What you need to know about Hiring A Rea Estate Agent


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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.

Published in: Real Estate
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What you need to know about Hiring A Rea Estate Agent

  1. 1. A Complete Guide to Hiring an Agent - Finding the Best Deals <ul><li>Thank you for attending </li></ul><ul><li>We will begin in a moment </li></ul><ul><li>Class Scheduled to begin at 6:00pm </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Scott Schang </li></ul><ul><li>Sponsored by </li></ul><ul><li>Broadview Mortgage Corporation </li></ul><ul><li>1-866-667-6724 </li></ul>
  2. 2. Hiring an Agent – Finding Deals <ul><li>The Purpose and Goals of this Class </li></ul><ul><li>To Create and Empower Home Owners </li></ul><ul><li>Introduce you to the buying process and demystify steps to buying a home </li></ul><ul><li>Educate you about importance of making an educated and informed choice about working with a Real Estate Agent </li></ul><ul><li>Empower you with the ability to get the most accurate information available while searching for homes that are for sale </li></ul>
  3. 3. Hiring an Agent – Finding Deals <ul><li>Ask Questions throughout presentation </li></ul><ul><li>You may type questions in at any time during the presentation – Questions box on your screen </li></ul><ul><li>Homeownership experts are standing by to answer your questions during the presentation </li></ul><ul><li>This is an interactive learning environment. You will get the most value by having your specific questions answered </li></ul><ul><li>The only dumb question is the one you don’t ask </li></ul><ul><li>Write this number down in case of technical difficulty </li></ul><ul><li>1-866-667-6724 </li></ul>
  4. 4. Hiring an Agent – Finding Deals <ul><li>The Road to Home Ownership is often paved with “fear of the unknown” </li></ul><ul><li>The unlearned can be learned </li></ul><ul><li>Misinformation can avoided if you ask enough of the right questions </li></ul><ul><li>A Simplified Overview of the Process </li></ul><ul><ul><li>Get approved for financing </li></ul></ul><ul><ul><li>Hire a Real Estate Agent </li></ul></ul><ul><ul><li>Find your dream home </li></ul></ul><ul><ul><li>Make an offer on your dream home </li></ul></ul><ul><ul><li>Offer accepted, what’s next? </li></ul></ul><ul><ul><li>Time line for the buying process </li></ul></ul>
  5. 5. Hiring an Agent – Finding Deals <ul><li>What is a REALTOR®? </li></ul><ul><li>A real estate agent is a REALTOR® when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS® </li></ul><ul><li>REALTORS® are pledged to a strict Code of Ethics and Standards of Practice. </li></ul><ul><li>The Role of a Real Estate Agent </li></ul><ul><li>Negotiates and facilitates the purchase of Real Estate on behalf of a “principle” – Buyer/Seller </li></ul><ul><li>Agency relationship / Fiduciary duties </li></ul><ul><ul><li>Seller’s Agent – Fiduciary duty to seller </li></ul></ul><ul><ul><li>Buyer’s Agent – Fiduciary duty to buyer </li></ul></ul>
  6. 6. Hiring an Agent – Finding Deals <ul><li>What is a Fiduciary? </li></ul><ul><li>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 </li></ul>
  7. 7. Hiring an Agent – Finding Deals <ul><li>What is “Fiduciary Duty”? </li></ul><ul><li>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. </li></ul><ul><li>Integrity - Defined as the soundness of moral principle and character. It means the agent must act with fidelity and honesty </li></ul><ul><li>&quot; Honesty and Duty of Full Disclosure &quot; 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 </li></ul>
  8. 8. Hiring an Agent – Finding Deals <ul><li>What is “Fiduciary Duty”? </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
  9. 9. Hiring an Agent – Finding Deals <ul><li>What is “Fiduciary Duty”? </li></ul><ul><li>Duty of Good Faith - includes total truthfulness, absolute integrity and total fidelity to the principal's interest. </li></ul><ul><li>The duty of good faith prohibits any advantage over the principal obtained by the slightest misrepresentation, concealment, threat or adverse pressure of any kind. </li></ul>
