Richard "RJ" Freedkin, Realtor - SECRETS OF SOPHISTICATED HOME BUYERS

SECRETS OF SOPHISTICATED HOME BUYERS

SECRETS OF SOPHISTICATED HOME TED HOME BUYERS

Richard "RJ" Freedkin, eedkin, Realtor

Table Of Contents

How REALTORS® Help Home Buyers

Own vs. Rent?

Buyer Needs, Wants and Desires

Real Estate Horror Stories

Searching for the Right Home

Buying a House: Negotiation Dos and Don'ts & What You Need to Know if You Need to Sell a Home in Order to Buy One

What to Know About Home Inspections

Shopping for a Home Loan

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First Time Home Buyer Programs & Potential Tax Benefits of Home Ownership

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10. The Closing Process and More

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11. Organizing Your Move

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Foreword

When I first ventured into the real estate industry over 40 years ago, I did so with the hopes of learning everything I could about it and helping new homeowners like you avoid the headaches often associated with the Real Estate Industry. In my many years of experience, not only have I helped alleviate the stress

of real estate transactions for thousands of clients, but I’ve also accumulated years of knowledge and experience that have helped my clients save more money for the homes they bought. (For more information on my background, please see my Biography immediately following this "Forward" section) I am sharing my home buying expertise in this book to help all home buyers have a great experience and to hopefully gain enough trust for anyone looking to purchase (or sell) a home to seriously consider using me as their Realtor. That’s why you’re receiving this book. I want to help you have the best home-buying experience possible! Of course, if you already have a Realtor that you trust and want to use for your next transaction, I certainly do not want to step on anyone's toes so hopefully, this book will act as a roadmap for whichever route you decide to take.

My top 3 goals I want this book to help you with are for you to...

1) Find the best possible home for your needs, 2) Negotiate the best price and terms for your new home, and 3) Avoid the headaches most commonly associated with the v

home-buying process.

Think of this book as my gift to you. It contains insider advice on the home-buying process to help you achieve your ultimate real estate goals Including: • How to search for the right home • What to know if you have to sell a home in order to buy a new one • What to know about home inspections • Shopping for a home loan And much, much more! If, after reading through it, you want me to help you find the perfect home (at no cost to you), I’d be more than happy to meet with you to discuss a specific plan to buy your first or next home. Also, if you know of anyone who is looking to purchase a home and if you find this book to be helpful, I would appreciate it if you could please pass it on so they too can get the same critical information to help them with their home purchase as well. Thank you. p.s. if you have a home to sell, I am extremely qualified to assist in getting you the most amount of money for your home as well!

Questions? Call me! (847) 922-8423 (847) 922-8423

Happy reading!

Richard "RJ" Freedkin, Realtor CRS, RENE, ABR, SRS, LHC eXp Realty, LLC 10 N. Martingale Rd. Suite 400 Schaumburg, IL 60173 (847) 922-8423 rjfreedkin@gmail.com

For the best home search on the internet, go to:

www.rjfreedkin.com

or scan code ====>

equal housing opportunity

p.s. if you are reading the digital version of this book and would like a hard copy, please contact me and I will be happy to get one out to you!

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ADDITIONAL BUYER RESOURCES SCAN CODES TO LEARN AB O LEARN ABOUT EACH TOPIC

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SELLER RESOURCES SCAN CODES TO LEARN AB O LEARN ABOUT EACH TOPIC

MARKET UPDATE JANUARY 2024. Y 2024. ix

If you are reading this and it is after January 1st, 2024 you may know that interest rates have more than doubled from earlier in 2022. Interest rates were around 2.75% to 3.5%. As of this writing interest rates are now around 7.00%. You may think that the sky is falling when looking at these rates, but just consider that the current rate is not that high from where it has been over the last 40 years. It is slightly below the average rate over the last 40 years. (see interest rate chart below)

How do I know this? I have been in real estate since 1976. I have seen many up-and-down market trends and interest rate fluctuations over the span of more than 40 years. You may have also seen some home prices dropping and in some areas, they are indeed dropping more than in other areas. x

