Archive for the 'Frequently Asked Questions' Category
FAQ #3: What is a Buyer’s Agent & Why Should I Hire One?
August 18th, 2007 Categories: Buyers, Frequently Asked Questions
A buyer’s agent is a REALTOR that represents you, the buyer throughout your home buying experience.
A buyer’s agent may be certified by the Real Estate Buyer’s Council or a real estate agent that prefers to work with buyers. Any real estate agent can work with a buyer.
Why Should I Hire A Buyer’s Agent?
In the real estate process you will meet a real estate agent that is listing the property (Listing Agent) or, in the case of new construction, a sales agent.
A listing agent represents the seller of the property and is hired to negotiated conditions favorable to the seller in order to sell their property.
Similarly, when you walk into the sales office for a new construction project, the sales person you meet, who may or may not be a REALTOR, is working for the builder.
Who is working for you? or looking out for your best interest? NO ONE
When you hire a buyer’s agent, you hire someone who represents you and you alone.
A accredited buyer’s agent owes certain fiduciary responsibilities to the buyer. They will:
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- Locate and show you property,
- Provide Market Value information,
- Structure your purchase offer to the seller,
- Negotiate with the seller,
- Handle all the details up to and at closing.
The average person buys real estate a few times in their lives. A real estate agent does this for a living. They can tell you the latest market conditions, issues to look for with different types of properties or neighborhoods and things you will never think about. They will guide you through the process.
How Does A Buyer Agent Get Paid?
This issue is spelled out in your Buyer Agreement. Most buyer’s agents will accept the commission that is offered in the MLS from the listing agent, others will require a determine percentage. Commissions are always negotiable. You should always discuss this with your buyer agent to make sure you understand how your agent is getting paid.
Most real estate agents are independant contractors who associate themselves with a broker. This is how they make thier living. They are professionals and shouldn’t shy away from answering any of your questions about your business relationship.
Buying a home is not like buying a car. You are making the largest single investment in your lifetime. You are going to live in your next home for years to come and can’t just trade it in if you don’t like it. Make sure you take the steps available to you to protect your investment.
For more information about real estate agency, read:
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Frequently Asked Question #2: What’s The Difference Between A Loan Officer & A Mortgage Broker?
August 2nd, 2007 Categories: Buyers, Frequently Asked Questions, Mortgages & Loans
This is the simple answer:
A Loan Officer uses their own money to fund your mortgage.
A Mortgage Broker uses someone else’s money to fund your mortgage.
But buying a mortgage is anything but simple. Buying a home is the largest single investment most people make in their lifetime. When people start shopping for a mortgage, they don’t even know enough to ask this simple question. Most people don’t even understand why they should care to ask this question. This is why the one thing they look for is the lowest interest rate they can find. It’s easy to understand–and the thing they think will save them the most money. But applying for and obtaining a mortgage is so much more than just the interest rate. I recently had a closing where having their loan officer attend their closing saved my clients money. So do your homework.
The mortgage business is large and complex– so I’m not going to attempt to explain the whole business here. Mortgages are bought and sold in secondary markets–this allows mortgages companies to make new mortgages. Mortgages are a big part of our economic structure and we are entering a scary time for the mortgage business. You, no doubt have seen daily reports of the state of the sub-prime market. The most recent casualty is American Home Mortgage.
I am still trying to grasp the impact it will all have on the primary mortgage market and home buying. I have found two bloggers who explain what is going very clearly. Visit their blogs to learn more on this subject:
Now– back to the basics….
Loan Officer
A mortgage loan officer is someone who works for an organization in the business of selling mortgages to people buying a home. Wells Fargo, Country Wide & First Horizon are three large national lenders in the business of selling mortgages. Banks such as Bank of America, Suntrust & Wachovia also have home lending divisions that provide mortgages. Both types of companies will also provide home equity loans and home equity lines of credit. Don’t assume because you have your checking and savings account with a bank, you will obtain a better mortgage. Shop around.
The main advantage of using a loan officer? When they guarantee a loan– they know where the money is coming from and that it will be there at closing. The main disadvantage? If you have questionable credit- they may not be able to offer you a loan product.
Mortgage Brokers
A mortgage broker is someone, usually an independent company or contractor who will “shop” your mortgage needs to other lenders who will fund the loan. According to the National Association of Mortgage Brokers 2004 survey, there are 53,000 mortgage brokerage company nationally employing about 418,700 employees.
