Read Nolo's Essential Guide to Buying Your First Home Online
Authors: Ilona Bray,Alayna Schroeder,Marcia Stewart
Tags: #Law, #Business & Economics, #House buying, #Property, #Real Estate
Nolo's Essential Guide to Buying Your First Home (19 page)
BOOK: Nolo's Essential Guide to Buying Your First Home
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Fiona was more convinced than her girlfriend that they could handle the financial commitment of a house. Fiona says, “Even after we’d done our research, had a mortgage broker evaluate our finances, and asked our parents to pitch in on a down payment, she resisted going to open houses. According to her stressed-out logic, we weren’t
really
ready, so it was a waste of everyone’s time. Finally I got her out looking, and it was great—seeing open houses suddenly made the process fun. Of course, it was also a reality check, since we realized we could afford less than we’d thought. But we ended up finding a wonderful house, with great neighbors.”
Nothing to Look at Yet? Finding Your Dream DevelopmentFiona was more convinced than her girlfriend that they could handle the financial commitment of a house. Fiona says, “Even after we’d done our research, had a mortgage broker evaluate our finances, and asked our parents to pitch in on a down payment, she resisted going to open houses. According to her stressed-out logic, we weren’t
really
ready, so it was a waste of everyone’s time. Finally I got her out looking, and it was great—seeing open houses suddenly made the process fun. Of course, it was also a reality check, since we realized we could afford less than we’d thought. But we ended up finding a wonderful house, with great neighbors.”
If you’re thinking of buying a newly built home, your community-to-be may look like a large sandbox. But that doesn’t mean you can’t do advance research. Your most important task will be to choose the best-quality developer before you go any further. Why? Well, as with any other product, different house manufacturers make different quality products. You don’t even want to go near a house built by a developer at the low end of the quality spectrum, no matter how affordable it seems.
Figure out which developers are working in your area, which are worth buying from, and whether they offer the types of houses you want. To find developers, use the websites listed under “Got Houses? Finding Out What’s Locally Available,” above. Then use the following tips to research them:
•
Talk to people.
This includes others who have purchased from a particular developer, local contractors, real estate professionals, and city planning staff. Don’t stop until you’ve gathered information about each local builder’s reputation from a variety of sources.
•
Ask tough questions of the developer and others.
You’ll want to find out how long the developer has been in business; how well funded the business is; whether it’s ever been sued and for what; and the credentials of the developer, its employees, and contractors. Don’t just take the developer’s word for it—double check with your state’s licensing board and the local building office.
•
Search online.
The National Association of Home Builders (
www.nahb.org
) is a good starting point. To hear feedback from other consumers, try searching Internet blogs, local newspaper websites, and homeowner-run websites such as
www.hobb.org
(Homeowners for Better Building) and Rate Your Builder (
www.rateryourbuilder.info
).
•
Call your local Better Business Bureau.
It’s often the first place that people turn to with complaints about local developers.
What’s Next?You’ve hopefully gotten a sense of which neighborhoods not only have a character you like, but offer the safety, schools, or other amenities you need. You’ve also gotten a sense of the local market and whether it offers houses you might want at a price you can afford. You’re almost ready to do some serious house shopping. But first, let’s figure out who’s going to help you do it.
CHAPTER 5
Select Your Players: Your Real Estate Team
Meet Your AdviserNancy Atwood, with ZipRealty, based in Framingham, Massachusetts. Nancy is a Designated Broker, responsible for the legal compliance and mentoring of real estate agents who directly serve buyers and sellers. ZipRealty is a full-service brokerage offering rebates on agent commissions (see
www.ziprealty.com
).