However, there is still very low inventory and as long as there are more buyers than sellers, there will still be some upward pressure on home prices. Homes that are in good condition and priced properly are still seeing multiple over-list price offers on them. Perhaps not the 20, 30, or more than what we were seeing earlier in 2022 and 2023 but perhaps 2, 3, 4, or even 5 offers. Listing agents who understand the current market, price their listings properly and still see good activity and quick offers and sales. What if you are a buyer who is also a seller? Great question! During the last 10 years, homes averaged about 3.8% appreciation per year, however, over the last couple of years home prices increased many months at a whopping 2% per month (or more) and averaged 14.5% year over year (as of June 2022). What we all have seen in the last couple of years simply is not a normal market. We are now slowly heading back into a normal market. This will not result in depreciation but rather in deceleration. This means that as long as we have low inventory as stated previously, we will still have upward pressure on prices but more in line with a normal price appreciation market. Did you miss the boat? NO! Keep in mind that there are more factors affecting inventory. There are going to be even fewer home sellers entering the market because just about everyone who owns a home has refinanced it to a low 3% or better interest rate. Many sellers who may have considered selling previously may no longer want to sell because they don’t want to sell a home with a mortgage at 3% to only buy a new one and have a mortgage rate at 6% or 7%. This situation will still put upward pressure on prices so if you are waiting for prices to drop, it may be a futile effort. Are you a buyer who is also worried about selling your home but not being able to buy one because of the low inventory? No worries, I have special programs to find you OFF Market homes in locations you want to buy in that NO OTHER BUYER will

ever know about.

Are you worried about giving up a low rate that you may have on your current home only to get a much higher rate on a new home? Don't be. As you have just learned, home prices are going to continue to move up albeit slower than previously. Keep this saying in mind... "Date the Rate and Marry the House". What this means is that if you found a home you love... BUY IT NOW. Interest rates fluctuate and you can always refinance when rates drop. You can also utilize other types of creative interest rate products such as 2-1 buydowns or adjustable rate mortgages to get lower rates now while waiting for the rates to drop later and refinance at that time. You may also have heard that as long as inflation stays high, the federal reserve plans on continuing to increase rates. Waiting for prices to fall means paying a higher interest rate which will probably not save you much on a mortgage payment. There are many negotiation strategies that a good agent can use in this changing market to help you not only get a lower home price but also save you money on an interest rate too! (p.s. One such strategy is getting the seller to pay YOU to get a lower interest rate! - ask me how!) Having a good agent representing you on your home purchase will help you take advantage of all these unique negotiation strategies versus newer and less experienced agents.

Questions? Give me a call! (847) 922-8423

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About Richard "RJ" Freedkin

Richard Freedkin is a Full-Time Licensed Realtor who has spent over 40 years in the Real Estate Arena where he has acquired considerable in-depth real estate knowledge and expertise. Within that time frame, he successfully built, owned, and operated a prominent mortgage brokerage firm originating more than 20 million dollars of mortgage loans per month in the 1980's and 1990's,

bought, sold and, managed millions of dollars of real estate, served as a general contractor rehabbing both single-family homes and apartment buildings, and became an author and sought after national speaker on the subject of selling homes quickly and for the most amount of money. There isn’t any aspect of Real Estate he doesn’t thoroughly enjoy, including helping his clients achieve their goals and dreams. Richard’s journey began in 1976 while working as a clerk in the mortgage department of a local mid-sized Chicago Savings and Loan Association. Within 10 years he climbed the ladder of success to senior management, where he spearheaded every facet of the mortgage department’s operations. In 1986, with all the valuable first-hand knowledge and experience he acquired, he decided to establish a mortgage brokerage of his own. Soon, his company became the third-largest brokerage across Northern Illinois, originating 20+ million dollars in monthly mortgage loans. Ultimately, this staggering success led to an array of prestigious awards from industry giants like Bank of America and Countrywide Funding.

