Beginnings

The first person who will be involved in the purchase of your new home is the real estate agent. The agent is the person who will help you choose the home which satisfies your needs and desires and fits into your budget. This person is the SELLING AGENT.

He or she can show you any home that is on the market through the Metropolitan Regional Information System (MRIS), which has replaced the Multiple Listing Service (MLS) in this area. He or she can help you qualify for a loan, write the contract for the home and provide you with numerous other services.

The selling agent will ask you some basic questions about your finances in order to help you determine the size loan for which you may qualify and, therefore, the price of the home you can purchase. The agent will also ask you questions about your preferences in a home, such as the number of bedrooms and bathrooms, size of yard, etc. This will help the agent narrow down the number of houses you will inspect, and enable him/her to show you homes that may interest you without wasting your time.

The Search

After the agent determines what kind of home you want, he/she will begin to show you houses. Remember that the agent working with you does not get paid until you settle on the house of your choice. That agent will do an enormous amount of work for you that you will never see. For instance, it can take hours to sort through all the houses on the market to find ones you may be interested in and to make appointments for you to see them. Respect the work the agent does for you by not looking at a house without the agent because they will not receive a commission on any house they do not show you. Again, the agent can show you any house listed in the MRIS used by the local Associations of Realtors, and can also frequently show you houses that are for sale by owner.

The Contract

Once you have found the house of your dreams the selling agent will help you write a purchase contract. This is your offer to the seller to purchase the house for the terms stated in the contract. The selling agent will present your contract to the listing agent and seller as soon as a meeting can be arranged. The seller may accept your contract as it is written by signing at the bottom. At that time you have a RATIFIED CONTRACT.

In many cases, the seller will counter your offer by changing some terms, such as the price, the number of points to be paid by the seller, the division of transfer and recordation taxes or even the settlement date. If this happens, the selling agent will bring that contract back to you. You can accept it, reject it, or counter the seller’s counter. Most contracts do not go back and forth too many times before being acceptable to both purchaser and seller.

Select Settlement Company

After your contract has been ratified, you should call a settlement company (title company) to tell them to begin collecting the information necessary to conduct your settlement.

Loan Process

Next, you will apply for your loan. One of the most important people you will meet during this process will be your loan officer. This is the person who will take your loan application and work to get your loan approved. Like the real estate agents, they do not get paid until you settle on your home.

When shopping for a lender, do not look only at rates or points. Ask about the lender’s reputation. Remember, without the loan, you will not be able to purchase this house. The real estate broker can be of significant help here by recommending a loan officer with whom they have had successful transactions.

You will also get to know the processor who will prepare your loan and gather and organize all the information necessary for your loan. This is the person who will contact your employer to verify that you are employed and obtain your credit report, along with many other documents.

Termite Inspection

After you have made your loan application, your real estate agent will need to contact a pest inspection of the property for termites. This should be done no earlier than 60 days nor later than 1 5 days before settlement. You probably will never meet the inspector, but you will receive a copy of the inspection report at or before settlement.

Surveyor

Unless you are purchasing a condominium, the lender will require that a current "House Location Survey" showing the location of the improvements within the boundaries of the property be provided prior to settlement. The settlement company will arrange for this to be done for you. At settlement, you will receive a copy of this survey.

Settlement

Settlement is the time when the money and deed are exchanged through the settlement attorney. Upon completion of settlement you will be the owner of the property!!!

The attorney conducting settlement will gather all the information necessary for settlement from you, the seller, your lender and your real estate agent, and will coordinate the settlement. Among other things, the attorney will assure compliance with the loan terms provided by your lender, that all the lender’s documents are properly signed, that the seller’s loan on the property will be paid off and released, and that the deed transferring the property to you is in proper form and signed. The original deed is sent to the courthouse for recording and later delivered to you.

The last people involved in this transaction are the movers. Let’s hope they come on time!

As part of a mutual agreement, you can elect to create a buyer agency relationship between us which will entitle you to the fiduciary client level services which include:

• Loyalty
• Obedience
• Disclosure
• Confidentiality
• Accounting in Dealings

A buyers agent will represent you and your interests in the purchase of your home. This is different from a typical sub-agency transaction where the buyer is not technically represented.

However, the seller agent has the duty to exercise reasonable skill and care in the performance of the Broker’s duties. This is a duty of honest and fair dealing and a duty to disclose all facts known to the broker which materially and adversely affect the consideration to be paid for the property.

A dual agency situation can arise if you have entered into an agency relationship and subsequently we look at a property listed with our company. This is a potentially challenging situation because it is difficult to afford both parties full client level services. Dual agency should only be entered into with the written agreement of both buyer and seller.

Agency is a legal relationship and a written agreement should be completed to explain all the duties and responsibilities.

Benefits of Buyer Agency

Loyalty

The real estate agent must act in the best interest of the buyer.

Obedience

Must follow the lawful instructions

Disclosure of all material facts

Examples but not limited to:

· Relationships between agent and other parties

· Existence of other offers

· Status of earnest money

· Sellers financial condition

· Property’s true worth

· Commission split with other brokers

· Legal effect of important contract provisions

Confidentiality

Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.

Accounting in dealings

Reporting of where any money placed in the hands of the broker is kept.

Reasonable skill and care

Arriving at a reasonable purchase price and advising buyer of such.

Affirmatively discovering material facts and disclosing them to the buyer.

Investigating the material facts related to the sale.

Who Pays the Commission?

· The Seller Does

The Seller has generally signed a listing agreement with his agent specifying a certain fee to be paid, and many times it has provisions for splitting that fee with the agent who sells the property, regardless of subagency or buyer agency.

· The Buyer Does

The Buyer can pay his agent a commission as set out in their written agreement. If this is the case, it would be inappropriate for the buyer’s agent to accept any portion of the fee paid by the seller.

· Indirectly, the Buyer Does

Even though the seller pays the commission out of his proceeds, it has argued that the buyer paid the commission as part of the overall purchase price. This assumes the buyer could have bought the home for less had it not been listed.

· Each Party Pays Their Agent

Each party pays their agent as specified in their written agreement

Questions to Ask When Writing an Offer

* If yes, may I have a copy to look at?

* Has the owner completed a property disclosure statement?

* What type of financing is available on the property at this time? Do you have quote sheets available?

* What would be a reasonable repair expense amount for this home?

* Has there been an appraisal made on this home?

* Could you run comparables of recent sales in the area?

* Are you aware of anything that might affect the value of the home presently or in the future?

* Would you prepare an estimated closing cost statement and figure the approximate payments?

* Would you prepare a comparison of an adjustable rate mortgage and a fixed rate mortgage and a Homeowner’s Analysis?