time if you keep seeing homes outside of your budget.
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2. You're also looking for homes on your own
Working with a real estate agent is a great way to identify suitable homes within your price range. But you don’t have to sit back and wait for your agent to come up with listings. There’s nothing wrong with searching for homes in your area or exploring open houses.
Still, you may want to remain mum on the amount of legwork you’re doing on your own. Your real estate agent won't get paid unless they show you a house that you end up buying. So if you tell them that you're also looking on your own, they may be less inclined to find you an ideal property.
If you feel your real estate agent isn’t showing you properties that meet your criteria, say so. But be polite and open about it. It just may be that your agent has limited inventory work within your area. But it may also be that your real estate agent is trying to keep things light and easy. If that’s the opposite of what you want, loop them in so they know how to best serve your needs.
3. You're in love with a home you've just seen
The sooner your agent finds you a home to make an offer on, the sooner your agent can collect their commission and move on to new clients. So if you see a home you like, you may want to contain your excitement.
If your real estate agent knows you're in love with a given home, they may pressure you into buying it. Additionally, if they have a relationship with the seller’s agent, they may loop them in on your interest and encourage the seller not to decrease the asking price.
If you find the home of your heart’s desire, play it cool. Tell your agent you’re interested in making an offer, present a number you’re comfortable with and see what happens. You may find that negotiations work out better in your favor.
That said, this assumes you’re not looking at a multiple-offer situation. If there’s a home you fall in love with that’s priced right and has multiple offers — and it’s a home worth fighting for — then you’ll need to be honest with your agent so they can do their best to win the bid.
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Maurie Backman has been writing professionally for well over a decade. Since becoming a full-time writer, she's produced thousands of articles on topics ranging from Social Security to investing to real estate.
