SEARCHING FOR A HOUSE
REAL
ESTATE AGENTS
When
you feel that you are ready to actually look at houses, it is time to select a
real estate agent. Selecting an agent that you trust is one of the most
important decisions when buying a home. The real estate agent will guide
you through the rest of the process, but just what role they play depends on who
they work for and what type of agent they are.
For
Whom Does The Real Estate Agent Work
This
can sometimes be tricky to determine, so be sure to ask each agent up front who
they are representing. There are three general categories of representation:
Seller’s agents, Buyer's Agents, and Dual Agency.
Seller's
Agents: This is the most common form of representation. Seller's
agents are paid by the seller. They receive a percentage of the selling
price of the home as payment. They have a confidentiality obligation to
the seller, NOT TO YOU (the buyer). For example, if a seller says to the
agent that they are asking $80,000, but will accept $60,000, the agent ethically
cannot tell you, the buyer, that information. On the other hand, if you tell the
agent you want to offer $60,000, but are willing to pay $70,000, the agent can
reveal that information to the seller. This is legal as long as you are aware of
it.
While
the seller's agent does have an obligation to the seller, they also are
obligated to be up front and honest with you, when it comes to disclosing all
known facts about the home.
The
benefits to you of dealing with a seller's agent is that you pay no fees to
them, and you have the freedom to shop for another agent if you are unhappy with
how they are serving you.
In
addition, you should still be treated well by the agent, because they are aware
of the fact that although they do not necessarily represent you, no one gets
paid until you are happy and ready to buy.
Buyer's
Agents: Buyer's agents are paid by the buyer to represent his interests. The
confidentiality obligation is then with the buyer, not the seller. The buyer and
agent enter into a contractual agreement whether a house is found or not.
Partial payment is usually required up-front. The negative side to working with
a buyer's agent is that because of the contract, you do not have the freedom to
move on to another agent if you are dissatisfied. If you go to another agent,
you will lose money.
Dual
Agency: Occasionally a seller's agent and a buyer's agent will work within
the same agency, or may even be the same person. This is called dual
agency. Both the buyer and the seller MUST be informed if this is the
case. The clients and agents agree to modify the agency relationship. The
agent(s) must treat the interest of the buyer and the seller equally. The
agent(s) must not disclose any information that would create a negotiating
advantage for either client.
Roles
The Real Estate Agent Plays
Listing
Agents: These agents will list properties for sale, but are rarely
involved in the selling of the properties. This would not be the type of
agent you would want to work with when shopping for your first home. If
you are not sure about the agent with whom you are working, ask him or her if he
or she will be involved in the closing. If not, find another agent.
Selling
Agents: These agents sell properties that are already listed.
They tend to be assertive. They are most often not concerned with each
individual buyer, but with whomever is closest to making a purchase. As a
first time buyer, you need to feel free to take your time, and think through
your decisions.
Part-time:
Agents sometimes only work part-time hours. This can be negative for the
buyer for a couple reasons. Part-time agents may not be as accessible to
you, and may not be as accommodating to your schedule.
Full-time:
Their knowledge is current, and they actively take part in continued training
and real estate associations. These agents will be actively involved in
each step of the process. A full-time agent is the best option for a first time
home buyer.
Selecting
An Agent
The
aforementioned types of agent, and agent roles are helpful when choosing an
agent. However, your evaluation of the agent as a person and your level of
trust in him are the most crucial parts of the selection process.
Suggestions
for finding a good agent:
 |
Ask
friends or relatives who have recently purchased a home. |
|
Look
for the following characteristics: honesty, ability to get along with
others, knack for numbers, good character judgment, logical thinking, and
returns phone calls quickly. |
|
Look
for knowledge in the following areas: selling of residential properties,
community they are selling in, current home values, and current financing
options. |
|
Experience
is most accurately measured by years in the business, not total amount or
total dollar of sales. |
|
An
agent who is a member of the National Association of Realtors (NAR) is
committed to abiding by certain rules and regulations, much like a code of
ethics. |
What
To Expect When You Meet An Agent
When you first meet an agent, they will ask you things
such as:
-
For
what type of home you are looking?
