How can I get the best deal on a home? Where do I start? Part 5

If you are still with me at this point—and still awake—you are doing well. Home financing is not the most exciting topic, but it is very important to those who are about to make a long term commitment.

It can be very confusing.  If you are lost, join the crowd.  Find a loan consultant that you trust and ask lots of questions.

At this point you should be aware of the type of loan that will work best for you and after your consultation with your loan consultant you will know what price range you can afford.

It is a good time to select an agent to help you identify that perfect home and help you complete the purchase. Note that a licensed agent in California does no have to be a Realtor®. I Realtor® is a licensed agent who is a member of the National, California and a local associations of Realtors®. They subscribe to a strict code of ethics and are committed to providing the highest standard of representation for their clients. I recommend that you select a Realtor®.

I would also suggest that you select a Realtor® who practices their craft on a full-time basis. With the tight economy there are fewer full-time Realtors in the market place. Do you really want John Smith from the accounting department representing you in the purchase of the most expensive asset you will probably own?

Another important aspect real estate law is a concept known as agency.  To put it into simple terms, an agent can represent a buyer, they can represent a seller or they can represent a buyer and seller in the same transaction?

Most properties are entered into the local MLS (Realtor’s® Multiple Listing Service) in order to gain the most exposure. When the listing agent enters the property into the MLS they also commit to pay a commission to the agent who brings a ready, willing and able buyer to the negotiating table and completed the purchase transaction. In simple terms, the seller pays the commission. So, it costs the buyer nothing to have professional representation!

Sales commissions are usually split in half, 50% to the listing broker and 50% to the selling broker (the broker representing the buyer).  Some buyers assume that if they find a property and agree to let the listing agent represent them in the purchase that they are going to save money. NOT SO! When a listing agent represents a buyer that broker gets 100% of the sales commission. The process is legal and happens every day.

If you are about to make the largest purchase of your life, would you feel more comfortable being represented by an agent who already has a contractual obligation to represent the seller? Or would you feel more confident being represented by an agent who is dedicated to representing you with 100% of their skill, experience and knowledge?

I know which choice I would make.   Let’s see now, 100% effort for ZERO out of pocket…

Stay tuned for the next Blog in this series.