Why Hire A Realtor?
A real estate transaction is complicated. In most cases, buying or selling a home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government-mandated settlement statements. When buying new construction there are a number of builder addenda as well. A knowledgeable guide through this complexity can help you avoid delays or costly mistakes.
Real estate has its own language. If you don’t know a CMA from a HUD, you can understand why it’s important to work with someone who speaks that language.
Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase, and even if you’ve done it before, laws and regulations change. That’s why having an expert on your side is critical.
Realtors provide objectivity. Since a home often symbolizes family, rest, and security, not just four walls and roof, home selling or buying is often a very emotional undertaking. For most people, a home is the biggest purchase they’ll every make. Having a concerned, but objective, third party helps you keep focused on both the business and emotional issues most important to you.
Who Pays The Commission?
The Seller Does
The seller generally signs a listing agreement with his Realtor (Listing Agent) specifying the fee to be paid, including a provision for splitting that fee with the Realtor who sells the property (Selling Agent). This is the typical way Selling Agents are paid in transactions where homes are listed as part of a Multiple Listing Service (MLS). In our marketplace, the MLS is the Northwest Multiple Listing Service (NWMLS).
The Buyer Does
The buyer can pay his agent a commission as set out in their written agreement. Buyers sometimes elect this option when they want their agent to help them purchase a non-listed property (For Sale By Owner). However, in many cases, the Seller of a “For Sale By Owner” property is willing to pay the Buyer’s Agent a commission. If this is the case, the Buyer may not need to pay any commission. In most cases, the buyer does not pay a commission.
Disclosure Prior to Offer
In any case, a Realtor should disclose how they will be paid prior to preparing a contract for you. You should clearly understand how the Realtor will work with you, whom they represent and how they will be paid.
Who will represent your interests and what is the State of Washington law
regarding real estate and your interests?
With a written agreement, you can elect to create an exclusive Buyer Agency relationship between us. As your exclusive Buyer’s Agent, I will represent you and your interests in the purchase of your home. I will provide you with a copy of the Law of Real Estate Agency Pamphlet, which further describes my legal duties under Washington state law.
Agency is a legal relationship, and a written agreement should be completed between us to more thoroughly explain our mutual duties and responsibilities. I will review this with you so that you will have a better understanding of how we can work together.
The Duties Of A Buyer’s Agent Include The Following:
- Loyalty—The agent must act in the best interest of the Buyer above all others.
- Disclosure of any conflicts of interest.
- Disclosure of all material facts which are not readily ascertainable such as:
- Relationships between parties
- Existence of other offers
- Status of earnest money
- Seller’s financial condition
- Matters affecting the value of a property
- Legal effect of important contract provisions
- A good faith and continuous effort to find you a property
- Accounting for all money and property received in a timely manner
As your agent, I will work diligently
to represent your interest above all others.
Tips to Help You With Your Home Search
Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.
Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.
Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get pre-approved for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.
Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.
Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.
Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.
Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.
Get help from a Realtor. Hire a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.
Common First-Time Home Buyer Mistakes
- They don’t ask enough questions of their lender and end up missing out on the best deal.
- They don’t act quickly enough to make a decision and someone else buys the house.
- They don’t find the right agent who’s willing to help them through the home-buying process.
- They don’t do enough to make their offer look appealing to a seller.
- They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.
A Final Note
Your home may be your single biggest investment and one of the largest transactions you may ever make. You want the best price and the most favorable terms. There are many options, legalities and details that go into a transaction, from the time you set the price to the final closing. A home must reflect the realities of your income. A home can also be an expression of personality and personal values.
The various steps of purchasing a home should be clearly understood, for each involves you in certain obligations as well as commits others to meet obligations to you. Please don’t be hesitant to ask any questions, no matter how big or small. I look forward to working with you and helping you realize your home-buying dreams!
Some information provided by National Association of Realtors and RealtorMag.