We all want the best deal we can get, especially when we buy or sell a house or condo. So you need to know some of the secrets your real estate agent might not tell you.
You already the bottom line in real estate is money. If you're buying, you want the most house for your money. A new kitchen, extra bedroom, a room with a view, etc.
Sellers of course, want the most money for the house.
And in the middle, are the people who make money off the deal. Since real estate agents don't get paid until a house is sold, the last thing they want it what's called a "deal killer: financing falling through, a wishy-washy buyer or seller, or a home inspector who's just a little too good with that inspection.
So, many agents steer clients to home inspectors they know are honest but easy, and "deal friendly."
"I've heard that it happens," said real estate agent Gini Johnson. "It's not a wise thing to do and it's not going to be the agent that continues to work."
Her advice? Talk to friends, and get the best inspector you can find.
We asked Johnson: "Is it fair to say, don't use the inspector that's referred to you by your realtor?"
She replied: "Sure! Find your own? That's fine. That would not offend me at all as an agent."
Negotiate The Commission
Here's another trick of the trade: When you sell your house, tell the agent you want to negotiate their commission.
Bill McCabe listed his house with a 4 percent commission instead of the traditional 6 percent -- getting the listing agent to drop their commission by 1.5 percent, and the buyer's agent to drop their commission by a half percent.
That saved McCabe $10,000.
Thanks to a glut of agents and discount listing sites on the Internet, broker Johh Hama told me agents are taking cuts -- even if they don't like to talk about it.
In times when the seller is also purchasing a property as well as selling a property, where there's two transactions -- that's when you're in a prime position to negotiate. But don't expect your agent to volunteer.
And be warned, buyer's agents may retaliate by not showing your house to potential buyers.
"I've had agents say to me, 'if you don't offer the full amount, we won't show your house,' " Hama said.
Computer Staging
Another big trend is staging -- presenting the home so the potential buyer can imagine themselves actually living there. And here's the newest trick of the trade that you'll start seeing this more and more on the Internet. It can show what the room looks like empty, or furnished.
As long as the computer picture doesn't lie about what you will get, it's legal.
After months searching, Erica McKelvey knows all about another trick of the trade.
We've looked at condos, we've looked at 3 bedroom houses. We've looked at 4 bedroom houses," she said.
And that's what certain adjectives really mean.
For instance:
"Cute, adorable, charming" means "it's small"
"Lots of potential" means "Lots of work" or "Sweat Equity"
"A bustling, energetic neighborhood" means count on traffic and most likely, noise.
So buying or selling, do your homework.
Check online to learn about neighborhoods and recent sales activity. Shop around for a good independent home inspector. And negotiate commissions.
Remember the bottom line in real estate is it's all about money.
posted by Rick at
5/03/2006 12:30:00 AM
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Tuesday, May 02, 2006 5/02/2006 12:24:00 AM
Details Stack Up When Time Comes To Sign The Papers
The final step in buying a house is the closing, also called settlement.
"It's when everything that was agreed upon in the contract is actually executed," says Julian Bryant, a real estate agent with Crye-Leike's Bellevue office.
Many buyers have the misconception that after an offer is accepted, an agent's job is done. But, he says, "Our job's just beginning at that point."
Denise Allis, president of Commonwealth Title Agency of Nashville, urges "constant communication" with your agent, lender and title company until the closing.
Bryant notes, "There's always some hiccup" getting to closing. Understanding potential hurdles can smooth the process.
Loan documents: Get everything to the lender when they ask for it, suggests Allis. And plan to close a few days before the purchase contract or loan expires, recommends Mary Frances Rudy, an attorney and owner of Rudy Title & Escrow. "Don't wait until the last day — if there's a snag with the loan, the buyer may lose the house," she says.
Appraisal: If the house appraises for less than the sales price, the lender won't make the loan, says Bryant. The buyer can pay the difference, notes Allis, or possibly get out of the contract if an appraisal contingency was included.
