Buyers Guide

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 a dozen more 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.
  • When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
  • Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50″ of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
  • Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82″ of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
  • Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).


 

Down Payment Assistance

We All Can Use a Little Help Sometimes

Down payment assistance or “gifting” programs target working families with steady employment, who are unable to save the required down payment. Under current law, down payment assistance programs allow the seller; lender, real estate professional and buyer to work together with a non-profit affordable housing organization, so deserving families get their down payment as a gift.

Down payment assistance or “gifting” programs target working families with steady employment, who are unable to save the required down payment. Under current law, down payment assistance programs allow the seller; lender, real estate professional and buyer to work together with a non-profit affordable housing organization, so deserving families get their down payment as a gift.

There are a lot of different down payment assistance gift fund programs out there. All of them give you money to help with your down payment from funds that are raised by home sellers. Does it really matter which down payment gift fund program you use? Yes. Nonprofit groups like Colorado Cares not only assists you with your down payment, it also requires the seller to contribute money to an organization that is committed to making the world a better place. The Colorado Cares Program also uses the latest internet-based technology to ensure that your down payment assistance gift funds are at the closing table when you are.

While each nonprofit has different procedures; typically the programs are very simple. After a buyer is approved, the charity donates the down payment with no requirements to pay it back-ever. Anyone qualifying for an FHA loan is potentially eligible for this kind of down payment assistance.

The monies for the down payment come from donations received by nonprofits and from fees paid by sellers to enroll their homes in the program. The typical down payment gift is between two and five percent of the home’s final contract sales price. Colorado Cares provide gift funds up to six percent.

The approach is obviously working. Programs like Colorado Cares are helping working individuals and families with good credit, steady employment, but little or no upfront money to take that first step toward home ownership.

For more information on down payment assistance programs go to Carhof


 

 

Home Inspections
What is an inspection?There are numerous types of inspections. An inspection is meant to evaluate, at minimum, the structural and mechanical condition of a property. It is not the same as an appraisal which evaluates the market value of a property. Persons involved in real estate transactions need unbiased information about the physical condition of property they plan to buy or sell and your contract should include a contingency that you obtain a satisfactory inspection report. Talk with your agent about the types of inspections available. Home Inspectors vs. Engineers

Home Inspector: A person who examines any component of a building, through visual means and through normal user controls, without the use of mathematical sciences. Engineering: Analysis or design work requiring extensive preparation and experience in the use of mathematics, physics, chemistry and the engineering sciences.

Finding a qualified Inspector

 

  • Referrals from satisfied customers
  • Referral from a local real estate agent or mortgage company
  • Local consumer affairs office
  • Yellow Pages under “Building Inspection Services”
  • Ask if she/he is a member of the American Society of Home Inspectors (ASHI). The ASHI has established standards of practice which include the specific services, limitations and exclusions that can be expected from private home inspectors.

    What the inspection, at minimum, includes

    Every inspection should include, but not be limited to, an evaluation of at least the following:

  • Foundations
  • Plumbing and electrical systems
  • Doors
  • Ceiling, walls and floors
  • Roof
  • Hazardous materials concerns
  • Heating and air conditioning systems
  • Common areas (in condominiums)
  • Insulation
  • Ventilation
  •  

    The 5 Biggest Mistakes Buyers Make in Today’s Market
    1. The Don’t ACT QUICKLY enough when they find the right home.
    2. When they meet with a Lender they Don’t ask ENOUGH or the RIGHT QUESTIONS.
    3. They Don’t THINK RESALE.
    4. They Don’t PACKAGE THEMSELVES or their offer so that it looks the best to the Seller or Listing Agent.
    5. They select the WRONG AGENT and/or the WRONG COMPANY.

     

    Answers to Frequently Asked Questions
    What is the difference between “pre-qualified” and “pre-approved”?If you are “pre-qualified” you have determined, with a loan officer, what price you can afford based on the down payment, your debts and the amount the mortgage company will approve for your mortgage. Being “pre-qualified” is only a determination of your probable credit. If you are “pre-approved”, your credit, employment and funds have been approved by the lender. What are closing costs?

    Closing costs are an accumulation of charges paid to different entities associated with the buying and selling of real estate. For buyers, they are usually about 4-6 % of the total sales price of a property. Some of the closing costs you might encounter are: application fees, appraisal fee, county taxes, credit report, discount points, documentation fee, escrow fees, homeowners’ association fees, loan fees, mortgage insurance, origination fees, tax registration and title insurance premium.

    What is a point?

    One point is equal to 1 % of the new loan amount. Whenever government regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of interest that would make the real estate loan competitive with other fields of investments, the lender must seek some method of increasing the yield for the investors. By charging “points”, the lender can bring the real estate loan up to those other investments.

    What is earnest money?

    When you make an offer, you will need to put up an earnest money deposit as a sign of good faith that you are seriously interested in buying a home. That deposit becomes a part of the purchase price and is held in a trust account until there is full acceptance of the offer. Typically, an earnest money is 3-5 % of the offer amount.

    What is title insurance?

    Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attach before date of policy.

    Is VA or FHA financing unfair to sellers?

    FHA and VA loans provide purchasers the opportunity to buy homes with minimal cash investment and at lower interest rates. The result is a larger market for sellers, who also benefit by receiving all cash for their equity.