Realtors
Why Use A Realtor To Purchase A Home?
8 Reasons to Use a Realtor to Purchase Your Home
How much does my real estate agent need to know?
Can I use an agent for a new home?
What about a buyer's agent?
What Is A Buyer's Agent?
Where can I get information on buyer agents?
Are commissions negotiable?
Do I need an attorney when I buy a house?
Where do I get information about finding a real estate attorney?
Why Use A Realtor To Purchase A Home?
Buying and selling real estate is one of the greatest financial investments that most people will make in their lifetime. Today the majority of real estate transactions exceed $100,000, and considering the small upside cost and the large downside risk, it seems almost foolish to consider a real estate deal without the professional assistance of a Realtor.
All licensed real estate agents are not the same. Only licensees who are members of the National Association of Realtors are properly called Realtors and can proudly display the Realtor logo on business cards or marketing materials. Realtors subscribe to a strict code of ethics, are expected to maintain a higher level of real estate knowledge, and are committed to treat all parties to the transaction honestly and fairly.
8 Reasons to Use a Realtor to Purchase Your Home:
- 1. A Realtor can assist you in determining your buying power, which is your financial reserves plus your borrowing capacity. Providing your Realtor with basic information about your available savings, income and liabilities will help him/her refer you to the lender best qualified to assist you.
- 2. A Realtor has many resources available to assist you in your home search. Sometimes what you are looking for in a home is available but not actively advertised in the market, and it can take creative investigation by your agent to find all of the available properties that meet your needs.
- 3. A Realtor can aid you in the selection process by providing objective information about each home. Agents who are Realtors have access to a variety of informational resources providing local community information on utilities, zoning, schools, etc. A Realtors knowledge and experience can answer your two most important questions: First, will the property provide the environment you want for a home or investment? Second, will the property have resale value when you are ready to sell?
- 4. A Realtor will help you negotiate. There are numerous negotiating factors, including but not limited to: price, financing, terms, date of possession, the inclusion or exclusion of repairs, and often furnishings or equipment. A thoughtfully planned out purchase agreement should provide a period of time for you to complete the appropriate inspections and investigations of the property before you are bound to complete the purchase. Your Realtor can advise you as to which inspections and investigations are required and recommend a team of professionals to complete them.
- 5. A Realtor can assist you in understanding the different financing options, as well as identifying qualified lenders who will complete this part of the buying process smoothly for you.
- 6. A Realtor provides due diligence during the evaluation of the property. Depending on the home and where it is located, this could include inspections for termites, dry rot, lead paint, asbestos, faulty structure, roof condition, septic and well tests, just to name a few. Your Realtor will aid you in finding responsible, qualified professionals to do these tests/inspections and provide you with written reports on their findings.
- 7. A Realtor will provide you with a preliminary report on the title of the property. Title indicates current ownership of the property, past owners and rights of access. The title to most properties will have some limitations; for example, easements for utilities. Your Realtor can help explain and resolve issues that might cause problems at a later date.
- 8. A Realtor will guide you through the real estate and loan closing process, making sure that everything flows together smoothly.
How much does my real estate agent need to know?
Real estate agents would say that the more you tell them, the better they can negotiate on your behalf. However, the degree of trust you have with an agent may depend upon their legal obligation.
Agents working for buyers have three possible choices: They can represent the buyer exclusively, called single agency, or represent the seller exclusively, called sub-agency, or represent both the buyer and seller in a dual-agency situation.
Some states require agents to disclose all possible agency relationships before they enter into a residential real estate transaction. Here is a summary of the three basic types:
- In a traditional relationship, real estate agents and brokers have a fiduciary relationship to the seller. Be aware that the seller pays the commission of both brokers, not just the one who lists and shows the property, but also to the sub-broker, who brings the ready, willing and able buyer to the table.
- Dual agency exists if two agents working for the same broker represent the buyer and seller in a transaction. A potential conflict of interest is created if the listing agent has advance knowledge of another buyer's offer. Therefore, the law states that a dual agent shall not disclose to the buyer that the seller will accept less than the list price, or disclose to the seller that the buyer will pay more than the offer price, without express written permission.
- A buyer also can hire his or her own agent who will represent the buyer's interests exclusively. A buyer's agent usually must be paid out of the buyer's own pocket but the buyer can trust them with financial information, knowing it will not be transmitted to the other broker and ultimately to the seller.
Can I use an agent for a new home?
Yes, however buyers should be aware of the differences inherent in working with sales agents who are employed by the developer, rather than traditional real estate agents.
Builders commonly require that an outside agent be present, and sign in, the first time a prospective purchaser visits a site before payment of commission even is discussed. At times when buyers use an advertisement to find the development themselves first, builders can refuse to pay any commission regardless of how helpful an agent may become later in the process. It is advisable to call the development first and inquire about their policy on compensating real estate agents if you are using one.
