Where To Begin
Checking Credit
Research Before Choosing A Neighborhood
Check the Zoning
New Home Or Resale?
Think You Don't Need Flood Insurance?
Used Homes
Do I Need Title Insurance?
Be Alert For Sellers’ Tricks
Recruiting The Experts
Choosing A Real Estate Agent
The Foreclosure Market
Buying? Think Selling!
ALWAYS—ALWAYS Hire a Home Inspector
Be Your Own Inspector
Partnership Purchases
Condominiums
Financing Tips
Can't Afford A Down Payment?
Negotiating Tips
10 Tips For Winning A Bidding War
Homebuying Checklist
Home Warranty Tips
Can You Afford the Home You Want?
Green Building Tips

BUYERS' CORNER

Recruiting The Experts

Most home buyers have a limited amount of knowledge of the home purchase process and may be afraid that their ignorance will cause them to overlook problems that might be obvious to those more familiar with real estate transactions. Such trepidations are not unfounded, and that's why I recommend surrounding yourself with the best team of experts you can find.

The specialists you'll need should be expert in their field-professional, knowledgeable, and dedicated to their craft. The team you assemble can give you a decisive advantage to help you locate and purchase your dream home.

AGENTS, BROKERS, REALTORS®

As you prepare for your search, you may decide to use the services of a real estate professional. Although finding one will be simple, finding a true professional may be somewhat more difficult. You'll want someone who is employed full time in real estate, who is familiar with the area where you want to live, works within your price range, and has sufficient time to dedicate to your search.

Many people are confused by the terms Realtor®, broker, and agent and wonder what the differences are. The term Realtor®, always capitalized and denoted with the registered symbol, refers to a real estate broker, agent, or appraiser who is a member of the National Association of Realtors and who agrees to follow a strict code of ethics prescribed by the association.

Real estate companies consist of agents who work with both sellers and purchasers and usually a single broker who acts as manager of all the transactions conducted by their office. The job of the broker is to confirm that all transactions conducted by the agents in their office are done both legally and ethically. The broker is there, also, to resolve problems or disputes that sometimes arise during real estate transactions.

While an agent must pass an exam and is licensed by the state in which they conduct business, the broker is required to take additional classes and spend a certain amount of time serving as an agent before earning his/her title. While sales agents work under the guidance of a broker, in some real estate companies, many of the agents also have the broker designation. Having such an agent may sometimes be a plus; however, a dedicated agent can generally meet the needs required for most transactions.

There are also other designations, such a GRI and CRS that denote additional training and experience. Agents who have made the effort to go beyond the minimum requirements are more likely to be able to help you, especially if unusual circumstances arise during your home purchase.

THE LENDER

The lender is another important member of your purchase team. The lender will determine the maximum amount of money you have to apply to your home purchase and will also set interest rates, loan fees, and monthly payments.

Although fees and rates may not appear to vary significantly from one lender to another, the seemingly small differences can have a dramatic impact over the life of a thirty-year mortgage. Shop your market. Compare fees and rates. Your decision will have a lasting impact upon your future.

An additional factor to consider as you select your lender is the service you'll receive. While an interview will give you only a brief glimpse of the lender's commitment to customer satisfaction, it's your first exposure to them. Pay attention to how through their presentation is and whether or not you fully understood everything presented.

Once again, your agent's input can be helpful. Real estate agents deal with many lenders each year and are quite familiar with those lenders who are principled, keep their commitments, and provide the best service. Get recommendations from your agent, your agent's broker, and other real estate professionals.

THE HOME INSPECTOR

Whether you're buying a new home or a resale, you'll want to have that home thoroughly inspected by a competent home inspector. All homes will have some hidden defects, and it's the job of the inspector to discover as many of those defects as possible. I'm not referring to the superficial or cosmetic defects that you'll find during a new home walk-thru. The kinds of problems you want your inspector to point out are those defects that can create significant problems and are expensive to correct.

Select your home inspector carefully. Get recommendations from friends who have recently purchased homes, you may wish to ask your real estate agent, but be aware that have a vested interest in achieving a closing. You can also go online and check with ashi.org for the American Society of Home Inspectors®. They will provide a list of certified home inspectors in your area. If your inspector is not a member of ASHI®, make certain that they are certified in the CABO building code and carry errors and omissions insurance. Then, interview at least three inspectors before you make a decision. A brief phone conversation will sometimes be enough to rule out some of those who are less competent.

Home inspectors, like all other professionals, vary widely in competence, knowledge, experience, and professionalism. Choose one who inspires confidence and trust. Your decision could keep you from purchasing a home with serious structural defects or other problems that could cost thousands of dollars to correct.

Expect to pay from $250 - $400 for the average inspection. While this fee is normally paid for by the purchaser, it is sometimes possible to get an eager seller to share in the cost of the inspection. Ask.

TAX/FINANCIAL ADVISERS

If you already have an accountant, tax adviser, or CPA, that's great. If you don't, it may be a good idea to consult one. Buying a home alters your financial picture significantly, and you may need expert advice to guide you through the process. Consulting an accountant or CPA will be well worth the modest fee they'll charge.

DO I NEED AN ATTORNEY?

The answer to that question varies by locality. Many states do not require the participation of an attorney in real estate transactions, allowing lay people-real estate, mortgage, and escrow companies to conduct closings. Some allow the closing to be handled by a single attorney, and a few may require that both parties be represented by counsel. Check with a local attorney or real estate company to determine the requirements in your area. However, if you have questions or doubts about any aspect of the purchase process, consulting an attorney will be worth the fee you'll pay for their services.

The average real estate transaction is straightforward and simple, and the purchase agreement, while written in legalese, is usually relatively easy to understand. In those cases, an attorney may not be necessary if not required by state law. If, however, you've chosen to make your purchase without an agent, are paying cash, or have complex stipulations in your purchase offer, then consulting an attorney may be helpful. Other situations requiring the advice or participation of an attorney are cases of multiple sellers, properties that have liens filed against them, or properties with title problems.

 

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