What are the advantages of using a real estate professional to help me buy a home?

Buying a home is certainly one of the most rewarding experiences most of us ever have; it's also one of the most challenging. If you're buying for the first time, the process may seem overwhelming. And even if you've been through it several times, every move is different and presents new challenges.

One clear advantage of enlisting the help of a sales professional is simply that you don't have to go through it alone. A good sales professional has the background and skills to help you through each step of the process, and make the experience of finding, buying and moving into your new home as smooth, quick and enjoyable as it can be. Another advantage is that a sales professional represents a valuable source of information about market trends; communities and neighborhoods; and especially homes for sale throughout the area. Remember, not every home seller runs an ad in the local paper or puts a sign up in the yard. In fact, many homes actually sell before there is ever a need to advertise them. The market expertise a sales professional offers you is augmented by access to complete, regularly updated information about every home listed by area sales professionals through the Multiple Listing Service (MLS). As you'll see in the following questions, such professional expertise and services can be of considerable help throughout the buying process.

STARTING THE BUYING PROCESS

The first thing you should do is to begin focusing on what you're looking for in a home. You can start by establishing priorities in the following three areas:

Location: Are you relocating to a new town because of a new job or to be closer to your current job? How will the location of schools, shops, and transportation affect your choice of neighborhood?

Personal Tastes: How large of a home do you need? What style of architecture do you prefer? What type of lot do you prefer? Depending on where you move to, you may have a choice of homes in dozens of styles, sizes, and settings.

Budget: How much home can you comfortably afford?

As you consider these issues, do a little research of your own. Look through magazines for ideas about home styles and features. Drive through neighborhoods that appeal to you to see what's available. Read the real estate listings in the newspaper to learn about current prices in the areas you're considering. Talk to friends about the features that you'd really like to have in your home. The more knowledgeable you become, the better your final decision is likely to be.

Then sit down and consider carefully all the things you're looking for in a home. The Homebuyer's Wish List worksheet later in this section is a good starting point. When you've filled it out, you'll begin to get a good idea of what you'd like your dream home to be.

The key word here is "right." While there's certainly no shortage of qualified sales professionals to choose from, it's important that you find one who can fully understand your wants, needs and individual tastes, and whose personal and professional judgment you respect.

Today's buyers also have more choices when it comes to choosing the sales professional who can best represent them in a real estate transaction. Until recent years, virtually all real estate professionals involved in a given transaction worked for the seller. However, a growing number of today's home buyers are choosing to be represented by a " buyer's agent," who represents the buyer in contrast to the traditional seller/sales professional relationship.

Many real estate companies throughout the United States have both buyer and seller agencies. A sales professional should present you with a disclosure statement before any working relationship is created. That statement should explain what a buyer's agent is and does, what a seller's agent is and does, and what dual agency means. It is very important to remember that real estate firms are governed by laws that can vary by state. Disclosure laws also vary by state.

Here are a few guidelines about the kind of service and experience you should be looking for. Plus review the top Six Reasons to Choose an ERA Professional.

We've found that affordability is probably the single biggest concern of today's first-time home buyers. Given the wide range of media coverage regularly devoted to the issue, it's not surprising that many young families wonder how long it will take them to afford their first home.

Our advice: Don't sell yourself short. Talk to your real estate professional. A good sales professional is committed to honestly and responsibly working with you to determine your affordable price range. There are many financing options available today, and some include low down payments. Your sales professional will help find an option that fits your budget, and you may be surprised at just how much home you can afford.

For tips on various mortgages and more, see the "Financing" section of this book.

RENTING VS. BUYING

A professional appraisal is the best way to tell if a home is priced fairly. A real estate appraisal is an unbiased opinion of a property's value based on its style and appearance, construction quality, usefulness, and other factors, including the value of comparable properties nearby.

When you apply for a mortgage, the lender will have a professional real estate appraiser perform an appraisal of the property.

For your own safety, and to make sure you're getting your money's worth in the home you choose, using a professional home inspector is highly recommended. A home inspector will check a variety of things such as your home's plumbing, heating, cooling, and electrical systems, and look for structural problems like a damp or leaky basement, etc.

Usually, you call an inspector immediately after you've made an offer on a home. However, before you sign any written offer, make sure (or have your attorney make sure) that it includes an inspection clause, which says that your purchase obligation is contingent on the findings of a professional home inspector.

Your inspector will not tell you whether he or she thinks the home is worth the money you are offering. Rather, the inspector's job is to make you aware of repairs that are recommended or necessary. A seller may be willing to renegotiate a price to accommodate needed repairs, or you may decide that the home will take too much work and money. A professional inspection will help you make an informed decision.

In choosing a home inspector, consider one who has been certified as a qualified and experienced member by a trade association. Your real estate professional can refer you to qualified inspectors in your area.

Review the Home Inspection Checklist.

Yes. It's not required, but it is very much to your advantage. You'll be able to clearly understand the inspection report and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you when you move into your new home. Most importantly, you'll see the home through the eyes of an objective third party.

In addition to the overall inspection, you may wish to have separate tests conducted to check for insects, the presence of radon gas, and the quality of drinking water, to name a few. Talk to your real estate professional for information about these tests and companies in the area that perform them.

When you've found a special house you want to call home, you'll probably feel excited and a bit nervous. Let the sales professional know you're ready to write an " offer to purchase" — a written document that declares how much you are willing to pay for the home provided that certain conditions are met. Because it's a legally binding contract that you will sign and date, it may be a good idea to have a lawyer review it, within the grace period noted in the contract.

This is the time when it is most important for you to keep in mind that, unless you have specifically retained the services of a buyer's agent, the sales professional is working for the seller. As the legal agent of the seller, he or she is obligated to help the seller get the best price, and will report to the seller any confidence you share.

It's best to make your offer without sharing with the agent your willingness to offer any higher price if the seller does not accept your offer.

Your offer should have a time limit for the seller to accept it, reject it, or make a counter-offer. If a counter-offer is made, you will have some time to respond. Often, several offers go back and forth until an offer is accepted, or one party decides to end negotiations.

There is really no rule to use in calculating an initial offer. Naturally, the buyer wants the best value and the seller want the best price, but negotiations can be influenced by many factors, such as a seller who may be changing jobs and wants to sell quickly, or a buyer who is set on a specific home.

After you've looked at the home's features, asked questions, checked comparables, and talked about it with your sales professional, you should have a good idea of what the home's value is in the current market. Consider what you can afford, and make an offer that you consider to be fair.

Most buyers and sellers negotiate on price, with both sides "giving" a little until both agree.

At that point, you typically will begin the process of arranging for an inspection and applying for a mortgage. See the "Financing" section of this book for more information.

When you sign an offer to purchase, your sales professional will ask you for " earnest money." This refers to a monetary commitment that shows you are serious about wanting to buy. Usually, you will be asked to write a check for one to 10 percent of the sale price.

This money will be held in a special escrow account. If your offer is accepted, your earnest money will be included as part of your down payment. If your offer is not accepted, you'll get back all your earnest money. But keep in mind that if you back out, you may forfeit the full amount.

Yes. Home warranties offer you protection against many potentially costly problems not covered by your homeowner's insurance. Such warranties have become increasingly popular in recent years, and for good reason. The coverage can save you thousands in the event of a major mechanical breakdown at a time when your cash reserves have been depleted by your down payment and moving expenses. For more about home warranties, see the information on the ERA® Home Protection Plan®.

CLOSING PROCEDURES AND MOVING