Hector Acosta, P.A. - SAVE MONEY ON YOUR DREAM HOME

SAVE MONEY ON YOUR DREAM HOME

Hector Acosta, P.A.

Table Of Contents

How Real Estate Agents Help Home Buyers

Owning vs. Renting

Buyers' Needs and Desires

Real Estate Horror Stories to Learn from

Searching for the Right Home

Buying a House: Negotiation Dos and Don'ts 54

What to Know about Home Inspections

Shopping for a Home Loan

Programs for Home Buyers

10. The Closing Process

11. Organizing Your Move

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About Hector Acosta I was raised in the vibrant town of Mayaguez, Puerto Rico, alongside three wonderful siblings. As a child, my dreams were fueled by a desire to become a Counterintelligence Agent, but life has a funny way of leading us down unexpected paths. Little did I know that a life-changing turn would reveal my true calling in the real estate industry. From a young age, I learned the importance of hard work and perseverance in achieving my dreams. I pursued my education with determination, earning a bachelor's degree in Psychology from the University of Puerto Rico's Mayaguez Campus and another in Information Technology from DeVry Technical Institute in Orlando, Florida. My military career as a U.S. Army intelligence officer shaped my professional journey. Rising to become a Counterintelligence Major, I served in various capacities, including crucial assignments during the Gulf War. These experiences cultivated my analytical and strategic skills and ignited a sense of duty to provide exceptional service to others. After my military service, I successfully operated an optical franchise. After selling it, I transitioned to the corporate world, managing retail for two Fortune 500 companies. Later, I worked at the Osceola School District in Information Technology and as a Cybersecurity instructor. However, my personal experience as a homebuyer finally opened the door to real estate. Disheartened by the customer service I received during my home purchase, I recognized a critical gap in the industry that I was determined to fill. Twenty-nine years ago, this realization propelled me into real estate, and I've since committed myself to changing the narrative

of the home buying and selling experience. I quickly learned that excellent customer service was paramount in building lasting client relationships. My military intelligence and corporate management background equipped me with the skills to understand the importance of perseverance, problem-solving, and education in ensuring client satisfaction. As I advanced in my career, I embraced the role of a real estate counselor, equipping myself with specialized training that spans various facets of the industry—property management, financing, appraisal, and investment strategies. My commitment to ongoing education ensures I remain a knowledgeable resource for my clients, guiding them with insight and expertise in every transaction. Throughout my diverse career, I've been honored with several accolades, including the Bronze Star and recognition in Who's Who, as well as being named Franchisee of the Year and Real Estate Rookie of the Year. These awards reflect my dedication to excellence and unwavering commitment to my client's success. Living in Kissimmee, Florida, with my wife Damaris, our granddaughter Delylah, and our beloved pets Bella, Lux, and Lulu, I've come to appreciate Central Florida's unique charm and vibrancy. My passion for technology and digital marketing has allowed me to adapt to the ever-evolving real estate landscape, helping my clients buy and sell their homes efficiently and effectively. At Coldwell Banker Realty, I found a team that shares my vision of exceptional customer service and high standards of excellence. Together, we strive to create meaningful experiences for every client I serve. My ultimate goal is to help you achieve your real estate dreams by providing a compassionate, dedicated, and results-driven service you can count on.

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I look forward to working with you and realizing your real estate aspirations!

Preface

Hello, future homeowner!

It's an absolute delight to meet you! If you're holding this book, chances are you're on the brink of one of life's most exciting journeys—buying a home! But let's be honest: the thought might also send shivers down your spine. That's normal! But fear not—I'm here to transform that nervous energy into pure excitement! With years of experience navigating the real estate landscape, I've gathered a treasure trove of insider knowledge and am ready to unveil it all. Together, we will turn the daunting process of home buying into a smooth, enjoyable, and empowering adventure!

In these pages, you'll discover:

• A comprehensive roadmap of the buying process, guiding you every step of the way • Purchase a home with "wedge" (instant equity). • A fun exercise to help uncover your wants versus needs in your future home. • Insightful tips on conquering the world of home loans like a pro. • A list of common pitfalls to dodge so you can reach your goal confidently. • A seasoned negotiation guide to help you snag the best deal possible. • And so much more sprinkled with inspiration! Now, you might be tempted to navigate this journey alone, and sure, it's possible. But let me tell you—having a dedicated agent

by your side who genuinely champions your needs can be the secret ingredient to discovering that perfect home. Yes, buying a home can feel overwhelming, but with this book (and my unwavering support!), we're going to make it not just manageable but truly enjoyable. So, let's dive in and turn your dream into a reality, one step at a time!

