A real estate agent can help save you time and effort in your search for the right home. Real estate professionals have access to home buying tools and experience that the average home buyer doesn’t have. The real estate agent’s role is to guide you through the home buying process and help you find the home that best suits your needs and price range. Real estate agents aren’t necessary in every real estate transaction, but they can help you:
- Understand the paperwork and legal requirements
- Find the neighborhood for your lifestyle
- Find the home that meets your needs
- Search property values in your area
- Negotiate the final offer
- Coordinate the closing process
The Negotiation Process
When you have found the home that best meets your needs, you are ready to make an offer on the house. In most cases your real estate agent will present your offer to the seller. Do not be discouraged if your first offer is rejected by the seller. It is not uncommon for the seller to make a counter-offer.
Once the selling price has been agreed upon by both the buyer and seller, a purchase contract is started. In most cases, your real estate agent will help you negotiate the terms of the purchase contract. The purchase contract is a legal contract that details the final terms for the purchase of the home including price, closing date, and estimates on the closing costs. By signing the purchase contract, it means you have agreed to purchase the property under the negotiated terms and price. Although some closing cost fees are required by law, you can negotiate others as part of the purchase offer.
What’s included in closing costs? Click Here
Who pays for what? There are no definitive rules on who pays which closing costs. The buyer and the seller usually negotiate who pays certain closing costs. For instance, the seller may be willing to negotiate full or partial payment of appraisal fees, loan points, credit report request, and inspection fees. Usually the seller is responsible for the brokerage fees, as this is compensation to the real estate agents for their roles in the sale of the home. Some foreclosure sellers will distinguish between closing costs and “prepaids” and refuse to pay any money towards prepaids. Prepaids are amounts
required to fund escrow accounts for loan companies to pay real estate tax and insurance bills when they come due.
Earnest Money – Typically required as part of the purchase contract, earnest money provides a “good faith” deposit and secures the sale agreement. This deposit is usually a portion of the purchase price. This deposit shows that the buyer is serious about purchasing the house. Earnest money is held in an escrow account for the buyer and can be applied toward the down payment or closing costs. In some cases, the buyer must pay the deposit in cash.
UPDATE – HOW TO FIND FORECLOSURES??
All bank-owned property or REO’s (real estate owned property) are listed on the local MLS (Multiple Listing Service). Even HUD properties eventually end up on the MLS (“REIN”, Real Estate Information Network, the MLS for the 7 cities and surrounding areas). There are certain safeguards to buying a bank-owned property on the MLS, not the least of which is being able to buy with a home inspection contingency, and buying with clear title to the property. Sign up for new listings of foreclosures. This subscription is FREE. Some websites might offer you lists for a fee, however you should NEVER have to pay for lists of foreclosure properties.