Why Use a REALTOR®?
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR “®” logo on the business card or 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 of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 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 foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you’re still not convinced of the value of a REALTOR®, here are additional reasons to use one:
- Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. 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 negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of 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 evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, 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 title of the property. 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 company or attorney can help you resolve issues that might cause problems at a later date.
- Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
- Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
Speak to a Lender…..sooner rather than later
Why get preapproved for a mortgage before you begin your search for a home? Preapproval puts a commitment behind your home-shopping interest. And, there are three people who will benefit from your preapproval. You, your Agent, and the Seller from whom you eventually buy a home. Let’s examine these three more carefully….
You: The most important beneficiary, of course, is you. One of the most common questions we get goes something along the lines of “How much house can we afford?” The best way to get an accurate answer is through preapproval. The mortgage preapproval process is a realtively simple one, but it is an important one. It begins the process of formally applying for a mortgage, and it gives everyone involved–especially you–a clear sense of the direction that things should be headed.
Your Agent: By knowing what your financial parameters are, your Agent can spend more time looking for houses that “fit” and less time pursuing dead ends. It also tells your agent that you are serious about this pursuit. Agents usually work dozens of leads at any one time. Knowing that you are one of the serious ones looking to locate that special property sooner, rather than later, will go a long way to move you to the top of your agent’s list.
The Seller: Want to strengthen your bargaining position? Get preapproved. Want your offer to stand out in a case of multiple offers for the same property? Get preapproved. Look at it from the seller’s prospective. If you had two offers on the table for your property, one from a preapproved buyer and the other from an “I’ll get around to that soon” buyer–to which offer would you devote the most attention? Even if the preapproved buyer’s offer was $5,000 less, would you take the risk that the “other” buyer may not be able to qualify to purchase your property? And, while the buyer with the higher price is fumbling though paperwork to see if they can get qualified, the preapproved buyer may very well have moved on to another property. The lesson in all this: Do yourself a favor and get preapproved!
The Realtors at The Coastal Real Estate Company would be happy to assist in referring you to several trusted lenders. Please contact us for further details.