CHAPTER 1 How Real Estat eal Estate Agents e Agents Help Home Buyers

At the start, I’ll tell you I’m a real estate agent—proudly so! Nice to meet you! I’m not trying to sell you anything, but I’m pleased to be of service. I’m giving you the benefits of 29 years of experience, advice, and training, earning over 20 designations and certifications I have gleaned throughout my career selling houses and being in real estate transactions—for both sellers and buyers. We can talk if you want me to help you find your dream home. Call me if you need me to clarify any information or answer any questions. Technology has changed the way homes are sought and bought today. In this “Information Era,” most buyers are first introduced to the house they eventually purchase via the internet, through Zillow, Realtor.com, or one of hundreds of other real estate 1

websites.

With all this information, you may want to know if you need a buyer's real estate agent or if you're able to handle the process independently.

WHY HOME BUYERS NEED A REAL ES UYERS NEED A REAL ESTATE AGENT

Ah, not so fast. The reasons to use a real estate agent today are as valid as yesterday. The ease of online transactions and the proliferation of services to assist buyers in handling their real estate transactions have come about recently throughout the last decade. This has caused buyers to wonder if using a real estate agent is no longer necessary or an expense that can be avoided. While doing the work yourself can save you money if you buy a “For Sale By Owner” (FSBO) house and the seller agrees to reduce the price to offset agent compensation, for many, a do-it- yourself home purchase might be pricier than a real estate agent’s compensation in the long run. In most home sales, there is a listing agent (the agent the seller engages to sell the property) and a selling agent (the agent who introduces the eventual buyer to the transaction). The selling agent is sometimes called the “buyer’s agent” because they are working on the buyer’s behalf, and it’s easier than explaining that the selling agent is not the listing agent but the buyer’s agent. Some real estate agents market themselves as “buyer’s agents,” “exclusive buyer’s agents,” or “buyer’s representatives.” These agents have chosen to make a business of finding homes for prospective buyers and handling the negotiations and transactions attendant to the purchase. These agents want to accentuate why buyers shouldn’t go directly to the listing agent when they purchase real estate.

A buyer who goes directly to the listing agent and allows that

agent to “manage” both sides of the transaction deals with an agent that might have conflicting responsibilities. Their job is to get a good price for the seller, and they might not zealously represent the buyer's interests. Those who market themselves as buyer’s agents indicate they only work for the buyer in a real estate transaction. A buyer's agent is, therefore, a real estate professional dedicated solely to representing your interests as the buyer throughout the home-buying process. Once you agree to work with a buyer’s agent, you will sign a written buyer agreement outlining key services and compensation. Then, the buyer’s agent will work on your behalf, helping you find properties that meet your criteria, scheduling viewings, negotiating offers, and handling all the necessary paperwork and legalities in purchasing a home.

BUYER AGREEMENT GREEMENTS

New regulations will mean that potential home buyers must sign a written buyer’s agreement before touring homes. A written buyer agreement is a formal contract between you and your buyer's agent. It outlines the services your agent will provide, the terms of your working relationship, and how the agent will be compensated. Compensation for the buyer’s agent can be directly paid by the buyer or negotiated in various forms. This agreement ensures that you and your agent clearly understand your mutual expectations and responsibilities.

Key Components of a Buyer’s Agreement

• Services Provided: Details of what your agent will do for you, such as finding homes, arranging viewings, and negotiating terms. • Compensation: Clear disclosure of how your agent will be paid. This could be a percentage of the purchase price, a

flat fee, or another arrangement. It's important to know that agent fees are negotiable and not set by law. • Term and Termination: The duration of the agreement and conditions under which either party can terminate it. • Consumer Protection: Disclosures related to your rights, confidentiality, and potential conflicts of interest. Entering into a buyer's agreement provides several benefits. First, it clarifies your relationship with your agent, ensuring both parties understand their roles and responsibilities. Second, it shows your agent's commitment to working hard on your home search. Lastly, it protects your interests and ensures transparency throughout the transaction. A formal agreement lets you proceed confidently, knowing that your agent is committed to helping you find your dream home while protecting your interests.

MORE ACCESS TO THE REAL ES O THE REAL ESTATE MARKE TE MARKET

A real estate agent will have better access to the market and an exceptional knowledge of local conditions. The agent is a full- time liaison between sellers and buyers. An agent will have ready access to other properties listed by other agents. Buyers’ and sellers’ agents know how to negotiate a real estate transaction. A real estate agent will track down homes that meet your criteria, contact sellers’ agents, and secure appointments for viewing the homes. Buyers, on their own, have a more difficult time with these things. This is even more so when a buyer moves due to relocation or employment opportunities and does not engage a buyer’s agent to handle matters.

NEGOTIATING IS HARDER ON YOUR OWN

A real estate agent will keep the transaction “at arm’s length” so personalities and emotions do not become involved. Price

negotiations require special skills and an understanding of the psychology of offering and counteroffering. Agents keep the transaction dispassionate and rational. For example, a buyer (you) might like a home but despise its wood- paneled walls, shag carpet, and lurid orange kitchen. When you work with an agent, you can express your opinions on the current owner’s decorating skills and complain about how much it will cost to upgrade the home without insulting the owner. Your agent will translate that to the seller—that you like the property but can see having to spend a certain amount on decorating costs and thus can offer much less.

