How to Get What You Want from the Realtor
Do You Want a Star, an Eager Beginner, or Someone in Between?
When you're cruising your target neighborhood you might notice one name that seems to appear on every other sign. This person could be either an extremely hardworking agent or a "star" Realtor who actually has very little to do with his clients until the final negotiations are in play. Opinions differ on whether these stars are worth hiring on the basis of their reputation, especially if you are buying rather than selling a home. For sellers, hiring someone who moves a lot of homes has obvious advantages. If nothing else, his track record makes him a known quantity. However, if you are buying a home and are going to be handed off to the star's assistant throughout your weeks or months of house hunting, hiring the star might not be the right move.
Agents everywhere agree that the relationship between client and Realtor is intense. Says Rhonna Robles, "When you're dealing with large amounts of money, you get to know a lot about a person very quickly. A lot of times you know things that their friends don't even know." If you crave the clout of a star but don't feel comfortable enough with him to share that level of intimacy, you would do well to interview a few other agents before making your decision.
Another element to consider is whether the Realtor is working for a large company. That can be important in a hot market, because your agent can describe the type of home you want to his coworkers and, ideally, get a heads-up on a great house before it ever hits the Multiple Listing Service. (The larger the company, the more likely it is that one of those agents will be listing a suitable home.) Even in a slow market, says Robles, "good things still fly off the market, so I always want to let the other agents know what I'm looking for."
Sometimes people find themselves clicking with a young, relatively inexperienced agent. Should experience trump rapport? Not necessarily. Young agents with fewer clients may be able to devote more time and energy to helping you. If they are working at a well-established agency, they are probably being mentored by a more experienced agent who will make sure all the details are handled properly.
Although a good Realtor will explain the process in detail, it helps if you walk in the door understanding the basic terms of a real estate transaction. Here are the top 10:
Adjustable Rate Mortgage (ARM): A loan in which either the interest rate or the length of time the loan is agreed for can change. First-time homebuyers beware: an ARM can be seductive, as you can get in a home at a lower monthly mortgage only to have that mortgage suddenly dramatically increase when interest rates go up.
Amortization: A payment plan on your house loan that allows equal payments over a finite period of time (typically 15 and 30 years). The initial payments primarily cover the interest on the loan and the balance of the payments cover the principal.
Binder: A preliminary agreement or "offer to purchase" on a property that is accompanied by "earnest money." Beware the earnest money is forfeited if the buyer doesn't go through with the deal.
Closing Costs: The numerous expenses and fees incurred by both buyer and seller during a real estate transaction. Who pays what is often negotiable, but the seller always pays the Realtor's commission.
Closing Day: The date on which the seller delivers the deed and the buyer pays for the property.
Deed: A written instrument, drawn up according to the laws of the state, that formally transfers title to a property from one owner to another. The deed is legally binding, and once it is sealed and accepted, it supercedes all other agreements.
Equity: The actual value that the owner has in the owned property. Equity is what is left after any outstanding loans or debts are subtracted from the current value of the property. As the mortgage is paid off, equity increases.
Escrow: A special trust account set aside by the lender in which the homeowner may deposit money to be held to cover specific anticipated expenses such as taxes or insurance premiums.
Points: Points are part of the credit the lender is extending to the borrower. One point is 1 percent of the total loan paid upfront. More than one point can be paid, they are subtracted from the principal, and either the buyer or seller can pay them. Note: HUD (U.S. Department of Housing and Urban Development) loans prohibit the buyer, but not the seller, from paying points.
Principal: The portion of the loan that pays off the actual cost of the house and does not include interest. (Interest goes to the lender.)
Title: The actual document that proves ownership of a given property.
From Say the Magic Words by Lynette Padwa. Copyright © 2005. Used by arrangement with Penguin Group (USA) Inc.
If you'd like to buy this book, go to Amazon.