Home Buyer's Guide

Buying your new home

Choosing a well-informed real estate professional to guide you through this important transaction can save time and make home buying easier. Before you enter into a discussion with a real estate agent regarding a real property transaction, you should understand exactly what type of representation you have from the agent in that transaction.

If the agent represents the seller: In this situation, the agent can assist the buyer but does not represent the buyer. The agent must place the interests of the seller first.

If the agent represents the buyer: The agent typically becomes the buyer's agent by entering into an agreement to represent the buyer. A buyer's agent can assist the seller but does not represent the seller. A buyer's agent must place the interests of the buyer first. An agent may not act as an agent for more than one party to a transaction without the disclosed and informed consent of both the buyer and seller.

You have the right to choose the type of representation you wish to receive. Payment of a fee to an agent does not necessarily establish that the agent represents you.

If you have any questions regarding the duties and responsibilities of the agent, you should resolve these questions before going further. Regardless of the agency relationships which may be established, you have the responsibility to protect your own interests.

The agent is required to provide a disclosure form to you and to reveal which party the agent represents. You should carefully read all agreements to ensure that they adequately express your understanding of the transaction.

Once you've read and discussed this information with the agent, you'll want to acknowledge your receipt of a copy of this form. Your cooperation will help the agent to comply with the regulations within your state.

After selecting a real estate agent with whom you are comfortable, you should meet with a lender to pre-qualify for a loan. Your lender will determine a maximum loan amount for which you are eligible.

Now, it is time to determine your housing needs. How many bathrooms and bedrooms does your family require? What type of neighborhood appeals to you? Do you prefer a restored Victorian or a contemporary ranch house?

After this is determined, your agent will show you prospective homes that fit these preferences and fall within a predetermined budget. When you've selected a home, your agent will help you prepare and present an offer to the seller.

An offer is a proposed sales contract. If the seller accepts it, you have a binding agreement. This is why your first offer should be as much in your favor as you can make it.

There is no standard real estate purchase contract. You can modify or add anything to a standard contract form. If the seller agrees, you have a deal. If not, you negotiate or keep looking.

Your offer should state.

• .....what fixtures, appliances and personal property (draperies, furniture, etc.) are to be sold with the home.

• ...that your deposit (earnest money) will be refunded and the sale cancelled if you are unable to obtain acceptable financing within a specified period of time.

• ...that a wood infestation report states the house is free of termites, beetles, carpenter ants and damage done by such insects, and that the contract is subject to this report being satisfactory to you.

• ...that a certificate states that the house is structurally sound, and that the plumbing, heating and electrical systems, as well as appliances are in working condition.

• ...how the reserve accounts (prepaids) for taxes, assessments, premiums and interest on assumed mortgages are to be divided between buyer and seller, as of the settlement date.

• ...that the grounds and the home's interior will be cleaned before you take possession.

Negotiable costs include those for title search, property survey and building inspections. The seller must provide a title, free and clear of all liens and encumbrances, except those agreed to in the contract or approved by the buyer after receiving the title search report.

Lenders and title insurance companies require a property survey to determine exact locations of the house, property lines, easements and rights-of-way. Either buyer or seller can pay for this.

To make sure the service is being done in their best interest, many buyers pay for inspections to determine structural soundness and the condition of the plumbing, heating, electrical systems and any appliances being purchased.

Before you sign your offer, make sure it contains the price o.f the home, the method of payment, the time you want possession of the property and other requirements. When your offer is accepted by the seller, and a purchase agreement is signed by both parties, it becomes a binding contract. At the closing, all final documents securing the mortgage are signed, the seller is paid and you are given possession of the home.