CONTRACTUALLY SPEAKING…

Many contracts and documents are involved in purchasing a house, and the stack could be more than an inch thick. Unless you’re a real estate lawyer or title agent, these documents will be foreign to you. Yet, they require detailed and accurate completions. Buying a property is not necessarily a “fill-in-the- blanks” transaction. One mistake in title work could haunt the buyer well down the line after purchase. This very situation happened. A property that sat on a double lot was put on the market. The neighbor bought it to remove a bit of the second lot to expand his yard. The seller then put the home back on the market, and it sold. Months later, through a property tax notification, it came out that, in preparing new deeds for the properties, the expanded yard area was correctly in the neighbor's name; however, the house had been transferred to the home buyer. The new homeowner now owned both houses, and the neighbor owned his expanded driveway and yard.

Fortunately, they were good neighbors and settled the matter

with a few signatures.

A real estate agent deals regularly with these contracts, conditions, and unexpected situations and is familiar with which conditions should be used, when they can safely be removed, and how to use the contract to protect you.

YOU WON'T NECESSARIL N'T NECESSARILY SAVE MONEY

The point of not using a real estate agent would be to save money. Otherwise, why would someone turn down professional assistance in finding a home? However, it’s unlikely that both the buyer and the seller will reap the benefits of not paying real estate agents. Buyers looking to purchase a home sold by an owner without an agent may believe they can save money on the home by not having an agent involved, so they look solely at For Sale By Owner (FSBO) houses. They might expect money to be saved and make an offer accordingly. Unless the buyer and seller agree to split the savings, they can’t both save that money—if the listing price was not already lowered to make it more market-attractive. Here’s a short list of the advantages that using a real estate agent can bring to your buying experience:

• Education and experience • Neighborhood knowledge • Price guidance • Market conditions information • Negotiation skills and confidentiality • The ability to handle paperwork • The ability to handle closing questions • Relationships for Future Business

It's vital to know the "ins and outs" of real estate agents before you hire one to help you search for a home and know what to expect and what will be expected of you.

WHO A REAL ESTATE AGENT IS GENT IS

Did you know that REALTOR® is a trademark denoting membership in the National Association of REALTOR® and cannot be used synonymously with a real estate agent? Here is how it works: Level 1. Real estate licensee: A licensed real estate agent who met the minimum number of hours in real estate education and passed the state's licensure test. After passing the exam and affiliating with a real estate brokerage, a licensee can list and sell real estate, including homes, multi-family properties, and commercial and industrial buildings. Level 2. A REALTOR® is somewhat diff t different: A REALTOR® is a member of the National Association of REALTORS® (NAR®) who adheres to higher standards and subscribes to its strict Code of Ethics. Remember, the term REALTOR® can only be used to convey membership in NAR®. It is important to homebuyers because REALTORS® abide by a strict Code of Ethics & Professional Standards—duties beyond state licensing laws and help ensure fair and honest treatment to all parties to real estate transactions. While an agent is always a real estate agent, a real estate agent isn’t always a REALTOR®. Level 3. Accredited Buyer's Representative (ABR®): If you're considering buying a home, you already know it can be quite an adventure. There are many twists and turns, and navigating this journey can feel overwhelming. That's where I come in! As an ABR®, I bring a wealth of expertise and insight to make your experience smoother and more enjoyable. Most buyers prefer working with an ABR® designee, like myself , because once they

understand these critical differences between real estate professionals, it is a choice that can significantly improve your home buying experience!

What is the ABR® Designation?

It's not just a badge; it's a mark of excellence awarded by the Real Estate Buyer's Agent Council (REBAC), part of the National Association of

REALTORS® (NAR®). This esteemed credential is specifically crafted for real estate agents dedicated to working with buyers like you. It's a testament to my commitment to understanding your needs and providing the best service possible. To earn this distinction, I've undergone thorough training that dives deep into key areas such as effective buyer representation, savvy negotiation tactics, and an understanding of contract law.

5 Reasons for you to use an ABR® Agent

Specialized Training for You! When you work with me, you're not just getting any agent—you're getting one who has completed specialized training focused solely on understanding your needs as a buyer. Whether you're stepping into the housing market for the first time or looking to add to your investment portfolio, I'm equipped to guide you through this unique process. My thorough coursework and experience ensure I'm prepared to offer advice tailored just for you, ensuring you make the best decisions for your situation. Negotiation Skills That Work for You. Want to secure the best deal on your dream home? My ABR® designation means I've honed advanced negotiation skills designed with your best interests in mind. I've learned how to navigate complex discussions, respond to counteroffers

