How to Avoid Costly Mistakes When Buying Your Next Home

Today’s low interest rates and large amounts of inventory make buying a new home easier than ever before. Maybe you need more room, less upkeep, just want a change, or maybe you’ve saved for a down payment and are ready to stop renting. Even if your credit isn’t so perfect or your down payment isn’t as significant as you’d like, chances are you could still buy that new home. It’s often just a matter of working with the right people who have the best strategies. When it comes to buying a new home, that means a REALTOR®.

What is a REALTOR®?

The term REALTOR® is not a generic term; it is a registered collective membership mark that identifies a licensed real estate professional who is a member of NAR, the National Association of REALTORS. The term REALTOR® is NOT synonymous with “real estate agent.” Not all real estate licensees are REALTORS®. Only members of the NAR can call themselves REALTORS®.

Through NAR membership, REALTORS® stay abreast of the most recent trends in their fields, remain well-informed of industry developments in their specialized areas, and address industry issues more effectively. NAR offers advanced educational opportunities to its members that allow REALTORS® to offer a more diverse array of services with such accredited sub-specialties as buyer’s representation (ABR®). REALTORS® are also industry innovators who have harnessed the power of the Internet to better serve consumers and have helped bring real estate technologies into the home buying and selling process to facilitate and streamline today’s real estate transactions. Plus, all REALTORS® have to take comprehensive training on NAR’s Code of Ethics, a comprehensive document that provides guidelines for protecting buyers and sellers, as a requirement for membership.

What can a REALTOR® do for a buyer?

Very simply, REALTORS® add value to the real estate transaction. A REALTOR® understands the local market and knows what matters to buyers and sellers in your area. They have the expertise and experience to help sellers protect their investment and help buyers build theirs. Using a buyer’s agent means you have a trained professional working with your best interests in mind. A buyer’s agent will work to find you the best property, negotiate the best price, ensure the property is inspected, and make sure you have the representation you need. Best of all, in most cases, the buyer’s agent is paid out of the seller’s commission, even though he/she works for you. Plus, things you tell a buyer’s agent remain confidential.

While some people are hesitant to use an agent because they think it means paying more, the reverse is usually true. In most situations, a buyer’s agent is simply working for the same commission that is paid by the seller and splits it with the seller’s listing agent. While some might argue this method leaves the incentive for a higher sales price, a buyer’s agent typically doesn’t make a large enough percentage of the purchase to make a difference. Even a $10,000 discount on the sales price typically only translates to a couple hundred dollars at most for the agent. It ultimately is in the agent’s best interest to negotiate and reduce that sale price. The benefit of a satisfied client and a positive word of mouth referrals is an investment that far outweighs a reduced commission.

Buying property is a complex and stressful task. Real estate transactions have become increasingly complicated in today’s market. New technology, laws, procedures, and competition from other buyers require buyer agents to perform at an ever-increasing level of competence and professionalism.  Today’s typical home sale involves as many as 20 steps to complete the transaction. REALTORS® work through the real estate transaction process daily and understand how it affects the interests of their clients and customers. REALTORS® know how to negotiate contract terms, manage inspections, and ensure a smooth settlement.

Buying a home doesn’t have to be a stressful experience, but the wrong decisions can end up costing you thousands of dollars. Working with a buyer’s agent who is a REALTOR® can help you avoid costly mistakes. A buyer’s agent has a fiduciary duty to their client. That means they are loyal only to you and obligated to protect your interests.

According to the 2009 NAR Profile of Home Buyers and Sellers, eighty-five percent of sellers used an agent or broker to sell their property. Shouldn’t you have an agent, too? Work with a buyer’s agent who has a keen understanding of the real estate business and who is on your side.

Posted in Home Ownership.

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