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Twenty-five years into his mortgage career, Richard was catapulted into the real estate investing space, where he successfully purchased, sold, rehabbed, and managed millions of dollars worth of real estate. As his accomplishments continued to gain momentum, he was inspired to write his debut book/ course, a 260-page “how-to” publication that teaches people all his unique systems on the art of selling homes in record time and for the most amount of money. Before he knew it, he became the go-to resource and sought- after expert on selling homes and was often invited to speak at esteemed real estate seminars and conventions nationwide. To this day, his cutting-edge marketing methods and systems have helped thousands of fellow real estate investors and homeowners across the nation achieve success with their properties. Using his Real Estate Broker’s License, Richard leverages his vast real estate knowledge, extensive experience, and unique systems to ensure his client’s goals turn into reality without the hassle typically associated with the industry. Richard also studies and utilizes extensive negotiation strategies ensuring whether you are a buyer or seller that your interests and hard-earned money are well represented. He has studied, passed stringent curriculum courses, and received several Realtor Certifications and Designations such as:

CRS - Certified Residential Specialist RENE – Real Estate Negotiation Expert ABR – Accredited Buyer Representative SRS – Seller Representative Specialist LHC - Luxury Homes Certified VA Certified Agent Certified “Express Offers” Agent

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When you're ready to move to the next step of buying or selling your home, Richard would be honored to work with you to guide you through the entire real estate process!

WHY USE RI E RICHARD FOR YOUR REAL ES UR REAL ESTATE TRANSACTION? Richard loves helping people with their real estate needs. He has spent his entire life helping people in real estate. He is passionate about making sure his clients are treated properly and well informed. WHAT SETS RICHARD APART FROM OTHER REAL ES THER REAL ESTATE AGENTS? Knowledge, experience, attention to detail, and superior negotiation skills. For over 40 years, Richard has been involved in over 8000 real estate transactions in various capacities and understands all the complexities of the real estate marketplace. Richard was a national speaker on real estate investing, has bought, sold, negotiated, managed, and rehabbed millions of dollars of real estate, and has authored several books on the subject. You can rest assured Richard has the knowledge, background, experience, and passion to help you with all your real estate needs. If you are buying, Richard uses all his knowledge and expertise to fight to get you the lowest price and the best terms for your home purchase. If you are selling a home, Richard uses all his knowledge and tools to fight for every penny of your hard-earned equity and strives to get above-market prices and the best terms for your home sale.

Give Richard a call at (847) 922-8423 (847) 922-8423to discuss all your options.

Richard's Designations and Certifications

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CHAPTER 1 How REALTORS® Help Home Buyers

As you read this book, please keep in mind that most of the concepts in this book apply to purchasing a resale home or one that has already been owned by one or more owners in the past. If you are looking for new construction, many of the details in this book may not apply but there are other other nuances you will need to know and I would be happy to consult with you regarding those nuances. With that said, I’ll come right out at the start and tell you I’m a Realtor — and I'm very proud of that! I serve as an integral part of the community by helping people buy and sell homes.

It's a very complex business and contrary to popular belief, we don't just open doors and let people look at homes. There can be well over 200 detailed steps involved in every real estate transaction. If you are not well versed in any or all of them, very costly mistakes can and often do happen. As a Realtor, I get to do what I love. Educate and help people buy and sell real estate. That's what I have been doing for over 40 years and why I feel it is incumbent on me to take those many 2

years of knowledge and experience and provide information that can help people understand the process and potential pitfalls. I want to make sure no one makes costly mistakes. During my 40+ years, I've been involved in thousands of real estate transactions; whether they were for buyers or sellers so you can be sure I have the background to help just about everyone. (want to learn more about my extensive real estate background? please read my bio located immediately before this chapter) Also, just so you understand, if after reading this book you would like me to represent you for a home purchase (or sale), I would be honored to.

HOW DO BUYER AGENTS GET PAID? (updated August 2024)

One question many buyers ask is, how do we get paid? That is an awesome question! Up until recently, "Buyer’s Realtors" were generally paid a portion of the "Listing Agent’s" (seller's Realtor) commission they charged their seller (which was agreed to by the seller up front at the listing appointment). The buyer's agent commission was then derived and paid from the sale price of the home. For instance, a listing agent may have charged a seller 6% of the sale price of the home and the seller agreed to offer 2.5% of that to a buyer agent as what is called a "co-operating commission". When the home sale closed, 6% of the home price was deducted from the price of the home and split accordingly to the two different real estate brokerages with the buyer's agent brokerage getting 2.5% and the listing agent brokerage getting 3.5%. (again this is just an example, every negotiated split is different based on what the sellers wanted to offer.) This method of payment basically allowed buyers to pay their agent by having it financed into the price of the home so they didn't have to come up with the money out of their pocket.

