Smart buyers will first, choose a buyers agent that is an Exclusive Buyers Agent. In the required disclosure that you should get on your first interview with a professional realtor, you should learn about the 5 types of Agency. If you are dealing with an Exclusive Buyers Agent you will likely get the most complete explanation of this designation. This means there are no other allegiances to anyone but the buyer, unlike the other types of Agents, whose allegiance is to their broker and seller. There are additional incentives to using me as your EBA, savings on loan origination and better loan programs are some of the incentives you won’t find with a traditional agent. They are rarely focused on saving the buyer money.
If you are not dealing with an Exclusive Buyers Agent, EBA, you may want to rethink your strategy to get the most disclosure and the most safeguarding of your motivation and financial reasons for choosing your mortgage and your home and save the most money in the process. Without this protection your financial position may be compromised and you may needlessly spend additional hundreds or thousands of dollars you could have saved. An EBA will provide you the best option as a buyer and safeguard your information.
The second most important choice you make as a buyer is your mortgage lender. You may have to do some research, a good portion of which your EBA will already have done for you by working with specific lenders who can offer you the best deal for the money. Since Lenders will not always explain the long term effects of some of your decisions that can affect your mortgage payment, you want to ensure that you are not being charged anything extra on your mortgage or closing costs that should not be there. Are you putting down 20%? If not, you may be paying Private Mortgage Insurance on your loan. This can get costly but there are ways to lower this amount if you qualify or ensure that you are not paying too much for your PMI by looking at all the available options. Some loans offer lower downpayment without PMI, some offer no loan origination fee if you work with an Exclusive Buyer Agent!
Beware the hidden fees of agents who want to steer you to their corporate lending partner and their corporate title company. You may not be getting the best deal from their affiliations. If you use an EBA, there are no affiliations to worry about. You will get much better fees as EBAs work to save you money.
Smart home buyers look to their EBA to provide guidance on which type of mortgage might suit them best. Talking to multiple lenders, finding out what options they offer and how the products differ to find out what impact early decisions have on the mortgage payment are all a necessary part of financing your new home. Getting a leg up on this research is the hallmark of a good realtor. They should assist you to research options that would help you most.
Once you find your Exclusive Buyer Agent and lender, you are ready to make the next move toward finding your home. Your EBA should also be able to point out or red flag issues on homes during showings. With the amount of homes on the market in foreclosure and short sale, there may be reasons why you should steer clear of some opportunities as they are not all what they appear on the MLS listing. Until you’ve seen the property with your agent, you will not know for sure if the home is a likely candidate for investment as your new home.
Protect yourself from exposure to predatory agents. Do not attend open house showings without your agent. Do not divulge information about yourself or your motivation for buying to other agents or homeowners. This is like showing other card players your hand when playing poker. It’s foolish and costly. Your Exclusive Buyer Agent will protect your interests, divulge only what is necessary to make an offer and protect your financial and motivation position when making inquiries or offers on your behalf.
Once you have identified your new home, protect your future investment by getting proper inspections, not only the home structure and mechanicals, but also RADON and sewer line inspections. You can save yourself thousands of dollars in repairs, Radon abatement and sewer line issues by taking the intial steps to locate and identify potentially costly problems. By spending a few hundred you can potentially save yourself thousands.
You can expect your EBA to keep a close eye on the process during the loan processing, make sure that once your Purchase Agreement is accepted and you have passed the Inspection period negotiations, that your appraisal is ordered. Ensure that your appraisal information provides support for the purchase price and if you are fortunate you may find you already have equity built into your home purchase if your home appraises above the purchase price.
Explaining the home buyer process, assisting with choice of lenders, apropriately pricing your offer, negotiating your best deal, ensuring inspections are done and confirming lender is on track and titlework is being processed are all part of the function of your Exclusive Buyers Agent. Saving you money on each step is also part of the process.
All agents are not created equal, be sure your agent’s allegiance is to you as the buyer and not their broker or a seller. Get the deal that is in your favor!