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| The Bingham Team |
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After many years of buying and selling real estate, listening closely to our clients, and examining how the real estate industry as a whole treats buyer clients, we formulated the following 10 tips to help avoid the pitfalls that turn dreams into disasters:
1. Meet with a lender before you start looking. You'll need to know how much house you can afford - before you make that emotional and financial commitment.
2. Don't start the looking process by calling the agent and/or telephone number shown on the sign in front of the house, or that you see on the ad in the newspaper or magazine. That person already represents the seller and has the seller's interest as his or her top priority.
3. Select a Buyer's Agent to represent and assist you in the purchase process. Buyers' Agents can show you any home on the market, regardless of the listing company. They can and should represent you at no charge.
4. The Buyer's Agent you select should be a Realtor. Realtors are members of the National Association of Realtors, and as such must adhere to a Code of Ethics. Not all agents are Realtors.
5. If at all possible, the Buyer's Agent you select should have the coveted designation of Accredited Buyer's Agent (ABR), issued by the Real Estate Buyer Agents Council (REBAC), part of the National Association of Realtors. Realtors with an ABR designation have received intensive training in the very specialized field of Buyer Representation, and have a special interest in Buyer Representation.
6. Beware of franchise, and "junk" fees the agent may say you'll have to pay at the time you sign a Buyer Brokerage Agreement. Although certain processing fees may be legitimate and appropriate, some fees are nothing more than money-making add-ons by the Brokerage or the agent, and are not required by law. If they insist on extra fees, and cannot justify them to your satisfaction, take your business elsewhere.
7. State Law requires that a Buyer Brokerage and Agency Disclosure Agreement be completed at the earliest possible time in an agent's dealings with a client, and in no case later than the writing of a Purchase Agreement. Ask about this form before the agent takes you out to see the first home, and verify exactly who you will be authorizing the agent to represent. (See # 8 below)
8. Under no circumstance agree to allow your agent to represent both you and seller in the same transaction. The practice of one agent representing both the buyer and the seller is called "Dual" or "Limited" Agency. In some states, it's illegal. In Utah, however, it's legal with the informed consent of the client. In many cases, the "informed" portion is overlooked and the agent minimizes or glosses over the very important rights and level of service the client will have to give up if he agrees. If it happens that the home you like best is listed by the agent you are working with, ask your agent to refer you to one of his associates. He'll normally receive a referral fee from that associate for the referral. It's okay for the Broker to represent both the buyer and seller, provided each is represented by a different agent within the company.
9. For peace of mind, two things you'll want to insist upon as a Buyer are: (1) to have the home you placed under contract inspected by a qualified Professional Home Inspector, and (2), to purchase a Home Protection (or Home Warranty) Plan. In addition, depending upon the specific property, it may make sense to spend a small amount more to upgrade the basic Title Insurance Policy the seller is required to obtain to an Eagle or similar policy. The additional coverage is well worth it. Your agent will almost always tell you about the necessity of a home inspection and recommend a Home Protection Plan, however agents are far less likely to recommend the Title Insurance Upgrade. Most agents simply aren't aware of them, or the additional protection the upgrade provides.
10. Avoid making any purchases that might weaken your credit before closing. Lenders frequently conduct a final credit check before funding their loan, and if you have acquire new debt, you may no longer qualify for the loan you'll need. We've seen home purchases fail at the last moment because an enthusiastic buyer has purchased that new shiny car to go in the new garage, days before the loan was to fund. Wait until after your home purchase is closed, and recorded.
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