Now things have changed. Because of a recent national class action lawsuit towards the end of 2023, sellers in some states sued because they felt they were forced to pay buyer agent fees or were not made aware of how this worked, and so now the entire industry is being forced to change. As a result of this, some sellers may no longer want to or agree to offer some or any commission to a buyer's agent for bringing them a buyer. So, what happens if that is the case? Well to begin with, this may hurt many buyers, especially first time home buyers. Buyers who have low down payments or don't have the extra money to pay their agent directly, as they wanted to use all their on-hand cash to go to the down payment, may no longer be able to buy a home as easily as they did before and may have to go at it alone without proper representation by an experience "buyer agent". They may have to wait to purchase a home until they save up more money. This, in my opinion, may not only affect buyers ( especially first time homebuyers) who don't have the extra cash to pay their agent directly but also will negatively affect home sellers who are not willing to offer a "co-op" buyer commission because it will greatly reduce the number of buyers in the market who can afford to purchase that home and pay their buyer's agent as well. Fortunately we have not seen a lot of sellers moving in this direction but this could change. For those listings where the seller is offering less or even no buyer agent commission, there are still many viable options for buyers to try and mitigate the amount they may have to come up with such as negotiating with the seller by getting a closing cost credit or increasing the price to cover it (which is how it was done originally but it was already as part of the listing where now it may be able to be negotiated on the back end). There are also other tactics and there may even be legislative relief which will allow lenders to allow buyers to finance the agent commission back into the home price as legislators will

soon come to realize this lawsuit created all kinds of problems that could drastically hurt the housing market. Of course there will still be more sellers than not who will still offer the buyer agent fee because they don't want to limit the amount of buyers who can purchase their homes. Even with those options, some buyers may still need to come up with some money to make sure their agent gets paid what they are due as in many cases it can be months of showing homes, submitting offers, preparing paperwork, negotiating, arranging inspections and the list goes on and on. As part of the lawsuit settlement, which went into effect August 17, 2024, buyers are now required to sign a buyer agent representation agreement that that spells out the agent's fee and what each party's responsibilities are. In any case, this will be an important discussion to have with your agent to make sure everyone is on the same page as to how your agent will be compensated. Also, no realtor can show ANY property to any person until this buyer agency agreement is signed. Most of us are in the business to help people, so it is not just about the money. You should also understand that we (the individual agents) do not get that full 2.5% or whatever the percentage ends up being as a commission. We must share that with our brokerage so we only end up getting a portion of that commission. Also, because we are considered self-employed, we have to pay additional self-employment tax on the net commission as well as cover all of our expenses. We don't see a penny of commission until the deal closes and that can be months or even years of showing homes submitting offers etc. for a buyer before they find one they like and actually get it under contract. Some of these buyer agency agreements starting in August may also require buyers to pay their agents upfront and ongoing for showings, drawing up paperwork, negotiations and so on. Every agreement is different and every fee is negotiable. I have prepared a comprehensive HOME BUYER GUIDE that

specifically addresses these new laws, options on how to negotiate with sellers who are offering less or no agent compensation and other choices you will have. Feel free to request my free guide.

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

Technology has changed the way homes are sought and bought today. In this “Information Era,” most buyers are first introduced to the home they eventually purchase via the Internet, through Zillow, Trulia, Realtor.com, Redfin, Homes.com, (among others). These are the top five “Most Popular Real Estate Sites,” as derived from eBizMBA’s Rank, which is a continually updated average of each website’s Alexa Global Traffic Rank, and U.S. Traffic Rank, from both Compete and Quantcast. So that means there is no real need for a buyer’s real estate agent, right? If a buyer can find and visit a home on the internet all on their own, why involve another party? Isn’t the only reason to use a real estate broker to find a home and just show homes available for sale?