gracefully, and create strategies that align with your budget and goals. My focus is to protect your interests while helping you feel confident about every decision. Understanding Contracts Like a Pro. Let's face it—contracts and legal jargon can be daunting. Thankfully, my ABR® training has equipped me with a deep understanding of contract law, so you don't have to tackle this alone. From submitting and viewing contracts to ensuring all legal standards are met, I'll be by your side every step, clearing up any confusion and providing peace of mind that you're protected throughout the buying process. A Commitment to Stellar Service. Choosing a real estate agent is about more than just credentials; it's about finding someone genuinely committed to your success. My ABR® designation showcases my dedication to delivering exceptional service—this isn't just a job for me; it's my passion! I strive to uphold the highest ethical standards and prioritize your needs and preferences at all times, ensuring you feel secure and well-cared for. Built on Trust and Integrity. REBAC and the NAR® hold ABR®-certified agents to rigorous ethical standards. So, when you work with me, you can trust that honesty, integrity, and professionalism are at the forefront of our partnership. I will always keep your best interests in mind, offering guidance that reflects these core values. ABR® agents protect the buyer's interests throughout the home- buying process. Buyers can schedule consultations with agents to learn more about their services and assess who best represents their needs. Once buyers have decided on an agent they feel can effectively represent them, they will enter into a buyer's agreement, formalizing the relationship and ensuring their interests are protected while searching for their new home.

HOW TO CHOOSE THE BEST AGENT FOR YOUR NEEDS UR NEEDS

You might be urged to pick the first real estate agent who appeals to or approaches you, but that’s something to avoid. As with any professional, there are degrees of professionalism, dedication, and experience. The “wow factor” will wear off. Meet with prospective buyer's agents in their offices. A good buyer’s agent will want to know whether you’re pre-approved for a loan by a financer, what kind, and the loan terms you’re getting. They should spend adequate time discovering what you’re looking for in a house. They should listen as much as talk and ask questions. Watch to see if the agent makes notes. If the agent doesn’t broach the topic, ask for an explanation of their understanding of agency relationships and obligations to you. The law requires agents to explain whether they’ll work for the buyer or the seller whenever they have substantive contact with a customer or prospective client. If the agent doesn’t offer you a buyer’s agreement, that agent represents the seller, not you. If the agent can’t explain agency concepts, move to the next agent. Be sure that the agent will show you all listings or properties on the market that meet your requirements, not only those handled in-house. Buyer’s agents have the legal duty to put the buyer’s needs ahead of their own. Even when his compensation for selling an in-house listing is higher, they must inform you about other available, suitable listings and take you to see viable prospects. A good buyer’s agent will provide you with a home-buying education. While the listing agent will point out a home's features, a good buyer’s agent will point out the faults—or provide you with adequate advice.

Competent buyer’s agents help buyers think clearly as the home- buying process unfolds. For example, if a house is a good buy, a buyer’s agent might suggest looking past the dated bathroom and kitchen and looking at the space above the garage that will make the perfect art studio you desire. Likewise, a cute house with all the amenities but with knob-and-tube wiring or a 40-year-old roof might not be worth the asking price. According to the San Francisco Chronicle’s Home Guide, if you decide to buy to build an addition, the agent should advise you to check the zoning before making an offer. Agree to sign a buyer’s agreement after you have met with an agent and discuss the terms for compensation, whether that's a negotiated commission structure or a direct payment from the buyer to the buyer's agent. A buyer’s agent must maintain your confidentiality, disclose material facts to you, including the potential for direct compensation, and maintain your loyalty.

LOOK FOR PROPER CREDENTIALS

You wouldn’t trust a doctor who didn't have the proper credentials and licensing. Don’t trust a real estate agent who doesn’t present theirs or doesn’t have them at all. It’s easy to find real estate agents who can take the job, but finding agents with exceptional credentials—those who have gone that extra step to take additional classes in certain specialties of real estate sales—is worth looking into.

Here are just a few of additional credentials I leverage:

Seller Representative Specialist (SRS): This is the premier credential in seller representation. It elevates professional standards and enhances personal performance.

Pricing Strategy Advisor (PSA): r (PSA): It enhances property pricing

skills, creates a comparable market analysis, works with appraisers, and guides clients through home value anxieties and misconceptions. Certified Distressed Property Expert® (CDPE®): This certification assists homeowners with a specific understanding of the complex issues of foreclosure and presents solutions for homeowners facing hardships in today's market, especially short sales. Short Sale & Foreclosure Resource® (SFR®): It assists buyers and sellers of distressed properties. Military Relocation Professional (MRP): l (MRP): It assists REALTORS® in working with current and former U.S. service members, their families, and veterans to find housing solutions that best suit their needs and fully utilize available benefits and support. At Home With Diversity® (AHWD®): Enables REALTORS® to work successfully with and within a rapidly changing multicultural market. It helps REALTORS® learn diversity sensitivity, how it applies to U.S. fair housing laws in their business, and ways to develop professional guidelines for working with people in the increasingly multicultural real estate market. Certified International Property Specialist (CIPS): t (CIPS): It assists REALTORS® who wish to develop or grow internationally. It provides the knowledge, research, network, and tools to help buyers and sellers around the globe. Seniors Real Estate Specialist® (SRES®): This designation assists me in helping sellers and buyers 50+ years old with their real estate goals. Clients can make informed decisions as they embrace a new chapter with confidence and clarity.