  10. 10. Hiring an Agent – Finding Deals <ul><li>Understanding Agency Relationships </li></ul><ul><ul><ul><li>From Realtor.com Website – Link provided </li></ul></ul></ul><ul><li>It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions. </li></ul><ul><li>Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company. </li></ul>
  11. 11. Hiring an Agent – Finding Deals <ul><li>Understanding Agency Relationships </li></ul><ul><ul><ul><li>From Realtor.com Website – Link provided </li></ul></ul></ul><ul><li>Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller. </li></ul><ul><li>All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract. </li></ul>
  12. 12. Hiring an Agent – Finding Deals <ul><li>Understanding Agency Relationships </li></ul><ul><ul><ul><li>From Realtor.com Website – Link provided </li></ul></ul></ul><ul><li>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. </li></ul><ul><li>The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. </li></ul><ul><li>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. </li></ul>
  13. 13. Hiring an Agent – Finding Deals <ul><li>Understanding Agency Relationships </li></ul><ul><ul><ul><li>From Realtor.com Website – Link provided </li></ul></ul></ul><ul><li>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. </li></ul><ul><li>Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties. </li></ul>
  14. 14. Hiring an Agent – Finding Deals <ul><li>Tips to Find and Hire an Agent </li></ul><ul><li>Friends and Family rule </li></ul><ul><ul><li>Firing a friend or family is not an option </li></ul></ul><ul><li>Business referrals are a good place to start </li></ul><ul><ul><li>Lender – experience working through sale </li></ul></ul><ul><ul><li>Escrow companies </li></ul></ul><ul><ul><li>Insurance Agents </li></ul></ul><ul><li>Looking for and Agent on the Internet </li></ul><ul><ul><li>Accessibility and communication </li></ul></ul><ul><ul><ul><li>Text, chat, email, cell phone, IM </li></ul></ul></ul><ul><ul><li>Websites vs. Blogs </li></ul></ul><ul><ul><ul><li>The social media phenomenon </li></ul></ul></ul><ul><ul><ul><li>Who are they as opposed to What they do </li></ul></ul></ul>
  15. 15. Hiring an Agent – Finding Deals <ul><li>Tips to Find and Hire an Agent </li></ul><ul><li>Ask for references of recent clients </li></ul><ul><ul><li>Call one to threes of their most recent clients </li></ul></ul><ul><ul><ul><li>Were they easy to reach / communicate </li></ul></ul></ul><ul><ul><ul><li>Did they give good advice during process </li></ul></ul></ul><ul><ul><ul><li>Were there any challenges during sale </li></ul></ul></ul><ul><ul><ul><li>Would you use them again </li></ul></ul></ul><ul><li>Real Estate Agents work for YOU </li></ul><ul><ul><li>Don’t be afraid to expect a high level of service </li></ul></ul><ul><ul><li>You are not obligated to stay with one buyer’s agent – avoid Buyer’s Agent Contracts </li></ul></ul><ul><ul><li>Stick with an Agent that does a great job for you </li></ul></ul><ul><ul><ul><li>Do not allow anyone else to write up offer </li></ul></ul></ul>
  16. 16. Hiring an Agent – Finding Deals <ul><li>Educated Decision to Create Agency </li></ul><ul><ul><li>The decision to work with a Real Estate Agent is a decision to hire a professional to work for you </li></ul></ul><ul><ul><li>This decision should be as the result of your research, a lengthy interview, talk to references and make an educated decision </li></ul></ul><ul><ul><li>A quality Real Estate Agent is looking out for your family’s best interest – they will earn your business </li></ul></ul><ul><ul><li>Avoid pressure tactics and implied urgency </li></ul></ul>