What about a buyer's agent?
In many states, it's now common for an agent to represent the buyers exclusively in the transaction and be paid a commission by the sellers. More and more buyers are going a step further, hiring and paying for their own agent, referred to as buyers brokers.
What Is A Buyer's Agent?
Qualifications As a prerequisite to selling real estate in Colorado, a person must be licensed by the state. Before a license is issued, minimum standards for education, examinations and experience must be met. After receiving their real estate license, many agents join their local board or association of Realtors and the National Association of Realtors.
The term Realtor is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors and subscribes to its strict Code of Ethics. An agent is bound by certain legal obligations, including;
- Placing the client's interest above anyone else's
- Keeping the clients information confidential
- Obeying the clients lawful instructions
- Reporting to the client anything that would be useful
- Accounting to the client for any money involved
A Realtor is held to an even higher standard of conduct under the NAR's Code of Ethics.
Buyer's Agency Until about 10 years ago residential real estate agents represented home sellers. Whether they were the 'listing agent' or the agent who brought the buyer to the contract, both were legally bound to represent the seller's interests. This meant that if the agent working with the buyer knew that the buyer would be willing to pay more for the home or other points of negotiation, the agent was bound to disclose that information to the seller. That has all changed; today homebuyers can hire a professional Realtor, who will be representing only their interests. This is known as a buyer's agent. When you hire and sign a contract to have a buyer's agent represent you, you'll receive a list of benefits, which may not cost you anything.
Your buyer's agent will;
- Gain a full understanding of what you are looking for in a home. They will ask you questions about neighborhood, community, along with specifics about the style and size of home that meets your criteria.
- Search for homes through the MLS (Multiple Listing Service) that meet your specifications and in many cases will even preview the homes. You will spend less time looking at homes that do not meet your needs or fit your price range.
- Monitor listings and make sure you are informed about new properties meeting your criteria, as soon as they come on the market.
- Network with other agents and stay informed about homes that are anticipated to come on the market before they are advertised, giving you the jump on other buyers.
- Explain the different mortgage options and assist you in finding a lender best qualified to provide the financing that meets your needs and financial situation.
- Research and inform you of information about the seller and property, letting you know the reasons for selling, timetable, whether the seller might accept a lower price or make concessions, how long the home has been on the market, advantages and disadvantages of the property, and if there have been previous offers and counteroffers.
- Help negotiate a contract with the best price and terms for you, not the seller, keeping your motivations confidential.
- Advise you as to which inspections and investigations are required and recommend a team of professionals to complete them.
- Monitor the progress of the transaction and advise you through the contract and closing process.
Cost & BenefitIn almost all cases, buyer's agents working in Colorado receive their fees from the sales commission specified in the seller's listing agreement. The seller's listing contract often stipulates that the commission they pay will be split between their own agent and the agent who brings the buyer to the settlement table. This means that as a homebuyer you can utilize the training, experience and professional representation of a buyer's agent without having to pay the commission yourself. Remember, when you contract to work with a buyer's agent, the agent is legally obligated to provide you with care, confidentiality, full disclosure and accurate accounting. They work solely on your behalf and can save you hours of time and thousands of dollars on your home purchase.
Where can I get information on buyer agents?
For information on buyer agents, contact the your area's Realtor association or National Association of Exclusive Buyers Agents: 320 West Sabal Palm Place, Suite 150, Longwood, FL 32779. Phone: 407-767-7700, Toll-Free: 800-986-2322, FAX: 407-834-4747, WEBSITE: www.naeba.org
Are commissions negotiable?
By law, real estate commissions are negotiable. The pricing of real estate service varies by level of service and consumer needs. Most agents charge between between 4 and 6 percent for full service and not all offer the option of paying a fee for an individual service.
Do I need an attorney when I buy a house?
In some states, you do need an attorney to complete a real estate transaction, but in others you do not.
Most home buyers are capable of handling routine real estate purchase contracts as long as they make certain they read the fine print and understand all the terms of the contract. In particular, you should be clear on the terms of any contingency clauses that will allow them to back out of the contract.
If you have any questions at all, it may be advisable to consult an attorney to avoid future legal hassles. In looking for an attorney, ask friends for recommendations or ask your real estate agent to recommend several. Call to inquire about fees and to check on their experience. In general, more experienced attorneys will cost more, but real estate fees as a rule are small relative to the cost of the property you are buying.
Where do I get information about finding a real estate attorney?
To find a real estate attorney, contact your local bar association, which may offer local referral services. You may also ask friends or your real estate agent for their recommendations. When you have several names, call each to find out about fees and their level of experience.