what you need to know about hiring a rea estate agent

Where homeownership education takes flight!

A Complete Guide to Hiring an Agent - Finding the Best Deals

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We will begin in a momentClass Scheduled to begin at 6:00pm

Homeownership Educator

Scott SchangSponsored by

Broadview Mortgage Corporation

1-866-667-6724


Hiring an Agent – Finding Deals

The Purpose and Goals of this Class

• To Create and Empower Home Owners

• Introduce you to the buying process and demystify steps to buying a home

• Educate you about importance of making an educated and informed choice about working with a Real Estate Agent

• Empower you with the ability to get the most accurate information available while searching for homes that are for sale



Ask Questions throughout presentation

• You may type questions in at any time during the presentation – Questions box on your screen

• Homeownership experts are standing by to answer your questions during the presentation

• This is an interactive learning environment. You will get the most value by having your specific questions answered

• The only dumb question is the one you don’t ask

Write this number down in case of technical difficulty

1-866-667-6724



The Road to Home Ownership is often paved with “fear of the unknown”

• The unlearned can be learned

• Misinformation can avoided if you ask enough of the right questions

• A Simplified Overview of the Process– Get approved for financing– Hire a Real Estate Agent– Find your dream home– Make an offer on your dream home– Offer accepted, what’s next? – Time line for the buying process



What is a REALTOR®?

• A real estate agent is a REALTOR® when he or she is a member of the NATIONAL ASSOCIATION OF REALTORS®

• REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.

The Role of a Real Estate Agent

• Negotiates and facilitates the purchase of Real Estate on behalf of a “principle” – Buyer/Seller

• Agency relationship / Fiduciary duties– Seller’s Agent – Fiduciary duty to seller– Buyer’s Agent – Fiduciary duty to buyer



What is a Fiduciary?

• Wikipedia - A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence



What is “Fiduciary Duty”?

• Utmost Care- The agent is bound to the higher standard of a professional in the field which extends the standard of duty to investigate within the means of the profession, to ensure the maximum protection and information be provided the principal.

• Integrity- Defined as the soundness of moral principle and character. It means the agent must act with fidelity and honesty

• "Honesty and Duty of Full Disclosure" of all material facts, either known, within the knowledge of or reasonably discoverable by the agent which could influence in any way the principal's decisions, actions or willingness to enter into a transaction




• Loyalty- An obligation to refrain from acquiring any interest adverse to that of a principal without full and complete disclosure of all material facts and obtaining the principal's informed consent.

• This precludes the agent from personally benefitting from secret profits, competing with the principal or obtaining an advantage from the agency for personal benefit of any kind.




• Duty of Good Faith - includes total truthfulness, absolute integrity and total fidelity to the principal's interest.

• The duty of good faith prohibits any advantage over the principal obtained by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.



Understanding Agency RelationshipsFrom Realtor.com Website – Link provided

• It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transactions.

• Ask your salesperson to explain what type of agency relationship you have with him or her and with the brokerage company.




• Seller's representative (also known as a listing agent or seller's agent). A seller's agent is hired by and represents the seller.

• All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.




• Buyer's representative(also known as a buyer’s agent).A real estate licensee who is hired by prospective buyers to represent them in a real estate transaction.

• The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer.

• The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or by a commission split with the listing broker.




• Disclosed dual agent. Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction.

• Dual agency relationships do not carry with them all of the traditional fiduciary duties to the clients. Instead, dual agents owe limited fiduciary duties.



Tips to Find and Hire an Agent• Friends and Family rule

– Firing a friend or family is not an option• Business referrals are a good place to start

– Lender – experience working through sale– Escrow companies– Insurance Agents

• Looking for and Agent on the Internet– Accessibility and communication

• Text, chat, email, cell phone, IM– Websites vs. Blogs

• The social media phenomenon• Who are they as opposed to What they do



Tips to Find and Hire an Agent

• Ask for references of recent clients– Call one to threes of their most recent clients

• Were they easy to reach / communicate• Did they give good advice during process• Were there any challenges during sale• Would you use them again

• Real Estate Agents work for YOU– Don’t be afraid to expect a high level of service– You are not obligated to stay with one buyer’s

agent – avoid Buyer’s Agent Contracts– Stick with an Agent that does a great job for you

• Do not allow anyone else to write up offer



Educated Decision to Create Agency

– The decision to work with a Real Estate Agent is a decision to hire a professional to work for you

– This decision should be as the result of your research, a lengthy interview, talk to references and make an educated decision

– A quality Real Estate Agent is looking out for your family’s best interest – they will earn your business

