What you need to know about Hiring A Rea Estate Agent

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Information about What you need to know about Hiring A Rea Estate Agent
Real Estate

Published on March 4, 2009

Author: porchlightscott

Source: slideshare.net

Description

This presentation helps you to understand the extent of the fiduciary responsibilities owed to you under an Agency Relationship.

Buying a home is one of the most important decisions of your life. This presentation will help you to make an informed and educated choice of which professionals to use to help you with this purchase.

A Complete Guide to Hiring an Agent - Finding the Best Deals Thank you for attending We will begin in a moment Class Scheduled to begin at 6:00pm Homeownership Educator Scott Schang Sponsored by Broadview Mortgage Corporation 1-866-667-6724

Thank you for attending

We will begin in a moment

Class Scheduled to begin at 6:00pm

Homeownership Educator

Scott Schang

Sponsored by

Broadview Mortgage Corporation

1-866-667-6724

Hiring an Agent – Finding Deals The Purpose and Goals of this Class To Create and Empower Home Owners Introduce you to the buying process and demystify steps to buying a home Educate you about importance of making an educated and informed choice about working with a Real Estate Agent Empower you with the ability to get the most accurate information available while searching for homes that are for sale

The Purpose and Goals of this Class

To Create and Empower Home Owners

Introduce you to the buying process and demystify steps to buying a home

Educate you about importance of making an educated and informed choice about working with a Real Estate Agent

Empower you with the ability to get the most accurate information available while searching for homes that are for sale

Hiring an Agent – Finding Deals Ask Questions throughout presentation You may type questions in at any time during the presentation – Questions box on your screen Homeownership experts are standing by to answer your questions during the presentation This is an interactive learning environment. You will get the most value by having your specific questions answered The only dumb question is the one you don’t ask Write this number down in case of technical difficulty 1-866-667-6724

Ask Questions throughout presentation

You may type questions in at any time during the presentation – Questions box on your screen

Homeownership experts are standing by to answer your questions during the presentation

This is an interactive learning environment. You will get the most value by having your specific questions answered

The only dumb question is the one you don’t ask

Write this number down in case of technical difficulty

1-866-667-6724

Hiring an Agent – Finding Deals The Road to Home Ownership is often paved with “fear of the unknown” The unlearned can be learned Misinformation can avoided if you ask enough of the right questions A Simplified Overview of the Process Get approved for financing Hire a Real Estate Agent Find your dream home Make an offer on your dream home Offer accepted, what’s next? Time line for the buying process

The Road to Home Ownership is often paved with “fear of the unknown”

The unlearned can be learned

Misinformation can avoided if you ask enough of the right questions

A Simplified Overview of the Process

Get approved for financing

Hire a Real Estate Agent

Find your dream home

Make an offer on your dream home

Offer accepted, what’s next?

Time line for the buying process

Hiring an Agent – Finding Deals What is a REALTOR®? A real estate agent is a REALTOR® when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS® REALTORS® are pledged to a strict Code of Ethics and Standards of Practice. The Role of a Real Estate Agent Negotiates and facilitates the purchase of Real Estate on behalf of a “principle” – Buyer/Seller Agency relationship / Fiduciary duties Seller’s Agent – Fiduciary duty to seller Buyer’s Agent – Fiduciary duty to buyer

What is a REALTOR®?

A real estate agent is a REALTOR® when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS®

REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.

The Role of a Real Estate Agent

Negotiates and facilitates the purchase of Real Estate on behalf of a “principle” – Buyer/Seller

Agency relationship / Fiduciary duties

Seller’s Agent – Fiduciary duty to seller

Buyer’s Agent – Fiduciary duty to buyer

Hiring an Agent – Finding Deals What is a Fiduciary? Wikipedia - A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence

What is a Fiduciary?

Wikipedia - A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence

Hiring an Agent – Finding Deals What is “Fiduciary Duty”? Utmost Care - The agent is bound to the higher standard of a professional in the field which extends the standard of duty to investigate within the means of the profession, to ensure the maximum protection and information be provided the principal. Integrity - Defined as the soundness of moral principle and character. It means the agent must act with fidelity and honesty " Honesty and Duty of Full Disclosure " of all material facts, either known, within the knowledge of or reasonably discoverable by the agent which could influence in any way the principal's decisions, actions or willingness to enter into a transaction

What is “Fiduciary Duty”?

Utmost Care - The agent is bound to the higher standard of a professional in the field which extends the standard of duty to investigate within the means of the profession, to ensure the maximum protection and information be provided the principal.

