Buying a home can be a very intimidating process from the outside looking in. Making a decision to buy, saving and securing a down payment, investigating loan programs and, ultimately, interviewing Realtors to navigate the entire process. Daunting as it may seem, the professionals we choose to guide us have expertise at each junction of the journey. For the clients, however, buying a home and working with a real estate professional is something that doesn’t happen often in life. So some of the nuances and niceties of this type of business partnership may not be familiar or understood. Some tips and guidelines might be helpful.
The first step in any home purchase is to decide whether you want to work with representation, by either dealing directly with listing agents, or if you want to hire your own agent. If you decide to hire your own agent, conduct interviews to find an agent with whom you are comfortable. If you are interviewing agents, let each agent know you are in the interview stage and will let them know when you have made your decision. This is common practice and most Realtors will expect to offer a presentation describing how they partner with their clients. You can also let the agent know how you want him or her to communicate with you and how often. This can also be a time to discuss how you prefer to preview homes. Would you like your agent to pick you up at your front door and drive you home after showing homes? Many will provide that service. If not, they will ask you to meet at the office or another convenient location. Open communication is essential to a smooth real estate transaction.
There is a difference between listing agents and buyers’ agents. A listing agent will represent the homeowners and market the home. An agent that a customer would hire to help buy a home is known as the buyer’s agent. It is important to make the distinction when you start looking for homes. Real estate professionals are rarely paid a salary and work on a commission basis. Hiring an agent to help you search for a home is considered a first step in a business contract. Expect to sign a Buyer/Broker agreement with your agent. It creates a relationship between you and the agent, and explains the agent’s duties to you and vice-a-versa. Ask about the difference between an exclusive and non-exclusive buyer’s broker agreement and decide which suits your needs. It is also common practice that the homeowners bear the burden of paying the commissions in a transaction, so it is not the buyer’s responsibility to pay the agent.
If choosing to contact the listing agents directly, they will expect to enter what is called “dual agency” in which case they would represent both the interests of the home owners and the potential home buyers. It is possible to utilize one professional for both parts of a sale. By law, agents are required to give buyers an agency disclosure. When you sign an agency disclosure it means that you have read the disclosure and understand what the Realtor’s responsibilities are in each type of agency. It is solely a disclosure. It is not an agreement. The most common agency is single agency, when a Realtor represents a client and then has a fiduciary responsibility to their client.
The saying “timing is everything” truly applies in the real estate world. Set realistic goals and a time frame to find your home. Ask your agent how you can help by supplying feedback. All things take time as well, as there are many variables in a home purchase. Writing a contract to purchase a home will encompass lending, inspections, appraisals and moving conveniences. It is better to have realistic expectations of the time required to fulfill all of the necessary steps.
If you aren’t ready to buy, then you probably don’t need a real estate agent just yet. You can go to open houses by yourself; call listing agents for showings – but be honest, and say that you are “only shopping.” You can also preview homes online and narrow your areas of interest. As you get closer, contacting a lender for pre-approval is a good first step. Once you can outline your comfort zone for cost, a Realtor can set up automatic searches and forward new homes that are listed automatically through email and other forms of technology.
There are many ways a real estate professional guides and explains the home purchasing process, no different than any other professional’s advice we may seek. Having a head start to the process and terminology will make the process as seamless as possible.