Some common "Things" in real estate that you might wonder about.
Q. I drove by a property with a Realty sign in the yard. Do I have to call the company listed on the sign to be able to get the best and most current information or set up a showing?
A. The answer is no. In the old days, and not that long ago, listing brokerages could hold their listings for showing only by their own agents and not allow other agents, from other companies to bring their clients to show. It was determined that it was not in the best interests of the sellers to continue to allow that practice. The Multiple Listing Service (MLS) was then created for the purpose of having real estate companies release and share information about their listings to any other licensed agent that requests it. They also then share in any commission. Most current real estate information, if not all, is available to licensed agents on line on the agent MLS site. ALL data about a MLS listed home is available to ALL other agents and brokers in our Range MLS region. You can call any agent you’d like to show you any MLS listed home regardless of which company has the sign in the yard.
Q. Does the agent, that might show me a house, actually represent me automatically? How does that work?
A. The answer is maybe. How an agent represents or doesn’t represent you is known in the industry as Agency Relationships. Every time a potential buyer views a home or sometimes even as soon as they show interest in a home, it’s mandated that the agent, they’re working with, disclose his or her representative status to that buyer. The potential buyer will be handed a simple Agency disclosure form to sign. It is not a contract. It’s simply done to prove that the agent disclosed to the buyer about their representative status as an agent in that particular home. Many buyers assume that they’re being represented by any agent that shows them a home. In fact, it’s not mandated that buyers be represented by anyone. A lot of buyers work with trusted agents that do not actually represent them. If a buyer requests or an agent requires a Buyer Representation contract to be signed, then the buyer will be represented solely by that agent and the agent will owe certain duty to the buyer and buyer to the agent. It’s important to know that there are a number of agency relationships that agents assume depending on the scenario. It would be a good idea for any buyer to ask their agent..”What is your agency relationship with me?”
Q. I’m trying to sell my home. My agent has identified a buyer that’s been approved for financing. His lender told him to request that I contribute to his closing costs in order for him to be approved for the loan. I’d never heard of that before. My agent told me that the buyer could ask for up to 6% of the agreed purchase price to help him pay his closing costs. Is it a common practice and do I have to do it?
A. The answer is yes and no. Yes, it’s common practice and No, you don’t have to agree to do it. Some buyers, especially those that qualify for a loan but have little or no down payment available to them, and also many first time homebuyers , sometimes need a little help to get to the closing table. If the buyers just cannot raise the necessary dollars to pay all of their closing costs….. the help may come in the form of what’s referred to as a “seller concession to buyers closing costs” where a seller who will often be receiving a large sum of money at closing, will be asked to share some with the buyer in order for the loan to be approved. Here’s the catch though: What a buyer requests a seller to pay towards his closing costs is one thing. What a seller agrees to pay may be another. In other words…it’s always negotiable. The seller can say no to a request for any seller contribution and hope that the lender will find another way to help the buyer. The seller could also say, ” I won’t pay 6%, but, I would pay 2%”. If the buyer’s lender accepts the terms you could be off to a successful closing.
Q. If I received an accepted purchase agreement for my home on the first day of any month, how long should I expect to have to wait for the transaction to close and what will I need to do, myself, to get to a successful closing asap?
A. The answer to this question will depend on the method the buyer uses to pay and whether or not any unforeseen roadblocks pop up along the way to closing. If the buyer will require normal financing, as most do, then an average time to get to the closing day might be 45 days. If a buyer will use immediate cash on hand generally one week to 10 days or sometimes even less time might be necessary to complete the transaction. Buyers and sellers should always be aware that the intention to close on a certain date may or may not be realized as all kinds of little and sometimes large hold ups can present themselves during the course of the transaction. Realtors that write up the paper work hand off to title companies and lenders once the purchase agreement is accepted and signed by both buyer and seller. From that point on they have a responsibility to keep tabs on the process, but, lose some ability to affect the trail of the paperwork as the rules and regulations of the banking industry can create the need for a buyer to sometimes have to provide any number of items, that were not originally requested, to complete the lender application such as: past payment stubs, proof of employment, tax information, past student loan information and other items. Having to all of the sudden provide this additional information can create hold ups and so can extend closing dates beyond the initial expectation. Most transactions, by far, do go ahead to a successful closing. It should just be noted that it’s not uncommon for lenders to require additional information at the last minute which can hold up a closing. Buyers should ask their lender to provide them a list of ALL necessary data they’ll need to supply the lender at the beginning of the relationship. Buyers can also be proactive and ask their realtor about issues that can arise between the sale and closing of a transaction and what the buyer might do to lessen their chance of having a closing extend.
Q. What exactly is EARNEST MONEY and what happens with it when a contract is signed and accepted.
A. Earnest money is money given by a buyer at the time of offering to be held in the listing broker’s trust account until closing. Most of the time, and with a successful closing, the amount is credited back to the buyer against the cost of the home. The purpose is basically to show a seller that you’re serious about purchasing the home. The seller could claim the earnest money if you were to back out of the transaction at some point and especially if the seller had to incur expenses due to your change of heart. From our experience, it’s unusual for earnest money not to be returned to the buyer when unforeseen circumstances, like financing failing or other generally accepted reasons for discontinuing a transaction happen.