The short answer is a resounding NO!

As mentioned previously, the reasons to use a real estate agent are many. They are as valid today as they were a few years ago. If you purchased a home 20 years ago, things are quite different. There are so many more laws and steps it would be wise but difficult to get up to date on all of them. There can be well over 200 complex detailed steps in a real estate transaction. While online transactions and the proliferation of services designed to assist buyers in handling their own real estate transactions came about recently (mostly during the last decade), many buyers unfortunately now believe that using a real estate agent is no longer necessary, or is an expense that can be avoided. While doing the work yourself may possibly save you if you buy

a “For Sale By Owner” (FSBO) house and IF the seller agrees to reduce the price by 2.5% - 3% (half of what a listing agent may have received), for many, a do-it-yourself home purchase many times ends up being more costly than what someone might have saved on a real estate agent’s commission in the long run. In most home sales, there is a “listing agent” (the agent hired by the seller to sell the property) and a selling agent (the agent who brings the eventual buyer into the transaction). The selling agent is sometimes also referred to as the “buyer’s agent” because he or she is often working on a buyer’s behalf and it’s easier than explaining that the selling agent is not the listing agent but is really the buyer’s agent. Some real estate agents market themselves as “buyer’s agents,” “exclusive buyer’s agents,” or “buyer’s representatives.” These real estate agents have chosen to make it their primary focus and business of finding homes for prospective buyers and handling the negotiations and transactions relative to those purchases. These agents, just like any good buyer's agent, should accentuate the many reasons (explained in the next couple of paragraphs) a buyer shouldn’t go directly to the listing agent when they purchase real estate. There are also agents like me that choose to work on both sides of the field. I can act as a buyer's agent when solely representing a buyer or a listing agent when solely representing a seller. I feel it is good to know both sides as it helps when negotiations begin no matter who I am representing. This ongoing exercise on being able to know both sides keeps me knowledgeable and sharp for whichever side I represent. However, with that said, I will never work as a dual agent who represents both sides of the same property transaction. Dual agents are allowed in Illinois and many other states but are illegal in some states as well. I feel that acting as a dual agent is unethical. There is more on dual agency below and later in this chapter.

DUAL AGENCY

A buyer who goes directly to the listing agent and allows that agent to “manage” both sides of the transaction (thinking that they will get a better deal by cutting out a buyers agent) is dealing with an agent who has conflicting responsibilities, also known as being a “dual agent”. A listing agent’s job is to negotiate in the best interest of the person who signed the listing agreement with them. So their ONLY client is the seller. If they also take on the buyer, whose interests are they really looking out for – the seller? The buyer? – See the problem and the issues it can create? They are now no longer a listing agent, they are a "Dual Agent" and now actually represent no one! Realtors who are hired to represent a buyer as a “buyer’s agent” are only working in the best interests of their client, the buyer! This is why you should make sure you are only dealing with a Realtor that is acting on your behalf as a “buyer’s agent”. Many agents will act as a dual agent as they can then get both sides of the commission and actually do less work since they cannot legally give advice to either side. Doesn't make sense that such representation is actually legal and allowed does it? Think about it this way, if someone hits your car and you are injured, would you want the same attorney who is representing the person who hit you that you are suing to represent you as well? That is "Dual Agency" in a nutshell.

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 should know 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. Experienced full-time buyers’ and sellers’ agents know how to put a real estate

transaction together.

A real estate agent will track down homes that meet your criteria, contact sellers’ agents, and secure appointments for viewing the homes. On their own, buyers have a more difficult time with these things. This is even more so in the case when a buyer is moving due to relocation or employment opportunity and engages a “buyer’s agent” to handle matters

