With the Income You Need to Buy a Median-Priced Home rising, you may need to Learn About Adjustable Rate Mortgages to preserve affordability.

With the Income You Need to Buy a Median-Priced Home rising, you may need to Learn About Adjustable Rate Mortgages to preserve affordability.

3 Things Homebuyers Should Never Say to Real Estate Agents

mouth-closedWhen shopping for a home, it's important to have a good rapport with your real estate agent. Being honest and open with your agent can help that professional find you the best home that fits your needs and budget. Yet many experts agree: There are some things homebuyers should never say to or discuss with their real estate agent.

This can include personally sensitive details. It can also include financial information that can take your leverage away as a buyer. Most real estate agents can and should be trusted. But truth is, some agents may take advantage of sensitive info you reveal to cinch a higher commission or faster sale.

That's why it's smart to think carefully about everything you plan to discuss with your real estate agent. Read on for tips for homebuyers about what you should and should not be disclosed to an agent when shopping.

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The right kind of communication

First, it's essential to understand that a real estate agent is in your corner.

"It's very important for buyers to have good communication with their agent," says Jennifer Okhovat, Realtor with Compass in Los Angeles. "A buyer's agent is there to represent you and assist in pursuing properties that you would like to purchase."

Think of it like a lawyer who is fighting on your side, she says.

"Good communication will result in a buyer's agent being better able to help you find properties that fit your needs. It will also save you time and money. Your agent can ask sellers or listing agents about specific characteristics of a property, for example. And they can sometimes uncover facts that may not be so obvious."

Tamara Heidel, a Las Vegas real estate broker, agrees.

"Buyers need to communicate clearly with their agent about their needs and wants in a home. Constant communication is key in finding the right home," says Heidel. "Remember -- agents are bound by a code of ethics to protect and promote their clients' best interests. So ideally, you should have no fears communicating with your agent about budget, life issues, or wish lists."

Related: What Is a Mortgage Preapproval Letter?

Topic #1 to avoid: Your ceiling

Still, some suggest caution. They say you need to be careful when it comes to certain topics and things homebuyers should never say to an agent. One of those topics is how much you are willing to pay for a certain property. Because if you go too high, agents won't stop you. And if you're way low, the agent and the seller may not take you seriously.

"Say a home costs $300,000. You boldly announce to your agent that you're willing to pay $330,000 for that home because you love it so much. Well, you may end up paying that stipulated amount or even higher," notes Amy Freedman, real estate broker/agent with Cleveland-based UpFlip.

Indeed, revealing your max budget may backfire on you.

"An agent could start showing you homes that are way out of your range. Or your agent may pressure you to make offers when you are not ready," says Benjamin Ross, Realtor with Mission Real Estate Group in San Antonio, Texas. "If this happens, fire your agent. They are not looking out for your best interests."

Nevertheless, you should get preapproved for your mortgage to know what you can spend. Your lender can prepare preapproval letters in several amounts so that sellers and agents don't know what your max budget is. This way, you can give the seller a preapproval letter that matches your offer.

Related: 5 Signs of a Bad Real Estate Agent

Topic #2 to avoid: personally sensitive information

Being able to speak freely and openly with your agent is preferred. But that doesn't mean you should show all your cards or divulge details agents don't need to know. Ross says there are three things you never need to disclose with your real estate agent:

  1. Your income. "Agents only need to know how much you are qualified to borrow. Beyond that, it's none of their business," Ross says.
  2. How much you have in the bank. "This is for your lender to know, not your real estate agent," he adds.
  3. Your personal and professional relationships. "This is also none of their business."

Freedman adds to that list your credit score and financial statements.

"While most agents won't care about your financial state, some may use it against you. So simply keeping your mouth shut about these details is the best move," advises Freedman.

Related: Credit Score Calculator

Topic #3 to avoid: pressure situations

Discussing scenarios like a forthcoming divorce or impending deadline to buy is also not recommended unless absolutely necessary. That's because an agent may use this time crunch against you. He or she could pressure you to accept a seller's price or contingencies sooner and without compromises. An irresponsible agent may also share this information with the listing or seller's agent, taking away any leverage you have.

"You don't really need to disclose anything like this that you are not comfortable with," says Ross.

"But remember," Ross adds, "if you are making offers and are seriously intending to purchase, it's crucial to work with an agent you trust."

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