Posted by: apriljobeasley | September 17, 2008

Buyer’s FAQs

Buyer’s Frequently Asked Questions

 

Why is it important for me to use a REALTORâ? 

Finding a good Realtorâ is the most important step in the process.  A good agent will save you time and money.  We have the right tools and knowledge to find a home for you.  For example, as a member of the public you are able to search the internet websites and only put in certain criteria; the number of rooms, bathrooms, price, etc.  This criterion is very general.  As agent I am able to search detail specific criteria.  Let’s consider for a moment you need a fenced in backyard, pool, and pantry.  Through my MLS search I am able to search for all of those things element properties very easily that do not meet your needs thus saving you time.  A Realtorâ can also save you money.  We are skilled negotiators working to get you the best sales price.  Not only that we have connections with trusted licensed professionals such as Home Inspectors, Termite Inspectors, and Appraisers etc.  As an agent with Coldwell Banker Towne Realty I have had monthly mortgage training.  I am not a licensed mortgage lender however one comes into the office and explains new and existing financing office. Due to this training I know certain financing options/programs that might help you save money.  I work hand in hand with the loan officer to help you get the best price and financing options available to you.

 

Do I pay for my use of REALTOR Services?

In most situations the seller pays the real estate agents commission (fees), thus freeing you of the obligation.  In some situations however people are not willing to pay agents commission.  Sometimes For Sale By Owners (FSBO’s) are not will to pay Realtor fees.  If they are not I will do my best to negotiate for my pay.  If they are not willing to pay a full commission and you still want that particular home then at that time you will be responsible for the commission.

 

What is agency?

There are a few types of agency a buyer deals with.  The first is a Transaction Broker.  This agent simply shows properties, answers basic questions, and handles paperwork.  They cannot make representations or recommendations for you.  The second type is a dual agent.  A dual agent works with the seller and the buyer.  They must keep all information confidential and stay neutral throughout the process.  Once again they cannot make recommendations or representations.  The third type of agent is a Buyer Broker.  This person represents you and can make recommendations.  They have a fiduciary (trustee) relationship with you meaning they are Obedient, Loyal, Disclose everything to you, keep Confidentiality, Accountable to you, and show Reasonable care.  Depending on your particular goals your agent will help decide which type of agency you require.

 

When do I obtain financing?

After you have found a Realtor you will need a loan officer.  This is a crucial step in the home buying process.  A loan officer will approve you for a loan.  This will allow you to know how much you may borrow and spend on a property.  If you are only approved for $100,000 then we know not to look at properties over that amount.  In the long run this will save you money and heartache.  Loan approval also strengthens your offer when you negotiate with a seller. 

 

Will I need any money on hand?

Yes.  You will need earnest money as explained below.  You may also be required by the mortgage company to put up a down payment.  This amount will vary from customer to customer.  You may also need money for closing costs.  A good loan officer should be able to tell you your estimated expenses upfront.  You will also need money to pay for a home inspection.  This will be around $275, and some home inspectors offer discounts.

 

What is Earnest Money?

You will need to put up what is called “Earnest Money” once a contract is written and accepted.  I typically require my buyers to put up at least $1000.  This money is letting the sellers know that you are serious about buying their home.  They are agreeing to take their home off of the market in hopes that it will close.  Sometimes however people write a contract on a home and things go wrong.  Perhaps financing was not finalized or the buyer simply backs out of the deal for no reason.  If something happens through the fault of the buyer and the sale does not close, then the earnest money will be kept by the seller.   If however the property does close then the earnest money is used as a credit for your closing costs.

 

What is the buying process?

After finding a Realtor and a loan officer you will begin the process of finding a home.  I personally do a counseling session with all of my buyers.  We discuss financing as well as the process.  At this time we look at your needs and why you have these specific needs.  We will then begin to look at properties.  Once you have found a home you would like to write a contract on, we will do so, thus starting the negotiating process.  After a contract is accepted you will write a check for the earnest money.  You then have 10 days to have the home inspected by a licensed inspector.  We will then ask for repairs to be made if needed.  If the seller is unwilling to make the repairs you then have two options.  A, back out of the contract, or B, continue with the purchase and make repairs on your own.  A termite inspection of the property will also be done and you have the same two options.  After the property is to your satisfaction, we will order an appraisal and lock in your finances.  We then go to the closing table.  At closing you will need a valid ID.  You will sign a lot of paperwork then receive your keys! 

 

What is a Home Warranty and do I need one?

A home warranty is just that, a warranty for your home.  Different warranties cover different items in the home however most of them cover the systems not structure of the home.  If you were to have a problem you would only pay a service fee (less than $60 in most cases, however this varies with different companies) and someone would come out to your home and remedy the problem.  This is a one year warranty that can be extended at the end of the year term if you wish.  I do suggest that people obtain a home warranty.  You may never have to use it, but in the case that you do it will save you a lot of money. 

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