Whether you're a first-time homebuyer or you've just been out of the game for a while, there's a good chance that you have a few questions. In an effort to try and clear up some of some of the confusion, we asked agents to share some of aspiring buyers' biggest questions.
"What will my real estate agent do for me?"
Too much to list, but a short list would be:
1. Real estate agents act as a consultant and offer up specialized advice on specific properties and neighborhoods that their clients may be considering.
2. They negotiate on behalf of their clients. They should be able to broker an agreement between parties while building in safeguards to protect their clients, if the deal goes south.
3. An agent will facilitate the contract through closing. Contracts are extensive and have many timelines that must be adhered to. The agent can ensure all deadlines are met and closing happens on time without costly delays.
— Richard Bridges, Pearson Smith Realty in Ashburn, VA
"Who pays the commission fees and how much do I owe you?"
The commission fee will be a percentage of the home's sale price — typically 6% — that's then split as payment to both the buyer's and seller's agents and their companies. However, the exact percentage paid is negotiated on a case-by-case basis, so it may vary.
In a traditional sale, the seller will be responsible for paying the entirety of the commission fee at settlement. (The buyer's portion of this fee is usually accounted for in the sale price and unofficially rolled into their mortgage payment.) That said, with more unusual purchases like short sales, foreclosures, and auctions, sometimes the buyer will have to pay the fee upfront.
— Maura Allain, RE/MAX Premiere Properties in Louisville, KY
"How much of a down payment do I need?"
Most buyers assume you still need to have 20 percent for a down payment and that is not true anymore. These days, most mortgage lenders are now offering conventional loans with as little as a 5 percent down payment to those who qualify and FHA Loans are still offering their 3 percent down payment.
The specific rates and programs available to you will vary according to your market and unique financial situation, so you should absolutely talk it over with your lender. But, that's a much more realistic ballpark to start with.
— Chris Sandker, ERA Real Estate in Cincinnati, OH
"How much should I offer?"
It depends. I like to tell my clients to look at a variety of factors:
First, look at how the home is priced compared to similar properties. Your agent can help you get a list of these together and it will give you a realistic starting place.
Next, find out how long the home has been listed. (If the home has been on the market for a while, the seller will probably be more open to negotiation than if the home is newly on the market.)
Finally, be realistic about your local market conditions. If it's a seller's market and homes have been going above asking price, you need to be prepared to price your offer competitively.
— Tom Hume, Windermere Professional Partners in Tacoma, WA
"What are contingencies? Should I include them in my offer?"
Contingencies are anything that needs to occur in order for the deal to continue moving forward. They can be things like inspections, the receipt of deposit monies, or obtaining a mortgage commitment. Nearly anything can count, as long as both the buyer and seller agree to it.
Sometimes, in competitive markets, there's pressure to leave contingencies like inspections out of your offer. However, this is really a personal decision. Ask yourself whether you'd feel more comfortable getting the house without knowing exactly what repairs will be needed or if you'd feel better going into the deal with certainty, even if it means potentially losing out to someone else.
— Kristina McCann, Alain Pinel Realtors in Orinda, CA
"Should I have the seller make repairs or reduce the sales price?"
I always tell my clients that it's best to have the seller make the repairs on structural issues (roof, foundation) and mechanical issues (hvac, plumbing). These big ticket items will usually still need to be taken care of, even if your deal falls through and there can often be complications. Let the seller deal with those risks and headaches!
If the issue is minor, something cosmetic or that you can live with for a while, I recommend getting an estimate done for the cost of the work and asking the seller to reduce the sale price accordingly.
— Jonathan Kobler, Keller Williams Realty in Southlake, TX