Recently, I have run into several folks who just had no idea how to go about the buying process. This is for people like them. Remember, capitalism is live and well in the US. Everyone knows you start by looking and visiting a place. But after that?
First, a property remains for sale until someone has formally agreed to buy it. Just because you say you want it is not a reason to take it off the market and risk losing a sale to someone else. To do that, we need your name on the dotted line and something green in my hand. No one does sales without a Purchase Contract. Since the buyer normally signs first (it represents his offer), once the seller accepts in writing, then it becomes binding upon both parties. Until both parties have signed, it’s all just words and good intentions. In it, we need to write everything that is important. For instance, if you need to borrow money to complete the purchase, then we need to have a contingency for this, so you can get your deposit money back if you can’t borrow enough to buy it. If you need to sell something before you can buy, we need to have a contingency for this in there as well. If you are afraid to buy without having an independent party do an inspection, we need to provide for this too.
All these kind of things protect the deposit you give and insure that it can be returned to do if you do not buy. But, be aware that the more of these protections that we put in for you, the weaker and less attractive your offer becomes. It’s not only about price; there are other things the seller must consider. The ideal contract, in the seller’s mind, is one for cash (no borrowing, nothing to sell first… ie, nothing to go wrong). But we don’t live in an ideal world and part of my job is to look for places where each party can reasonably compromise.
Bargaining: Like buying a car, most sales involve some bargaining between the buyer and seller. But not all do (remember Saturn cars?). There are some times when the seller’s price is - really, honestly - firm. And there are a few times when a property actually brings more than the asking price. Don’t let these things put you off. What you need to keep in mind is simple: “At what price is it worth it for me to buy?” That’s your top line. Don’t be afraid to reach it and don’t be afraid to make offers. Many more sales would be made if buyers did this. It is in the buyer’s best interest to buy as low as he can and in the seller’s to sell as dear as he can. If there is going to be a sale, we will reach a compromise in-between. Remember: it's capitalism.
Brokers: I represent the seller in nearly every transaction. He pays me, not the buyer. But I have legal and very real fiduciary duties to all parties. Yes, my final loyalties must reside with the seller, but I am not going to risk losing the sale (or my license) by knowingly misrepresenting something. And often, if I don’t help the buyer, the deal doesn’t get done. I’d like to think I have earned the trust of all parties, but I will never stand in the way of someone who wants to pay another party to get independent verification.
Deposit: I do not want to ever take more than 10% of the selling price as a deposit. Anything more I consider excessive. But I prefer to be as close to that as I can get. Everyone wants to know, “How low can it be?” That depends upon how comfortable the seller feels with you and also to how much he feels it would “‘hurt” you to lose it. No one wants to hurt you, but on the other hand, if you decide you really want a white home and not a gray one, we want enough down so that you won’t just back out of the deal. The money you put down to hold it should be enough to hold your attention and keep you focused upon completing the sale. It is money you risk. The seller has risk too - losing a sale to a better qualified buyer during the time he is obligated to you.
That money goes into our Escrow Account. I (not the seller) have control of it but it’s not my money. Neither of you will get it unless the sale goes through or is dissolved according to the terms of our Contract. If the two of you should get to squabbling, I don’t write any checks until there is a release from the other party. That’s an incentive to settle differences if they arise.
Then we involve Attorneys. While I recommend that each party have their own, sometimes they are shared to save a little money and time, and once in a while one party goes unrepresented. We do need at least one attorney to complete the closing; I am not qualified to do that, either by training or legally. The attorney will search the records to be sure you are getting a clean and good title. He will file the deed and prepare all the closing papers that you need and in general lead you through the process. His job is to make sure you get the property that you want and at the same time ensure that it will be legally safe and secure from anyone else’s potential claims.
First, a property remains for sale until someone has formally agreed to buy it. Just because you say you want it is not a reason to take it off the market and risk losing a sale to someone else. To do that, we need your name on the dotted line and something green in my hand. No one does sales without a Purchase Contract. Since the buyer normally signs first (it represents his offer), once the seller accepts in writing, then it becomes binding upon both parties. Until both parties have signed, it’s all just words and good intentions. In it, we need to write everything that is important. For instance, if you need to borrow money to complete the purchase, then we need to have a contingency for this, so you can get your deposit money back if you can’t borrow enough to buy it. If you need to sell something before you can buy, we need to have a contingency for this in there as well. If you are afraid to buy without having an independent party do an inspection, we need to provide for this too.
All these kind of things protect the deposit you give and insure that it can be returned to do if you do not buy. But, be aware that the more of these protections that we put in for you, the weaker and less attractive your offer becomes. It’s not only about price; there are other things the seller must consider. The ideal contract, in the seller’s mind, is one for cash (no borrowing, nothing to sell first… ie, nothing to go wrong). But we don’t live in an ideal world and part of my job is to look for places where each party can reasonably compromise.
Bargaining: Like buying a car, most sales involve some bargaining between the buyer and seller. But not all do (remember Saturn cars?). There are some times when the seller’s price is - really, honestly - firm. And there are a few times when a property actually brings more than the asking price. Don’t let these things put you off. What you need to keep in mind is simple: “At what price is it worth it for me to buy?” That’s your top line. Don’t be afraid to reach it and don’t be afraid to make offers. Many more sales would be made if buyers did this. It is in the buyer’s best interest to buy as low as he can and in the seller’s to sell as dear as he can. If there is going to be a sale, we will reach a compromise in-between. Remember: it's capitalism.
Brokers: I represent the seller in nearly every transaction. He pays me, not the buyer. But I have legal and very real fiduciary duties to all parties. Yes, my final loyalties must reside with the seller, but I am not going to risk losing the sale (or my license) by knowingly misrepresenting something. And often, if I don’t help the buyer, the deal doesn’t get done. I’d like to think I have earned the trust of all parties, but I will never stand in the way of someone who wants to pay another party to get independent verification.
Deposit: I do not want to ever take more than 10% of the selling price as a deposit. Anything more I consider excessive. But I prefer to be as close to that as I can get. Everyone wants to know, “How low can it be?” That depends upon how comfortable the seller feels with you and also to how much he feels it would “‘hurt” you to lose it. No one wants to hurt you, but on the other hand, if you decide you really want a white home and not a gray one, we want enough down so that you won’t just back out of the deal. The money you put down to hold it should be enough to hold your attention and keep you focused upon completing the sale. It is money you risk. The seller has risk too - losing a sale to a better qualified buyer during the time he is obligated to you.
That money goes into our Escrow Account. I (not the seller) have control of it but it’s not my money. Neither of you will get it unless the sale goes through or is dissolved according to the terms of our Contract. If the two of you should get to squabbling, I don’t write any checks until there is a release from the other party. That’s an incentive to settle differences if they arise.
Then we involve Attorneys. While I recommend that each party have their own, sometimes they are shared to save a little money and time, and once in a while one party goes unrepresented. We do need at least one attorney to complete the closing; I am not qualified to do that, either by training or legally. The attorney will search the records to be sure you are getting a clean and good title. He will file the deed and prepare all the closing papers that you need and in general lead you through the process. His job is to make sure you get the property that you want and at the same time ensure that it will be legally safe and secure from anyone else’s potential claims.