Frequently Asked Questions by Buyer
2. Do I have to pay my Buyer’s Agent?
3. Why should I buy instead of rent?
4. What do I have to do first?
6. How can I be assured of getting the best interest rate?
7. How can I get to know a community and be assured that a house investment there is wise?
8. How will I know what to offer for a property?
9. How will I know the property doesn’t have some hidden defect or that it won’t be a "money pit"?
10. What if I don’t get my mortgage?
Buyers of property today have many more tools to work with than buyers of just a few years ago. One of these tools is a "buyer’s agent". A buyer’s agent is a real estate licensee who works for you, the buyer. Pennsylvania law requires that a buyer’s agent has to have the buyer’s interests at heart, will listen carefully to understand the buyer’s needs, will work with vigilance to find the right property, will help with negotiations on price and inspections, and will make sure that the purchase process is as smooth as possible for the buyer. The buyer and the buyer’s agent sign a contract called a "representation agreement" that spells out the obligations of each party to the contract, just the way a seller and a listing agent would sign a listing contract to sell a house. When you sign a representation agreement with me, you hire 20 years of real estate professionalism during which I have been consistently the top agent in my office for production and client satisfaction.
2. Do I have to pay my Buyer’s Agent?
In a word, yes. In practice, your obligation to pay your buyer’s agent is most often fulfilled through the commission that is paid by the seller to his or her agent. You do not need to have extra cash to pay your own agent. In the rare case when the listing commission is not split with the buyer’s agent, payment to the buyer’s agent can be worked into the financing of the transaction.
3. Why should I buy instead of rent?
When you buy, you invest in a home, in a community and in yourself. As you make mortgage payments, you build up your equity and increase your assets. When you rent, you pay money to a landlord. You never see it again. When you buy a primary residence, you receive tax benefits, too. You may deduct from your income the amount of real estate taxes and mortgage interest that you pay on that residence, so your income tax bill is significantly smaller on April 15th.
4. What do I have to do first?
Strategize with your agent. Choose a mortgage company, get pre-qualified. Sometimes I advise buyers to actually apply for a mortgage loan. You want to be in a position to win in a competitive marketplace. Think about the requirements you have for a new home and articulate these as clearly as you can to your agent. You and your agent should work as a team. Check out newspapers, the internet, and sale signs. Your agent will be scanning all those things along with the multiple listing service, and she will be networking with other realtors to know what may be coming on the market. Be ready to move quickly when the property becomes available.
5. I have to buy a new home, but I need the equity from my present home for the down payment. Do I have to sell my house first before I can buy another? What if I sell but then can’t find the house I like?
There is always some anxiety in this situation. You are not alone. Many others face the same prospect. We will look at your finances and determine how to approach it. Sometimes a swing loan can release your home equity in cash for you to use. There are low down payment mortgage programs that can solve the problem. Sometimes folks in this situation will sell, then they will rent a while until the right house comes along. Sometimes we are able to negotiate a longer than usual time to settlement so there is more time to find the right property. Where there is a will, there is a way. If your financial picture dictates that you must sell before you buy, you may be assured that, as your buyer’s agent, I will scour the landscape to find your new house.
6. How can I be assured of getting the best interest rate?
When searching for the right mortgage, you want to consider several things. The interest rate, although a major factor, is only one of them. Other factors include: lender charges at settlement, how long the lender has been in business, the lender’s references, the lender’s reputation for service. You want to find a lender who will make it easy for you to apply for your loan. For instance, a mortgage company will send a representative to your home or to my office to take your application instead of making you report to a banking office between 9AM and 3PM.
7. How can I get to know a community and be assured that a house investment there is wise?
The best way to get to know a neighborhood that may be unfamiliar to you is to tour it. Take a walk at different times of the day or evening. Say hello to people you meet. Ask them how they like living there. I have found that census reports, internet-produced neighborhood reports and police reports often do not give an accurate flavor for many communities where the housing stock, quality of life, and vitality of community spirit are attractive and strong.
8. How will I know what to offer for a property?
You and your buyer agent will perform the same kind of analysis that a seller does when choosing an asking price. My clients and I search for recent sales of comparable homes in the market place. Armed with that information, we consider the property’s condition and location, and we also consider how much my clients want the house. An offering price becomes clear quickly.
9. How will I know the property doesn’t have some hidden defect or that it won’t be a "money pit"?
Every house, no matter how new or old, will need maintenance from time to time. You know within yourself how much skill, energy or time you have to devote to such tasks, and you will choose a house accordingly. To be sure you have a good sense of what you are getting into, your offer will include inspection contingencies. I always recommend a "property inspection" contingency to my buyers so they will have a period of time when a professional home inspector will look over the entire property with thoroughness and care and will issue a written report detailing its condition. Other possible inspections to have include environmental issues like radon, asbestos, lead in water or paint, and underground tanks, wood infestation, and water or sewer inspections when the property has a well or a private sewer system. Many of these inspections are commonly done and good inspectors are readily available. Your choice of inspections may depend on the strategies in your offer.
10. What if I don’t get my mortgage?
If I am your buyer agent, I will not let you get into a situation where you won’t get your mortgage. Period. End of story. Rest easy.