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Buyer broker, the buying process, and how I owe you fiduciary duties

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Buyer broker, the buying process, and how I owe you fiduciary duties

We will need to go through these things before looking at homes. We can avoid a lot of miscommunication and surprises by just having a conversation. There will be expenses along the way like home inspection and closing costs.

  1. Start with looking at properties. Yes, it is first step to get set up on a listing alert from the MLS and you may also use a website from Zillow or Realtor.com. This is great to narrow down what you like or dislike and get your expectations set for home costs in different areas. Here is a great video to get you started: 10 first steps to buying a home

2. Getting Prequalified

a) 4 ways to a higher credit score

b) Find a lender/bank to get you a prequalification letter; we will need this to submit with the offer. Getting prequalified is done before looking at homes. The letter will let you and the seller know how much you can borrow. We would try to look at homes in your budget.

3. How Realtors get paid and what we do:

Fiduciary Duties: Click here for the Fiduciary duties we owe to our clients.

The foundations of the fiduciary duties that I am obligated to provide to my clients can be described with a simple acronym – OLD CAR.

O: Obedience – to follow the instructions of your client that are allowable within the law. To follow all federal, state, and local laws and regulations

L: Loyalty – To place the interests of your clients above all other interests, including my own.

D: Disclosure – To disclose information about transactions and properties vital for your clients/customers to know to make informed decisions. Such disclosures include material facts that may affect property value, property desirability, or the findings of the buyer.

C: Confidentiality  To keep information received from your clients that may harm your clients’ positions private and confidential.

A: Accounting – To keep an accurate accounting for money and property entrusted in your care as it relates to the real estate transaction.

R: Reasonable Skill and Care  To use your professionalism, education, and skill to perform your duties for your clients to the best of your ability.

Realtors only make money when a deal goes through and closes. Sellers offer a commission on the MLS and pay the buyer’s agent for their work in bringing a buyer. We have access to off-market properties as well, and there are ways for me to write the commissions in. Also, new builds are a special one, which your agent mostly has to be with you on the first time to the home builders showroom, or you need to mention them. Please consult with your agent or me before starting to look at new builds; you could be paying too much for the home and miss out on rebates.

4. Getting ready to pull the trigger: Things happen fast, and this blog and conversation are to get you prepared for what’s to come. Have we a) got a pre-qual letter from your lender? b) Do you know the numbers c) Do you understand the way realtors get paid?

5. The ten day inspection period This blog pretty much explains everything, but once the buyer and seller agree and go under contract, you have ten days to get the home inspected with an array of inspectors such as general, AC, roof, and termite. Depending on the age of the building.

6. Closing costs: click here. Know your closing costs so that when you sign at closing with your title company, it’s not a big surprise.

7. The AAR contract is explained. Click here for the link.

8. Buyer broker: A buyer brokerage or buyer agency is the practice of real estate brokers and their agents representing a buyer in a real estate transaction rather than, by default, representing the seller either directly or as a sub-agent.

This is a contract between you and me to continue buying a home. When a realtor is working with a buyer in a committed relationship (lol, sort of like you know…..), the smoother the relationship, and it’s clear what’s expected. The realtor can direct more time into helping the client find their dream home, including FSBOs, new builds, and the MLS.

Some people have an idea that realtors get paid hourly, but we do not, so this is why we need commitment so that I can work for you. This is how I concentrate my #grind, are you committed?

10. Appraisals, the last sticking point. Generally paid for by the buyer and ordered in the inspection period. When an appraisal comes in on price or high, it’s typically not an issue, but when it’s low, the buyer has to come up with the difference to continue the contract. The buyer then has the opportunity to accept and pay the difference, negotiate the seller down, or cancel the contract.

11. Earnest money. Earnest money is an amount of money you put down to show you’re serious about purchasing a home. It’s also known as a good faith deposit. Its held with the title company

11. Closing date and the Walkthrough. The Walkthrough usually happens three days before the closing of escrow.

12. Know the market; read through this blog for the latest market updates.

12. The separation anxiety afterward, you’re going to miss me 

I hope this helps explain how the process works and how a real estate professional owes you fiduciary duties.

Jay Bru

480-466-4917

jay@jaybrugroup.com

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