A Realtor Can Help
The process of buying a home or investment
generally starts with determining your buying power; that is, your
financial reserves plus your borrowing capacity. If you give a real
estate agent some basic information about your available savings,
income and current debt, he or she can refer you to lenders best
qualified to help you. Most lenders -- banks and mortgage companies
-- offer limited choices.
Looking
Once you know how much you can and want to
invest, the next step is to find the properties that most nearly fit
your needs. This is the time to choose a real estate licensee. When
picking a real estate agent look for one who is also a realtor. A
realtor is a member of the NATIONAL ASSOCIATION OF realtors, a real
estate trade association, and all members agree to abide by a 17
article Code of Ethics. A realtor has many resources to assist you
in your search. Sometimes the property you are seeking is available
but not actively advertised in the market. It will take some
investigation by your agent to find all available properties.
Choosing a property
Your job is to make the final selection of
the right property for you. This is when excitement and emotion run
high. Your real estate agent can assist you in the selection process
by providing objective information about each property. Agents who
are realtors have access to a variety of informational resources.
realtors can provide local community information on utilities,
zoning, schools, etc. There are two things you'll want to know.
First, will the property provide the environment I want for a home
or investment? Second, will the property have resale value when I am
ready to sell?
Negotiating
There are myriad negotiating factors,
including but not limited to price, financing, terms, date of
possession and often the inclusion or exclusion of repairs and
furnishings or equipment. The purchase agreement should provide a
period of time for you to complete appropriate inspections and
investigations of the property before you are bound to complete the
purchase. Your agent can advise you as to which investigations and
inspections are recommended or required.
Due diligence
With a negotiated agreement in hand, it is
time to complete the evaluation of the property. Depending on the
area and property, this could include inspections for termites, dry
rot, asbestos, faulty structure, roof condition, septic tank and
well tests, just to name a few. Your agent can assist you in finding
qualified responsible professionals to do most of these
investigations and provide you with written reports. You will also
want to see a preliminary report on the title of the property. Title
indicates ownership of property. The title to most properties will
have some limitations; for example, easements (access rights) for
utilities. Your agent, title company or attorney can help you
resolve issues that might cause problems at a later date.
Financing
As soon as you are reasonably sure the
property is right for you, the process of obtaining financing
begins. Your agent can help you in understanding different financing
options and in identifying qualified lenders.
Closing or settlement
Finally, there is the closing, or
settlement, as it is known in different parts of the country. Every
area has its own unique customs. In some areas, the title or escrow
company will handle this process. In other parts of the country, an
attorney does it all. Again, your real estate agent can guide you
through this process and make sure everything flows together
smoothly.
Why use a realtor?
All real estate licensees are not the
same. Only real estate licensees who are members of the NATIONAL
ASSOCIATION OF realtors are properly called realtors. They proudly
display the REALTOR "®" logo on their business cards or
other marketing and sales literature. realtors are committed to
treat all parties in a transaction honestly. realtors subscribe to a
strict code of ethics and are expected to maintain a high level of
knowledge of the process of buying and selling real estate. An
independent survey reports that 84% of home buyers would use the
same realtor again.
You be the judge
Real estate transactions involve one of
the biggest financial investments most people experience in their
lifetime. Transactions today usually exceed $100,000. If you had a
$100,000 income tax problem, would you attempt to deal with it
without the help of a CPA? If you had a $100,000 legal question,
would you deal with it without the help of an attorney? Considering
the small upside cost and the large downside risk, it would be
foolish to consider a deal in real estate without the professional
assistance of a realtor.
