What Your Buyer’s Real Estate Agent Won’t Tell You – Part 1

Buying a house – The realistic approach

This article is not about the secrets of buying a rental property for no money down and half the price of the market value of the house. I am not Tom Vu or Don Lapre and I am not in jail.

In Canada, the no money down home did use to exist, but not anymore. Some banks and/or lenders were willing to lend you the 5% down payment so that you don’t have to pay a dime out of your own pockets to purchase a home. However, given the current financial situation with tighter lending restrictions, there will be no bank or lenders who can do that in Canada.

The buying home for half price did use to exist as well. At one point, foreclosures in Canada would allow foreclosed homes to be sold at rock bottom prices. The new law, which has been in placed for many years now require the homes be sold at the highest possible price for foreclosed homes or else the lenders could be sued. Hence, sometimes foreclosed homes sell higher because Canadians have the misconception that foreclosed homes are a really good deal causing it to have a reverse affect. There have been many people buying foreclosed homes believing they got a good deal and not doing a thorough check as to the actual value of the home.

Now, clearing out the quick money maker myths of buying homes, there are still many things you need to be aware of before starting.

If there exist ever an industry with more sneaky sales tactics and money motivated people, it has got to the Real Estate industry. As a buyer, you could be dishing out $350 000 and everyone wants a piece. The Real Estate Agents want a piece. The lenders want a piece. The lawyers want a piece and the sellers want piece. No wonder there are so many scams in this industry.

The first thing to be aware of is the Real Estate Agent. A Real Estate Agent is suppose to act on your behalf to buy or sell the home. Both the buyer of the home and seller of the home will have their own Real Estate Agent called a Buyer’s Real Estate Agent and a Seller’s Real Estate Agent.

In Canada, each Real Estate Agent gets an average of 2.5% and sometimes 2% for the commission of selling the home. Some Real Estate Agents provide cash back rewards. Canadian Real Estate Agents gets higher commission than anywhere else. In United States, their Real Estate Agents only get 1% of the commission and their homes are actually much cheaper. Even though Real Estate Agents are the least educated of the parties involved in the buying home transaction, they seem to be getting the biggest piece of the pie.

Do not listen to their gimmicks on Real Estate Agents are ethical. (http://www.howrealtorshelp.ca) Where do they get the idea any Real Estate Agent off the street is ethical. Their claim is based on these tests that they pass to become a Real Estate Agent. Agents passing a test does not meant hey are ethical. It only means they can remember enough to pass the test.

One would believe it should be the Real Estate Agent’s job to help the buyer ensure the home is of value. Rightly so, many buyers depend on the Real Estate Agent to protect them and provide them advice and in my opinion, the ethical Real Estate Agent should do that. However, the true reality is that Real Estate Agents do not make money unless if the home is purchased. The reality is that the Real Estate Agent’s salary is not truly dependent on giving you advice. The Real Estate Agent’s job is to get the buyer to buy a home through them so they can get paid!

As a result of this, what ends up happening, are two types of Real Estate Agents with variations in between. The first type is the honest agent with the belief “If I work hard and treat my buyer right, the buyer will come back to buy more homes from me. The second type is the “I need to get the buyer to buy a house quickly so that I can move on to the next buyer (sucker) so that I can maximize my time for profit.” The bottom line is that you are looking for the first type and you want to avoid the second type.

We’ll call the first type, the Bad Real Estate Agent. We’ll call the second type, the Good Real Estate Agent.

So what kind of characteristics does the Good Real Estate Agent have that the Good Real Estate Agent does not have?

1. The first characteristic is Patience. Bad Real Estate Agents will attempt to sell you a home quickly to get the money quickly. Do not buy a house without spending a lot of time looking at several different homes. Be careful of tactics such as Real Estate Agents claiming it is the perfect and acting like a salesman rather than providing you information.

2. The second characteristic is information. A good Real Estate Agent needs to provide you all the information to let you make the informed decision and we are not talking about their opinion. Real Estate’s opinion does not matter. Real Estate Agents have data such as the history of the house being sold at, homes being sold near the area and type. A Real Estate Agent should be able to provide you with a compilation of official documents that tells you these kinds of data to let YOU make an informed decision.

3. The third characteristic is care. You will know this during the actual signing of the contract to purchase the home at a certain price. Once you become interested in a property and want to buy the property at a certain price set by YOU, you have to write up a contract. The contract consist at least three conditions that will null the sale of the home and a security deposit.

The common three conditions are, buyer can get financing, the home passes inspection and the appraisal value of the home is above the price to be purchased. Generally, you will want the lenders to appraise the home so that you know the fair value of the home and the lenders would only lend of you are buying the home at fair market value.

The security deposit is an amount you will provide to lock the home from being sold to other buyers while you perform to checks to see whether these conditions have been met. If these conditions are not met, then you SHOULD get your security deposit back.

The Bad Real Estate Agents will want to you provide very few conditions and a big security deposit. Doing so ensure the home is more likely to be sold.

Do NOT go through the internet and pick the first agent you see or the agent that has the most advertisements. They are just spending marketing money which they intend to recover from you. I especially find the ones that are top ranked search engines to be the most conniving, especially the Mississauga location!

More to Come!

Is it Worth Paying Real Estate Agent Commissions Or Should You Sell Your Home Yourself?

A lot of home sellers resent paying real estate agent commissions and question whether or not they might be better off selling their own home ‘for sale by owner’ FSBO.

Well, there is no clear-cut answer. It really depends on the seller and how successful he or she is likely to be at selling real estate. It is true that agent commissions can run into thousands, or even tens of thousands, of dollars depending on the value of the property. And, sometimes the sale comes together very quickly with minimum effort on the part of the real estate agent. However, that is not always the case with many property sales become a long drawn-out process.