-
Are
you qualified financially?
-
How
much money do you have available for a down payment and closing costs?
-
Do
you have to sell another home before you buy?
-
How
motivated of a buyer are you (an estimated time frame for purchasing)?
-
Are
you working with any other agents?
Be
open and honest with the agent. It will help them find you the house for which
you are looking. It will make the purchasing process flow more
quickly. Be honest about your current financial situation. Failing to
reveal necessary financial information can cause major delays in the process and
may prevent approval of the loan.
HOUSE
HUNTING
Once
you have selected an agent, the search begins for your new home. Your
agent will have home listings, but do not hesitate to check newspapers or drive
around the neighborhood yourself. If you see a home you are interested in,
tell your agent and let them make the necessary arrangements.
What
Home Description Abbreviations Really Mean
Home
listings include a description of the home and property. The following
abbreviations are frequently found in these descriptions.
| A/C |
air conditioning |
|
ac |
acre |
| Appl |
appliances |
|
assum |
assumable mortgage |
| BA |
bathroom |
|
bal |
balcony |
| Blt |
built-in |
|
BR |
bedroom |
| Brk |
brick |
|
bsmt |
basement |
| Bth |
bath |
|
burg.fire |
burglar/fire alarm |
| CAC |
central air conditioning |
|
con |
convenient to |
| Cpt |
carpet |
|
Ctr |
center |
| dbl |
double |
|
Dk |
deck |
| EIK |
eat-in-kitchen |
|
Fam rm |
Family Room |
| FHA |
qualifies for FHA |
|
Fin |
Finished |
| flr |
floor |
|
Fml |
formal |
| fpl |
fireplace |
|
Gar |
garage |
| gas |
gas heating |
|
HW |
hardwood |
| Ingrnd |
In-ground pool |
|
in-law |
separate apartment |
| Lib |
library |
|
lg |
large |
| Lin |
linoleum |
|
Lndry |
laundry room |
| loc |
location |
|
LR |
living room |
| md's |
maid's room |
|
Mint |
excellent condition |
| mod |
modern |
|
Mstr |
master bedroom |
| mtg |
mortgage |
|
Nr |
near |
| occup |
occupancy |
|
Pnld |
paneled |
| pfl of |
professional office |
|
Pkg |
parking |
| pvt |
private |
|
Rec rm |
recreation room |
| rm |
room |
|
Schls |
schools |
| scpd |
landscaped |
|
Semi-det |
semi-detached |
| sep ent |
separate entrance |
|
Shwr |
shower |
| sld dr |
sliding doors |
|
Spklr |
underground sprinkler |
| starter |
small first home |
|
Steam |
steam heating |
| terr |
terrace |
|
TH |
townhouse |
| txs |
taxes |
|
VA |
qualifies for VA loan |
| WW cpt |
wall to wall carpet |
|
Wbf |
wood burning fireplace |
| xtr |
extras |
|
Yd |
yard |
| yr |
year |
|
|
|
House
Hunting Tips:
|
Keep
an organized record of all the houses you view. A useful
checklist and organizational tool is located on the following page. Click
here. |
|
Keep
your needs, wants and financial capabilities in mind at all times. |
|
Set
a realistic time schedule. Two hours is the usual maximum time for
each session, but if you have less in mind, or would prefer to view only a
certain number of houses, let your agent know.
|
|
Plan
to leave young children at home. Avoid any unnecessary distractions, so you
can focus on evaluating the homes you are viewing. |
EVALUATING THE NEIGHBORHOOD
What To Ask:
The Neighborhood:
What is the overall appearance? cleanliness? atmosphere?
What is the property tax rate?
Taxes on property are charged by municipalities, counties, and schools to
maintain services, such as the police, firefighters, street cleaning, etc.