Integrity - Defined as the soundness of moral principle and character. It means the agent must act with fidelity and honesty

" Honesty and Duty of Full Disclosure " of all material facts, either known, within the knowledge of or reasonably discoverable by the agent which could influence in any way the principal's decisions, actions or willingness to enter into a transaction

Hiring an Agent – Finding Deals What is “Fiduciary Duty”? Loyalty - An obligation to refrain from acquiring any interest adverse to that of a principal without full and complete disclosure of all material facts and obtaining the principal's informed consent. This precludes the agent from personally benefitting from secret profits, competing with the principal or obtaining an advantage from the agency for personal benefit of any kind.

What is “Fiduciary Duty”?

Loyalty - An obligation to refrain from acquiring any interest adverse to that of a principal without full and complete disclosure of all material facts and obtaining the principal's informed consent.

This precludes the agent from personally benefitting from secret profits, competing with the principal or obtaining an advantage from the agency for personal benefit of any kind.

Hiring an Agent – Finding Deals What is “Fiduciary Duty”? Duty of Good Faith - includes total truthfulness, absolute integrity and total fidelity to the principal's interest. The duty of good faith prohibits any advantage over the principal obtained by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.

What is “Fiduciary Duty”?

Duty of Good Faith - includes total truthfulness, absolute integrity and total fidelity to the principal's interest.

The duty of good faith prohibits any advantage over the principal obtained by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.

Hiring an Agent – Finding Deals Understanding Agency Relationships From Realtor.com Website – Link provided It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.

Understanding Agency Relationships

From Realtor.com Website – Link provided

It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions.

Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.

Hiring an Agent – Finding Deals Understanding Agency Relationships From Realtor.com Website – Link provided Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Understanding Agency Relationships

From Realtor.com Website – Link provided

Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller.

All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Hiring an Agent – Finding Deals Understanding Agency Relationships From Realtor.com Website – Link provided Buyer's representative (also known as a buyer’s agent).A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.

Understanding Agency Relationships

From Realtor.com Website – Link provided

Buyer's representative (also known as a buyer’s agent).A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction.

The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer.

The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.

Hiring an Agent – Finding Deals Understanding Agency Relationships From Realtor.com Website – Link provided Disclosed dual agent . Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties.

Understanding Agency Relationships

From Realtor.com Website – Link provided

Disclosed dual agent . Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction.

Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties.

Hiring an Agent – Finding Deals Tips to Find and Hire an Agent Friends and Family rule Firing a friend or family is not an option Business referrals are a good place to start Lender – experience working through sale Escrow companies Insurance Agents Looking for and Agent on the Internet Accessibility and communication Text, chat, email, cell phone, IM Websites vs. Blogs The social media phenomenon Who are they as opposed to What they do

Tips to Find and Hire an Agent

Friends and Family rule

Firing a friend or family is not an option

Business referrals are a good place to start

Lender – experience working through sale

Escrow companies

Insurance Agents

Looking for and Agent on the Internet

Accessibility and communication

Text, chat, email, cell phone, IM

Websites vs. Blogs

The social media phenomenon

Who are they as opposed to What they do

Hiring an Agent – Finding Deals Tips to Find and Hire an Agent Ask for references of recent clients Call one to threes of their most recent clients Were they easy to reach / communicate Did they give good advice during process Were there any challenges during sale Would you use them again Real Estate Agents work for YOU Don’t be afraid to expect a high level of service You are not obligated to stay with one buyer’s agent – avoid Buyer’s Agent Contracts Stick with an Agent that does a great job for you Do not allow anyone else to write up offer

Tips to Find and Hire an Agent

Ask for references of recent clients

Call one to threes of their most recent clients

Were they easy to reach / communicate

Did they give good advice during process

Were there any challenges during sale

Would you use them again

Real Estate Agents work for YOU

Don’t be afraid to expect a high level of service

You are not obligated to stay with one buyer’s agent – avoid Buyer’s Agent Contracts

Stick with an Agent that does a great job for you

Do not allow anyone else to write up offer

Hiring an Agent – Finding Deals Educated Decision to Create Agency The decision to work with a Real Estate Agent is a decision to hire a professional to work for you This decision should be as the result of your research, a lengthy interview, talk to references and make an educated decision A quality Real Estate Agent is looking out for your family’s best interest – they will earn your business Avoid pressure tactics and implied urgency

Educated Decision to Create Agency

The decision to work with a Real Estate Agent is a decision to hire a professional to work for you

This decision should be as the result of your research, a lengthy interview, talk to references and make an educated decision

A quality Real Estate Agent is looking out for your family’s best interest – they will earn your business

