The process of buying a home or investment generally
starts with determining your buying power; that is, your
financial reserves plus your borrowing capacity. If you
give a real estate agent some basic information about
your available savings, income and current debt, they
can refer you to lenders best qualified to help you. Most
lenders -- banks and mortgage companies -- offer limited
choices.
Finding
Once you know how much you can and want to invest, the
next step is to find the properties that most nearly fit
your needs. This is the time to choose a real estate licensee.
When picking a real estate agent look for one who is also
a REALTOR®. A REALTOR® is a member of the NATIONAL
ASSOCIATION OF REALTORS®, a real estate trade association,
and all members agree to abide by a 17 article Code of
Ethics. A REALTOR® has many resources to assist you
in that search. Sometimes the property you are seeking
is available but not actively advertised in the market,
and it will take some investigation by your agent to find
all available properties.
Selecting
Your job is to make the final selection of the right
property for you. This is when excitement and emotion
run high. Your real estate agent can assist you in the
selection process by providing objective information about
each property. Agents who are REALTORS® have access
to a variety of informational resources. REALTORS®
can provide local community information on utilities,
zoning. schools, etc. There are two things you'll want
to know. First, will the property provide the environment
I want for a home or investment? Second, will the property
have resale value when I am ready to sell?
Negotiating
There are a myriad of negotiating factors, including,
but not limited to price, financing, terms, date of possession,
and often the inclusion or exclusion of repairs and furnishings
or equipment. The purchase agreement should also provide
a period of time for you to complete appropriate inspections
and investigations of the property before you are bound
to complete the purchase. Your agent can advise you as
to which investigations and inspections are recommended
or required.
Due Diligence
With a negotiated agreement in hand, it is time to complete
the evaluation of the property. Depending on the area
and property, this could include inspections for termites,
dry rot, asbestos, faulty structure, roof condition, septic
tank and well tests, just to name a few. Your agent can
assist you in finding qualified responsible professionals
to do most of these investigations and provide you with
written reports. You will also want to see a preliminary
report on the title of the property. Title indicates ownership
of property and can be mired in confusing status of past
owners or rights of access. The title to most properties
will have some limitations; for example, easements (access
rights) for utilities. Your agent, title company or attorney
can help you resolve issues that might cause problems
at a later date.
Financing
As soon as you are reasonably sure the property is right
for you, the process of obtaining financing begins. Your
agent can help you in understanding different financing
options and in identifying qualified lenders.
Closing or Settlement
Finally, there is the closing, or settlement, as it
is known in different parts of the country. Every area
has its own unique customs. In some areas, the title or
escrow company will handle this process. In other parts
of the country, an attorney does it all. Again, your real
estate agent can guide you through this process and make
sure everything flows together smoothly.
Protection for Buyers & Sellers
REALTORS® subscribe to a strict Code of Ethics and
accept the responsibility of promoting the interests of
buyers and sellers by protecting them from fraud and misrepresentation.
Continuing Education
REALTORS® are constantly upgrading their professional
abilities by keeping informed about market trends, the
latest industry innovations, new legislation and civil
rights.
You be the judge
Real estate transactions involve one of the biggest
financial investments most people experience in their
lifetime. Transactions today usually exceed $100,000.
If you had a $100,000 income tax problem, would you attempt
to deal with it without the help of a CPA? If you had
a $100,000 legal question, would you deal with it without
the help of an attorney? Considering the small upside
cost and the large downside risk, it would be foolish
to consider a deal in real estate without the professional
assistance of a REALTOR®!
How Do Real Estate Agents Get Paid?
Real estate agents or brokers are generally paid through
the sales commission paid by the seller when a transaction
closes. Agents have expenses and financial obligations
just like you, so it will be to your mutual benefit if
you choose a real estate agent and stick with that person.
The agent will respect your loyalty and respond with a
sincere commitment to you.
