Why do I need a realtor? I can just use the internet to search - I can buy direct from a builder, a Seller, or I can even use a lawyer.
You can also use a GOOD realtor. The internet is useful only as one of the tools. A lawyer can be very high priced or average. His/her service will definitely be higher if you want him to answer all your questions at all hours of the day (or night) or do the dozens of 'errands' that have to be done that are outside of the legal forms. A Realtor willingly runs those errands, can interpret and make sense of the dozens of legal forms, the same promulgated legal forms that lawyers use, and simplify them - as part of their job. 'Realtors' were invented in the first place to get away from the abuses of rampant building and property fraud and high priced $200 hour lawyers. So it is definitely simpler, cheaper, and a more comfortable arrangement, and very, very convenient! But see for yourself. Ask questions! Ask the Realtor to meet you somewhere to see a house! Judge for yourself. If you feel comfortable with that person, their knowledge, the way they answer your questions - that is the best way by far.
Notice the 'Home-Made graphic I drew on the Whiteboard for a client. The Realtor does all this and yet carries on his solemn responsibility to ensure all these entities, including their latest changes, mesh well with the legal and ethical responsibilities of the Realtor. The Whiteboard drawing illustrates the dynamic of using somebody who can coordinate ALL activities in the transaction in an honorable and ethical way; an experienced person who not only STARTS the entire process, but keeps track of all the MIDDLE STEPS, and knows how to "end" properly - and keep in mind you don't always 'end' at the END.
Those necessary contacts in EACH entity-organization need to be right at the fingertips of the GREAT REALTOR who DRIVES the entire transaction. This is the part most home buyers don't think about. It is a lot of work, and a lot of responsibility. Yes, the Great Realtor knows the law. No, The Great Reatlor is not a lawyer. Yes the Great Realtor knows finance, building methods, appraisals, inspections, etc etc etc - but no the Great Realtor is NOT a lender, a builder, an appraiser, an inspector etc etc. We were "Invented" to make sure the whole process becomes easier - and cheaper - and nowadays about 12% of us 10,000 Realtors in San Antonio are doing 90% of the work.
Some say you can use the internet so well to 'find' houses they don't need a realtor to find houses. Only partly True. internet search engines are great, but they only "feed" you partial information. The Most VITAL and USEFUL information comes from the Great Realtor! When you ZILLOW SEARCH a house that looks great, it is sometimes not up-to-date and may have already been 'SOLD' the day before, it lacks TAX Rates, HOA information, School, Community etc etc but Worse 9 times out of 10 you will be 'fed' right into the jaws of the brand new realtor who is looking for all the experience he/she can get.
But if you call up a Great Realtor and say 'Rick, I found this house' - I may come back to you in 5 minutes with 'I checked it out for you - and it's got foundation problems, or 'it was already sold 3 days ago and they never updated it, or ".. the HOA fees are $250 per month, the taxes are $7,500 every year, etc...... So call me enough times and we may build a good business relationship and i will actually "give You" my OWN search engine (that I pay for each quarter in order to get up-to-date Home info every 15 minutes) and you get an auto-email of 'the house of your dreams' as soon as that exact match hits MLS.
With the convenience of viewing properties on the internet, or driving around to talk to builders by yourself it is very tempting to believe you can tackle the whole process by yourself as well. But remember there is way more to it than "looking at a model home". It's just such a big investment and lengthy project. I think we know better than to just trust personalities or just our own selves. You need a trained 2nd pair of eyes and ears to vet the process as well as someone else in the fight for you, who acts just as if you had a family fiduciary responsibility on your side. THAT Is a Realtor!
REALTORS ARE NOT ALL THE SAME
The other thing to consider as well is realtors are not all alike. Experience plays a big part in the success and smoothness of the transaction. Those with 8-10 years of experience are Veterans. Those with 2 years or less are rookies. The Wall Street Journal put out an interesting article written by Sanette Tanaka two years ago claiming that an Experienced Realtor is worth $25,000 more than a rookie realtor: http://www.wsj.com/articles/SB10001424127887324123004579057500395585922
Basically this is true because the Experienced realtor (especially one who has lived and stayed in the same area for as long as he has been in the practice) is more familiar with the local laws, communities, builders, etc. And of course it is a well known fact that any Realtor who came from a successful Sales background will generally do better than one who hasn't.