What she doesNancy started with ZipRealty as an agent, where she helped countless homebuyers and sellers. She moved up to her current position as a broker and is now responsible for 175 full-service buyer and seller agents statewide. She was named a ZipRealty outstanding employee of the year in 2006. Nancyʹs pre-real estate experience includes 25 years in the hi-tech industry doing customer service, sales, and marketing.First houseʺIt was a three-bedroom ranch-style home in Harvard, Massachusetts (not the college—Harvard is a rural town, 32 miles west of Boston). Finding it took a little work—I wasnʹt in real estate then, and our agent kept showing us places that cost $30,000 more than our absolute limit or needed more work than we were then capable of handling. But eventually we found this place and were so excited to be moving out of the city and into an area with good schools and more open space. Still, the house itself was so small that our kids would sit on the washing machine to talk to me while I made dinner.ʺLikes best about her workʺI really like training and helping agents, especially those new to the business—Iʹm so excited when one of my agents makes his or her first deal. I tell them that itʹs not a sales job, but a support job, in which customers need to trust you with the largest purchase in their lives. Iʹm also particularly interested in ethical issues around real estate. Because itʹs a commission-based job, agents sometimes forget that our fiduciary responsibility is to the clients, not the commission. I tell them you canʹt control other peopleʹs ethics, but you can control your own. My agents like to hear that, they get it, and Iʹm proud of the fact that weʹve never had one ethics complaint filed against us here in Massachusetts.ʺFantasy houseʺThe house I live in now. Around 1984, my husband and I bought four acres of land, designed a house, and had it built in Harvard, one quarter mile from the center of town. Itʹs contemporary in style, very open and sunny, with passive solar energy. I know some couples fight over home construction, but for my husband and I it turned out to be an incredible bonding experience. We spent every weekend at Loweʹs or Home Depot, choosing fixtures, lighting, and hardware. He did such tasks as the wiring, while I focused on designing the kitchen. Itʹs the biggest room in the house, with granite countertops so I can just roll out my homemade pizza dough, and windows that overlook our neighborsʹ horse farm.ʺTop tip for first-time homebuyersʺChoose an agent you can trust. Interview your agent, and ask lots of questions—not only about the agentʹs experience, but about their level of caring and consistency of customer referrals. For example, when interviewing, I ask agents what theyʹre most proud of. If they say something like, ʹIʹm still invited to so-and-soʹs home every December during the holidays,ʹ thatʹs wonderful. There are really a lot of agents like that out there, and not just at ZipRealty. Donʹt let the negative things you may have heard about some agents make you settle for one who isnʹt both caring and professional.ʺ
B
uying a first home is a complex process, and there’s no reason to do it alone. You can bring together a team of experts who’ve seen it all before (many times!). They’ll not only help you understand what you need to do but also perform key tasks themselves, like negotiating with the seller, finding the best deal on a mortgage and helping fill out the paperwork, and making sure a property doesn’t have hidden defects. Your real estate team will usually include:
uying a first home is a complex process, and there’s no reason to do it alone. You can bring together a team of experts who’ve seen it all before (many times!). They’ll not only help you understand what you need to do but also perform key tasks themselves, like negotiating with the seller, finding the best deal on a mortgage and helping fill out the paperwork, and making sure a property doesn’t have hidden defects. Your real estate team will usually include:
• a real estate agent, who will help you find, negotiate for, and complete the purchase of your home
• a mortgage broker or banker, who will help locate the best financing
• a real estate attorney (in several but not all states), who will make sure the deal is properly and fairly drafted and that the seller has good title
• a home inspector, who will examine the property’s condition, and
• a closing or escrow agent, who will help ensure that the transfer happens smoothly and on time.
Unlike a sports team, these players may not work together directly. But even if they never meet, they share a common goal: to help you purchase your house on the best possible terms. Still, you’re the boss (and the checkbook), so you’ll want to be confident about your players and their abilities. In this chapter, we’ll explain each person’s role and how to select top players.
Your Team Captain: The Real Estate AgentYour real estate agent has the broadest role of any team member: You’ll work together from start to finish.
Who Real Estate Agents AreYou’ve probably heard different names—broker, agent, or Realtor®—used to describe real estate agents. These convey different levels of experience, training, and knowledge.
•
Agents.
A “real estate agent” is the most generic of the choices. Agents must be licensed in the state where they work. This usually means completing 30 to 90 hours of classroom instruction, passing an exam, and renewing their licenses every one or two years.
•
Brokers.
A real estate broker is one step up from an agent. Brokers have more education and experience. In many real estate agencies (also referred to as “brokerages”), the buyer works with an agent on a daily basis, but the agent is supervised by a broker. If the buyer has problems the agent can’t resolve, the broker will handle them. In smaller, independent agencies, the buyer may work directly with a broker. When we use the term “real estate agent,” we’re referring to both agents and brokers.
•
Realtors®.
Over half of all licensed agents are members of the National Association of Realtors® (NAR), a trade association. NAR members can use the designation “Realtor®.” They must comply with the NAR’s standards of practice and Code of Ethics. Membership also suggests that the agent is up-to-date on real estate issues (because NAR provides training, member newsletters, and other resources) and has a network of contacts through the organization.
Real Estate Agents on the Silver Screen• Annette Bening plays Carolyn Burnham in
American Beauty.• Jack Lemmon, Kevin Spacey, Alan Arkin, and Ed Harris play competing agents in
Glengarry Glen Ross.• Julianne Moore plays Marlene Craven in
The Hand That Rocks the Cradle.• Craig T. Nelson plays Steven Freeling in
Poltergeist.
Realtors® may also have advanced designations/certifications through the NAR and its affiliate organizations. You’re particularly interested in the Accredited Buyer Representative (ABR) or Accredited Buyer Representative Manager (ABRM) designations, given to Realtors® or brokers specializing in representing buyers.
BOOK: Nolo's Essential Guide to Buying Your First Home
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