BUYER AGENCY

Buyer agency is a type of representation that has been increasing in popularity. It provides the counseling and representation that buyers ideally should receive when they are purchasing a property. There are some buyers who feel they do not need representation. They may know enough about the buying process and been through it enough times very recently to handle everything themselves.

When a seller hires a real estate agent to list their home, that seller signs a listing agreement with their agent, authorizing that agent to do whatever is required to procure a buyer (you) for their property.

If you call on an ad for a property, you understand the real estate agent you speak with is representing the seller. But what many people don’t know is if they go and see other properties with that same agent, the agent is still not working for you, but rather for the sellers of each of those other properties, regardless of whether or not they have a listing agreement with each owner. This is known as sub-agency.

You may think, "How can this agent really be working for the seller even though we've become friends? They really aren't representing me if they themselves haven't signed listing agreements with each seller?" It sounds crazy, but it's true, and that is why Buyer Representation is growing in popularity.  Now, by contracting with a BUYER’S AGENT, buyers can have that same representation for themselves that sellers have had all along!

The ideal real estate transaction includes representation for both the buyer and seller. Unfortunately, there are a number of transactions in Texas where this does not happen. You would think that if you contact an agent in any real estate magazine, from the Yellow Pages, or internet, that agent would be working for you when you find your home. This is not true.

A traditional real estate agent that would meet with you and take you to see a few houses, is actually the “sub-agent” of the selling agent. They aren’t working for your best interests, even if they are showing you several different properties which are listed by several different companies. These agents are legally working for the seller instead of you.

Buyer agency is usually created through a written buyer representation agreement in which the agent gives their full loyalty and fiduciary trust to protect the buyer in the real estate transaction.

Any information you give your Buyer's Agent is kept confidential. Your transaction is negotiated by them with your best interests in mind.

FINANCING

 One of the most important parts of getting started on your home search is knowing how much house you can afford. You should obtain a pre-approval or preferably, Prequalification, from a lender before you begin looking at homes.

In order to get a pre-approval, you will submit your loan application, along with some of the other documents required to get a mortgage. The lender will check your credit, and approve your loan contingent upon finding a suitable property.

Having a pre-approval in hand gives you a distinct advantage when you are trying to have an offer accepted by a seller. It shows the seller that you are serious enough to have already gotten a head-start on the loan process, which typically means a faster closing. Also, you have an advantage over other buyers who may be competing with offers on the same property you want. If you were a seller and you had two offers to choose from - one buyer had gotten a rough idea of what they could afford and had a longer time frame for a mortgage contingency, and the other had a full pre-approval and only needed property specific details for final loan approval, which would you choose?

If you are interested in getting pre-approved with a lender that we frequently work with, just contact us, and we will supply the names and contact information for some lenders who would be happy to discuss your financing options with you.

PRE-APPROVAL or PRE-QUALIFICATION?

Before you start looking for a home, consider getting a preliminary loan approval from your lender. There are two types of loan approvals available to consumers – pre-approval and pre-qualified. While both may put you in a potentially stronger buying position, getting pre-approved by the lender carries a bit more weight.

When you obtain pre-qualification for a home loan, you provide a lender with your approximate income, current debts, and important details from your credit history. Your lender will then calculate how much money you may be eligible to borrow prior to applying for a loan. Your lender will also be required to provide you with a Conditional Qualification Letter, which determines your likelihood of obtaining a loan. However, all information submitted is subject to verification at the time the loan application is submitted.

When you get pre-approved for a loan, you actually fill out a mortgage loan application. After an extensive examination of your financial situation, your lender will commit, in writing, to fund your loan, pending a successful appraisal of the home and a few other conditions. Your mortgage broker will also provide you with a Conditional Approval Letter. Getting pre-approved for a mortgage typically enables you to move quickly when you find the home you’ve been searching for. It also lets a seller know you are serious and may prevent you from losing out to another purchaser who already has financing arranged. Having a pre-approved loan is the closest thing to buying with cash.

INSPECTIONS

Some buyers purchase a property “as-is, where-is”.  Others elect to purchase a “termination option” so that a professional has time to properly inspect the home for defects.  The typical home inspection costs between $250 - $350 dollars, but is often worth the expense.  A professional home inspector will walk through the property with you, pointing out things you may have originally missed when looking at the home, and give you tips and advice on how to properly maintain your home once you own it.  After receiving a poor inspection, you will have the right to “opt-out” of the contract and receive your earnest deposit back in full if it is completed prior to the termination option’s date. 

It is not the job of an inspector to give estimates on repairs or refer specific contractors. Their job is only to find defects in the property and make you aware of them, so you may make informed decisions from that point. Home inspectors in Texas are licensed professionals.

Termite Inspectors are also worth the investment even if you don’t see evidence of termites.  Remediation of defects found in the property can often be renegotiated between the buyer and seller prior to continuing with the contract.  

If you have any questions about home inspections or need to  find an inspector, feel free to contact us.

SETTLEMENT CHECKLIST for the BUYER

Checklist of items to do if you are the BUYER of the house about to go to settlement:

1.   Switch all applicable utility accounts to your name, effective the date of settlement UNLESS the sellers are renting the home back from you for a certain period of time, in which case, make the transfer effective the date that your rent back period ends. You can find utility companies contact information and websites on my home page under “My Business Friends.”

2.   Call your insurance agent and buy home insurance effective the date of settlement.  If you are financing your home, this must be done in order to close as the financial institution will require it.   (Please note:  This is replacement insurance for the structural components of the house that you are buying. It does NOT cover the future contents of the house--that requires a separate insurance rider.)

3.   If you are renting the home back to the sellers, you may wish to purchase a landlords insurance rider to your policy for the duration of your rent back; talk to your insurance agent about this.

4.   Unless there is a rent back agreement in place, the home should be vacant, clean, and ready for a pre-settlement walk through inspection approximately two hours prior to settlement. (If you are renting back to the sellers, we will still do a pre-settlement walk through inspection, but the home will NOT be vacant, of course.)

5.    Please call or e-mail me to schedule this pre-settlement inspection.

6.   All buyers of the house are required to bring a photo ID with them to closing settlement.  (Valid driver’s license, passport, etc)

7.   If you, or any other buyer of the property, will not be able to attend closing, please call the attorney’s office and ask them to make arrangements for a "Power of Attorney," so that someone else can sign for the person who won't be able to attend.

8.   Approximately three to four hours before settlement (NOT EARLIER), I will be able to give you the final tally of funds that you'll need to bring to settlement. Bring that amount as a CERTIFIED CHECK made payable to the settlement attorney's office. Don't forget to bring your checkbook with you to settlement. If your certified funds are more than adequate, you will receive a refund at closing. If your certified funds are short by a small amount, you can write a personal check to make up the difference.

9.    If you feel that I have deserved it, I would welcome a reference letter from you, so I can share it with future clients on my website and in personal interviews.

The Texas Real Estate Commission (TREC) requires all real estate licensees to provide all  prospective buyers, tenants, sellers, and landlords of real estate in the State of Texas full disclosure as to the type of brokerage service they will provide to the client.

Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or a prospective buyer, you should know that the broker who lists the property for sale is the owner’s agent. A broker who acts as a sub agent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.

You will be provided with the full disclosure by an AGAPE REALTY agent prior to working with them.

Texas Real Estate Brokers and Salesmen are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 or telephone (512) 465-3960.

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