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DO I REALLY NEED A BUYER'S AGENT?
For most people, purchasing a home will be the most expensive single investment they will make in their entire life. The home buying process is a complex one, and can easily become overwhelming for individuals who do not have a lot of experience in the home buying field. You may know where you want to live, the style of home you wish to purchase, the school zone you want to be in, and even the price of the home you can afford. Knowing the answer to these questions will get you started in your search to find a new home. But, before you sign on the dotted line, and commit to a huge financial investment that will impact your future for many years to come, it is wise to do some homework! You need to learn some of the basic information on legal matters concerning your home purchase.
One of the first, and possibly the most important lessons you need to learn is that the listing agent represents the seller. The seller hired the listing agent to work for them and to sell their home. The seller is the client of the listing agent and it is the listing agents job to get the most money for their clients home. If you contact the listing agent and work direct with that agent on purchasing their listing, then you must either:
1) Agree to purchase the home without representation. You are a customer of the listing agent but not a client. The listing agent does not have any obligation to work with you to secure the best deal for you in purchasing the home. On the contrary, the listing agent is required to work for the seller to convince you to pay the most money for their home and close in the most favorable terms for the seller.
Or
2) The listing agent, and seller, must both agree in writing, that the agent will revert to a Facilitator or Dual Agent. What does this mean? It basically means that you, as the buyer, will not have any representation and the listing agent will help neither party negotiate the best deal. The listing agent cannot release any confidential information to either party and basically just facilitates passing information back and forth between buyer and seller. But, keep in mind that the listing agent has had a relationship established with the seller for some time. It is very difficult for a listing agent to truly be a facilitator and not show favoritism toward the seller during negotiations.
Why would you risk making the largest single investment in your life by representing yourself? The real estate commission is already established when the listing is secured by the listing agent. The seller has already agreed up front to a set amount of commission. This commission is paid by the seller at closing and not the buyer. It costs the buyer ZERO dollars in commission to hire their own Realtor and secure knowledgeable and professional representation for themselves during negotiations!
Before entering into a contract, make sure you are aware of
Financing Contingencies and Clauses What type of financing are you using? Has the seller agreed in the contract to your specific type of financing? You cannot just decide to go FHA/VA after you have executed a contract stating conventional financing.
Appraisal Contingencies How many days to you have before the appraisal MUST be ordered by the lender? Are you still shopping around for a loan officer? If so, you need to be aware that contracts have a definite time frame the require you to have ordered the appraisal to be conducted. Have you required the house to appraise at a specific amount or the contract becomes void? What happens if the home doesnt appraise for the purchase price or appraises for more than the purchase price?
Home inspection clauses - How many days you have to complete the home inspection? What items will and will not be covered under the inspection? Have you seen any cosmetic items that you think will be fixed after the inspection? If so, you need to address those in the writing on the contract! Cosmetic repairs are not required to be completed unless stated in the contract.
Are you clear on when and under what circumstances you, and/or the seller, can void the contract?
What happens if you cannot close your contract by the specific date?
Have you read and signed the Property Condition Disclosure Form?
Are you using a Tennessee Association of Realtors contract of a custom contract created by the builder or other real estate agency? Beware of builder contracts which typically favor the builder!
Where will you be closing your home purchase? Has the contract stated what title company and/or attorney is responsible for closing the sale for the buyer and the seller? Are you aware that different closing companies charge different rates for closing transactions?
Have you researched the property taxes for the home and feel comfortable that you will be able to afford the property taxes on your home if it is assessed at a higher rate?
Have you researched the rates for your homeowners insurance for the home? Are you comfortable with the payments for your insurance?
Is there a Home Owners Association? If so, how much is the monthly fee? Are you aware of the restrictions and how they will impact your lifestyle? Are you confident that you can live within the required restrictions? (e.g. some areas will not allow detached buildings, boats and RVs cannot be parked in the yard or on the street, you may not be able to paint your front door specific colors.) It is crucial that you are aware of any restrictions in place!
Is the property in a flood plain, and if so, have you checked the flood insurance rates?
Is the property on septic or sewer? If it is sewer, have you requested documentation from the seller regarding the number of bedrooms the septic system was approved for? Are you buying a four bedroom home that only has a three bedroom perk site?
What items is the seller leaving and what items are they taking? It is so important that all items be clearly stated in the contract and then signed and initialed by all parties. This prevents a lot of headaches down the road when you are planning on moving into a home that comes complete with all drapes, blinds, and appliances still in place but the seller has packed everything up, including the stove and moved!
Are you paying for title or will the seller be footing this expense?
Are you paying for your closing costs or have you asked the seller to pay all, or a portion of, your closing expenses? Is the contract clearly written so that everyone knows what closing costs, title, and prepaid expenses are to be paid, and by what party? A contract cannot simply say, seller to pay closing cost but needs to be very specific stating a maximum amount, and which costs are covered. Are you knowledgeable on what happens if, for example, the seller agreed to pay $5,000 toward closing costs but the final fees on the HUD only total $4,600?
What happens if you discover a problem with the home in your final walk through just before closing? Do you still close? If not, what happens! At this point you are relieved to know that you have already hired expert representation by working with an experienced Realtor who truly represents you as the buyer!
I hope you can see that it is so important to work with a qualified, experienced, and knowledgeable Buyers Agent when purchasing your next home. Form a relationship with a Realtor that you trust and work with them throughout the entire process of buying your new home.
I will help you utilize the most cutting-edge technology available in searching for your next home and make sure that you are aware of all the great listings that come on the market ~ as SOON as they hit the market! In addition, you will find that I am committed to providing customer service that is head and shoulders above the competition. My commitment to customer service goes far beyond the signing of the contract. It is my goal to make sure you are thrilled with your home purchase and help you resolve any problems that might even arise after the closing date! I want to earn your business as your current and future Realtor and also earn the referrals of your family and friends!
Whether you are interested in purchasing your first home or have achieved a level of success that allows you to purchase a grand estate home, I am available to help you make a wise investment and help you make the best decisions on buying or building your next new home. From condos to mansions, please call Sherri Wellborn at 615-566-3789 when you are ready to work with a qualified Buyers Agent. After all, it costs you nothing to hire excellent representation!
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