NEGOTIATING IS HARDER ON YOUR OWN

Negotiating is not like it used to be many years ago when you could talk directly to the home seller and "haggle" for their home. Unless you are negotiating on an FSBO (for sale by owner) property where the seller does not have an agent, the process is far more "sterile". There is typically a seller's realtor and a buyer's realtor on the transaction. Even if you aren't represented by a buyer's agent, you are only allowed to speak with the seller's agent. This will make your negotiation strengths weaker as the emotion a seller may have is shielded from you. However, having an agent represent you will put you on a more level playing field as you won't be negotiating with and against a far more experienced seller's agent. Your buyer's agent, if experienced, will be able to negotiate better on your behalf as they know the ins and outs to work with the other agent professionally. A good real estate agent will keep the transaction “at arm’s length,” such that personalities and emotions generally do not become involved. Negotiations take special skill and understanding of the psychology of offering and counter-offering as well as all the other terms and strategies that can sweeten a deal in your favor. 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 via their agent in such a way that won't insult them. Your agent will let them know that you may have an interest in the but can see having to spend $xx in decorating costs, and thus the reason for the lower offer.

CONTRACTUALLY SPEAKING…

There are many contracts and documents involved in purchasing a home. The stack can easily end up being 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 a “fill-in-the-blanks” transaction and a mistake, let’s say in title work, could haunt any buyer (or seller) 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 carve off a bit of the second lot to expand his yard. He now owned his home and the home next to his along with the 2nd lot in between the homes. He then put just the other home that was originally on the double lot on the market and it sold which would have left him with his home and the part of the 2nd lot he wanted for himself. Months later, through a property tax notification, it came out that in preparing new deeds for the properties, the expanded yard area

of the 2nd lot was correctly in his name but both homes on either side had been incorrectly transferred to the new 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. Phewwww! A good real estate agent, as well as a good real estate attorney, deals regularly with these contracts, conditions, and unexpected situations, and is familiar with which conditions should be used and when they can safely be removed, and how to use the contract to protect you.

YOU MAY NOT SAVE MONEY DOING IT ON YOUR OWN

The common thought of not using a real estate agent would be to save money, right? Otherwise, why would a buyer turn down professional assistance in finding a home to their liking as well as handling negotiations and the many other home buying duties? However, it’s unlikely that both the buyer and the seller will reap the benefits of not paying real estate agent commissions. It works like this: An owner selling on his own will price the house based on the sale prices of other comparable properties in the area. Many of these properties will be sold with the help of an agent; therefore, the seller profits in getting to keep the percentage of the home’s sale price that might otherwise be paid to the real estate agent. That's the whole mentality of why most sellers go the route of selling FSBO. They want to net more money. Buyers looking to purchase a home sold by FSBO owners believe they can save money on the home by not having an agent involved and so they spend their hours looking solely at FSBO houses. They might expect to get that benefit and make an offer accordingly. Unless the buyer and seller agree to split the savings,

they can’t both save the commission — and that’s if the listing price was not already lowered by near the commission amount to make it more market-attractive. Here’s a shortlist of advantages that using a real estate agent can bring to your buying experience:

• Education and experience • Agents are Buffers • Neighborhood knowledge • Price guidance • Market conditions information

• Professional Networking and Vendor essentials • Negotiation skills, strategies, and confidentiality • The "ins and outs" of inspections • Handling volumes of paperwork • Answer questions after closing • Develop relationships for future business

It’s extremely important to know the “ins and outs” of what to look for in a real estate agent before you bring one along with you to help in your home search, so you will know what to expect and what will be expected of you.

THE DIFFERENCE BETWEEN A REAL ESTATE AGENT AND A REAL GENT AND A REALTOR®

In short, a real estate agent is someone licensed to list and sell real estate, including homes, multi-family properties, and commercial and industrial buildings. A REALTOR®, however, is somewhat different. A Realtor® is a member of the National Association of REALTORS®. While an agent is always a real estate agent, a real estate agent isn’t always a Realtor®. Realtors® tend to be more educated on real estate and tend to take the business

more seriously than just real estate agents. REALTORS® are required to take ongoing education classes to keep their affiliation. For the purpose of this book, I will just be referring to all agents as real estate agents or buyer or seller agents. Real Estate Agents who work on behalf of and in the best interests of the buyer, are commonly called “Buyer’s Agents”. "Listing Agents" typically represent the seller and act in the best interests of their client. As stated previously, a listing agent might be able to represent both the buyer and the seller if they get a signed agreement by both the buyer and seller stating they are acting as a dual agent. I do not recommend dual agency as it creates many conflicts of interest. Buyer’s agents work on commission. The commission is typically paid to them by the listing agent at closing by splitting the commission they negotiated and received from their client, the seller. However, as stated earlier in the chapter this method of payment is now going through some changes and may affect how your agent gets compensated.