Insurance: Get homeowner's insurance at least a week before closing and provide proof of insurance to the closing company, Allis says. And don't forget separate flood insurance if the home sits in a flood plain, says Bryant.
Closing costs: A lender usually sends the settlement statement, called a HUD-1, to buyers 24 to 48 hours before closing, Bryant says. Without this form, which details all costs and how much money to bring to closing, buyers may not have enough money — or time to get the required cashier's check — to settle.
Final walkthrough: Buyers have the right to tour the property (usually the day before closing) to ensure that it's "in same general condition" as when the offer was made, says Bryant.
If there's damage or something doesn't work, "agents would negotiate any repairs and set up an escrow account," says Rudy, often for 1½ times the estimated repair cost. "It puts pressure on the seller to get work done," she says.
The closing: After proving identity (bring ID), buyers should "expect to sign quite a few documents," says Allis, noting that most buyer closings take an hour. She says closing agents, who are not necessarily lawyers in Tennessee, should explain each of the documents. Rudy says five are particularly important.
• The HUD-1 details all the loan and closing costs.
• The note details interest rate, number of payments, minimum payment and any pre-payment penalty.
• The payment letter shows the monthly principal and interest and any escrow payments for insurance and taxes.
• The truth-in-lending statement shows the total cost of the life of the loan. "It's the first time people actually understand what they're paying for the house."
• Warranty deed is what puts the property in the buyers' names. "You are not an owner unless you're on the warranty deed," says Rudy, adding that some people mistakenly believe that signing the deed of trust grants ownership.
If all goes according to plan, buyers will leave the closing with keys to their house, says Allis. "Ultimately that's what they want — they bought a piece of property and they want to move in as soon as they possibly can."
posted by Rick at
5/02/2006 12:24:00 AM
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5/02/2006 12:20:00 AM
Home Buying Advice
All home buyers should plan to make a final walk-through inspection of their new homes prior to closing in order to make sure the condition of the property is the same as it was on the day you signed your purchase contract.
You should take an early walk through to check repairs agreed to by the seller, but this early inspection does not replace your final walk-through on closing day.
Checking Completed RepairsPlan to verify that requested repairs have been made as soon as the seller notifies you they are complete. Don't put off this inspection, because if problems still exist you'll need time to get them corrected before closing.
If possible, the home inspector who discovered that repairs were necessary should accompany you to verify that repairs have been made.
Taking Your Final Walk-ThroughAlways do your final walk-through after the sellers have moved, but before you go to closing.
At this point you're not inspecting for repairs--you simply want to make sure that the home is in the same condition it was in when you signed the contract to purchase it.
Have items been damaged during the move? Inspect floors for rips or gouges. Look at the walls, especially around door frames that large furniture and appliances might have been moved through.
Most offers to purchase include wording that states that all major systems in the home must be working at the time of closing, so it's fine to do a quick test of appliances and other items such as the furnace and air conditioning. Those items should have been checked during the home inspection, but there's always a chance they've quit working since that date.
Make sure all items the sellers agreed to leave are still there.
Make sure all items the sellers agreed to remove have been removed.
If the condition of the home has changed since your offer to purchase it, you are in a better position to get the problems handled when you bring them to everyone's attention before the deed changes hands.
If necessary, repair or replacement funds can be negotiated, deposited into an attorney's trust fund, then drawn on to bring the home back to the shape it was in on your contract date. If you do not use an attorney to close in your state, ask your real estate agent for advice on how to proceed. It's usually best to hold back an amount that exceeds the estimate for making repairs.
An alternative is to negotiate a flat amount to be paid to you at closing. Or, if damage is excessive, you might prefer to delay closing until repairs are made.
The final walk-through is not the time to do a home inspection. It's simply an opportunity to make sure that the home being conveyed to you is the home you agreed to buy.
posted by Rick at
5/02/2006 12:20:00 AM
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