Avoid pressure tactics and implied urgency

Hiring an Agent – Finding Deals “ Red Flags” of High Pressure Agency A FOR SALE sign is an advertisement paid for and placed by the Seller’s Agent Placing an offer with this Agent creates Dual Agency Agents at Open Houses are most often Seller’s Agents Avoid high pressure tactics by ALWAYS taking your agent with you when you look at homes Get the address and make arrangements to view home later

“ Red Flags” of High Pressure Agency

A FOR SALE sign is an advertisement paid for and placed by the Seller’s Agent

Placing an offer with this Agent creates Dual Agency

Agents at Open Houses are most often Seller’s Agents

Avoid high pressure tactics by ALWAYS taking your agent with you when you look at homes

Get the address and make arrangements to view home later

Hiring an Agent – Finding Deals Finding Your Dream Home The Search Searching the Internet for Home Listings Most “internet sites” are advertisements for Real Estate Agents Very little information is provided and you must “register” to get details You are now a “lead” generated from someone’s marketing dollar As long as you understand this – you have the ability to avoid any action that may inadvertently bring an inconvenience to you

Finding Your Dream Home

The Search

Searching the Internet for Home Listings

Most “internet sites” are advertisements for Real Estate Agents

Very little information is provided and you must “register” to get details

You are now a “lead” generated from someone’s marketing dollar

As long as you understand this – you have the ability to avoid any action that may inadvertently bring an inconvenience to you

Hiring an Agent – Finding Deals Finding Your Dream Home The Search Listing from the MLS – Real Time Realtor.com Listingbook.com RealSeekr.com Agent supplied site Agent updated sites – Updated manually Zillow.com Trulia.com Most others…..

Finding Your Dream Home

The Search

Listing from the MLS – Real Time

Realtor.com

Listingbook.com

RealSeekr.com

Agent supplied site

Agent updated sites – Updated manually

Zillow.com

Trulia.com

Most others…..

Hiring an Agent – Finding Deals Finding Your Dream Home The Search Private remarks can contain important information that would be important to you in the decision making process Only your Agent can see private remarks Tips for finding the best deals Know what you’re looking for – Wish list Communicate with your Agent often Actively search the MLS on your own This will help Agent understand your “likes” Ask your Agent to actively search homes for you

Finding Your Dream Home

The Search

Private remarks can contain important information that would be important to you in the decision making process

Only your Agent can see private remarks

Tips for finding the best deals

Know what you’re looking for – Wish list

Communicate with your Agent often

Actively search the MLS on your own

This will help Agent understand your “likes”

Ask your Agent to actively search homes for you

Hiring an Agent – Finding Deals Making an Offer on Your Dream Home Residential Purchase Agreement California Association of Realtors – 8 pgs Addendum to Purchase Agreement common with short sales and foreclosures Good Faith Deposit – Earnest Money Deposit Held by Agent until 3 days after acceptance $1,000 is usually acceptable Some sellers may require 1% of sales price Higher deposit will strengthen offer

Making an Offer on Your Dream Home

Residential Purchase Agreement

California Association of Realtors – 8 pgs

Addendum to Purchase Agreement common with short sales and foreclosures

Good Faith Deposit – Earnest Money Deposit

Held by Agent until 3 days after acceptance

$1,000 is usually acceptable

Some sellers may require 1% of sales price

Higher deposit will strengthen offer

Hiring an Agent – Finding Deals Making an Offer on Your Dream Home Seller Concessions Credit from seller to be used to cover closing costs only – not down payment Based on sales price not loan amounts Net (actual offer) is less concessions Highest and Best offer is Net offer Common to ask Seller to pay Home Warranty Common for Seller to choose closing services Common for Buyer and Seller to split closing services Some say 50/50 – Each pay own

Making an Offer on Your Dream Home

Seller Concessions

Credit from seller to be used to cover closing costs only – not down payment

Based on sales price not loan amounts

Net (actual offer) is less concessions

Highest and Best offer is Net offer

Common to ask Seller to pay Home Warranty

Common for Seller to choose closing services

Common for Buyer and Seller to split closing services

Some say 50/50 – Each pay own

Hiring an Agent – Finding Deals Offer is Accepted, What’s Next? Counter Offer Seller accepts offer with conditions Fully executed purchase contract Both seller and buyer agree on terms Escrow Company Third party that mediates entire transaction and the transferring of all monies involved Title Company Insures title against pre-existing liens Appraisal and Home Inspection Appraisal required by lender Home Inspection is optional (Get One!)

Offer is Accepted, What’s Next?