HOW TO CHOOSE THE BEST AGENT FOR YOUR NEEDS UR NEEDS

You might feel the urge to pick the first real estate agent who appeals to or approaches you, but that’s something to avoid. Like with any profession, there are degrees of professionalism, dedication, and experience. The “wow slick factor” will simply and quickly wear off. Meet personally with prospective buyer’s agents in advance whenever possible. A good buyer’s agent will want to know whether you have taken the important step of getting “pre- approved” (not just “pre-qualified”) for a home loan by a lender (see more on this in my chapter entitled "shopping for a home loan"). The agent should have a good familiarity with the lending

process and will also want to know what kind of loan you were pre-approved for, the terms of the loan, the down payment requirements, and how much the lender used for taxes and possibly association dues (especially if you are shopping for a condo or townhome - but some single-family homes may also have an association fee). You should have the pre-approval letter with you when you meet the agent. The agent should also spend adequate time to discover exactly what you are looking for in your next home. They should listen as much as they talk and ask questions. Watch to see if the agent takes detailed notes as they will need them when performing searches to find you the perfect home. If the agent doesn’t broach the topic, ask for an explanation of his understanding of agency relationships and obligations to you. The law requires agents to explain whether they’ll be working for the buyer or the seller whenever they have substantive contact with a customer or prospective client. The agent should present to you a “Buyer’s Agency” or “Exclusive Buyer’s Agency” agreement which indicates in writing that they would be representing your interests only. If the agent can’t explain agency concepts to you, move on to another agent. A good buyer’s agent will provide home-buying education. While a listing agent will point out all the features and beautiful updates to a home; a good buyer’s agent will point to the faults — or advise when they can be overlooked. Competent buyer agents help their buyers to think clearly as the homebuying 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 studio you desire. Likewise, a cute house with all the amenities, but with old "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 a home with the intention of building an addition, the agent should advise you to check the zoning before making an offer. Agree to sign a buyer’s agency agreement after you have met with an agent. Some people sign an agency agreement after attending a showing given by the agent. Working with a seller’s agent is a mistake, according to an article by Amy Fontinelle of Forbes’ Investopedia. Any information you reveal will become leverage that the seller can use in a purchase negotiation. A buyer’s agent is legally required to maintain your confidentiality, disclose material facts to you, and maintain loyalty to you. These are fiduciary duties.

LOOK FOR PROPER CREDENTIALS / CERTIFICATIONS

You wouldn’t trust a doctor who doesn’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 special 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 couple of credentials within real estate that you should be on the lookout for:

• Certified Residential Specialist (CRS): t (CRS):Certified

Residential Specialist (CRS) is the highest credential awarded to residential sales agents, managers and brokers who have completed a series of detailed requirements to earn this highly coveted designation. • Accredited Buyer’s Representative Certification (ABR): Completed additional education courses focusing on the proper representation of buyers in their transactions. • Real Estate Negotiation Expert Certification - (RENE): n - (RENE): Completed additional education courses focusing on higher-level negotiation strategies. • Seller Residential Specialist - (SRS): Completed additional education courses focusing on higher-level strategies when representing sellers. • Luxury Homes Certified - (LHC): Looking to purchase a Luxury Home? Make sure the Realtor you choose is well- versed in all aspects of the Luxury Home Market and has also done Luxury Home Transactions! You may ask, why as a buyer should you look for someone well- versed in being a seller's agent? Excellent question! Knowing the other side of a transaction intimately gives a Realtor better insight into what is happening on both sides of a transaction which will help your agent better negotiate on your behalf on the buying side. Similarly, if you choose a real estate agent who’s also a member of the National Association of Realtors® - one who can legally call him or herself a Realtor®, it will be a bonus. However, ensure they have credentials that are relevant to your need(s).