The tax rate is usually a percentage of the value of the home. To estimate
what property tax you will have to pay on a given house look at the most recent
tax receipts or bills from the current or previous owners.
Availability of Community Services:
Transportation:
Where is public transportation accessible?
How often is it accessible? How long does it take to get to the places you
frequently go?
Day-care/Pre-school:
Where are nearby facilities? Do they have room for your child? What programs are
offered? What are the days and times of availability? What are the costs?
Schools:
What schools will your child attend? Where will the bus pick up your
child? What is the quality of the schools?
Recreation
Facilities:
Is
recreation membership required? What local parks are nearby and what do
they offer? What are the costs?
Hospital/Medical
Services:
Where is the nearest hospital? Are emergency facilities close?
Police/Fire
Protection:
How accessible are police, fire and emergency services? Is the protection
adequate? Will the home be protected by neighborhood watch? Does the area have
911 access?
Television
Reception:
Is reception adequate? Is cable television available and necessary for quality
reception?
Telephone
Service:
Will service be available as soon as you move into the house? What other
services are available?
Postal
Service:
Will mail be delivered to the front porch, curb or community mailboxes?
Where is nearest post office?
Trash
Collection:
Is commercial garbage collection service available? When is trash picked up? If
there are dumpsters, where are they?
Street
Maintenance and Parking:
Are roads properly maintained? Will community or county crews plow the
roads and keep them open in the winter? Will it be your responsibility to
maintain any part of the road? Is it a law that sidewalks be
shoveled? What are the parking restrictions on weekdays, weekends,
overnight, and in emergencies? Can you park directly in front of your
home?
Water
and Sewer:
Are water and sewer facilities adequate? Are there water restrictions?
Property
Taxes:
What are the property taxes now and what are they expected to be? Is a tax
increase expected?
Zoning
Changes and New Construction:
Have there been any recent zoning changes? Are zoning changes anticipated?
Is new construction planned that will change the appearance of, or the traffic
flow, through the neighborhood?
Conveniences:
How accessible are and where can the following conveniences be located: library,
church, grocery store, shopping mall, service station, tennis courts, swimming
pool, etc.?
Drawbacks:
What are the drawbacks? Any of the following in close proximity to a home
negatively affect property values:
| airport |
landfill of dump |
undeveloped land |
| railway |
sewage plant |
floodplain |
| freeway |
power lines |
poor air quality |
| commercial areas |
industrial areas |
|
What
Not To Ask:
In
keeping with the Fair Housing Act, real estate agents cannot limit the houses
they show. Any person and/or family has the right to view and purchase a
home in any neighborhood regardless of their race, age, ethnicity, gender, or
sexual orientation. If you feel that your real estate agent is only taking
you to certain neighborhoods because of one of these reasons, find a new agent.
If you desire to take legal action contact the Fair Housing Partnership in your
area.
Similarly,
asking your real estate agent such questions about the make-up of a community is
not appropriate, nor is asking your agent to not take you to certain areas
because of their racial or ethnic composition.
FOR
SALE BY OWNER (FSBO) HOMES
Some
sellers choose not to list their home with an agent. They advertise on their own
property, in newspapers, and in community distributions. If you are
interested in a FSBO home you can have your real estate agent represent you, and
handle all the arrangements and negotiations. Be aware that the seller
will probably not pay the realtor. Your agent will become a buyer's agent,
with you paying the commission. This may be worth it if you really like
the house, but it is necessary to clarify who exactly will be paying the realtor
if the sale goes through.
FSBOs
sometimes have a unique financing option called a lease/purchase option. This
option is an arrangement strictly between you and the seller. It is not
financed through a lender, and there is no closing. The purpose of this
option is for the buyer to have time to get their credit in line, so that they
can eventually qualify for a mortgage and complete the purchase of the
house. A large down payment is needed up front, but monthly payments are
comparable to a rental payment. In this kind of situation, the seller is
still the owner and is responsible for insurance, taxes, and water, until the
buyer receives a mortgage and completes the purchase of the house.
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