E-PRO: Helps REALTORS® master today's advanced digital

marketing techniques and increase their ability to reach customers, expand their capabilities, and build trust by safeguarding client information. C2EX: This endorsement is only available to REALTORS® who are committed to fostering an environment that promotes excellent customer service consistent with the highest real estate standards and Code of Ethics. The program enables real estate professionals to assess and build on their competency in 11 core areas. These professionals are committed to ensuring their clients and consumers everywhere can access the American dream of home and property ownership. New Home Co-Broker (NHCB): This certification assists buyers considering newly constructed homes in finding the right home that matches their needs, lifestyle, and budget.

CAUTION: THE PROBLEM WITH THE B LEM WITH THE BUILDERS

There is no one looking out for you. If you walk into the builders unrepresented, they'll do everything they can to create a one- sided deal. It's their job. Below is their typical profile:

Handsome Sales Dude (Will run for office someday)

He makes you feel like you're the only person in the room. Smells good and talks fast. Drives a suspicious nice car. He says, "It's fine," a lot when you ask questions.

• 95% of the time, he is worried about his

quarterly bonus

• 5% of the time is concerned about you getting a good deal

Friendly Sales Lady (Can talk to a wall)

She started by asking about your dogs, and suddenly, you're signing a 50-page contract. She needs you to buy a house today, or her boss might replace her.

• 42% Knowledge of the builder's product • 84% Has 'commission breath.'

Please don't visit a developer without proper representation. The sales agent at the developer's office represents the developer's interests, not yours . It is most likely a level 1 agent. If you visit a developer, tell them you have an agent, preferably a level 3, and never complete any paperwork.

ADDITIONAL MEMB AL MEMBERSHIPS

If you choose to use a real estate agent who’s also a member of the National Association of REALTORS®, it will be a bonus. However, ensure they have credentials relevant to your need(s).

RESEARCH LICENSING

Your state will have a license board for all active REALTORS® and agents, which you can easily access. You will also be able to see their contact information, disciplinary actions, complaints, or any other information you’ll need to help influence your decision—especially since most information is now online.

GIVE THE “WHAT ELSE” TEST

A good agent will know about all the other properties for sale in the area. Also, a good agent always does their research regarding the events in the current market and those homes that are out there for the taking. In short, you want an agent who's an expert in the current market and someone who constantly stays on top of things.

RESEARCH THEIR BUSINESS ACTIVITY

Learning the type of market presence a real estate agent has is the best way to figure them out. Ideally, you will want an agent specializing in one or two real estate markets and understanding which homes and amenities are available within your price range. If you're uncomfortable asking the agent directly, you can unearth this information by asking them or the state licensing authority. You’re better off with an agent actively engaged in one area and price range—e.g., residential homes around the $200,000 to $250,000 range or the $400,000 and up range.

GOING THE BUYER'S AGENT ROUTE

So, you’re ready to take the plunge and look for a place to call “home.” To get the most out of it, use a buyer’s agent to avoid paperwork, stampedes of buyers competing for the same property, and other challenges. Home buying can be exciting but also complex and stressful — so having a pro by your side can make an enormous difference. True to the name, buyer’s agents assist home buyers every step of the way; they can also save you both time and money on the road to homeownership. When you find the right one for you, these real estate agents will work day and night to ensure all your

needs and requirements are met when it comes to finding the right home.

GETTING STARTED WITH A B TED WITH A BUYER’S AGENT

Your buyer’s agent will have a vast knowledge of the area's current real estate market, which includes neighborhood amenities and conditions, the law, zoning issues, price trends, negotiations, taxes, financing, and insurance. Once you meet with the buyer's agent and sign the buyer's agreement, they'll help you determine your needs and wants when finding a home and a neighborhood. The agent will teach you what you can afford, help you set a budget, provide some insight into the current conditions of the market, and explain what you should expect while shopping for a home. During the shopping period, you’ll meet with your agent for tours of homes you might be interested in. They will provide insight into the floor plans, the home’s pertinent selling points, neighborhood information, and a rundown of local activities, restaurants, shopping centers, etc. So that you know, your agent is responsible for completing all inspections and disclosures. I have a team of closing coordinators to ensure smooth coordination and completion of all tasks from the roof inspector, attorneys, lenders, title company, and other professionals involved in the home purchase. If issues need to be negotiated, you won’t have to. Your buyer’s agent will do that for you and ensure all changes and corrections are made.

