Many buyers do not fully understand the home-buying process and the role of a real estate agent. Here are some of the most often asked questions agents receive from buyers.
What Type of Information Will My Agent Need From Me?
To do the best job for you, your agent will need the best information you can provide. This would include such things as:
Keep in mind that a very specific set of criteria may narrow your list of potential properties, while a very broad list may lead to an overwhelming number of properties to view.
What is a "Buyer's Agency Agreement"?
A "buyer agency agreement" is a contract between a buyer and a real estate agent. Contracts can vary in length, and can include or exclude certain geographical areas. The buyer agency agreement lays out the commitments of the buyer to the agent, and of the agent to the buyer.
Is It Expensive to Use a Buyers Agent?
The compensation that a buyer's agent (also called the "selling agent") receives typically comes from the seller's proceeds and is a percentage of the total commission charged by the listing company. That information is available to me through the Multiple Listing Service (MLS). In such a case, there is no cost for a buyer to be represented by an agent.
If a buyer is interested in purchasing a property not listed in an MLS, it is possible that the seller will not compensate the buyer's agent. In this case, a buyer agency agreement would detail the buyer's obligation to compensate their agent. Typically, even with unlisted properties, the seller compensates the buyer's agent.
Can I Go To Open Houses Without My Agent?
Yes, however, when meeting the agent hosting the open house it's best if you immediately identify yourself as working with another agent. If you don't, your agent might not be able to help you write an offer on that property in the future.
Can I Work With More Than One Agent?
Sometimes buyers think that having more than one agent "working for them" means they'll have more sets of eyes looking out for the perfect home. The reality is that agents all have access to the same database of homes on the market - the MLS. Working with just one agent also allows that agent to spend enough time with you to really get to know you and your wants & needs. They'll be able to ask questions as they show you homes, helping you refine your parameters as you go. Having one agent also saves you time, as once your agent knows you well, they will not show you homes they know will not work for you.
What Is A "Dual Agent" And Should I Work With One?
"Dual agency" refers to the practice of a single agent representing both the buyer and the seller during the real estate transaction. When an agent acts in a dual capacity, they owe the same fiduciary responsibility to both parties. Most states have a required brochure or pamphlet which details the responsibilities of buyer's agents, seller's agents, and dual agents. Buyers considering the use of a dual agent should pay particular attention to the difference in responsibilities when an agent acts as a representative of both the buyer and the seller.
When you are working with an agent who is acting as a dual agent, you have lost your strong "advocate" in the buying process. In addition, buyers usually meet dual agents at open houses ... meaning that the agent has already developed a strong working (and contractual) relationship with the seller. In such a case, it's human nature that the agent is going to feel a stronger responsibility to negotiate on the seller's behalf. Since the seller has already agreed to compensate an agent as part of the listing agreement, it only makes sense for you to find an agent who is solely committed to being your advocate. The practice of dual agency, when not performed correctly, is one of the leading causes of real estate litigation. I DO NOT PRACTICE DUAL AGENCY!
What If I Need To Sell My House Before I Buy A New One?
To put yourself in the best negotiating position before you find the new home you want, hire a qualified real estate agent to help you put your home on the market. Once you write an offer on a new home, your offer will be "contingent" upon the sale of your home. A buyer in this position may not have the same negotiating power as one whose home has already sold (or at least has an accepted offer). The seller may be hesitant to accept your offer because there are too many things that must happen before the sale can close.
How Does My Offer Get Presented To The Seller?
I will call the agent who is the listing agent for the home you have chosen. We will make arrangements with the seller to present your offer. I will be there to explain the details of your offer and negotiate on your behalf.
What Happens If I Offer Less Than The Asking Price?
If you offer less money, the seller has three options. They can accept the lower offer, counter your offer or reject it completely. Remember that there could be another buyer who is also interested in the home you've chosen. If they happen to write an offer at the same time you do, the seller will have two offers to compare. There are usually many aspects of each offer to consider, but ultimately the seller will want to accept the best and most complete offer. In active real estate markets, homes often sell for their listed price. In hot markets, there may be many buyers vying for the same house, which sometimes drives the final sale price above the original listing price. As a real estate professional, I can help you plan your strategy, based on the current real estate market in our area.
Does It Cost Me Money To Make An Offer?
When you write the offer on the home you've chosen, you will be expected to include an earnest money deposit. The deposit is a sign of your good faith that you are seriously interested in buying the home.
Where Does My Earnest Money Go?
Once the buyer and seller have a mutually accepted offer, the earnest money is deposited into a trust account. That deposit becomes a credit to the buyer and becomes part of the purchase expense.
Can I Lose My Earnest Money?
Real estate contracts are complicated legal transactions. This is another area where having a knowledgeable and professional agent is a necessity. Rarely does the buyer lose the earnest money. Most often, if the transaction falls apart, there are circumstances beyond the buyer's control that cause it to happen. If the buyer willfully decides, however, that they no longer want to buy the house and has no legal reason for rescinding their offer, then the seller has the right to retain the earnest money.
Is That All The Money That's Involved?
Some lenders require the cost of the appraisal and credit report at the time of the loan application.