Frquently Asked Questions about Buying Real Estate

A buyer's agent is a real estate agent who has a contractual agreement to represent the buyer in a real estate transaction.

Typically, nothing for the buyer. A buyer's agent is usually paid a commission from the seller of the property, rather than being paid by the buyer.

The Buyer's Agency contract is the agreement between you and your buyers agent that makes clear the relationship. It binds the agent to make sure he works for your best interest in negotiating the best possible price and terms for the property you eventually purchase. It also provides proof of your relationship that helps assure that your buyer's agent can collect a fee from the seller when you close on your property.

Mortgages have become more difficult to obtain, credit scores are having a much greater impact on your interest rate, and the entire process is taking more time. In order to have the best opportunity to address any unknowns that may arise, we recommend you engage a mortgage professional very early in the process. Once you have determined the general area and type of home you are likely to want to make an offer on, it is time to start working with a mortgage professional. Any of our agents can assist you with finding a mortgage professional appropriate to your situation.

In this market, it often makes sense to talk to more than one professional and see what they have to offer. Each company has different products and services. While the differences may sound small, they can have dramatic long term effects. Any of our agents are happy to provide referrals to local professionals you may find helpful.

There are a number of steps in purchasing a home. We will work with you to make sure the appropriate steps for your specific situation are followed. However, this will give you a general idea.

• You and your agent will write an offer
• The offer will be submitted by your buyer's agent to the listing agent
• The listing agent will review the offer with the seller
• The seller will accept the offer or counter certain terms
• Once both sides agree on all terms in writing, a binding agreement will exist
• An inspection is typically ordered - both the buyer's agent and the buyer should be present to review findings with the inspector
• Any negotiation around inspection items will take place
• Financing is formally applied for - typically including a formal appraisal
• Your agent will work with you, the mortgage representative, the closing attorney, and the listing agent to ensure a smooth closing
• The closing attorney will ensure the title to the property is clear
• You sign on the dotted line!
• Possession to the property is typically granted within 3 days of closing in metro Atlanta, but it will be specified in the contract.

Note: Steps vary based on the type of sale (standard, corporate owned, bank owned, short sale, foreclosure, etc.) and the type of property (condo, town home, detached single family home, land, etc.). Please work with your agent to ensure you know the appropriate steps for your specific situation.

There are a lot of mis-conceptions about foreclosures. Here are some of the basics. First, there are typically 3 phases to a foreclosure - 1) pre-foreclosure (a short sale) 2) the court house auction (the actual foreclosure) and 3) a bank owned property (REO). To purchase a foreclosure in either phase 1 or 3, you would engage a buyer's agent the same as you would to purchase property being sold conventionally. If you wish to buy a home on the court house steps, you will need to find the local publication for properties in your county, determine when the auction take place, and show up at the court house to bid on the property. Court house step sale typically require full payment the same day. Phase 1 and 3 options typically allow for mortgage financing to occur.

A short sale is any sale where real property is being sold for less than the current balance of a mortgage and the mortgage holder is being asked to approve the sale without receiving the entire balance of the debt owed to them at closing. In a short sale the mortgage holder releases their lien on the property, but may require the seller to take out a non-secured loan for any balance owed to them.

A short sale occurs prior to a property being auctioned for foreclosure. In a short sale, the seller and the bank are both involved in the transaction, and both must agree with the buyer to all of the terms of the transaction. Short sales are fuzzier in terms of the condition of the title and wiping out any debts tied to a property.

The best deal for you may be any type of sale - conventional, short sale, foreclosure, etc. It is a mistake to limit your search based on these criteria generically. There may be factors like how quickly you need a deal closed that would limit these quite specifically. Work with your agent to determine all of the factors important to you in searching for a home. Agents have the best tools and networks to find the right home for you.

Foreclosures can be the best deals - but they can also be the worst. It is important to understand your goals, your time line, and your capacity to deal with unknowns. A bank owned property is almost always sold as-is with no disclosures. Properties may have utilities turned off making inspections difficult, and any number of title issues, time delays, and wall street pressures can change a deal on a dime. You need to be very prepared to have long delays, slow responses, and things pop-up that you will have to deal with patiently, quickly, and without much emotion to do well in the foreclosure market. Be sure to work with an agent who understands this market. We have certified foreclosure specialists on staff.

The most challenging issue in purchasing a short sale is the number of parties involved. In a normal transaction you have a buyer and a seller. In a short sale, you have a buyer, a seller, and a bank (at a minimum). The seller is typically easier to deal with in this situation, as they are not going to receive money at closing - they just want out of the home. The bank, however, has a number of factors driving their response (or lack thereof). A bank may want the insurance money they receive in the event of a foreclosure more than they want your deal. They may not have adequate staff to review offers for weeks at a time. They may require paperwork be submitted multiple times to keep it "current." Be aware the bank will expect you to react almost immediately, and they will respond at their leisure. Since the seller is involved, you may have the benefit of a property disclosure statement. Again, it is important to work with an agent who knows how to navigate this world. We have successfully navigated numerous short sale scenarios for our clients.

Once a property has actually been foreclosed and is owned by the bank, a couple of things happen. First, the bank should do anything necessary to ensure the title is clear prior to marketing the property. Second, they obtain a number of opionions on the properties value, and tend to price it aggressively in the market. That being said, their goal is not to give the property away. Banks are shifting to firmer positions on pricing and becoming more likely to let a property remain on the market until they receive what they consider a fair offer.