DUAL AGENCY: THE BASICS

A “dual agency” relationship occurs when a buyer is represented by a brokerage firm controlling the listing. Once an agent represents the seller and the buyer within the same transaction, the situation is known as “dual agency.” In multiple states, this is illegal because of the conflicts of interest that can arise regarding the broker. Even in states where allowed, the dual agency must be disclosed and consented to by all parties involved. This arrangement can create potential conflicts of interest, and buyers should be fully aware of these implications before agreeing to a dual agency. All agents have the same responsibility: to inform their clients of all potential risks that could arise due to conflicts of interest. Regarding dual agency, there are definite advantages for the seller. • We have already gained the trust of your listing agent, so we have established representation for the buyer. • Your agent brought you the buyer knowing you’re selling, even if your property has not yet hit the market. • Your listing agent will have already covered and researched your neighborhood’s market to generate buyer inquiries. This means your agent will be working from all sides of the deal to sell your house faster and with more incentive. • Your agent works with corporate relocation buyers who need to find a house quickly, and they will ensure that your home is bought. There are also cons for the seller when it comes to dual agency, and they are:

• Your agent can’t advise you as thoroughly when they must act as a dual agent because impartial facilitation is required. • Your listing agent cannot negotiate the best or highest price for you if you are dealing with the best and lowest terms for the buyer. • If the opportunity arises, earning compensation from both buyer and seller may tempt the agent to coerce a deal you might not accept otherwise. • Your agent may inhibit all access to your listing through buyers with agents. Please clarify essential details with your agent beforehand to avoid surprises or missteps in a dual agency sale. You can do this using an exclusive buyer or listing agreement.

HOW REAL ESTATE AGENTS ARE COMPENSATED

The compensation structure for real estate agents can vary, especially with recent August 17, 2024, regulatory changes that offer more flexibility and transparency. Agents are required to disclose their compensation arrangements clearly in the buyer agreement. This ensures that you, as a buyer, understand precisely how your agent will be compensated and can make informed decisions. Compensation has always been negotiable and remains negotiable today.

Possible Compensation Structures

Recent regulations now allow for more varied compensation structures. Buyers must proactively understand the costs associated with their agent's services and may need to factor them into their home purchase budget. Here are some of the ways a buyer’s agent can be compensated:

1. Split Commission Model: Starting August 17, 2024, commission information will no longer be communicated via the MLS (Multiple Listing Service). Compensation agreements based on commission must now occur off-MLS through negotiation and consultation between real estate professionals. These agreements may still follow the traditional split commission model, where real estate agents are paid a commission based on the home's final sale price. This commission is typically a percentage agreed upon between the seller and the listing agent. Using this payment model, the buyer's agent would receive a portion of the commission, as arranged between the listing agent and the buyer's agent. Typically, all commission payments go through the broker managing the brokerage where the agent works. From there, the commission is split between the broker and the agent according to their internal agreement. 2. Direct Payment from the Buyer: The buyer may agree to pay their agent directly. This can be a flat fee, an hourly rate, or a percentage of the purchase price. 3. Negotiated Arrangements: The buyer and agent can negotiate other customized compensation agreements. Before starting to tour homes, you MUST have a signed written buyer's agreement with your agent. This agreement will outline your agent's services, the compensation structure, and other terms of your working relationship. Recent regulation changes have given greater flexibility for agent compensation methods, reinforcing the importance of entering into a written buyer's agreement. This formal agreement ensures both parties are clear on expectations and protects your interests throughout the home-buying process.

WHY NOT ALL REAL T ALL REALTORS® ARE CREATED EQUAL

In the world of real estate, the choices can often seem overwhelming. With so many agents marketing their services, how do you know who to trust? A truth that’s not frequently spoken: not all realtors are the same. They come from different backgrounds with varying experiences and skill sets. Choosing the right agent can make all the difference in your real estate journey.

Think Outside the Box: My Unique Background

As a former U.S. Army counterintelligence officer, I bring a unique perspective to real estate. My military training equipped me with invaluable skills in strategic planning, critical thinking, and intelligence preparation. I was trained to assess situations, adapt tactics, and execute plans that lead to success, even in the most challenging environments.

Your Unique Situation, Our Targeted Approach

What sets me apart is my commitment to understanding your unique situation. Whether you are a first-time homebuyer or an experienced investor, I take the time to listen to your needs and develop a tailored strategy. I leverage a variety of databases, market analytics, and my vast knowledge gained from 29 years of real estate experience to identify opportunities that align perfectly with your goals. As in military operations, where every detail counts, I meticulously analyze each aspect to position you for success. By combining classic real estate strategies with my innovative, intelligence-based approach, Intelligence Preparation of the Real Estate Battlefield , I ensure that you are not just another client—you are a valued partner on the battlefield we are navigating together.

