The deal sounded too good to be true: a two-story town home, completely gutted and refurbished according to my specifications and design preferences. Coordination of contractors' services and all aspects of the closing and financing were to be handled by an in-house development group - and at a price I could afford. The representative, draped in gold chains and reeking of dime store cologne, grinned at me. "This is the easiest real estate transaction you'll ever have," he assured me, after informing me there was no need to use the Realtor I had selected to represent me just two weeks earlier. Being a first-time buyer, I nearly let the promise of a brand-spanking new town home blind me. That's a scary thought.
Because once my Realtor caught wind of the development company's tactics, he did a little research ... and found out that these "developers had a record of shady tactics. What was sold as the "easiest real estate transaction" I'd ever have could have been a nightmare. It was a hard lesson to learn right out of the starting gate. And yet, I'm glad it happened. The experience taught me the value of having a bona fide Realtor on my side - somebody who has appointed to look after my best interests, and sometimes even fight for them.Sure, some people can and do go it alone when buying or selling homes. If you're savvy enough to navigate the occasionally murky waters of the real estate transaction, then more power to you. But particularly for first-time buyers, the value of an experienced Realtor is immeasurable - a lesson I learned from the school of hard knocks. A Realtor's role extends far beyond just finding a buyer, or a nice house in a good neighborhood. In many cases, your Realtor is there to provide a reality check - as mine did - and to handle the tough negotiations involved before closing. My Realtor has assured me that regardless of what those developers tried to spoon-feed me, the real estate transaction is never, ever easy. He doesn't need to convince me.
Among a Realtor's areas of expertise are:
- Advertising properties both to other Realtors and prospective buyers on the MLS, as well as through other local and regional media;
- Creating marketing strategies to sell properties, based on accurate information and research about each property;
- Holding and supervising open houses in various properties on the market;
- Offering recommendations and information about various neighborhoods and properties that fit within a buyer's price range and individual preferences/lifestyle needs;
- Draw up an estimate of the market value of the seller's home;
- Drawing up the contract and negotiating its terms;
- Providing guidance to buyers seeking financing;
- Coordinating and handling all issues related to the inspection;
- Coordinating appraisals and contingency dates
- Negotiating offers and counteroffers;
- Screening prospective buyers and reviewing their offers before an acceptance by the seller;
- Assisting the seller when contract conditions - for example, furnace repair, new carpet installation, etc. - are required.
While some sellers choose to "go it alone" in order to avoid having to pay a real estate commission, if you don't know what you're getting into, the results could be far more costly than the commission. In fact, a commission is really the price you pay for peace of mind. And for buyers, a Realtor eliminates much of the legwork involved in finding your next home. The process is much like finding a needle in a haystack - which is why it's so critical to find yourself an experienced Realtor who possesses an intimate knowledge of local-market conditions and properties which represent a good investment. Best of all, your Realtor can go to bat for you, steering you clear of such scenarios as the memorable one recounted above.
While the town home I lost seemed great, my Realtor reminded me that the process shouldn't be as shady as the one we'd just experienced. He successfully convinced me that this town home wasn't worth the risks. So the search continues ... for me, a little more cautiously than before. Whether or not I'll find the town home of my dreams, I'm not sure, but I do know that I'm sold on the merits of having a Realtor on my side.
Hot markets usually mean multiple offers will be received for just about every home for sale. How can you buy the home of your dreams when several other people are also bidding on it? Here are five tips:
- Make your best offer. Reality is, the bottom line is the most important thing for most vendors. They're looking to sell their home for the highest possible price. If you want to win a bidding war, offering the highest price - something attractively above the asking amount - is a sure way to get the vendor's attention. Most vendors who receive multiple offers only seriously consider those at the top of the price heap.
- Cover the vendor's costs. Of course, price is only part of the equation when it comes to the vendor's net proceeds from the sale. An offer with a slightly lower price can win if the buyer agrees to incur some of the vendor's costs. For example, assuming the vendor's existing mortgage can eliminate discharge penalty costs for the vendor.
- Show you're serious. Offer to make a large deposit and as large a down payment as you can. Putting more money on the table up-front shows the seller you're serious about the transaction and willing to put your money behind your intentions.
- Get pre-approved. Submit a copy of your mortgage pre-approval with your offer. A pre-qualification letter is helpful, but a full approval, subject only to an appraisal of the property, is even better. Vendors favor buyers who demonstrate that they're financially able to close the transaction. Get your pre-approval letter from a local mortgage broker who has a good reputation among the local agents.
- Don't add unusual or unnecessary conditions or requests to your offer. Vendors know extra conditions (e.g., the approval of in-laws, the sale of another residence) can delay the transaction or create a loophole for the buyer to bow out of the agreement. Special requests (e.g., including appliances if they have been excluded in the listing) complicate the offer and distract both sides from more important elements. On the other hand, don't waive standard inspection and financing conditions unless you thoroughly understand the risks.
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