Why Use a REALTOR® When Buying a Home?
A real estate agent can help you understand everything you need to know about the home buying process. Not all real estate licensees are the same; only those who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR ” ®” trademark on their business cards and other marketing and sales literature.
REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict Code of Ethics and are expected to maintain a higher level of knowledge in the process of buying and selling real estate. An independent survey reported that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments in the lifetime of most people. Most real estate transactions usually exceed $250,000. If you had a $250,000 income tax problem, would you attempt to deal with it without the help of a certified professional accountant? If you had a $250,000 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 wise to work with a professional REALTOR® when you are buying a home.
If you’re still not convinced of the value of a REALTOR®, here are more reasons to use one:
Your REALTOR® can help you understand different financing options and identify qualified lenders. If you give a REALTOR® 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.
Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
Your REALTOR® 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?
Your REALTOR® can help you with negotiations and inspections. There are many negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or appliances. The purchase and sale agreement should allow 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.
Your REALTOR® provides due diligence during the property evaluation. Depending on the area and property, this could include inspections for termites, dry rot, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® 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 property title. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title search company or real estate attorney can help you resolve issues that might cause problems at a later date.
Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
How to Choose a REALTOR®
Not all agents or brokers are REALTORS® – there is a difference.
As a prerequisite for selling real estate, real estate professionals must be licensed by the state of Georgia, either as an agent/salesperson or as a broker. Before a license is issued, minimum standards for education, examinations and experience, which are determined by the Georgia Real Estate Commission must be met. After receiving a real estate license, some agents join their local board or association of REALTORS® and the National Association of REALTORS® (NAR), the world’s largest professional trade association. These real estate agents are called REALTORS®.
The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of NAR and who adheres to its strict Code of Ethics (which in many cases goes beyond state law). In most areas, it is the REALTOR® who shares information on the homes they are marketing, through a Multiple Listing Service (MLS). Working with a REALTOR® who belongs to an MLS will give you access to the greatest number of homes.
What Are an Agent’s Obligations to You?
A real estate agent is bound by certain legal obligations. Traditionally, these common-law obligations are to
• put the client’s interests above anyone else’s
• keep the client’s information confidential
• obey the client’s lawful instructions
• report to the client anything that would be useful
• account to the client for any money involved
A REALTOR® is held to an even higher standard of conduct under NAR’s Code of Ethics. In recent years, state laws have been passed setting up various duties for different types of agents. When you first start working with a REALTOR®, ask for a clear explanation of Georgia’s state real estate agent regulations, so that you will know where you stand on these important matters.
Seller’s Agents and Buyer’s Agents
If you’re dealing with a seller’s agent, he or she may be duty-bound to tell the seller that important fact. In Georgia, the seller’s agent doesn’t have any duty of confidentiality towards you when talking to you as a customer. Honest treatment might require that the agent warn you that “I must convey to the seller anything that would be useful so don’t tell me anything you wouldn’t tell the seller.” If you’re dealing with seller’s agents, it’s a good idea to keep confidential information to yourself.
Many home buyers prefer to hire a buyer’s agent, one who owes the full range of duties, including confidentiality and obedience, to the buyer. A buyer’s agent is often paid by the seller, regardless of the agency relationship.
Evaluating a Real Estate Agent
In making your decision to work with an agent, there are certain questions you should ask when evaluating a potential agent. The first question you should ask is whether the agent is a REALTOR®. Here are other questions you should then ask the agent:
• Do you have an active real estate license in good standing? To find this information, you can check with your state’s governing agency.
• Do you belong to the MLS and/or a reliable online home buyer’s search service? Multiple Listing Services are cooperative information networks of REALTORS® that provide descriptions of most of the houses for sale in a particular region.
• Is real estate your full-time career?
• What real estate designations do you hold?
• Which party do you represent – the buyer or the seller? This discussion is supposed to occur early on, at “first serious contact” with you. The agent should discuss the state of Georgia’s particular definitions of agency, so you’ll know where you stand.
• When I commit to working with you, how will you help me accomplish my goals? Will the agent show you homes that meet your requirements and will he or she provide you with a list of the properties you’ve been shown?
Buyers – Who Represents You?
An important topic in the world of real estate is the issue of agency. Some people might have you believe that it really doesn’t affect you, the buyer, and that nothing much has changed. But they are wrong.
The topic of agency is important to buyers because it answers the most fundamental question that can be asked of any real estate professional: Who do you represent in this transaction?
Until that question is answered, you may be left with the impression that all agents who work with buyers actually represent those buyers, and that you have somebody going to bat for you in a transaction. Well, the issue of agency is important, because without it you can never be sure who represents who.
Get a written “Buyer’s Agent” agreement. Make sure that the agent you are working with has agreed, in writing, to represent you as a “Buyer’s Agent.” This will require signing a buyer brokerage agreement in which you promise to work only with that particular agent for a specific period of time, often 6 months. It also means that you promise not to buy from anybody else, even For Sale By Owner properties, without involving your Buyer’s Agent. In almost every case, the commission will still come from the seller, but your agent must present and negotiate the offer.
Never disclose anything you wouldn’t want the seller to hear. Never say anything to anybody unless you would be willing to have that information repeated into a seller’s ear. Assume that everybody, and I mean everybody, is working for a seller unless you have specifically hired them to work for you. And even then, be discreet.