Buying with "Wedge"

Wedge refers to buying real estate for under-market value, which creates instant equity. There are several benefits to purchasing real estate with wedge: • The ability to refinance or sell the property, potentially profiting from it. • A safeguard during a potential housing market crash, as the equity loss can be absorbed. • Allows you to sell the property if you are forced to move and cannot cash flow. When purchasing your home, you must understand the advantages of a wedge. Selling or refinancing a property can cost tens or hundreds of thousands of dollars. Determining if a property has a wedge is done through my granular market analysis in the subject property's subdivision, comparing it to the selling prices of other properties. In some cases, repairs may be necessary to bring the property up to the standard of the different properties in the area to capture the wedge. When purchasing real estate, aiming to buy 10% to 15% below market value is a good rule of thumb. With interest rates expected to remain high, there is a window of opportunity to find great deals. It is essential not to make emotional decisions when buying a house and to prioritize your personal and investment goals. Wedge is one of the compelling real estate strategies I use because it can lead to significant financial benefits for my clients. With extensive experience and training in this field, I harness my knowledge to guide clients through purchasing properties below market value, creating instant equity. This potential for significant financial benefits should inspire optimism in potential

buyers.

By focusing on wedge acquisitions, clients can unlock a range of advantages. When you buy a property for 10% to 15% under market value, you create equity from day one and equip yourself with options for the future. This financial security, even in the face of market downturns, is a key benefit of the wedge strategy. Furthermore, if life circumstances necessitate a move, purchasing strategically means selling the property without severe financial strain, even if you may not have positive cash flow. Understanding the intricacies of wedge involves thorough market analysis, which I conduct meticulously to ensure our selections are well-analyzed. This includes evaluating comparable sales within the neighborhood and identifying necessary repairs that could further enhance the property's value, ensuring it aligns with community standards. The current real estate landscape, particularly with high interest rates, offers opportunities to capitalize on potential deals. This is where my experience comes into play—I can provide insights and practical advice on navigating these opportunities without succumbing to the Fear of Missing Out (FOMO). FOMO often leads to making emotional decisions rather than informed purchases. Clear and open communication of your investment goals is paramount in this process, and I'm here to facilitate that. I will ensure that every aspect of your purchase aligns with your financial aspirations. Together, we can turn what might seem like a daunting process into a strategic move towards securing not just a home but a valuable asset that stands robust against market fluctuations and fulfills your long-term investment objectives. Let's work together to leverage the wedge and secure your financial future in real estate.

The REALTOR® of Choice for Your Real Estate Goal

In my journey as a REALTOR®, I have acquired more than 20 designations and certifications in real estate, but what truly defines my work is a passion for helping my clients achieve their dreams. I strive to be your trusted ally in this process, ensuring you have the information, support, and expertise to make informed decisions. Choosing the right agent is crucial, and I am here to ensure you feel empowered in that choice. When you think of real estate, think of me—as your strategic ABR® partner dedicated to navigating the market and demystifying the process. If you're ready to kickstart your home-buying adventure and want a knowledgeable partner, don't hesitate to reach out! Let us embark on this journey together, and let me make one thing clear: your goals are within reach, and I am here to help you achieve them .

CHAPTER 2 Owning vs. Renting

Owning your own home might be one of the defining qualities of the "American Dream:" the ideals that include opportunity for prosperity and success and upward social mobility for the family and children, achieved through hard work.

Homeownership is indeed ingrained as one of the strongest representations of that vision—66% of Americans own their own home and more hope they will or wish they did. Homeownership resonates deeply with Americans, evoking feelings of financial security, permanency, status, and pride. Lifestyle choices play a significant role in the decision to own or rent. Homeownership often aligns with household formation, such as marriage and growing a family. It's interesting to note that for the millennial generation, owning a home is usually motivated by the desire to provide a stable environment for their pets. The U.S. homeownership rate has fluctuated between 62% and 70% since the 1950s. Most young people begin their independent lives renting an apartment, maximizing lifestyle flexibility and minimizing the hefty upfront costs of purchasing a home. As they build careers, save money, and start families, many buy a house, recognizing that home ownership, as opposed to rental living, is 24

more appropriate to their growing family needs.

At the other end of the age spectrum are homeowners nearing retirement who may desire to sell their homes, downsize, avoid maintenance and other obligations, and return to renting.

WHICH IS BEST?

