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Understanding Agency and Buyer Representation
As real estate agents, we are bound by several obligations to you, the client:
- Reasonable skill and care
- Obedience of all laws and instructions
- Accountability (for all money)
- Honesty, trust, dependability – Santa Realty’s core values
- Loyalty to YOUR interests
- Disclosure of all pertinent data and factual information
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At Santa Realty, we will provide you with all necessary disclosures up front defining our brokerage relationship and the services we will facilitate on your behalf.
Other key Experts
Home Inspectors are licensed by the state in which they are allowed to do business, and can assist you in determining the physical condition of the house and identifying any problem areas of your potential purchase. It is important that you select a competent and thorough Home Inspector to take you through the home. This can be a great investment and provide you with items that you can negotiate to have repaired prior to you purchasing from the seller.
Your attorney is responsible for making sure that your purchase and sales contract is acceptable and legal. Although your realtor helps you fill out this paperwork, your attorney is generally the legal counsel that advises you about the legalities of the contract. Make sure you hire a real estate attorney. Some people think that any attorney can facilitate a closing, and they can, but wouldn’t you prefer an attorney who does this as their primary role? When you are making one of the largest investments you might ever make in your life, it sure makes the best sense to use a firm that specializes in real estate law. Providing title searches on your behalf is very important to ensure that the property you are purchasing is not encumbered by something that is not listed in the deed or some town records. People who facilitate title searches are experts at this, and do this day in and day out, so you want the best.
Tax and/or Financial Advisor
Depending on your current and future needs, both of these experts can benefit you in making a sound decision to purchase a home. There are major tax benefits to owning a home such as tax deductions on your Federal and State income tax returns. Each year there are changes to these guidelines, and you should seek an accountant to assist you in determining the “value” of owning a home each year.
Negotiating an offer, counteroffers, credits
After you find the home of your dreams, now is the time to make an offer with the help of your real estate agent. Your agent will provide you with the latest version of the standard local purchase and sales contract.
All realistic offers have these elements:
Realistic financing terms – Having your pre-approval letter when submitting your formal offer proves to the seller that you can afford to purchase their home and it provides them with your financial strength. The interest rate, loan fees, and time to attain the loan need to be based on current lending conditions. It could, for example, take three weeks in order for the lending institution to provide “Commitment” to lend you the money. Writing in the purchase and sale that you will have commitment in two weeks, would be a stretch and could raise red flags with the seller.
Realistic offer – When submitting a formal offer, you should be making a solid offer based on comparable sales within the last three to six months, also factoring in the condition, location, age of home, and size. We can’t stress enough the importance in submitting an offer that is realistic with the current economic climate.
Solid offers contain contingencies – When you initially submit your offer, you are offering the seller a price based on the items that you can see and understand to be fully functional. It is always a good idea to have the home inspected after the agreed upon purchase price. This enables you to re-negotiate the contract is there are defects found that were not known prior to your offer. A reasonable seller will agree to some type of repair and/or credit to the buyer at closing so that the item will no longer be an issue for the buyer.
Once inspections have been completed and negotiations are completed, the contract is officially ratified. Normally a second deposit is provided to the seller at this point to bring the contract closer to the closing table. All offers and counteroffers should be in writing, unless there are several offer/counter-offer scenarios in a quick timeframe (usually same day)
Your final closing statement should be provided to you 24 hours prior to your actual closing. This final statement records all the money related to your home purchase.
- Debits: These are funds that are paid out on your behalf. Loan fees, homeowners insurance premiums, property taxes and the actual purchase price of the home will be present in this section.
- Credits: This is any money that you have already committed to the purchase to this point such as deposit(s). If the seller is providing you with any credits at closing towards any repairs, these will also fall in this section. Your loan, will also show as a credit.
Some states have a “Final Verification of Condition” clause in the purchase and sale contract. If your state does not have this, you can advise your agent or attorney to insert this into your contract.
Ideally, your agent should do a formal walk-through of the property with you the day of closing. The sole purpose of this walk-through is to ensure that the property is in the same condition as it was when you signed the contract to purchase the home. There have been instances where something negatively happened at the property (normally an accident or some type of natural disaster) and the new homeowner ended up inheriting the issue. This can turn into a legal problem after the closing when it is something that could be better handled if all parties were aware with their attorneys present to resolve the issue head on.
By now, you should have already received your HUD Statement, which represents all of your debits and credits. You closing should take place at the buyer attorney’s office. You attorney is responsible for paying everything on your behalf after the lender has released the money into their escrow account. Make sure you keep your HUD statement in a safe place. The document will be necessary for your account to view when filing your taxes the following year as there are items on this that may be tax deductible.
To meet with Santa Realty, the #1 realtor in Connecticut, pick up the phone and call Rick or Kristina today!