The main advantage of using a broker? They may be able to find you a lender who will sell you a loan. The main disadvantage? You won’t know until it’s too late whether or not you will get the loan promised. Here is a recent story from Rain City Guide that is a prime example of what can happen: Read Part 1, and Part 2.
There are good apples and bad apples in any industry. Over the next few months- you are going to be hearing many stories about bad apples. (Note: Patricia De Luca mentioned in this article is no relation to me.) Don’t let that scare you away from buying a home. Do your research, ask for referrals from a friend–ASK QUESTIONS. Never be afraid to ask questions.
Even better, when you work with a trusted REALTOR, they know the market and can recommend a mortgage person they have worked with, someone they trust, and someone they know will deliver.
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Frequently Asked Question #1: What is the difference between a Condominimum & a Townhouse?
July 22nd, 2007 Categories: Buyers, Condos, Frequently Asked Questions, Real Estate News
Condominium is a type of ownership while a townhouse is a type of architecture.All around Arlington & Alexandria many of the townhouses are condo ownership. Park Fairfax, Fairlington, Windgate & Arlington Village are good examples of townhouse communities that are also condos.
Condo Ownership
Condominium is a type of ownership where you own “wall-to-wall” of a particular unit and share ownership with other unit owners for the common areas of the property.
In addition to your mortgage payment, you pay a condo fee that contributes to the overall budget of maintaining the common areas of the property like the pool, lawn care, parking lots. In addition, your condo fee helps pay for the master insurance policy, management company costs, reserve funds for general repair and replacement of items like the roof, sidewalks, parking lot pavement.
Your condo is run by an elected condo board made up of other owners who volunteer their time to manage the condo’s budget, vote on the condo’s rules and management issues.
There are advantages and disadvantages to owning a condo. One major advantage is that you have a reduced amount of maintenance to worry about. The condo takes care of your roof, sidewalks, and any outside maintenance of the property. One disadvantage that most people object is the requirement to follow a set of rules. Most rules are reasonable but make sure you know what they are BEFORE you buy any condo.
Fee Simple Ownership
Fee simple ownership is the type of ownership where you own the entire building and the land that it stands on. You own and are taxed on a plot of land and its improvement (your home).
Your home may belong to a homeowners association where you pay a fee in order to maintain common areas like pool, community center, private trash or snow removal.
Your home owners fee is significantly less than a condo fee– but you have an increased amount of home maintenance to manage. Homeowners associations also have a set of rules to follow– so READ your homeowners association documents BEFORE you purchase a home or townhouse in a homeowners association.
Virginia’s Condominium/Home Owners Association Laws
Virginia Law requires that any potential owner receive a complete set of condo or home owners’ association documents. As a potential buyer, you should receive these documents within 14 days of ratifying your contract. Certain information is required in these docs:
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- Latest financial statement of the association
- Any violations of the current unit owner
- Complete set of the most current rules and regulations
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The complete checklist of what is required for condos and a home in an association can be found on the state’s web site. The buyer then has three days to read and review these documents. Anytime during this time, the buyer can void their contract without losing their earnest money deposit. While the owner can’t change the rules, they are required to fix any violations found by the association and any payments owned to the association.
Which is Better to Own?
There is no right answer here. It depends on your situation. In Arlington and Alexandria, there are whole condo neighborhoods– like Shirlington. So it’s not that easy for your condo to lose value. Many people think that owning a condo is owning “cheaper” real estate. Not true– at least in Virginia.
If you are someone who doesn’t want to do their own maintenance and plan on hiring someone to do all the work around the house– like mowing the lawn or outdoor repairs; or are someone who has a busy lifestyle and just doesn’t have time to take care of all the home maintenance involved with owning a home, then owning a condo is an option to consider.
If you are someone who who loves everything about owning a home–like mowing the lawn or just tinkering around the house– fee simple ownership is the way to go.
When you are considering buying property, it’s important to understand the different type of ownership in property. The other type not covered here is Co-Op ownership– maybe in the future– but there aren’t many co-ops in Northern Virginia. If you are interested in this type of ownership– visit the Virginia Community Association Network provide below.
Other sources of info:
Virginia Community Association Network
Arlington County Condo, Homeowner & Tenant Associations
Fairfax County Condo & Homeowners Associations
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