MOST FREQUENTLY ASKED QUESTIONS BY BUYERS
WHAT ARE THE STEPS IN PURCHASING A HOME?
1. Find a real estate agent.
2. Sign agency agreement (explained later in detail)
3. Find a mortgage lender (your real estate agent can recommend one) to determine what price range you should be looking in based on your debt to income ratios and credit scores.
4. Determine what your needs and desires are in a home such as location, number of bedrooms, number of baths and anything else that is important to you such as schools, views, etc.
5. Your real estate agent will provide information on all properties in the Pikes Peak Multiple List System that have your specific criteria.
6. Decide which homes you would like to look at from the information provided by your real estate agent.
7. Your real estate agent will set up appointments to look at these homes called “showings”.
8. Look at as many homes as you would like until you find the right home that meets your needs.
9. Write an offer on the best home for you and provide earnest money at time of offer. Amount of earnest money varies depending on the amount of the home.
10. Once you have an accepted offer, hire a professional inspector to accompany you for an inspection of the property for any major defects. The cost for an inspection varies depending on the size of the home.
11. Start the loan application process with your mortgage lender.
12. Close on your home in approximately 30-45 days from the day your offer is accepted.
WHAT DOES IT COST AS A BUYER TO USE AN AGENT?
The compensation your real estate agent receives typically comes from the Seller’s proceeds. In other words, there is no cost for a Buyer to use an agent in a traditional agent/buyer relationship. If you have a Buyer’s Agency Agreement there is no cost to you as, in most cases, the buyer’s agent is paid by the listing agent who is paid by the Seller. I say “in most cases” because there are situations such as “For Sale by Owner” where the Seller is unwilling to pay a commission to the Buyer’s agent. Even in these cases, the Seller sometimes is willing to pay a commission of 3%, just not a full commission to both the Listing Agent and Buyer Agent.
WHAT ARE THE DIFFERENT AGENCY RELATIONSHIPS?
A buyer agency is when your agent works solely for your benefit and not that of the Seller. A transaction broker agency is when the agent works for both parties in facilitating the transaction.
A great analogue is that of a “coach” and “referee”. A “coach” (buyer agency relationship) can give you the rules and plays of the game (advice) and is looking out for the team’s (your) best interest. However, a “referee” (transaction broker relationship) can only tell you the rules of the game. He is not allowed to give you plays or favor one team over the other.
CAN MY AGENT GIVE ME INFORMATION REGARDING PROPERTIES FROM OTHER COMPANIES?
Yes, if that other company is a member of Pikes Peak Multiple Listing Service (MLS) – which most real estate companies in Colorado Springs are. For Sale by Owner (FSBO) properties are not listed in the MLS so an agent likely would not be able to provide information regarding them. However, with a buyer agency agreement, your agent may be able to help you purchase a FSBO. Also a buyer agent can help you purchase any new home builds.
WHAT IF I FIND A PROPERTY ON MY OWN THAT I WANT TO SEE?
You should contact your agent and not the property owner or the agent listing the property or the builder. Having the address or the MLS number is very helpful and will assist your agent in gathering information regarding the property.
WHAT TYPE OF INFORMATION WILL MY AGENT NEED FROM ME?
An agent will need any type of information regarding the property you are looking for that is important to you. For example, number of bedrooms, garage size, price, location and number of bathrooms are common criteria. Other considerations include the school district, type of home (ranch, tri-level, etc) and room sizes. Keep in mind that a search that is too specific may narrow your list of properties too much while one that is too broad may give you more properties to look at than you have time to go through!
An agent may also ask you for other information such as hobbies or activities you enjoy, children’s names, birthdays, etc. This type of information fosters more of a “friend” relationship than a “business” one and makes the home buying process much less stressful.
CAN I GO TO OPEN HOUSES WITHOUT MY AGENT?
You can go to open houses without your agent. However, you need to make sure that you indicate you are working with an agent already. If you don’t, your agent might not be able to help you write an offer on that property in the future.
HOW CAN I FIND OUT ABOUT NEW PROPERTIES?
Your agent should be able to accommodate your particular situation whether it is via e-mail, phone calls, etc. Clients with e-mail capability can receive automatic updates from the MLS system as soon as new listings are entered. Also your agent should be able to set up a personalized webpage for you.
WHAT IF I AM UNHAPPY AND WANT TO SWITCH AGENTS?
Let the agent know first that you are unhappy and the reasons why. See if you can work out the issues with them.
SUMMARY
When purchasing real estate, a sales agent can be an invaluable resource if you remember your responsibilities:
1. Work with just one agent
2. Make sure you tell your agent everything
3. Always tell other agents you are already working with an agent
4. Consider your agent a friend
5. You will meet a lot of people during the time you are looking to purchase a home who are also looking to purchase, please give them your real estate agent’s card
If you have any questions regarding purchasing a home or would like me to be your agent, please give me a call. I want your home buying experience to be as easy and enjoyable as possible and will do everything I can to ensure you find the right home, at the right price in the right neighborhood.