Counter Offer

Seller accepts offer with conditions

Fully executed purchase contract

Both seller and buyer agree on terms

Escrow Company

Third party that mediates entire transaction and the transferring of all monies involved

Title Company

Insures title against pre-existing liens

Appraisal and Home Inspection

Appraisal required by lender

Home Inspection is optional (Get One!)

Hiring an Agent – Finding Deals Time Line for the Buying Process Escrow Period Establishes closing date 30 days is normal Contingency Period 17 days for financing / 10 day for inspections Can cancel if financing or inspections fail Have good faith deposit returned if cancelled Close of Escrow – Transaction Complete Sign loan documents Fund loan – 24-48 hours Record loan – Next day usually

Time Line for the Buying Process

Escrow Period

Establishes closing date

30 days is normal

Contingency Period

17 days for financing / 10 day for inspections

Can cancel if financing or inspections fail

Have good faith deposit returned if cancelled

Close of Escrow – Transaction Complete

Sign loan documents

Fund loan – 24-48 hours

Record loan – Next day usually

Homebuyer Tax Credit News Federal Tax Credit - $8,000 Not paid back if live in home for 3 years Must be first time homebuyer Income limits Expires on November 30 th , 2009 State of California Tax Credit - $10,000 Must buy “new construction” home Purchase after 3/1/09 and before 3/1/10 Do not have to be first time homebuyer No income limits Complete qualifying details on YouTube video – You will get link shortly

Federal Tax Credit - $8,000

Not paid back if live in home for 3 years

Must be first time homebuyer

Income limits

Expires on November 30 th , 2009

State of California Tax Credit - $10,000

Must buy “new construction” home

Purchase after 3/1/09 and before 3/1/10

Do not have to be first time homebuyer

No income limits

Complete qualifying details on YouTube video – You will get link shortly

What’s the Next Step? Very First Step – Get pre-approved for financing Get pre-approved for the maximum you can qualify for – Be prepared for competition Start interviewing Buyer’s Agents – We can refer someone to you that shares our values Work with a Real Estate Agent that is experienced with this market and your loan

Very First Step – Get pre-approved for financing

Get pre-approved for the maximum you can qualify for – Be prepared for competition

Start interviewing Buyer’s Agents – We can refer someone to you that shares our values

Work with a Real Estate Agent that is experienced with this market and your loan

Hiring an Agent – Finding Deals Wrap up and Take Aways We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs We are more than happy to be your “second opinion” if you are already working with someone We are more than happy to refer you to a qualified Real Estate Agent We are committed to educating and empowering homeowners - Join us for future classes

Wrap up and Take Aways

We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs

We are more than happy to be your “second opinion” if you are already working with someone

We are more than happy to refer you to a qualified Real Estate Agent

We are committed to educating and empowering homeowners - Join us for future classes

Hiring an Agent – Finding Deals Wrap up and Take Aways You will receive a “Thank you” email with links to the information we’ve talked about here today including Copy of power point presentation Secure on-line loan application Links to all the topics we discussed in class Dream Home Finder request Link to more information about Tax Credit A schedule of all upcoming classes

Wrap up and Take Aways

You will receive a “Thank you” email with links to the information we’ve talked about here today including

Copy of power point presentation

Secure on-line loan application

Links to all the topics we discussed in class

Dream Home Finder request

Link to more information about Tax Credit

A schedule of all upcoming classes

Upcoming Homebuyer Classes A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application A Complete Guide to Buying Foreclosures and Short Sales A Complete Guide to Closing Costs and the Good Faith Estimate A Complete Guide to the CalPERS Home Loan Program Five 100% Financing Loans You Should Know About A Complete Guide to FHA Purchase Loans Working to record and archive all classes for viewing anytime – I will keep you updated Check back often for upcoming classes

A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application

A Complete Guide to Buying Foreclosures and Short Sales

A Complete Guide to Closing Costs and the Good Faith Estimate

A Complete Guide to the CalPERS Home Loan Program

Five 100% Financing Loans You Should Know About

A Complete Guide to FHA Purchase Loans

Working to record and archive all classes for viewing anytime – I will keep you updated

Check back often for upcoming classes

Thank You for Attending If you enjoyed this class – Tell a friend  Your input is Valuable Please complete 2 question survey when you log off For more information 1-866-667-6724 Sponsored by Broadview Mortgage Corporation Homeownership Educator Scott Schang

Your input is Valuable

Please complete 2 question survey when you log off

For more information

1-866-667-6724

Sponsored by

Broadview Mortgage Corporation

Homeownership Educator

Scott Schang

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