Buying a home can be your most exciting experience and biggest single investment. The more prepared , educated and organized you are, the less stressful and more smooth the transaction. Equip yourself with detailed information, practical tips and resources from this web site. From initial planning, to selecting the right home, through negotiations and closing, a RE/MAX Preferred agent can help you make an informed decision that's right for you!
Agency Representation | Financing | Property Taxes | Home Inspection
Home Owner's Insurance | Home Warranties | Property Disclosure |
100 Questions & Answers About Buying New Home
Whether you are buying your first home or your tenth, today's consumers have the option to choose the type of representation they want when enlisting the expertise and knowledge of a real estate professional. Traditionally, most agents represented the seller. Today, however, home-buying consumers have the option to seek assistance with their search for the perfect home from a buyer's broker - a real estate professional who will agree to represent their sole interest.
Buyer agency involves an agent representing the buyer in a real estate transaction for a fee paid by, or on behalf of the buyer. Many buyer agency agreements specify that the seller will pay the commission. A buyer's agent is employed by a purchaser to get the best possible price and terms for a buyer.
A buyer's agent represents the buyer just as a seller's agent represents a seller. Other types of relations that can exist include the following:
Seller's subagent - the agent represents the seller in a transaction, and works with the buyer as a customer.
Dual agency - the agent represents both the buyer and the seller in the same transaction. This may only be done with the informed consent of both the buyer and the seller.
Designated Agency - This is a form of dual agency where one agent is designated to solely represent the buyer and another designated to represent the seller.
Before deciding on what type of representation is the best for you, the Raleigh/Wake Board of Realtors recommends that, in addition to the various forms of representation, you understand that the term "agency" refers to the fiduciary relationship that exists between a buyer or seller and the real estate agent who represents them. Some form of written disclosure is recommended between agents and the consumers they are working with, to help ensure there is no misunderstanding regarding agency relationships.
Currently, 46 states and the District of Columbia have mandated agency disclosure through either legislation or regulation. This requires real estate agents to inform the parties to a transaction whom they represent. The North Carolina Association of Realtors worked with the North Carolina Real Estate Commission to establish legislation that requires mandatory disclosure of agency by all real estate licensees effective July 1, 1995.
The changes in the way real estate professionals are representing consumers can be attributed to a better-educated public looking for flexibility and options in the buying process. The National Association of Realtors and the Raleigh/Wake Board of Realtors endorse freedom of choice and informed consent for consumers of real estate services when creating agency relationships with real estate professionals.
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Buying a home may well be the largest financial investment you will ever make. Naturally, you will want to know as much as possible about the property before you finalize its purchase at closing.
The first thing you will notice about the house is its architectural style. If you like the way the house looks in its setting and it satisfies your needs as to location, size, and price, you may decide to make a purchase offer. You may want to make your offer contingent upon the home having an acceptable inspection.
At this point, it is important to turn to a knowledgeable, independent and state licensed home inspector for advice on the overall condition of the home. The home inspector will examine the house and let you know if the home is structurally sound and if the primary systems are in good working order.
At the time of the inspection, you should accompany the inspector on a tour of the house, discussing the pros and cons of the visible features. After completing the inspection, the inspector will provide you with a written report summarizing what he has found. The inspection report will detail the condition of the principal items inspected and any other items which may be of concern to you. Most contracts include an inspection clause that specifies the time frame and options with regard to any findings during the inspection.
Home Owner's Insurance
When buying a home, one word you will hear often is "insurance." As a homeowner, you are concerned about protecting your house, your personal belongings, and your personal liability. It is important that the coverage you choose provide the comprehensive protection that you need.
This type of insurance protects you and your house against losses from fire, theft, liability, vandalism, water damage, wind damage, tornadoes, and loss of use. Earthquake and flood insurance are not included but can be purchased separately.
There are three types of homeowner's policies to choose from. A clear understanding of the coverage each type offers will help you select the right policy for your needs. Each type carries a deductible amount you select. A standard policy requires coverage for at least 80% of the value of your home, excluding land and the foundation. It will usually insure your personal property at actual cash value.
A broad-form policy is more inclusive than the standard policy and covers additional named perils such as glass breakage, smoke damage, etc. An all-risk policy covers even more than do the standard and broad-form policies. An example of a covered risk might be damage caused to your roof from ice build-up in the gutters. Some of these policies offer optional guaranteed replacement cost coverage on your home and its contents.
Replacement cost coverage will pay to rebuild your home and replace its contents with no depreciation coming into play. It is important to understand that the replacement value of your home is based on your insurance company's estimate of the cost to rebuild your home on your property. It is not based on the purchase or appraised value of the home. Most policies have a built-in annual increase of replacement cost coverage.
You may want to insure certain valuables such as jewelry, furs, silverware, camera equipment, and art on an addition to the basic homeowner's policy. This addition is called a personal property schedule. A schedule provides a specific amount of insurance for each valuable on an itemized basis. It guarantees full replacement value, has no deductibles, and covers the loss no matter what its cause.
