Home Buying and Realtors
Realtors In the Home Buying Process
by George Bogosian
Finding a house that you want, may come easy to some folks, if this is your profile, count yourself among the blessed! Others may need to work harder and take more time and effort. Sometimes friends tell you about a home for sale, or you might see a home while driving around an area, or you see an ad in the paper. You can find your home in many ways. The facts are that most people use a Realtor (Agent) to help them find a house. Find a Realtor that's right for you....it will make all the difference.
Find a Realtor that is worthy of your loyalty and trust.
You deserve nothing less. Remember, this will probably be one of, if not, the most important financial decision you will make during your life on this planet!! This purchase has the potential to propel you forward or set you back financially. This will be one of your most important financial investments; I repeat myself for your benefit! You deserve the best Realtor available to you. You want someone who will deal honestly and fairly with you. Good Realtors are looking for long term relationships; they would love to sell your house in the future if and when you decide to sell. Statistics show that most of us stay in our homes an average of 5 to 7 years.
References and experience will make a difference, but just as important is your connection with the person.
Do they listen? Do they answer your questions? Are they providing you with the level of service you want? Are they pushing you too hard to buy? You’ve already done some work, so you should have some understanding of the house you are looking for when you visit an agent.
A Realtor works for the seller, which is their first obligation. They own agency, to the seller, but owes fair dealing to you, the buyer. They owe you diligence in finding and revealing to you both the positives and negatives about the property. It is also in the seller’s interest to sell at fair market value; otherwise the property could stay on the market too long or just not sell. Looking at comparably priced properties educates you to the values of the homes you’ll be looking at, and just because you financially qualify for a specific amount of money doesn’t mean you would be willing to pay that much for a specific house. Buy what you want and need. You should know your financial limits at this time because you did a preliminary application (pre-qualified) with a lender. Use your Realtor for understanding relative values in the market and use yourself to understand the style of home you want. Your personal likes and dislikes are important here, not someone else’s. Fifty percent of purchasing a home is a personal choice, yours, and the Realtor really has no say in that, and fifty percent is purely business and the Realtor can be of great help. You want them to work hard for you.
You don't want the agent to think or believe that you are just looking and really don't intend to buy at this time. Their motivation is the commission that is paid for from the proceeds of the house sale.
Remember that the agent is working for the seller and their fiduciary responsibility is to the seller’s best interest.
There should not be an adversarial situation between you and your Realtor. If there is, than something is wrong! The Real Estate Agent gets a portion of the 4% to 7% commission. There is a split with the Agent and the Real Estate Agency that he or she works for. If your Agent finds you a house listed through another Broker, then the commission is shared with that listing Broker, (known as a Co-Broker) your Agent, and the company your Agents works with. Your Agent would like to sell you a home that is listed with their agency because they, one, receive a larger commission because there is less sharing of the commission, two, they have a responsibility to their listing sellers, and three, they may have a better understanding of these properties. Most agents will show you all homes listed in the area you are interested in buying to maximize their time in working with you. They are being competent in their service and also hope to complete a sale. Use the Multiple Listing Book (know as MLS book) to see most homes listed in the area by all agencies. Also ask about home not listed in the MLS book, you can be sure there are some. Builder homes, Co-exclusive listing and open listings are other possibilities.
You need to inform your broker about the price range you are looking in, but not the final amount of money you are willing to spend on a specific house. Remember that your shopping price range is different than you maximum spending limit. Stay within your limits! There is a balance here you must learn to do with your broker. A good broker understands your dilemma and will work to find the house of your dreams that you can afford.
We will discuss using a buyer-broker in Part 2. They work for you, the buyer, and not the seller. This method has become very popular. Click below to go to Part 2.