How To Buy A Home & How To Interview REALTORS: A Continuation of the Series Covering the Recent NAR Lawsuit Settlements

If you’ve been following along with my weekly articles which have explained the ins-and-outs of the lawsuit settlements against the National Association of Realtors (NAR) then by now you understand the following: details about each of those lawsuits, the “wild west” history of real estate sales in the United States, the two major changes Realtors have to implement this August and how those changes will affect home buyers and sellers, and understanding the cooperative compensation model rule that the lawsuits were all about. If you’ve missed one of the articles I encourage you to go back and give them a read.

 At this point the question becomes, “So what?” Well, I’m so glad you asked. I’ve been addressing these questions on social media (@GuardianRealtyID on Facebook and Instagram) if you’d like to see more, but I’ll give a succinct breakdown here.

The most streamlined process for buying a home should look like this now that these lawsuit settlements and changes have been announced:

1)   Explore your buying power and preparedness to buy a home by contacting lending institutions to get prequalified for a loan. Because loan officers at various companies will be requesting the same paperwork from you, I always recommend people submit applications with at least four types of companies: a local credit union, a bank, a mortgage company and an online lender. Submit these four applications within a short timeframe so your credit isn’t hit repeatedly. It’s a good idea to research loan types so you understand the benefits and drawbacks of certain types of loans, the amount of money you’ll need to afford each type of loan you qualify for, and limitations (if any) for the type of home each loan will allow you to purchase. Once you’ve chosen the type of loan you’re interested in getting, compare each of the lenders who said they would give you a loan, to see if you can negotiate a better deal with them – apples to apples, for your preferred loan type. Then, pick one to work with. Also, find out what loan terms you may have to request from a seller in order to purchase a home (a seller concession for closing costs may be necessary depending on how much cash you have on hand), and whether or not you can afford to pay a buyer’s agent out-of-pocket or whether you’ll have to rely on the seller to pay your agent. This commission offering may be available already or you may have to write this fee in to your contract when you’re submitting your offer to buy a home.

2)   Research & Interview REALTORS. Research REALTORS in your area who are masters of this service area. Do they know the area you plan to buy a home in? Are they local and available to look for homes on a schedule that works well for you? Do they offer virtual showings? How much are they charging for their services? Do they specialize in the type of home you plan to buy? Are they timely and reliable? Are they responsive? Do they understand their legal forms and contracts well? Do they currently have any legal claims against them or have they in the past? Do they have many good reviews online? If so, what have other people’s experiences been like working with them? Is this agent just paying for advertising in the area you plan to buy, or are they actually aware of that local market and easily able to assist you and provide local experience and support to you? Is this agent ethical, honest and do they have integrity? For a comprehensive explanation of “How to Interview A Realtor” feel free to contact Alana Burns for a more thorough copy of this helpful information.

3)   Hire One Realtor & Sign an Exclusive Agreement to Work With Them. In this paperwork, make sure you address your ability to pay them for their services in the event a seller is unwilling to pay them, and how you plan to incorporate their payment into any forthcoming contracts you enter into to buy a home. This may affect the homes you look at though (depending on how much a seller is willing to pay a buyer’s agent), so make sure you verify your financial ability to pay for agency representation with your lender before you commit to anything in writing in the buyers representation agreement. Provide the REALTOR with your prequalification or preapproval letter.

4)   Search For A Home

5)   Submit An Offer / Negotiate A Deal With The Seller

6)   Complete Loan Application, Inspection & Appraisal Contingencies

7)   Signing / Close of Escrow

In the past many people would begin their home search online, find any REALTOR who would let them into a home they were interested in seeing, quickly get prequalified with a lender, then submit an offer to purchase the home. Following this new, more streamlined approach to buying, will make the process smoother for everyone involved and empower buyers to be selective about the team they assemble to help them through this important process.