  17. 17. Hiring an Agent – Finding Deals <ul><li>“ Red Flags” of High Pressure Agency </li></ul><ul><li>A FOR SALE sign is an advertisement paid for and placed by the Seller’s Agent </li></ul><ul><li>Placing an offer with this Agent creates Dual Agency </li></ul><ul><li>Agents at Open Houses are most often Seller’s Agents </li></ul><ul><li>Avoid high pressure tactics by ALWAYS taking your agent with you when you look at homes </li></ul><ul><ul><li>Get the address and make arrangements to view home later </li></ul></ul>
  18. 18. Hiring an Agent – Finding Deals <ul><li>Finding Your Dream Home </li></ul><ul><li>The Search </li></ul><ul><li>Searching the Internet for Home Listings </li></ul><ul><ul><li>Most “internet sites” are advertisements for Real Estate Agents </li></ul></ul><ul><ul><li>Very little information is provided and you must “register” to get details </li></ul></ul><ul><ul><ul><li>You are now a “lead” generated from someone’s marketing dollar </li></ul></ul></ul><ul><ul><li>As long as you understand this – you have the ability to avoid any action that may inadvertently bring an inconvenience to you </li></ul></ul>
  19. 19. Hiring an Agent – Finding Deals <ul><li>Finding Your Dream Home </li></ul><ul><li>The Search </li></ul><ul><li>Listing from the MLS – Real Time </li></ul><ul><ul><li>Realtor.com </li></ul></ul><ul><ul><li>Listingbook.com </li></ul></ul><ul><ul><li>RealSeekr.com </li></ul></ul><ul><ul><li>Agent supplied site </li></ul></ul><ul><li>Agent updated sites – Updated manually </li></ul><ul><ul><li>Zillow.com </li></ul></ul><ul><ul><li>Trulia.com </li></ul></ul><ul><ul><li>Most others….. </li></ul></ul>
  20. 20. Hiring an Agent – Finding Deals <ul><li>Finding Your Dream Home </li></ul><ul><li>The Search </li></ul><ul><li>Private remarks can contain important information that would be important to you in the decision making process </li></ul><ul><ul><li>Only your Agent can see private remarks </li></ul></ul><ul><li>Tips for finding the best deals </li></ul><ul><ul><li>Know what you’re looking for – Wish list </li></ul></ul><ul><ul><li>Communicate with your Agent often </li></ul></ul><ul><ul><li>Actively search the MLS on your own </li></ul></ul><ul><ul><ul><li>This will help Agent understand your “likes” </li></ul></ul></ul><ul><ul><li>Ask your Agent to actively search homes for you </li></ul></ul>
  21. 21. Hiring an Agent – Finding Deals <ul><li>Making an Offer on Your Dream Home </li></ul><ul><li>Residential Purchase Agreement </li></ul><ul><ul><li>California Association of Realtors – 8 pgs </li></ul></ul><ul><ul><li>Addendum to Purchase Agreement common with short sales and foreclosures </li></ul></ul><ul><li>Good Faith Deposit – Earnest Money Deposit </li></ul><ul><ul><li>Held by Agent until 3 days after acceptance </li></ul></ul><ul><ul><li>$1,000 is usually acceptable </li></ul></ul><ul><ul><li>Some sellers may require 1% of sales price </li></ul></ul><ul><ul><li>Higher deposit will strengthen offer </li></ul></ul>
  22. 22. Hiring an Agent – Finding Deals <ul><li>Making an Offer on Your Dream Home </li></ul><ul><li>Seller Concessions </li></ul><ul><ul><li>Credit from seller to be used to cover closing costs only – not down payment </li></ul></ul><ul><ul><li>Based on sales price not loan amounts </li></ul></ul><ul><ul><li>Net (actual offer) is less concessions </li></ul></ul><ul><ul><ul><li>Highest and Best offer is Net offer </li></ul></ul></ul><ul><li>Common to ask Seller to pay Home Warranty </li></ul><ul><li>Common for Seller to choose closing services </li></ul><ul><li>Common for Buyer and Seller to split closing services </li></ul><ul><ul><li>Some say 50/50 – Each pay own </li></ul></ul>
  23. 23. Hiring an Agent – Finding Deals <ul><li>Offer is Accepted, What’s Next? </li></ul><ul><li>Counter Offer </li></ul><ul><ul><li>Seller accepts offer with conditions </li></ul></ul><ul><li>Fully executed purchase contract </li></ul><ul><ul><li>Both seller and buyer agree on terms </li></ul></ul><ul><li>Escrow Company </li></ul><ul><ul><li>Third party that mediates entire transaction and the transferring of all monies involved </li></ul></ul><ul><li>Title Company </li></ul><ul><ul><li>Insures title against pre-existing liens </li></ul></ul><ul><li>Appraisal and Home Inspection </li></ul><ul><ul><li>Appraisal required by lender </li></ul></ul><ul><ul><li>Home Inspection is optional (Get One!) </li></ul></ul>
