From a homebuyer’s standpoint, is it really necessary to hire a real estate agent? Mortgage advice can be had from many viewpoints. After all, most realtors have online listings, or you can take a ride through that desirable sub-division to look for signs and call each of the listing agents for the properties you are considering. Be prepared, however, to start fielding or screening unsolicited calls and e-mails for other homes the listing agent may have available.
Exactly what kind of mortgage advice or assistance can a buyer’s agent provide for you? A buyer’s agent works for the homebuyer, not the seller. Their job is to provide experienced advice and to put your interests above that of the seller.
A buyer’s agent can judge reasonable offers based on the following information:
- Comparable sales in the area based on Multiple Listing Service (MLS)
- Evaluating the selling agents historical list-price vs. sales-price ratios
- Comparable sales from the tax rolls
- Average price per square foot of homes in the area
- Average price per upgrade (e.g., swimming pool, fencing, garage, appliances)
Real estate agents can also provide historical documents on the home. This includes previous/existing mortgages, liens, tax data, and plat information, as well as how long the home you are considering has been on the market. The best mortgage advice is to get as much information about the property as possible, to avoid any surprises in the future.
A real estate agent should be able to suggest a pricing strategy. For example, you may be willing to offer a better price, provided the seller is willing to make some concessions (which may include considerations such as closing in 30 days, inclusion of appliances, or providing home warranty insurance). Perhaps you would get a better deal by assuming an existing mortgage, if the mortgage is assumable. The agent’s advice may be to provide collateral in the form of a chattel mortgage.
A real estate agent will be familiar with the terminology used in real estate contracts, and they can help identify errors and provide advice about correcting any loopholes or other problems. These issues can prove to be costly in the future if they are not addressed before mortgage closing time. Some mortgage loans are contingent on the condition of the property, since the property serves as the collateral for your loan. There is often a mountain of paperwork involved in any real estate transaction, and a buyer’s agent can provide mortgage and real estate advice. Having someone who is experienced and knowledgeable to wade through and decipher the “legalese” can be very reassuring.
A real estate agent can help determine hidden costs, such as Home Owner Association fees, utility costs, and any unpaid encumbrances (for example, if the seller still owes money for county road improvements that they are paying through property taxes each year). In some areas, a home within the city limits may pay more for utilities (water, sewer, refuse collection, and electric) than a similar home just outside the city limits. The experience and first-hand knowledge of good real estate agents enables them to offer you sound and sage advice.
An agent can provide you with demographic information, public and private schools, median income level, major area employers, homebuying advice, and recommend reputable mortgage brokers, mortgage lenders, and local banks offering mortgage loans. They should become familiar with your personal finances and status to provide guidance as to what types of loans are available for you.
One of the key benefits of hiring an experienced real estate agent is having someone to negotiate on your behalf, with your best interests in mind.