Insurance companies rely on both good faith and proof of loss in reconciling losses which may occur to household goods and personal property. For your own protection, it is a good idea to keep a complete inventory of everything you own in a safe deposit box. Support the inventory with photographs, videotapes, and receipts. Include the actual price or a reliable estimate.
When purchasing homeowner's insurance, there are ways of lowering your premium. Most insurance companies offer discounts for smoke alarms, fire extinguishers, deadbolt locks, and whole-house alarm systems. If your home is fairly new, or if you elect to insure your automobiles with the same company, you are likely to receive a discount on your premium.
Another way of lowering your premium is to select as high a deductible as you can afford. Raising your deductible reduces your premium. Insurance is the type of service you buy hoping that you will never have to use it. Discuss with your agent your unique needs and concerns when you purchase the insurance and whenever your needs change. The right insurance can give you a sense of security in knowing that you are adequately protected.
Ask your RE/MAX agent about the availability of a home warranty insurance program. A home warranty policy protects you from the expense of major repair or replacement caused by unexpected mechanical failure of a major system or appliance. For a moderate premium, payable at closing, you can acquire a policy which protects you for one full year after closing from major repair or replacement bills.
Home inspections are practically a given these days when it comes to buying a property. In some cases, though, an inspection may not be sufficient in providing a complete evaluation.
To ensure that the buyer is making the right decision, he or she should visit the house and give it a workout - including flushing the toilets, turning on the lights, and running the water. Buyers should also visit at different times of the day to listen for traffic or noise.
Finally, prospective bidders should contact the city where the home is located to check on the permits for additions like patios and basements to be sure that they meet safety code standards.
North Carolina General Statute requires homeowners of residential real estate (single-family homes and dwellings with up to four units) to fill out a property disclosure statement when they are selling their properties. This statement form is available from any RE/MAX Preferred office. A disclosure statement must be furnished to all potential purchasers in connection with the sale, exchange, option and sale under a lease with option to purchase (unless the tenant is already occupying or intends to occupy the dwelling). A disclosure statement is not required for some transactions however, including the first sale of a dwelling which has never been inhabited and transactions of residential properties made pursuant to a lease with option to purchase where the lessee occupies or intends to occupy the dwelling.
Homeowners who attempt to sell their homes on their own (for-sale-by-owner) are not excluded and they have the same obligation to provide this disclosure statement to potential buyers, whether or not they are assisted by a licensed real state broker or salesman.
Exemptions to this requirement are as follows:
- New constructed never occupied homes
- Transfers from one co-owner to another
- Transfers to a spouse or persons in the lineal line
- Transfers between spouses as a result of a divorce
- Transfers pursuant to a court order, foreclosures, bankruptcy, or by trustees or estate administrators
- Lease with option to purchase contract where the lessee occupies or intends to occupy the dwelling
- Transfers between parties when both parties agree in advance not to complete a residential property disclosure statement
Most real estate agents are probably confident in their ability to handle negotiation of a single offer to purchase. However, they may feel less certain when they are presented with more than one offer for the same property.
Listing agents must promptly present each offer to their seller-clients, whether there is only one offer or several offers on the same property. In no event may an agent wait more than five days to present any offer. If multiple offers arrive at the agent's office before he or she has had a chance to deliver any of them, the agent should present all of the offers to the seller at the same time.
There is no "first come, first served" rule, just because an offer is the first to arrive does not mean that it has priority over an offer that arrives later. The seller may accept any offer, without regard to the order in which the offers were made and received. Alternatively, the seller may choose to negotiate with any prospective purchaser so long as the choice is not made for a reason that would violate Fair Housing laws.
The listing agent should inform the agent working with each prospect that other offers have been made on the property, unless the seller prohibits him from doing so. However, if one agent is notified of a multiple offer situation, then all agents must be notified. A Listing agent is not permitted to disclose the terms of competing offers to one or more of the buyers, which is called "shopping" offers to purchase. The law requires that real estate agents treat prospective buyers honestly and fairly. An agent who discloses the terms of competing offers to one buyer gives that buyer an advantage over the others and thereby breaches the duty of fairness owed to the other buyers. An agent who informs each buyer that there are competing offers for the property, without disclosing the terms of the other offers, keeps all the buyers on an equal playing field, and thereby fulfills the duty of fairness.
Once offers are presented to the seller, the listing agent may then assist the seller in determining which offer is best for the seller and whether or not the best offer should be accepted. If none of the offers is acceptable, the seller may reject all of them. In that case, the listing agent should advise the agents working with the prospective purchasers to invite those prospects to make new, better offers. The listing agent may orally outline what price and terms the seller would be willing to consider.
Alternatively, the seller could make a counteroffer to one of the prospective buyers. However, listing agents should be careful not to allow the seller to make written counteroffers to more than one buyer and thereby run the risk that each will be accepted.