I’m in the Market to Buy
If you’re buying a home, one way to find out about and visit a lot of properties is to work with a real estate professional. This service does not cost you anything; the seller pays the fee at the time the property is sold (the “closing”). Real estate agents and Realtors can be helpful in setting up times to look at properties, negotiating with the sellers over the price you are willing to offer, and getting the deal to closing.
Real estate professionals can also help you think through what sort of a house you’re looking for. Agents can show you properties in your price range and with the features you’re interested in. While real estate agents usually work for the seller, “buyer-brokers” represent the buyer’s interest in the deal. They also collect their fee at closing when the sale is complete.
Real estate professionals have something called the Multiple Listing Service (MLS), a computerized database of homes for sale. They can use this to search for the type of property you want in the town or neighborhood where you want to live. MLS listings are also available to the general public although real estate agents get access to more information. The listings have one or more pictures as well as basic information about the property: the number of bedrooms, how old it is, and the lot size. You can find vacant lots in the MLS as well, if you’re interested in building a new house.
Alert: Compare and Save on Title Insurance To save money on title insurance, compare rates among title insurance companies. Ask what services and limitations on coverage are provided under each policy so that you can decide whether higher-cost coverage may be better for your needs. However, in many states title insurance premium rates are established by the state and you may not be able to negotiate a lower rate. If you are buying a home which has changed hands within the last several years, ask your title company about a “reissue rate,” which is cheaper. If you are buying a newly constructed home, make certain your title insurance covers claims by contractors. These claims are known as “mechanics liens.”
While many people feel more secure working with a real estate agent, there are also a number of properties being sold by their owners. Look for guides to “for sale by owner” (or FSBO) properties in your area in supermarket foyers, Laundromats, or other high-traffic areas. You can also find listings on the Web. A quick Internet search brought up the following two FSBO services, but there are many others:
As a buyer, looking at FSBO properties means that you will be negotiating directly with the seller of the property. This means that you will not have the benefit of a skilled professional looking out for you. If this concerns you, it makes sense to hire a lawyer to look over the contract.
What If I Want to Sell?
Real estate professionals can be very helpful if you’re planning to sell your property. To begin with, they can give you a sense of how much it is worth. This is not the same as a formal appraisal. This service provided by real estate agents is usually done for free, and is based on a rough search of comparable properties in the surrounding area.
If you are getting pressured to sell by a “predatory buyer,” who is offering you cash if you sell immediately at a low price, you might want to contact a local real estate firm and see if they can give you a better sense of the actual value of the property.
When you list your property with a real estate professional, you sign a contract with the agent for a period of time. This gives the agent the exclusive right to try to sell your property for you. If the property doesn’t sell, you can choose not to renew the listing agreement when the contract period ends. The real estate professional will advertise your property in the newspaper, in the Multiple Listing Service (an online database), and in other publications. The real estate professional is responsible for showing the property, getting the signed purchase and sale agreement, and helping to bring the deal to closing. The agent or Realtor can also give you helpful tips on what you can do to make your property easier to sell. You only pay if the property sells, and that fee is paid at closing (the settlement meeting where the property actually changes hands). The fee varies, but is usually from 5% to 7% of the sales price.
Choosing a Reputable Real Estate Agent
One good way to find a real estate professional is to look around an area where you’re interested in buying or selling and take note of the real estate signs you see. Who’s listing the most properties? Is the office local? Find out who other people in the neighborhood have used as an agent. Were they pleased with the service? Keep in mind that you don’t have to work with the first real estate agent you meet; you should shop around to find someone who understands your needs and is going to be easy to work with.
There are real estate associations in every state, and often local branches as well. The state Resource Guides at Route 4 have information on the associations in your state. You can search the associations’ websites for a licensed real estate professional in your area, and also find out what to do if you are not satisfied with your current real estate professional.
Some questions to ask a real estate professional are:
- Can you show me your real estate license?
- How long have you been in business?
- What qualifications do you have to sell real estate?
- Can I have a list of references to call?
- Do you have a plan for marketing a property like mine?
- How much of your business comes from referrals?
- How do you track what’s happening with my listing (number of calls, number of showings, activity at open houses, and so on)?
Many people feel that using a licensed, qualified real estate agent is the best way to buy and sell real estate, especially if you do not have a lot of experience yourself. It is easy to be taken by real estate scams, and a good real estate agent will protect you from that.
You might want to work with a licensed Realtor®. While both real estate agents and Realtors® are licensed to sell real estate, a Realtor® is a member of the National Association of Realtors®. The main difference between a real estate agent and a Realtor® is that a Realtor® must subscribe to the Realtor® Code of Ethics and its underlying Standards of Practice. The standards are much more restrictive and confining than those governing agents who simply hold a real estate license.
Selecting a For Sale by Owner (FSBO) Service
If you feel sure that you can sell the property yourself, a For Sale by Owner service is likely to be available in your area. You pay a fee for this service, but it is less than what you would pay a real estate professional. The service will market your property in publications and on websites, and supply forms and documents, as well as some tips, on screening buyers and selling property. You may still want to get legal advice on the contracts and forms that you use for the sale.
Selling a house by yourself means that you have to show the unit, negotiate directly with the buyer on the purchase and sale agreement, and handle any other issues as they come up. If this concerns you, you can always hire a lawyer to look over the purchase and sale agreement or come with you to the closing.
The websites for two FSBO online services are listed below, but there are many others.