Real Estate Questions Answered Here
by Art Santellen, REALTOR®
Note: This is the beginning of a special series of 11 columns I'm writing to teach you everything you need to know about buying a home and getting yourself ready to buy a home.
You will remember that last week I mentioned that the poor think about real estate differently than the rich. I also mentioned that most poor people fail to have the "ganas" needed to buy a home. So here's a plan that's guaranteed to help everyone who wants to buy a home. It's a plan that will work even if you're reading this newspaper from your campsite under the Fountain Creek bridge. Warning: this plan will work but only if you do exactly what I tell you to do.
There are 12 steps to buying a home: finding a Realtor, pre qualification, pre-approval, drive-by shopping, stop-by stopping, writing the offer, the loan application, inspecting the home, appraising the home, home loan underwriter approval, the closing, moving in.
The most common mistake made by people who want to buy a home is scrambling these 12 steps. That is, they start looking for a home (which is step #4) before completing steps 1 through 3. Yes, I've even talked to several people who have completed step #12 before even thing about working on step #1. Impossible? No, these are people who have moved into a home where the owner is offering a lease-option-to-buy deal. Why, I've even talked to people who were in a lease-option deal with a person who was not the real owner of the property!
Step #1 - Finding a Realtor
There are lots of ways to find a Realtor to help you with the home buying process. Here are some of my ideas.
First, you need to know that there are lots of different types of people who will help you with the real estate process. You can always do it yourself, you can use the services of an attorney, you can work with a real estate licensee, or you can work with a Realtor.
Having bought and sold several houses on my own, before I became a Realtor, I cannot recommend this method. That's because in real estate (like most other things) you just don't know what you don't know. Looking back on the homes I purchased and sold, I now realize I lost tens of thousands of dollars. The term used for people who sell their own homes is, For Sale By Owner, or FSBO. A FSBO home seller is outgunned by the greenest of any real estate licensee. The term used for people who buy their own homes is, silly.
There are states which require the use of attorneys in every real estate transaction.... Colorado is not one of them. Still, the option remains for you to use an attorney to represent you in the sale or purchase of a home. Usually the shopping and marketing phase must be over. The attorney will review the legal documents you prepare (or that can prepare for a fee) and give you legal advice. Some attorneys will also attend the closing and give you legal advice pertaining to the documents you are signing.
In all states, people who "broker" or facilitate real estate transactions, must have a real estate license granted by that state. These real estate professionals are fully qualified to help anyone buy or sell real estate. About half of these licensees take one more step. They join a Realtor association.
Real estate licensees who take this extra step are known as Realtors. They take this extra step for a couple of reasons. The biggest reason is that Realtor associations keep a data base of all properties for sale usually called the Multiple Listing Service. This data base makes it easy for Realtors to help home sellers market their properties and for home buyers find just the right home. This data base is also helpful in determining the fair market value of the home you wish to sell or buy.
The next biggest reason is that Realtor associations provide continuing education opportunities. ~ Colorado, each licensee must complete 24 hours of continuing education every 3 years. Realtor associations provide the courses necessary for each Realtor to keep their license current.
Another reason for joining a Realtor association is the ability for licensees to subscribe to a strict code of professional ethics. It also includes the use of hearings and penalties for Realtors alleged to have transgressed that code of ethics. It means that Realtors have taken an oath to a level of professionalism and ethics beyond the minimums proscribed by state law.
OK. So just how do you find a good real estate professional?
First, you need to decide if you want the services of an attorney, a real estate licensee, or a Realtor
Second, you need to talk to your friends, relatives, co-workers and neighbors to determine if they can recommend someone. Real estate professionals who helped them and wore recommended by them will probably do the same good job for you.
Third, you need to interview at least 3 real estate professionals. Since buying a home is a team effort, you need to determine if that person will perform well as a member of YOUR home buying team.
Fourth, does your agent LISTEN to what you want? Are you working with a person who is trying to sell you on a home or who is giving you the information and advice you need to make an informed decision?
Fifth, how much do their services cost and who pays their commission?
Sixth, if things go bad, what are your options? Can you get out of ~e buyer agency contract? To whom can you complain if you're unhappy with your agent's performance?
Next week, step #2 in the home buying process, getting loan pre qualified.
NOTE: As you can see, I really do get questions from the public. To add your question to this list, please send them to me at the address listed below. Thanks.
The answers to these, and other fascinating real estate questions will be answered here, in Hispania News, next week.
When you're ready to buy or sell a home, see a REALTOR®
Art is a REALTOR® with Heritage Realtors in Colorado Springs.
If you have a real estate question you’d like answered, please send them to:
Art Santellen, care of Hispania News
PO Box 15116
Colorado Springs, CO 80935