Questions and Answers Regarding Escrow Accounts Whether you are purchasing a new home or you are considering applying to refinance your home, chances are the lender will require an escrow account.
Do FirstTime Home Buyers Need An Agent
The National Association of REALTORS® would like me to tell you that all agents are ethical, honest, experienced and care about their clients -- especially aboutfirst-time home buyers-- but that would not be true. It might be true about the majority of the agents in the business, but it's not true about all of them.
There are agents whose sole purpose is to make as much money as they possibly can,
as quickly as possible, with little regard for the buyers they stomp on along the way. The problem is some of these agents look and act just like the ethical agents, so it's hard to tell them apart, it's confusing. This confusion can also make some first-time home buyers overly suspicious. They wonder if they would be better off without an agent. They think maybe they can buy their first-time home by themselves and do a better job.
That's unlikely, and I'll tell you why. First-time home buyers are generally engaged in some other business apart from real estate, so they tend to know very little about real estate. Most experienced real estate agents are in the business full-time, so they acquire knowledge every single day. The business of buying a home is complicated, filled with paperwork; it requires expert negotiations and there are often small problems which, if left undetected, can easily blow up into proportions so huge that your entire transaction could be placed into jeopardy.
Agent to Buy a Home
There's a little unknown thing called a variable commission, which makes some buyers think they will get a better deal by going directly to the listing agent. This is how it works. Say the real estate commission is 8 apples, and the listing agent is willing to split thatcommission with a buyer's agent, so each will get 4 apples.
In a variable commission arrangement, the listing agent might have a side deal with the seller or make a side deal upon offer presentation. This deal might be if the listing agent happens to also represent the buyer, the listing agent might reduce the commission from 8 apples to 6 apples. Which would save the seller 2 apples.
First, realize the seller will eat those two apples and will not give them to the you. But if the buyer has reduced the sales price by, say, 2 apples, the seller will break even. Some people believe the listing agent has more incentive to push through an offer when the agent represents both parties in a dual agency capacity. Bear in mind that behavior is unethical. If it's true, do you want to work with unethical agent? Moreover, tell me please, how a listing agent can have a buyer's best interest at heart while representing the seller?
About Hiring a Buyer's Agent to Buy a Home
A buyer's agent, if push comes to shove, generally has the ability to match a listing agent's variable commission rate, if it's necessary, so don't let that little game prevent you fromhiring a buyer's agent.
Negotiate on your behalf.
Fight for the sales price, terms and conditions that best match your criterion.
Anticipate problems and head them off at the pass.
Tell you the truth.
Disclose defects the agent can see.
Provide you with seller disclosures and every piece of documentation to which you are legally entitled.
After you've bought a few homes and are used to the process, you might not need to hire your own agent to buy another home. But for your first home? Absolutely, hire a buyer's agent. Besides, you'll find that agents who specialize in working with first-time home buyers tend to derive a great deal of personal satisfaction in providing superior customer service and making their buyers' dreams come true. Those are good qualities in a buyer's agent.
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