RESEARCH LICENSING

Your state will have a licensing board for all active real estate

Realtors® and agents, which you can easily access. You will also be able to see their information, disciplinary actions, complaints, or any other information that you’ll need to help influence your decision — especially since most of the information is now posted online. DO THEY HAVE ANY VERIFIED TES VE ANY VERIFIED TESTIMONIALS FROM RECENT CLIENTS? Ask the agent to show you a list of sales they’ve made in the past year and some Google, Realtor.com, or other verified testimonials for references. A good agent will do so, while a bad agent will give you excuses and essentially shoot the request down.

GIVE THE “WHAT ELSE” TEST

When you show interest in a property a good agent will suggest they do some research to show you "comps" - all the other properties for sale or that have recently sold in the area. Also, a good agent always does their research regarding the events and trends in the current market, and strategies for taking advantage of those trends. In short, you want an agent who’s an expert on the current market, and someone who always stays on top of things.

RESEARCH THEIR BUSINESS ACTIVITY

Learning the type of market presence that a real estate agent has is the best way to figure them out. Ideally, you’re going to want an agent who has been in the real estate arena for at least five years, specializes in one or two real estate markets, and understands which types of homes and amenities are available within your price range.

You’re better off with an agent who’s actively engaged in working in the price range you are looking at — e.g., residential homes around the $150,000 to $550,000 range or the $700,000 and up range if you are more interested in the luxury market. CHECK THEIR REAL ESTATE BACKGROUND AND UND AND HISTORY Once you know the area of specialization of the agent you’re considering working with, check out their website - every “in the know” real estate agent maintains a website today. Their website should show their past sales, their past and current listings, and more information about the agent and their background. Some knowledgeable Realtors may even have written articles on their site to educate prospects. You should also be able to search their website for all properties in their service area that are currently for sale. This is called an MLS feed. Most buyers will start searching on the Internet. Therefore, if an agent doesn’t have much of an online presence or one at all, then it’s best to move on. The best agents will advertise themselves on multiple platforms, especially the Internet. You want an agent who will use every tool in the book to be successful. You will also want to review the agent’s background covering all their real estate experience which could be of benefit to you in helping you achieve your goals and desires.

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 the pitfalls and problems that can present themselves if you try it on your own. Home buying can be exciting but it can also be complex and stressful — which is why having a pro by your side can make an enormous difference.

You’ve already read and learned about buyer’s agents, seller’s agents, listing agents, and so on. You’re a buyer, so what’s a buyer’s agent? 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. These real estate agents do not hold "Bankers" hours. They work day and night, weekdays and weekends for you. If you listen to the advice above and find the best one for you, one that ensures all your needs and requirements are met when it comes to finding the right home for you, you will most likely end up with a beautiful new home at the best price possible and hopefully, be another satisfied client who hopefully writes another glowing review for that agent.

WHAT BUYER'S AGENTS DO FOR YOU

Your buyer’s agent will have a vast knowledge of the current real estate market for the area, which will include neighborhood amenities and conditions, the law, zoning issues, price trends, negotiations, taxes, financing, and insurance. Once you meet with the buyer’s agent, they’ll generally help you determine your needs and wants when it comes to finding you a home and a neighborhood. The agent will aid you in learning about what you can afford, help you in setting a budget, provide some insight into the current conditions of the market, and explain what you should expect while shopping for a home. In addition, they will help you find a suitable level of financing. During the shopping-for-a-home period, you’ll probably meet with your agent for tours of various homes in which you might be interested. They will give you insight into the floor plans, the home’s pertinent selling points (and their negative points), and information about the neighborhood and schools.

Your agent is also responsible for coordinating all facets of the transaction with the many parties also involved such as home inspectors, attorneys, lenders, and other professionals that may need to get involved in the transaction. If negotiations need to be made over price or other issues, you won’t have to negotiate them on your own. Your buyer’s agent will do that for you on your behalf after consulting with you. They will prepare all the initial contracts and ensure all disclosures legally required from the seller are presented and signed. A good agent will understand all the sections of the contracts and disclosures and should explain all the pertinent sections to you but don't be afraid to ask questions about anything you don't understand. Your buyer’s agent provides an invaluable service and will be with you every step of the way right up to and including closing when the keys to your new home are presented to you!