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Your Buying Team

Your Buying Team

The Team and the Players

You don't have to become an expert in property values, mortgages, tax and real estate law, title insurance, escrow, pest-control work, and construction techniques in order to play the house-buying game well. Instead, you can hire people who've already mastered the skills that you lack. Home buying is a team sport. Your job is to lead and coach the team, not play every position. After you assemble a winning team, your players should give you solid advice so you can make brilliant decisions.

Because you probably don't have an unlimited budget, you need to determine which experts are absolutely necessary and which tasks you can handle yourself. You are the one who must determine how competent or challenged you feel with the various aspects of the home-buying process.

The Players

Here's an overview of the possible players on your team. Each player brings a different skill into the game. Assemble a great team, and they will guide you through any situation that may arise during your transaction. Keep in mind that good players act as advisors—not decision makers. Decision making is your job. After all, it's your money on the line.

The Perfect Agent

A good agent can be the foundation of your real estate team. An agent can help you find a home that meets your needs, negotiate for that home on your behalf, supervise property inspections, and coordinate the closing. Agents often have useful leads for mortgage loans. A good agent's negotiating skills and knowledge of property values can save you thousands of dollars.

All the best agents have certain important qualities in common:

Your Agent and You

After working so hard to find a great agent, it would be a shame to inadvertently ruin the relationship. Good buyer/agent relationships are based upon pillars of mutual loyalty and trust that develop over time.

More isn't always better.

One common fallacy is thinking that five agents will be five times better than one agent. The more agents you work with, the better your chances of quickly finding your dream home. Things don't work that way in the real world. One good agent can quickly show you every home on the market that meets your price, neighborhood, size, and condition specifications. If none of the houses is what you want, good agents keep looking until the right home hits the market. They don't limit their searches to houses listed by their office. Whether you work with one agent or one hundred, you'll see the same houses.

Agents know that they won't get paid if you don't buy. That risk comes with the job. What agents hate is losing a sale after months of hard work because they called you shortly after another agent called you about the same house. That risk is unnecessary. Don't be surprised, however, if good agents in the same area opt out of a horse race. Their odds of getting paid for their work increase dramatically when they spend their time on buyers who work exclusively with them. Loyalty begets loyalty.

Your agent is not the enemy

Another fallacy is viewing your agent as your adversary. Some buyers think that the less their agent knows about them, the better. Such buyers believe that, after agents know why they want to buy and how much cash they have, the agents will somehow magically manipulate them into spending more than they can afford.

Good agents ask such questions because they need to be sure that you're financially qualified in order to avoid wasting your time and theirs by showing you property that you can't afford. If your agent knows that you're under deadline pressure to buy, she'll give your house hunt top priority.

Good agents won't betray your trust. They know that if they take care of you, the commission takes care of itself.

Good agents know that you have the power to impact their careers. If they please you, you'll be a source of glowing referrals for them.

Other Key Advisors

Home Inspectors

A home's price is directly related to its physical condition. Homes in top shape sell for top dollar. Fixer-uppers sell at greatly reduced prices because whoever buys them must spend money on repairs to get them back into pristine condition.

You can't know how much work a house may need just by looking at it. You can't see whether the roof leaks, the electrical system is shockingly defective, the plumbing is shot, the furnace's heat exchanger is cracked, the chimney is loose, or termites are feasting on the woodwork. Invisible defects like these cost major money to repair.

Because you don't want to inadvertently become the owner of a home with such expensive hidden problems, you need property inspectors on your team. None of the other players on your team are qualified to advise you about a house's physical condition or the cost of necessary corrective work.

Finding a home inspector

A Home Inspection is a very important part of the home buying process. Home inspections generally provide buyers with information about the property's major systems including, although not limited to, heating, air conditioning, plumbing and electrical systems, foundation and structure, roof and flashing and possible environmental conditions affecting the property. Expect to receive a written report from the home inspector. Choosing a qualified individual to perform the inspection can be a daunting task.

The following is a list of items that should be taken into account when choosing a Home Inspector:

Finding financial and tax advisors

If you want to hire a financial or tax advisor, interview several before you select one. Check with your agent, banker, lawyer, business associates, and friends for referrals. As is the case with selecting your agent, you should get client references from each tax advisor and call the references.

Here are the qualities to look for in a good financial or tax advisor:

Understanding Agency

Single agency

In this form of representation, a Broker/Licensee represents one of the two parties (seller or buyer) in the transaction and will play one of two roles:

Seller's Agent: In this type of agency, a Broker/Licensee works solely for the seller.

Buyer's Agent: In this type of agency, a Broker/Licensee works solely for the buyer. A Buyer's Agent represents only the buyer even if the seller pays a portion or all of the commission.

Dual agency

Dual Agency is the most confusing and least understood form of agency. In this form of representation, the Broker/Licensee represents both the seller and buyer equally.Although this is allowed by law, the confusion begins because logically, a Licensee can't represent your best interests as a seller (for instance, getting the highest price possible) while representing the buyer's best interests (getting the lowest price possible) at the same time.

The most common type of Dual Agency involves two different Licensees who both work for the same Broker. For example, you list your home with Sarah, a Berkshire Hathaway Fox & Roach licensee who agrees to be your exclusive agent. Unknown to you and Sarah, Betty Buyer met Bob, who is also a licensee from Berkshire Hathaway Fox & Roach. Betty liked Bob's style and asked him to represent her exclusively as a buyer's agent. Bob enthusiastically accepted. So far, so good! You have Sarah, your exclusive agent, and Betty has Bob, her exclusive agent. Everything is fine, until Bob shows Betty your house. Betty loves it and instructs Bob to write up an offer on it immediately.

At the moment Betty decides to look at your house, the agency relationships that you and Betty have with your respective agents change. Like it or not, Sarah suddenly represents both you and Betty. Similarly, Bob becomes your agent as well as Betty's agent.

Why? Even though two different agents are involved in the transaction, both agents work for the same real estate broker - Berkshire Hathaway Fox & Roach. Berkshire Hathaway Fox & Roach and the licensees represent the seller and the buyer as soon as the property is shown. That's dual agency. Because Berkshire Hathaway Fox & Roach is a large brokerage operation with many offices and licensees, your odds of experiencing dual agency are high.

Pennsylvania, New Jersey and Delaware all permit dual agency relationships as long as the agency status is disclosed in advance, and confirmed by both parties, in writing. Undisclosed dual agency occurs if the seller and buyer have not been advised about or consented to Dual Agency and can be used as grounds to have a purchase agreement revoked and may permit the injured parties to seek recovery against (that is, sue) the Broker.

Designated agency (available in Pennsylvania only)

Designated Agency allows individual licensees to maintain their exclusive status of representation with a seller and buyer, even when both parties are represented by the same Broker. In this type of relationship, the individual Licensees each represent one of the two parties to the transaction, work for the same Broker and each plays one of the following roles:

Seller's Agent: In this type of agency, a Broker/Licensee works solely for the seller.

Buyer's Agent: In this type of agency, a Broker/Licensee works solely for the buyer. A Buyer's Agent represents only the buyer even if the seller pays a portion or all of the commission. While the licensees remain in the exclusive relationships with you, the Broker will act as the dual agent in this type of relationship, and is responsible to oversee the activities of the Licensees involved in the transaction. Again, consent in writing is required.

In the event a single licensee represents both the seller and the buyer in a transaction, the agency relationship will change and the Licensee will act as a dual agent as described above. Written consent of the parties is required for this change to occur.