FSBO home sellers experience mixed results because they either lack the time, people skills, marketing skills, negotiating skills and even the inclination to sell their own home. For others, selling their home comes as an exciting challenge they cannot resist.

Obviously, the big advantage of selling your own property; is that you avoid the agent commission. Make no mistake – if you dream of making a larger down payment on your next home, or want to retire, or simply want to hang onto the equity you have worked so hard for… then you could save thousands by paying yourself NOT an agent.

On the other hand, hiring a real estate agent and paying thousands in commissions, could be money well spent. A case in point would be when a real estate agent gets you a better sale price for your home.

There are a lot of variables to consider: like your own ability and enthusiasm verses the experience of a professional agent. There are pros and cons for each method of selling. A lot will depend on you or the skill of the agent representing you.

Most agents would argue; if you needed a heart operation would you perform it yourself, or have an experienced heart surgeon do it for you? Maybe they are right?

Maybe you do need a professional agent who is experienced in the business for selling homes? But, the counter argument is that, an increasing number of people are successfully selling their own homes (FSBO), WITHOUT the services of an experienced agent. What’s more, they are saving themselves thousands of dollars in commissions.

Real estate agents will also argue; selling a home in today’s market is not like it was a decade ago. The market is more competitive, the buyers are much more astute, and the laws are more complex. Add to this the property sales statistics proving that the average agent has a better chance of selling a home in a shorter time span (and frequently for more money) than the average FSBO seller. But, what is average?

Not every seller is the same and nor is every real estate agent. There is no shortage of incompetent agents and there plenty of “super capable” ones too. The trick is differentiating the good from the bad!

With that said, perhaps the biggest obstacle a seller faces is the “emotional attachment” the vendor has to the property being sold. The home might be where the kids grew up, or where the family pet is buried. The home might have been designed, decorated, or landscaped to the vendor’s personal tastes. That is why many sellers are blind to the flaws that an agent can easily spot. And, that is also why an agent may have a different view of what the home is really worth in today’s competitive market.

An experienced real estate agent can provide a seller with a Comparative Market Analysis (CMA), so the seller knows what the home is actually worth, instead of what the vendor feels it is worth. An agent can provide an independent and objective view which can be the difference in making a sale.

So, think carefully before deciding what home selling method suits you best. You may be able to do a far better job yourself and save yourself thousands of dollars in real estate agent commissions.

If you do not genuinely believe you can do a better job, then you might be best to consider listing with a local agent. Choose carefully, interview more than one real estate agent and ask for testimonials from satisfied customers.

And above all, make sure he or she earns the agent commissions you are paying.

The Ultimate Guide – How to Become a Real Estate Agent

Real estate agents have a sufficiently flexible career and also just about endless pay growth. As a way to have success in this business, it is best to commit effort for continuing your own education plus building your portfolio of clients. Before you start practicing as a real estate professional, you will need to initially meet your state’s academic prerequisites and pass both state and national accreditation examinations.

To become a registered estate agent, you must first fulfill your state’s instructional specifications and pass an examination. Whereas every state has their own variety of specifications, there are essential key elements that must be reached. Qualified estate agents must be:

  • At least 18 years of age
  • A U.S. citizen

California mandates potential applicants to take three college-level instructional classes, as opposed to other states want a different set volume of class hours. Utah, as an example, merely calls for two classes that total 90 hours.

Contact your regional realty commission to find out specifically what the accreditation needs are in your state. Remember the fact that several housing agencies will also have their unique distinct education specifications.

Register for a Real Estate Program

Sign up for a certified and trustworthy program. A lot of tuition are going to be college-level, and you have the option of either taking classes on-line or simply in an actual class room.

Choosing a Brokerage

A broker is the company where realty works. Agents work in a supervision of brokers; therefore you will have to get in touch with brokerage firm before you complete your tutorials.

While searching for a brokerage company, look at its size, reputation as well as any training opportunities they’ll give you. Uncover more about the brokerage’s credibility through networking with other people in the field.

For being a real estate professional, you’re going to be working on commission fee. The money that you will obtain will be split between you and the broker. How the commission is divided is determined by the contract you have with the brokerage or real property company. In some cases, fresh agents make a lesser proportion as compared with more experienced agents or agents who offer more expensive houses. Whenever you get more working experience in the segment, you could settle new commission rate with your broker.

How to Become Licensed?

Before you could get approved in your state, you are required to first pass a state and national exam. A number of states will in addition ask you to submit a criminal background check. The fee to receive an authorization will vary among states; numerous agents will probably pay at least $200 to become approved.

Get prepared for The First Year as being a Real estate agent

Bear in mind that agents are generally paid on commission, and it may devote some time prior to making your very first sale. First-year real estate professionals are advised to allot some money to assist them to get through the beginning stages of the job. You should plan on having the initial weeks gathering your own customer base and learning the ropes.

Creating a Customer Base

Building your consumer base is a vital part for being a real estate professional. Novice realtors traditionally consult with a real estate broker and simply take advantage of their own individual social network to find clients. Gurus in the field encourage choosing a coach quickly who is able to drive you towards buyer and seller contacts. Your personal supervisors may separate commissions with you and also make it easier to learn more about the field.

Combined with your mentor’s assistance, it’s possible to utilize your very own circle of relationships to make contact with prospective buyers and home owners. There’s an excellent probability that one of your mates, family or neighbors are in need of a real estate professional.

In numerous ways, becoming a real estate agent is usually like running your own business. You may be working in a brokerage firm with several other competent realtors, yet each member of the team operates on their own. You need to learn to differentiate yourself as being a real estate agent to draw in new customers and then sell real estate. Your success will likely be defined by the time, attempt and commitment you place into your job.