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Frequently Asked Questions when Buying a Home

1. How should I choose a buyer agent?
2. Can a buyer agent also help me sell my house?
3. Do I have to have a written agreement with a buyer agent?
4. Can I have more than one buyer agent?
5. Can a buyer agent show me FSBO properties?
6. Can a buyer agent really save me money?
7. How much training does a buyer agent have to have?
8. Are home inspections necessary for New Homes?
9. Why inspect resale homes- doesn't the appraiser check them out?
10. Are commissions negotiable?
11. Who pays the commission for the buyer agent?
12. How can I get an answer to a different question about real estate?
13. Can you explain the 2010 Homebuyer Tax Credit?

 How should I choose a buyer agent?

a. Size and comfort of car - you may be riding in it for awhile
b. Insurance coverage - ask if he has business coverage for passengers
c. Experience - how long in the business and how much does he seem to know
d. ABR vice generic self proclaimed real estate credentials
e. Guarantees - will he put anything in writing
f. Referrals - can he give you names and numbers for recent clients
g. Tech savvy - a digital camera, a web site, and e-mail at a bare minimum. Having the ePRO certification is a very good sign
h. Look for a Realtor with the Certified New Homes Sales Professional (CSP) designation if you are considering buying a Brand New Home.

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 Can a buyer agent also help me sell my house?

Yes, and some agents such as Tricia and myself will reduce their commission on one part when they are doing two transactions with you. The agent will also be in a better position to help you coordinate both moves in a timely manner.

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 Do I have to have a written agreement with a buyer agent?

No, but it is best to have one so that there are no misunderstandings. The written buyer agency agreement assures the agent that you will work with only him in return for his commitment to do various and specific things to help you find a home. If you don't know your agent well or have any doubts about the process, then keep the term of the agreement short and/or have a cancellation clause.

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 Can I have more than one buyer agent?

Not if you have an exclusive buyer agency agreement. However if you are looking in two different areas, such as Northern Virginia and Maryland, then you could limit the exclusivity and work with a different agent in each area.

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 Can a buyer agent show me FSBO properties?

Often, but not always. In most cases For Sale By Owners are willing to work with buyer agents since we provide a lot of expertise that they don't have. Give your agent the address or phone number, and let him contact the FSBO first.

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 Can a buyer agent really save me money?

Generally buyer agents have been found to save their clients money, but every transaction is different and savings are subjective depending on what they are being compared to. Buyer agents should be able to negotiate on your behalf, but in some markets supply and demand impact what can be negotiated and just getting your contract accepted over someone else's offer is an important victory. A buyer representative should be able to help you negotiate all aspects of the contract, not just the sales price.

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 How much training does a buyer agent have to have?

Training can vary. Any agent can claim to be a buyer agent. Most agents have at least a couple of hours of company training backed by a certificate issued by the real estate company. The Accredited Buyer Representative, ABR®, is the only designation recognized by the National Association of Realtors for buyer agents.

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 Are home inspections necessary for New Homes?

It is always wise to get an independent professional inspector's opinion of your home. I recommend that, at a minimum, try to have a new home inspected just before the drywall is installed or about nine months after moving in (while the builder's warranty is still in effect). You may also want to have the home inspected a day or two after the foundation has been poured. Make sure you get an inspector with several years experience who has already done a lot of new home inspections. Inspectors in Virginia are not licensed and their backgrounds vary. Talk to the inspector to make sure that he can and will cover any areas that you have specific concerns about.

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 Why inspect resale homes- doesn't the appraiser check them out?

While the appraiser may take a quick look at a few things such as the roof, his main concern is to determine the value of your home, not its condition. The apprasier is primarily concerned with establishing value by comparing your home to similar size, nearby, homes that have been sold. I strongly recommend professional home inspections to all of my clients. It may also be a good idea to get a Radon test if you expect anyone to sleep or spend a lot of time in the basement. If you have concerns, professional inspections can also be obtained for specific items like mold or lead based paint. Professional inspections are separate expenses to the buyer at the time of the inspection. Make sure you choose an experienced inspector who has already done a lot of home inspections.

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 Are real estate commissions negotiable?

Yes, but this is not normally a buyer concern, since most or all of the commission usually comes from the seller. The buyer's agreement with his agent usually authorizes the agent to accept payment from the listing company. You should ask your agent if he plans to show you only listings offering top commission dollar. Some listing agents may offer a lower commission than others and you should know if you agent plans to screen out those listings.

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 Who pays the commission for the buyer agent?

a. Usually the buyer agent is paid from the real estate commission that the seller pays to the listing company. The listing company normally shares part of the total listing commission with the selling company.
b. You may agree to pay your buyer agent's commission.
c. Sometimes a combination of both sources may be necessary, depending upon your agreement with your agent and the amount of commission being offered via the seller.

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 How can I get an answer to a different question about real estate?

Send an email to romie@LetsMove.net and I will do my best to answer any specific question you may have. You can also look in the faq section of this site for home selling questions.

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 Can you explain the 2010 Homebuyer Tax Credit?



USE IT OR LOSE IT

The Home Buyer Tax Credit expires 1 July 2010, but you must have your home under contract by 30 April 2010, unless you were out of the country for at least 90 days during the previous 16 months on a military or foreign service assignment. Qualifing FSO and military personal get a one year extension. To help everyone better understand the extended and expanded home buyer tax credit, here are some highlights of the changes.


Who can claim the credit?
“First-time home buyers” who purchase homes between November 7, 2009 and April 30, 2010 are eligible for the credit. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

For current homeowners purchasing a home during the same time frame, they are also eligible for a tax credit, so long as the home being sold or vacated was their principal residence for five consecutive years within the last eight. To elaborate, it must be the same home; it is not enough that they have been homeowners for five consecutive years, they must have been in the same home for five consecutive years.

Another key point is that the existing home does not need to be sold. One must, however, occupy the new home as a principal residence and do so for three years or risk recapture of the credit. Also, the new home does not need to cost more than the old home despite the concept that it is directed at “move up” buyers.

How much is the credit and what are the income limits?
The maximum allowable credit for first-time home buyers is $8,000 or 10% of the sales price, whichever is less. For current homeowners, it is $6,500 or 10% of the sale price, whichever is less. Under the extended home buyer tax credit, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum credit.

The credit decreases for single buyers who earn between $125,000 and $145,000 and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit deceases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income – over $145,000 for singles and over $245,000 for couples – are not eligible for the credit.


What are the deadlines for qualifying for the credit?

Under the extended home buyer tax credit, as long as a written binding contract to purchase a home is in effect on April 30, 2010, and the deal is closed by July 1, 2010, one can claim the credit.


Will the tax credit need to be repaid?
No, the buyer does not need to repay the tax credit if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale. Another provision of the law waives the recapture provisions for service members who receive orders that require them to move.

Are there any other critical provisions?
-There are three provisions people should be aware of:
-There is an $800,000 limitation on the cost of the home
-The purchaser must be at least 18 years old on the date of purchase
-For a married couple, only one spouse must meet this age requirement and dependents are not eligible to claim the credit

Finally, as an anti-fraud measure, purchasers must attach documentation of purchase to his/her tax return claiming the credit. Normally this would be a copy of the HUD-1, but could include other documents reflecting the settlement.

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