How are Realtors paid?
Under these arrangements homebuyer’s DO NOT pay for the services they receive from their agent.
Real estate agents are paid on commission, which is generally a percentage of the selling price of the home and paid by the seller. The commission amount is established in the listing agreement between the seller and his/her agent.
The commission is paid only if the property closes. The selling agent’s broker and buying agent’s broker split the commission.
Why should I work with a Realtor when I buy?
There are many compelling reasons to use a real estate agent when you buy a home:
Realtors have access to the Multiple Listing Service. This allows agent’s to search for properties that specifically meet a buyer’s criteria. This service enables agents to rule out properties that show up on other sites even after they may have come off the market
Realtors can schedule showings on your time and answer questions about any properties may be interested in.
Most importantly a Realtor can utilize the MLS to determine what other homes have sold for in the neighborhood so you don’t over pay for your home.
The purchase process is a complicated and frustrating process involving many conflicts that arise during the offer, inspections, appraisal, and closing. An agent is trained in conflict resolution and has experience in weathering issues that may arise.
A Realtor can help you find a reputable mortgage company, home inspector, and title company.
How do I choose a Realtor?
A qualified candidate...
Is familiar with the area of town you’re interested in
Is available at times that are convenient for you
Asks questions about what you want and need in a home
Is a good listener
Has respect for you and your preferences
Follows up with answers to questions he/she did not initially know
Returns calls promptly
What is a Pre-Approval Letter?
It is not a guaranty that you will receive a loan. This letter is typically provided after a lender has taken a brief look at your credit and income. The final approval comes the week of closing after an underwriter with the bank has had a chance to review your financial statements, the home appraised value, and the terms of your contract. A pre-approval letter is important for many reasons. It usually sets forth certain conditions that if met will lead you to being able to close on the home of your choosing. The letter also established approximately how much home you may be able to afford. Realtors use this letter as an important negotiating tool to show the lender that there is reason to believe you as the buyer will be able to close on the loan. Without this letter it is difficult to convince a seller to take their home off of the market and enter into a contract.
Do I need to have a Home Inspection?
The answer is that you should. Would you purchase a used car without a test drive or car fax report? Unlikely, but a used car is pennies compared to a home purchase. The reward in having a home inspection far outweighs the risk of not having one. The cost of an inspection is usually a few hundred dollars, but the cost of overlooked repairs may be thousands. Some items an inspector may look at include the foundation, structure, roof, plumbing, and electrical elements of the home. Additionally, an inspector can be requested to inspect for mold, termites, and radon. An inspection can be an important negotiating tool for obtaining repairs at the seller’s expense prior to closing. Note that not all sellers agree to make any or all repairs a buyer may request.
Don’t Sellers have to disclose defects?
A Seller will typically fill out a disclosure packet indicating what they know about the property, but most sellers are not experts in analyzing the condition of a home. The disclosure is an FYI that is provided prior to the writing of a contract. It is not a substitute for obtaining an inspection.
What items do I need when I meet with a lender?
Each lender is a little different and may request additional items, but you can typically expect to provide the following items:
Your gross income
The amount of cash you have available for the down payment investment, closing costs and necessary reserves
Your current debts (This is typically provided in the loan application)
Recent pay stubs
Two years of W-2 statements
Two years of federal tax returns
To verify your available cash, your lender will want to see your two most recent bank statements for both your savings and checking accounts.
Additional income statements such as alimony, child support, retirement benefits, stock, and other assets.
How can I verify my credit?
You can obtain a copy of your credit report from one or all of the three credit reporting agencies:
Trans Union www.transunion.com
Equifax www.equifax.com
Experian www.experian.com
