Buyer's Frequently Asked Questions
When I go to an open house, am I expected to work with the agent there?
No. The agent at the open house is either the Seller's agent or someone else working in their office. As a courtesy, you should tell that agent that you are working with me or give them one of my cards. If you don't do this, they may try to get your number so they can contact you for an interview to show you houses. Having an agent representing you exclusively will result in your obtaining the best possible price and terms with your specific interest protected.
If I see a sign and am curious, do I call that number and ask about the house?
When you call on a sign, you will be speaking to the "floor agent" - this is a person in the office who is designated to speak to "sign calls". Their hope is to make an appointment to meet you so they can work with you as your agent. Call me with the address instead. I can find out the information from the MLS data or call the seller's agent. I can show you any house that is for sale. All of the information is shared through our Multiple Listing Service (MLS).
Why the big deal about whom I call or talk to?
Real estate agents are paid on commission only. The agents holding open houses and answering the floor calls are hoping to win over a client for a future sale. If you use their time and then later inform them you have an agent you want to use, they could get upset.
How much and when do you get paid?
Realtors get paid when the sale is finalized and the escrow closes. When the house was listed, the seller and their agent negotiated a commission, which would be split, between the seller's agent and the buyer's agent. Within the office, the agent gets a share, usually 50% - 70% of that total. This still seems like a lot of money until you consider Realtors have no benefits for health or retirement and must pay their own taxes as independent contractors. We also are required to pay dues, fees, legal, insurance, management fees, educational and other costs as a self employed person.
Why is your list of active inventory so important?
If you shop the sales at Nordstrom or Marshall Field's, you realize that the best merchandise goes fast. The salespeople might even shop before the doors open. It is the same with real estate. Agents enter listings into the Multiple Listing Service 7 days a week. If you want that special property, you'll need to create a Custom MLS Search which will send out emails as soon as new properties meeting your criteria appear in the MLS database.
What can you offer me that other agents can't?
I work for your best interests. Most good agents do. We realize that the key to being in business for the long run is to treat our clients just exactly as we would want to be treated. That means being diligent, honest and resourceful. By the end of the transaction, your real estate agent should become a trusted friend. After we have agreed to work together, the first step is to begin the loan approval process. Once your price range has been determined, we can begin to look for a home.
How important is getting pre-approved for a loan?
Pre-approval can make the difference between winning and losing a bid. It could also mean paying thousands less for the same house. Don't go shopping for a home until you are pre-approved. You'll be glad you did. If you need the names of mortgage brokers or bankers in the area, let me know. I can tell you which lenders are favored by most real estate agents (i.e. the sellers). This is to place you in a good position when your offer is delivered to the sellers and conveys your strength in following through with the purchase.
What about multiple offers?
If more than one buyer writes an offer on the same home, each buyer is entitled to know how many others are bidding. The price of each offer is kept secret. Your agent will present the offer in the best possible light, and help you write a competitive bid. Knowing how many other offers there are is crucial and knowing whom the other agents are is as important. This is where an experienced agent really counts. Today's market statistics have shown properties have sold between 5% and 30% over the asking price when there are multiple offers. The strategy has been for sellers to place their property for sale at a price that is actually a little less than market value. Hopefully this tactic will change when more properties come on the market.
How can I deal with inspection issues?
Your home inspector will tell you what repair and maintenance issues to expect. He or she may recommend follow-up estimates from various trades. When it is time for you to remove your inspection contingency, you can say yes to the property, say no, or ask for repairs or credits to cover costs of repairs. If the seller won't accept your proposal, you can back out. This is the most important part of your transaction. Your investigation to determine the condition of the property will help to remove questions or worries you may have about the property and it should also give you information on how you can maintain the property in the future.
What do I need to investigate besides having the home inspection?
Everything you can think of. If it's a lemon, you want to find out before you buy it, not afterwards. I recommend looking at the city or county records for the property, talking to planning and zoning, interviewing a neighbor and calling the police department or checking their web site for local statistics. Check with your insurance agent. Your home inspector will recommend repair estimates or professional evaluations as he sees fit. Review the seller's transfer disclosure statements and put questions in writing. Ask your title officer about any matters on the title report. Take your time and find out all you can. It's worth it.
What if my Uncle Jack wants to do the inspection?
Okay, but I recommend getting an impartial inspector as well. If you have to have your relative inspect the house, get a second opinion. When you sell the house, your uncle's opinion will be of no value to the buyer, and you may have to deal with issues that a local inspector would have flagged.
How do I know if I am paying the right price for the house?
I will show you a list of the comparable sales in the neighborhood. You can drive by and check them out for yourself. The final sales price of a home is reported after escrow closes. There is little information regarding the possibilities of credits or free rent or other negotiated items. But as a general tool for information it is the most accurate.
What happens to my deposit check, and what if I don't go through with the escrow?
After your offer is accepted, your deposit check must go to the Title Company within 3 business days. It is refundable to you if you back out under the contingency provisions in the contract. Typically you have an inspection contingency and a financing contingency. You can also back out and get your deposit returned if you do not approve of information provided by the seller in the transfer disclosure statement, with 3 days of receipt.
When do I need the rest of the money?
Besides your initial deposit, which goes into title upon acceptance of your contract, you will be increasing your deposit to 3% of the purchase price in about 10 days, depending on when your contingencies are removed. On the business day before closing, you need the balance of the down payment. The Title Company will show you a balance sheet before then outlining your closing costs, and they will explain how to wire your funds to them the day before it closes.
Do I have to be in town for closing?
Actually, no. You have to sign your buyer's papers at least three business days before closing, but you can do it sooner. You can sign them anywhere where a notary can be found. It is best to sign at your title company where they can make correction or changes as needed. On the day of closing you are not needed for anything! But I would want to deliver the keys for your new home to you.
Can I get into the house to show friends and family during escrow?
Sure! That's considered normal. I'll set it up for you.
What other advice do you have?
Check with your attorney about how you want to take title. Discuss arbitration and liquidated damages with your legal counselor. These clauses are in all contracts, and the decision should be made with an attorney.
How do I know it's the right house for me?
If you have done your homework; having made a detailed list of what you would like in a home, you then go from the house hunting to house-buying stage. You're going to like the house each time you visit it during escrow. It feels right. Don't be confused by buyer's remorse, which is basically worrying and being scared of a commitment. Everybody worries about things and no house is perfect. If here is a serious defect that can't be corrected, let it go. But don't get caught up in fearful thinking.
I like the house but I'm afraid I'm overpaying.
Join the club. Everybody thinks they are overpaying. If you like the house can afford it, and your real estate agent thinks it is a saleable home, you're probably just worrying. Make sure it's in a good location and is the kind of home that most people would like. If you hold it for a few years, then those extra few thousands become less important.