Most adults face the dilemma of buying or renting a home as they plan for their future. Before you decide, it's essential to consider your circumstances. Owning and renting have advantages; your best choice will depend on your situation. What will be the duration of your stay in the home? Each market is different, but whether the time you plan to spend in the house warrants its purchase is possible to predict. Generally, it takes four to seven years to break even on a home (i.e., where there has been enough appreciation to pay back the cost of the transaction and ownership). If you're considering buying and selling a home in two years, buying could be more expensive than renting. Do you think of or need your house as an investment in your retirement plan? Many Americans see their homes as a valuable asset, often integral to their retirement strategy. Real estate is commonly regarded as a solid long-term investment, frequently favored over other options like stocks, gold, or savings accounts. Its appeal lies in the potential for value appreciation over time. However, it's wise to remember that the real estate market is subject to fluctuations. Various market and economic factors can increase and decrease property values. This reality highlights the importance of considering real estate as one component of a diversified investment portfolio, recognizing both its potential benefits and inherent risks. Are you financially ready? Owning a home is a financial commitment that requires planning how home ownership fits

into where your life is headed. Ask yourself your budget and whether buying or renting would require you to stretch your finances. Crunch all the numbers. A frequent mistake of first- time home buyers is comparing a month’s rent to a month’s mortgage payment. Many people don’t have all the numbers. To ensure a fair comparison, several additional fees must be considered: principal interest, property taxes, property insurance, homeowners' association (HOA) fees, and ongoing maintenance. Are you prepared for the down payment? This lump sum payment funds your equity in the property, which is essentially how much of the property you own. The more you pay upfront, the more equity you have. Down payments vary; 20% is preferred and gets the best rates. Some loans allow down payments as low as 3%. Sometimes, relatives help with the down payment. If you have a choice, take a gift rather than a loan because lenders will add the loan debt to other monthly obligations and potential mortgage payments to determine your debt-to-income ratio, which generally can't top 43% to qualify for a home loan. Can you afford the monthly mortgage and its components? Generally, a mortgage includes loan principal and interest (both amortized over the life of the loan) plus homeowner’s insurance and property taxes (prorated). These items can affect the monthly loan-only payment by several hundred dollars. Are you emotionally ready? Can you handle the stress? A significant factor to consider when buying a home is stress. The Holmes and Rahe Stress Scale, a landmark stress study, ranks many events that accompany buying a home in the top 43 most stressful circumstances in life. Four events are specifically home- related: change in financial state (No. 16), large mortgage or loan (No. 20), change in living conditions (No. 28), and change in residence (No. 32). If someone has recently made other life changes, such as marriage (No. 7), switching careers (No. 18), or

having a child (No. 14), it might be wise to postpone buying a home. Stress overload can lead to missed payments, destroying credit, or even losing the house. It's better to rent if your life is in flux and buy when your stress levels are lower. Are you ready for commitment? Are you prepared to make many decisions, from picking a real estate agent to picking paint colors? Are you confident enough to choose a neighborhood where you believe home values will continue to appreciate and that will serve your needs (i.e., proximity to schools, shopping, recreation, etc.)? Are you ready to devote the time and attention to maintaining a home (i.e., leaf-raking, grass-cutting, appliance maintenance, repair, etc.)? Taking care of your most significant investment can be gratifying, but only if you're ready.

ADVANTAGES OF BUYING YOUR HOME

Control over housing expenses. By selecting a fixed-rate 15-, 20-, 25-, or 30-year mortgage, the homeowner is assured that housing costs won't increase and will be eliminated at the end of the term (subject to refinancing). You build equity. Some of each monthly mortgage payment goes toward the loan's interest. Other portions may go to homeowner's insurance and county taxes. The remainder pays down the loan principal. Every dollar put toward your loan's principal represents a dollar of equity—actual property ownership. Further, the property should appreciate each year, adding to equity (what the house could be sold for versus what is owed). Discounting specific blip periods, such as the 2006 housing bubble burst, home prices in the U.S. appreciate nationally at an average annual rate between 3% and 5%. Remember that home value appreciation varies significantly across metro areas compared to the national average.

Improvements increase your home’s value. A homeowner can

also increase a home’s value through home improvements, thus making your home more comfortable and enjoyable while growing its loan-to-value (LTV) ratio. For instance, adding a bathroom or finishing a basement substantially increases the property’s functionality and appeal while potentially boosting its value. Tax advantages of home ownership. There are significant tax benefits associated with buying a house, both at the time of purchase and for the duration of time you own the home: • Homestead exemption. Many states exempt owner- occupied homes (homesteads) from a portion of the property tax amount that would typically accrue. For instance, Louisiana exempts the first $75,000 of a home’s value from property tax assessments, so a $200,000 home in New Orleans is taxed as if it were worth $125,000. • Federal tax deductions. When you’re looking to purchase a home, it’s essential to understand what can be deducted from your tax return and what can’t. Property taxes and interest paid on your mortgage can be deducted if you itemize your federal income taxes, which can reduce your income tax burden. Many home buyers, unfortunately, overlook the effect of mortgage interest on their federal income tax payments. Mortgage interest can be a powerful financial planning tool. Calculate the mortgage interest deductions you are eligible for and include that in your annual financial planning. Then, check Internal the Revenue Service (IRS) Form 1098, which you’ll receive from your lender at the end of the year. This form shows the amount of mortgage interest that you’ve paid. The Tax Cuts and Jobs Act (TCJA) applies from 2018 to 2025 and limits the aggregate deduction for state and local real 28

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