Most home buyers need to finance their purchase with a mortgage. Unfortunately, many don't realize they should obtain a mortgage preapproval before they seriously look for a home. Sellers today usually insist on seeing a preapproval before negotiating the sale of their property.
I'm working with a couple now that had an idea of the price of the home they could purchase, but found a home they wanted to look out before getting a mortgage preapproval. They loved the house, but needed a preproval to make an offer. They obtained a preapproved, but found that they can only make a very low offer on the home. They may get lucky and the seller may accept their offer; but, they were looking for homes above their price range. I fear they will be disappointed.
To avoid disappointment and wasted time looking at homes above their price range, buyers should get a mortgage preapproval before shopping for a home.
A mortgage preapproval does not lock a buyer into a specific mortgage company. Buyers can still shop around for the best rate. It will help them to know their price limitations and allow them to move quickly when they find the home of their dreams.
Showing posts with label Buyer's Agent. Show all posts
Showing posts with label Buyer's Agent. Show all posts
Wednesday, February 15, 2012
Sunday, December 4, 2011
Should You Have a Buyer's Agent When Purchasing A Home?
Most home buyers start their search for a new home by viewing properties on the Internet. Many will also visit open houses. This is a great way for buyers to acquaint themselves with what is available in their price range. When they see something they might like, they tend to call the agent whose name pops up by the property on the Internet. Depending on the website, this may or may not be the listing agent.
The advantage of dealing with the listing agent is that s/he may be more familiar with the property than other qualified agents. The disadvantage is that s/he represents the seller. Is this a matter of concern, and should you have a buyer's agent when purchasing a home?
The concept of "buyer's agent" is a fairly new one. Historically, the realtor working with the buyer was actually an agent for the seller. The logic was that the realtor was being paid a commission by the seller; so, his interests were to be primary. This led to many buyers misunderstanding the role of the realtor with whom they were working and dissatisfaction with the transaction. Consequently, the concept of "buyer's agent" was born. Now, even though an agent is paid a commission by the seller, s/he can represent the interests of the buyer.
If you purchase a home from the listing agent, are you represented? Well, not to the extent that you would be if you had your own agent. When the listing agent is also the buyer's agent, s/he is a "dual agent." A dual agent must walk a tight rope and not favor one party over the other. PA law states that a dual agent take "no action that is adverse or detrimental to either party's interest in the transaction." A dual agent owes both parties confidentiality, except that the agent must disclose material defects. In other words, the dual agent must remain neutral to both parties during negotiations and during the transaction.
Some buyers are savvy negotiators and familiar with real estate transactions, but most benefit from the guidance of an experienced agent representing them alone. Many times buyer's will seek guidance on price values, appropriate starting points for price negotiations and responses to inspection issues. Although each transaction is unique, experienced agents gain a feel for reading between the lines and knowing what the traffic will bear. Having an agent that truly represents you as a a buyer is usually an advantage.
If you wish to be represented, should you wait until you find the right home? After all, if you call a real estate office, some agent will probably show you the house you are curious about, and many will agree to e-mail you new properties that meet your criteria. Well, it's possible to find a property that way, but most agents will not expend a lot of effort trying to find the perfect house for you if they think you may buy through another agent. By hiring an agent to represent you, your status changes from a "customer" to a "client". A buyer's agent in PA is obligated to make a "continuous and good faith effort" to find a suitable property for you. In exchange, you agree that during the time period of the agency agreement, you will not purchase a home through another agent. Hiring an agent early in your home search will also allow you to choose your agent rather than winding up with an agent that happened to answer the phone when you called to see a house.
When I am employed as a buyer's agent, finding my client the right home is important to me and a priority. I search the MLS daily and visit broker's open houses to see if a home meets my client's criteria. I often drive by properties to check locations and neighborhoods and frequently preview homes before actually showing them to buyers. This is a major commitment of time and effort. Many agents work this way. Buyers who shop through several agents may not be serious buyers and are less likely to buy from any particular agent. Therefore, they do not get the time and attention buyers who have shown loyalty to an agent will command.
The advantage of dealing with the listing agent is that s/he may be more familiar with the property than other qualified agents. The disadvantage is that s/he represents the seller. Is this a matter of concern, and should you have a buyer's agent when purchasing a home?
The concept of "buyer's agent" is a fairly new one. Historically, the realtor working with the buyer was actually an agent for the seller. The logic was that the realtor was being paid a commission by the seller; so, his interests were to be primary. This led to many buyers misunderstanding the role of the realtor with whom they were working and dissatisfaction with the transaction. Consequently, the concept of "buyer's agent" was born. Now, even though an agent is paid a commission by the seller, s/he can represent the interests of the buyer.
If you purchase a home from the listing agent, are you represented? Well, not to the extent that you would be if you had your own agent. When the listing agent is also the buyer's agent, s/he is a "dual agent." A dual agent must walk a tight rope and not favor one party over the other. PA law states that a dual agent take "no action that is adverse or detrimental to either party's interest in the transaction." A dual agent owes both parties confidentiality, except that the agent must disclose material defects. In other words, the dual agent must remain neutral to both parties during negotiations and during the transaction.
Some buyers are savvy negotiators and familiar with real estate transactions, but most benefit from the guidance of an experienced agent representing them alone. Many times buyer's will seek guidance on price values, appropriate starting points for price negotiations and responses to inspection issues. Although each transaction is unique, experienced agents gain a feel for reading between the lines and knowing what the traffic will bear. Having an agent that truly represents you as a a buyer is usually an advantage.
If you wish to be represented, should you wait until you find the right home? After all, if you call a real estate office, some agent will probably show you the house you are curious about, and many will agree to e-mail you new properties that meet your criteria. Well, it's possible to find a property that way, but most agents will not expend a lot of effort trying to find the perfect house for you if they think you may buy through another agent. By hiring an agent to represent you, your status changes from a "customer" to a "client". A buyer's agent in PA is obligated to make a "continuous and good faith effort" to find a suitable property for you. In exchange, you agree that during the time period of the agency agreement, you will not purchase a home through another agent. Hiring an agent early in your home search will also allow you to choose your agent rather than winding up with an agent that happened to answer the phone when you called to see a house.
When I am employed as a buyer's agent, finding my client the right home is important to me and a priority. I search the MLS daily and visit broker's open houses to see if a home meets my client's criteria. I often drive by properties to check locations and neighborhoods and frequently preview homes before actually showing them to buyers. This is a major commitment of time and effort. Many agents work this way. Buyers who shop through several agents may not be serious buyers and are less likely to buy from any particular agent. Therefore, they do not get the time and attention buyers who have shown loyalty to an agent will command.
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