  24. 24. Hiring an Agent – Finding Deals <ul><li>Time Line for the Buying Process </li></ul><ul><li>Escrow Period </li></ul><ul><ul><li>Establishes closing date </li></ul></ul><ul><ul><ul><li>30 days is normal </li></ul></ul></ul><ul><li>Contingency Period </li></ul><ul><ul><li>17 days for financing / 10 day for inspections </li></ul></ul><ul><ul><li>Can cancel if financing or inspections fail </li></ul></ul><ul><ul><li>Have good faith deposit returned if cancelled </li></ul></ul><ul><li>Close of Escrow – Transaction Complete </li></ul><ul><ul><li>Sign loan documents </li></ul></ul><ul><ul><li>Fund loan – 24-48 hours </li></ul></ul><ul><ul><li>Record loan – Next day usually </li></ul></ul>
  25. 25. Homebuyer Tax Credit News <ul><li>Federal Tax Credit - $8,000 </li></ul><ul><ul><li>Not paid back if live in home for 3 years </li></ul></ul><ul><ul><li>Must be first time homebuyer </li></ul></ul><ul><ul><li>Income limits </li></ul></ul><ul><ul><li>Expires on November 30 th , 2009 </li></ul></ul><ul><li>State of California Tax Credit - $10,000 </li></ul><ul><ul><li>Must buy “new construction” home </li></ul></ul><ul><ul><li>Purchase after 3/1/09 and before 3/1/10 </li></ul></ul><ul><ul><li>Do not have to be first time homebuyer </li></ul></ul><ul><ul><li>No income limits </li></ul></ul><ul><li>Complete qualifying details on YouTube video – You will get link shortly </li></ul>
  26. 26. What’s the Next Step? <ul><li>Very First Step – Get pre-approved for financing </li></ul><ul><li>Get pre-approved for the maximum you can qualify for – Be prepared for competition </li></ul><ul><li>Start interviewing Buyer’s Agents – We can refer someone to you that shares our values </li></ul><ul><li>Work with a Real Estate Agent that is experienced with this market and your loan </li></ul>
  27. 27. Hiring an Agent – Finding Deals <ul><li>Wrap up and Take Aways </li></ul><ul><ul><li>We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs </li></ul></ul><ul><ul><li>We are more than happy to be your “second opinion” if you are already working with someone </li></ul></ul><ul><ul><li>We are more than happy to refer you to a qualified Real Estate Agent </li></ul></ul><ul><ul><li>We are committed to educating and empowering homeowners - Join us for future classes </li></ul></ul>
  28. 28. Hiring an Agent – Finding Deals <ul><li>Wrap up and Take Aways </li></ul><ul><li>You will receive a “Thank you” email with links to the information we’ve talked about here today including </li></ul><ul><ul><li>Copy of power point presentation </li></ul></ul><ul><ul><li>Secure on-line loan application </li></ul></ul><ul><ul><li>Links to all the topics we discussed in class </li></ul></ul><ul><ul><li>Dream Home Finder request </li></ul></ul><ul><ul><li>Link to more information about Tax Credit </li></ul></ul><ul><ul><li>A schedule of all upcoming classes </li></ul></ul>
  29. 29. Upcoming Homebuyer Classes <ul><li>A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application </li></ul><ul><li>A Complete Guide to Buying Foreclosures and Short Sales </li></ul><ul><li>A Complete Guide to Closing Costs and the Good Faith Estimate </li></ul><ul><li>A Complete Guide to the CalPERS Home Loan Program </li></ul><ul><li>Five 100% Financing Loans You Should Know About </li></ul><ul><li>A Complete Guide to FHA Purchase Loans </li></ul><ul><li>Working to record and archive all classes for viewing anytime – I will keep you updated </li></ul><ul><li>Check back often for upcoming classes </li></ul>
  30. 30. Thank You for Attending If you enjoyed this class – Tell a friend  <ul><li>Your input is Valuable </li></ul><ul><li>Please complete 2 question survey when you log off </li></ul><ul><li>For more information </li></ul><ul><li>1-866-667-6724 </li></ul><ul><li>Sponsored by </li></ul><ul><li>Broadview Mortgage Corporation </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Scott Schang </li></ul>