– Avoid pressure tactics and implied urgency



“Red Flags” of High Pressure Agency

• A FOR SALE sign is an advertisement paid for and placed by the Seller’s Agent

• Placing an offer with this Agent creates Dual Agency

• Agents at Open Houses are most often Seller’s Agents

• Avoid high pressure tactics by ALWAYS taking your agent with you when you look at homes– Get the address and make arrangements to view

home later



Finding Your Dream Home

The Search

• Searching the Internet for Home Listings

– Most “internet sites” are advertisements for Real Estate Agents

– Very little information is provided and you must “register” to get details

• You are now a “lead” generated from someone’s marketing dollar

– As long as you understand this – you have the ability to avoid any action that may inadvertently bring an inconvenience to you




The Search

• Listing from the MLS – Real Time– Realtor.com– Listingbook.com– RealSeekr.com– Agent supplied site

• Agent updated sites – Updated manually– Zillow.com– Trulia.com– Most others…..




The Search

• Private remarks can contain important information that would be important to you in the decision making process– Only your Agent can see private remarks

• Tips for finding the best deals– Know what you’re looking for – Wish list– Communicate with your Agent often– Actively search the MLS on your own

• This will help Agent understand your “likes”– Ask your Agent to actively search homes for you



Making an Offer on Your Dream Home

• Residential Purchase Agreement– California Association of Realtors – 8 pgs– Addendum to Purchase Agreement common with

short sales and foreclosures

• Good Faith Deposit – Earnest Money Deposit– Held by Agent until 3 days after acceptance – $1,000 is usually acceptable– Some sellers may require 1% of sales price– Higher deposit will strengthen offer



Making an Offer on Your Dream Home

• Seller Concessions– Credit from seller to be used to cover closing

costs only – not down payment– Based on sales price not loan amounts– Net (actual offer) is less concessions

• Highest and Best offer is Net offer

• Common to ask Seller to pay Home Warranty

• Common for Seller to choose closing services

• Common for Buyer and Seller to split closing services – Some say 50/50 – Each pay own



Offer is Accepted, What’s Next?

• Counter Offer– Seller accepts offer with conditions

• Fully executed purchase contract– Both seller and buyer agree on terms

• Escrow Company– Third party that mediates entire transaction and

the transferring of all monies involved• Title Company

– Insures title against pre-existing liens• Appraisal and Home Inspection

– Appraisal required by lender– Home Inspection is optional (Get One!)



Time Line for the Buying Process

• Escrow Period– Establishes closing date

• 30 days is normal

• Contingency Period– 17 days for financing / 10 day for inspections– Can cancel if financing or inspections fail– Have good faith deposit returned if cancelled

• Close of Escrow – Transaction Complete– Sign loan documents– Fund loan – 24-48 hours– Record loan – Next day usually


Homebuyer Tax Credit News

• Federal Tax Credit - $8,000– Not paid back if live in home for 3 years– Must be first time homebuyer– Income limits– Expires on November 30th, 2009

• State of California Tax Credit - $10,000– Must buy “new construction” home– Purchase after 3/1/09 and before 3/1/10– Do not have to be first time homebuyer– No income limits

• Complete qualifying details on YouTube video – You will get link shortly


What’s the Next Step?

• Very First Step – Get pre-approved for financing

• Get pre-approved for the maximum you can qualify for – Be prepared for competition

• Start interviewing Buyer’s Agents – We can refer someone to you that shares our values

• Work with a Real Estate Agent that is experienced with this market and your loan



Wrap up and Take Aways

– We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs

– We are more than happy to be your “second opinion” if you are already working with someone

– We are more than happy to refer you to a qualified Real Estate Agent

– We are committed to educating and empowering homeowners - Join us for future classes



Wrap up and Take Aways

• You will receive a “Thank you” email with links to the information we’ve talked about here today including

– Copy of power point presentation– Secure on-line loan application– Links to all the topics we discussed in class– Dream Home Finder request– Link to more information about Tax Credit– A schedule of all upcoming classes


Upcoming Homebuyer Classes

• A First Time Home buyer’s Complete Guide to Credit, Qualifying and Completing the Loan Application

• A Complete Guide to Buying Foreclosures and Short Sales

• A Complete Guide to Closing Costs and the Good Faith Estimate

• A Complete Guide to the CalPERS Home Loan Program

• Five 100% Financing Loans You Should Know About

• A Complete Guide to FHA Purchase Loans

• Working to record and archive all classes for viewing anytime – I will keep you updated

Check back often for upcoming classes


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For more information

1-866-667-6724Sponsored by

Broadview Mortgage CorporationHomeownership Educator

Scott Schang