Life on the Georgia Coast as a Realtor: January 2015

Thursday, January 29, 2015

Buying a house? Why do you need a Buyer's Agent?

Home buyers should always have their own agent. Buyer agents work to negotiate the best terms and price for the buyer. Best of all, the buyer agent’s services are free to the buyer. Most people think they have to pay a sales commission. The truth is this: only the seller pays the commission. Whether a buyer uses an agent or not, the SELLER still pays the commission. The only person who wins when buyers are not represented is the listing agent.

Most buyer agents will have their clients sign an agency agreement, an Exclusive Buyer Agency Agreement. It outlines their services, how they are compensated, and how the two parties will work together. Remember, you wouldn’t hire your spouse’s attorney to represent you in your divorce. The same goes for real estate. Why use the seller’s agent to negotiate your best interest? There is an inherent conflict of interest. The home buying process is stressful enough without worrying about who you can and cannot trust. Your buyer’s agent is your trusted advocate.

Buyer Agents and the Agreements

According to most buyer agency agreements, the buyer’s agent must do these things:

§ Protect their client’s financial information

§ Negotiate the best possible price for the buyer

§ Must disclose to the buyer if they are working with another buyer interested in the same property

§ Show all properties the buyer is interested in that fits their criteria and budget

§ Connect you with the service providers—inspectors, lenders, home warranty companies—to best suit your needs

The buyer also has some responsibilities to their buyer’s agent:

§ Buyers must work with their buyers agent exclusively

§ Buyers should never give personal information to any other agent

§ Buyers should not call other agents to see properties, even if they think they are saving their agent some time and effort

§ Buyers should clearly define their must haves and deal breakers to help their agent streamline the showing process

Make sure the buyer’s agent you select is familiar with the type of property you want to purchase, the area you want to purchase in and the particulars of your situation. An agent is only as effective as the information they are given. Clients relocating from one city to another require a different set of skills from a client moving within the same area, for example.

Buying real estate is a big decision. The best advice is to find a REALTOR® who will guide you through the local market conditions. I am a REALTOR® and have worked with many buyers in our local market. I have experience in a wide variety of properties and price ranges. Feel free to take a look at my Realtor.com page at http://rltr.cm/co4i and check out my Recommendations. I am confident you'll enjoy working with me and you'll save a significant amount of money on the purchase of your next home.

Cheers!

Jeff

Jeff Williams

REALTOR, RSPS

Resort & Second Home Markets Specialist

Hodnett Cooper Real Estate
520 Ocean Boulevard, St. Simons Island, GA 31522
Cell: (912)-270-0032

Fax: (912)-634-8350

jeff@hodnettcooper.com

www.hodnettcooper.com

Wednesday, January 21, 2015

Selling your home? Ask for a loan preapproval letter!

Ask anyone who’s been in real estate for a while they’ll tell you: “We spend a bunch of time working with you on selling your home, spend money to market the home, host open houses and show the home to prospective buyers, finally getting an offer in writing that everyone is happy with and putting the home under contract – only to discover the buyer can’t qualify for a mortgage. That wastes and agent’s time, wastes your time and can cost valuable time that the home is off the market. We can protect your interests by asking for a pre-approval or at least a pre-qualification letter with any offer submitted on your home. This minimizes the chance that we’ll be working with an unqualified buyer.

Note that there is a difference between being pre-qualified and being pre-approved. Someone who is pre-qualified has not actually put in a formal loan application. The borrower has simply stated his or her assets and income to the lender, and they’ve probably pulled a credit bureau report. But at the pre-qualification stage, the lender usually hasn’t verified the information with any reliable third party.

If a buyer is pre-approved, it’s still not an ironclad guarantee that he will get a mortgage issued on a particular property. But it does generally mean that the lender has already looked at the buyer’s W-2 statements, tax returns, income statements, and bank and financial accounts.

From your perspective, a pre-approval letter is much stronger – but also much more elusive.

What do you need to see in a pre-qualification letter? At a minimum, you want to see these things nailed down:

Your buyer identified by name – whether a corporation or individual.
The loan amount they can qualify for.
A statement that the lender has determined that the buyer has the assets on hand to go through with the transaction.
An expiration date – say, 60 days from the date of the issuance of the letter.

That said, it’s nowhere near as strong as a pre-approval letter. When someone comes pre-approved, you know that individual has invested some time in the process. They have also put their own credibility on the line, and sworn under penalty of law that they have the assets they stated they have – and face jail time for mortgage fraud if they are caught lying, because now the bank has loan documents with their signature on them.

Once someone goes through that process, and only has a certain amount of time in the pre-approval window to buy a house, he or she is much more eager to close a deal – and less likely to waste your time or theirs with unproductive lowball offers.

As Realtors®, when we see offers with a pre-approval or at least a pre-qualification letter, we tend to advise clients to consider those offers over offers with no letters. When it comes to considering a written offer from a buyer, don’t be shy about protecting your time by insisting on some sort of pre-qualification documentation.

Cheers and I hope to hear from you soon!