Excerpt from Tennessean, The (Nashville, TN)
February 1, 2004

A homebuyer's best friend

Real estate agents take burden off first-time buyers

By ELIZABETH BETTS HICKMAN
Staff Writer

If you're thinking of buying or selling a home this year, chances are you're going to work with a real estate professional. And if you've never bought or sold property before, you'll probably be glad for the help.  For new buyers-to-be, here's a step-by-step guide to working with a licensed real estate agent, some things to expect and some ways to make the process move more quickly and easily.  Sellers, presumably, have been through at least one real estate transaction (their original purchase), but there are a few things to know about working with a real estate professional on the selling end of things, too.

Planning to buy

These days, more and more potential buyers are using real estate professionals to represent them on the buying end of purchasing real estate. It's not just about helping them find a house but also about organizing visits to prospective properties, drafting offers and eventually, closing the deal.

Having a "buyer's agent" or "buyer's representative" has become more widespread since about the mid-1990s, according to Mike Nichols, principal broker with Prudential Woodmont Realty. That's about the time when more real estate firms began to focus on buyers as well as people selling their homes. And nowadays, you will probably be asked to sign a buyer representation form or buyer's agency agreement if you're serious about working with an agent.

This form, which you should read carefully just like anything you'd sign, basically states the agent's responsibilities and essentially says that if you buy a house you agree to use that agent to represent you in the sale.  It may also include language that you (the buyer) will provide a commission if one is not offered by the seller, for example, if a house is unlisted or in some cases, for sale by owner. It formalizes what has been, for many years, a somewhat informal process, which meant it was open to misunderstandings and abuses, such as an unethical buyer spending days with a real estate professional only to use someone else to close a deal and therefore earn a commission. Likewise, the form clarifies what the buyer's agent will do for you as a potential buyer.

"It started when people would go to an open house, see an agent sitting there, and the consumer thought they were working for them if they bought the house," says Nichols. Agents who show a home or whose name appears with a listing are representing a seller, and are therefore looking after their interests, not those of a potential buyer. They can help you buy the house, but keep in mind they're not working for you.

Working with a real estate agent 101: The process

1. Know what you can spend and/or secure financing: Pre-qualified and pre-approved are loose terms you'll hear as you start the buying process, and you should start by knowing how much you can spend to buy a house. 
   
   "Pre-qualified means you have been given a range of prices, an upper limit, so you'll at least know what price range you should be investigating. "If you can get pre-approved, it means that the lender is telling you that you can get a loan for sure."
   
   ...This is actually better, since it helps you have a stronger offer when it does come to that stage.  "That means the offer you make doesn't have to be subject to financing."
    
2. Identify potential properties: These days, a lot of folks do their own research on the Internet, but you'll save a ton of time if you work with your agent as well as on your own.  After you know how much you can spend and have formalized your agreement with a buyer's agent, be clear with them about the areas of town you are or aren't interested in.
   
   Be really honest and make a list of features you'd love to have in a house, and also features that would be deal-killers for you, and give this to your agent. For instance, you might hate basements or have to have a garage. Determine if you want a completely new home or an existing house. Tell your agent if you're willing to do some fixing up or if you'd like a house that is freshly painted and "move-in ready."
   
   And it's a myth that you don't need to use a real estate agent on a house that's new.
   
   Pat Skow, an affiliate broker with Prudential Woodmont, recently worked with Clark and Jan McCabe to purchase a new house in the Riverbridge subdivision in Bellevue. She helped the couple through the entire process, from selecting a good lot on the basis of good views and drainage to reviewing different floor plans.
   
   "We knew we wanted her to be part of it," says Jan McCabe, who adds that the family chose the new house after looking at many options and thinking through their lifestyle. "She would ask us a lot of questions, too, and that was good."
   
   During a recent walk-through, Skow noticed a few minor points that the builder will take care of before the couple moves in, and she also helped develop a punch list of small items that have to be finished.
   
   "That's where a Realtor really comes in handy, making sure everything functions, any blemishes are fixed," McCabe said.  And that type of looking out for the buyer, in addition to helping plan the building process if someone is buying and building in a new development, is a benefit to using a buyer's representative.
    
3. Make an offer: The agent representing you (as a buyer) will write an offer when you decide that you've found a house that's in your price range and that you'd love to have. It's important that they write various contingencies, or situations where you can legally cancel the agreement if you have to.
   
   For instance, one common contingency is that the buyer approve the inspection report. That means that if you don't approve the home inspection and realize the house is in far worse shape and needs much more work than you first realized, you can legally dissolve the agreement. Make sure you read and understand the full terms of the offer that your agent is making.
   
   Whether you are purchasing an existing home or a new home that was finished yesterday, real estate agents agree that you need a solid inspection by a reputable inspector, not just your brother who's handy with tools, for instance.
    
4. Closing: Money will change hands, and you'll be the new owner of a house. And you can thank your real estate agent for being your advocate every step of the way and explaining the sometimes-complicated path to the American Dream.

Elizabeth Betts Hickman writes about residential architecture and design for The Tennessean. Reach her at 259-8045 or ebetts@Tennessean.com.

PHOTOS BY BILL STEBER / STAFF:

Pat Skow, an affiliate broker with Prudential Woodmont Realty, talks with new homeowners Clark and Jan McCabe as they walk through the McCabes' new home in the Riverbridge subdivision in Bellevue. Skow is representing the McCabes in their real estate transaction. Below, they look through another room.

Copyright (c) The Tennessean. All rights reserved. Reproduced with the permission of Gannett Co., Inc. by NewsBank, inc.
Record Number: nsh2004022515524451

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