Once a buyer knows how much
house he/she can afford, the buyer is now ready to find the property that
not only fits his/her practical needs, but emotional needs as well. When searching
for a house, it is recommended that the buyer consult a professional real
estate agent. We shall use our hypothetical buyer, Mortimer Gage, to illustrate
this step of finding and securing the right property.
When we last left Mortimer
Gage, he was learning about the different types of mortgage loan programs
available, and determining which program was best suited for his needs. Now
let's take a look back in time when Mortimer and his wife, Morticia, were
looking for their dream home.
When they were first married,
they drove around the suburbs every Sunday looking at houses and thumbing
through newspapers, hoping that someday they would be able to afford a home
of their own. Through hard work and perseverance, Mortimer and his wi fe were
financially able to purchase a home. Now they face another challenge - where
to find the dream home. The Gage's worked hard for their money, so they wanted
to make sure they were completely satisfied with their purchase. Mortimer
decided to get advice from an old college friend Reil S. Tate. Mr. Tate is
a professional realtor serving the greater s uburban area, and knows all the
details involved in selecting a house. After exchanging pleasantries, the
first question that Mortimer asked Reil was, What is the most important thing
I need to consider when selecting a house?
Mr. Tate told Mortimer that
he needs to become an educated buyer. To do this, Mortimer needs to find an
area that is appealing to him and his wife. Once they find the area, they
need to acquaint themselves to the sale prices of homes in the area. The best
way to achieve this is to do what Mortimer did, obtain the services of a real
estate agent. Although most agents are paid by and work for the seller, some
agents choose to work for the buyer. To eliminate any uncertainty, the state
law requires that an agent must disclose to the buyer, in writing, that the
agent's best interests lie with the buyer. This disclosure should take place
prior to viewing any homes. Mr. Tate also told Mortimer to always make interior
inspections of homes of interest. A buyer doesn't need any unpleasant surprises
when moving in.
Mortimer took Mr. Tate's
advice and learned to average prices of homes in the area that he was interested.
Mort and his wife also inspected the inside of houses they were of interested.
After two weeks, Mort and
his wife found a house that was everything they wanted. So they went back
to Reil S. Tate and asked for further advice - how to negotiate a price.
Mr. Tate told Mort that this
phase needs to be handled patiently and logically. If the property is listed
at a realistic price (according to what similar homes have sold for in the
area) an initial offer price of 90- 95% of the list price is normal. The seller
will then respond to the buyer's offer by either accepting it, rejecting it,
or in most cases making a counter offer. The buyer then has the option of
accepting the counter offer, rejecting it, or making another counter offer.
Although there is no limit to the number of counter offers that can be made,
the second round of negotiating is usually the last.
Tate also informed Mortimer
that everything regarding the property can have a perceived dollar value,
and is therefore negotiable. This includes the price, the down payment, the
financing, the closing date, personal property included in the house, possession
date and occupancy details. For example, a lower purchase price might be offset
by lower use and occupancy charges, less personal property or a quicker closing
date.
Mortimer also needs to consider
obtaining the services of an attorney, or at least an attorneyÕs approval
rider (which allows both parties the advice of their respective attorney,
before the contract is finalized). An attorney can be very helpful wh en questions
regarding the sale contract arise. Topics that may arise are the need for
a home inspection or hazardous material inspection, or how to distribute settlement
costs.
A final advantage of using
a real estate agent that Mortimer should consider is that real estate agents
are not personally involved in the purchase. Agents are able to objectively
point out good points and bad points in property and the resulting contract.
Mortimer was so impressed
by Reil S. Tate's knowledge on this matter, that he decided to officially
obtain his services to help purchase a home. Mortimer also decided to call
his lawyer, Seymour Cash, to help with all legal matters that can arise.
Go
to Part 4: Selecting The Real Estate Agent Right For You!