ABOUT BUILDERS -
Wonderful people! We Realtors know them - and they know us. Many of us used to do that job, We work together. Every single week my builders provide me a collective "Hot Sheet", a booklet filled with the 'specials' they all have. As great as this booklet is for the builders - it could be their worst enemy in the hands of the general public. It contains the prices and models of ALL THE OTHER BUILDERS (their Competition). When I worked for a builder (before I became a Realtor) I didn't really like Realtors, They would uncover my deals (because of the hot-sheet as well as the fact that I had a relationship with them) since I had 'promised' a house to another buyer I was working with. They explained to me that they had a fiduciary responsibility (by State law) to serve their clients very best interests ahead of them and find the best deal they could get.
I changed from a Builder rep, to a Realtor because I could now "see" all the homes from all the "other" builders anywhere in the entire San Antonio and New Braunfel/Seguin area on behalf of my client. So I was given the "30,000' foot' view as well as the legal view (we memorize all the Legal forms, so you don't have to pay a lawyer $200 an hour) to do the littany of free. things that Realtors do as just part of the job(instead of racking up countless hours @ $200/hour.
There are so many hidden details that are not put on the internet about new home. Construction because. It Is private enterprise and nobody's buslness. but the builders.. If you speak to a builder's 'Sales Counselor' there are so many things that don't get to be talked about before you sign on the dotted line. When a Realtor accompanies you to the builder we always ask for and get a list of the 'Standard' features that come with the plan he is talking about. That matches up. With the weekly Hot Sheet.
It is also very good practice to 'bring a realtor with you' when you talk to the Sales Counselor who may ask "what kind of payment can you afford' Realtors always counsel their client :don't answer that question! You'll lose your negotiating position of you do. Instead the realtor will Slow him down and Insist on getting the data you need in order to compare 'apples-to-apples' despite how much you may be infatuated with the highly decorated model. If you can, try to get a Realtor to come with you as you visit fancy dressed up models, things will go much easier
Who better to guide you in this first meeting to set the tone than a local Realtor (who has a Legal Fiduciary Responsibiity by state law, to work in your best interests - where the builder absolutely has no such legal responsibiity) and the Realtor knows how to work with the sales counselor in your behalf. Look at the TAB 'Use Realtor?/WHY?" and get some help in knowing how to really use a realtor. Also check out the BLOG nect to the TAB, "Texas Living Styles"
In a brand new home, you still need to remember that home is being built by "crews". They don't all speak enliish, and communication issues pop up all the time. Things get left out; unfinished; or damaged. The pressure is on to build and finish the house on-time and your furniture is arriving. If you hire a '3rd party independent inspector' most of the time you will find these mistakes. Do not use the builders suggestion that they "inspect it" vs our recommended "3rd Party Inspector". It is worth the $300-400 dollars out of pocket to use an independent one. You are going to have to Try to schedule them between the twilight zone of when the house has been completed and the day of close. This is another area where you can use your Realtor to help you by being at the inspection himself.You will always find mistakes - some minor, some serious. But it's better to find out about them now, get it out in the open and get it taken care of rather than 6 months later.
Always remember Builders have nothing but the best intentions, but their mainfocus is making a profit. On the other hand the main focus of the Realtor acting as Buyers agent is to follow State Law and to serve the Buyers best interests and has the Fiduciary responsibility to carry this out.
But a Realtor is not only helpful in this scenario but in giving sound financial options and advice - and proves his worth as a true Ombudsman on behalf of his client. Recently i helped get a buyer a 4% interest rate from a builder after she was told she could only qualify for 4.5% (at first the rate was 4.25%). As her credit was examined more closely after the contract was signed the builder's lender warned about the impending interest rate rise. I was her Realtor. By state law I have a Fiduciary responsibiity to serve the 'buyers best interests', so I found another lender I had on the tip of my tongue, and in the blink of an eye (time was of the essence!) I got her 4%. However, I suggested we go back to the builder and remark on our wonderful find.
The builder, not wanting to be bested decided that they could do 4% as well - so I certainly helped her case - because the builder saw that she had a powerful ally in me, and agreed that they could do 4%. She was already under stress and I sincerely feel she would not have been able to pull this off on her own.This kind of skill only comes from experience and local knowledge, and valued relationships in the lending industry. It may well backfire if a home buyer tries this on their own with a lender, because you have to value the builders relationship - they are the one's building your home
Real Estate has changed over the years. But much of it hasn't It wasn't long ago when a Realtor did the 'whole transaction', and also handled the financing for the deal. People used the Real estate agent as a 'bridge' to many facets of the transaction, much as they do today. They were the simpler years of real estate when business operated a lot on trust. Things weren't regulated as much. It was a different age, even a different country back then. People found good realtors through word of mouth, everything was done on paper, and your father likely knew the local banker on a first name basis and probably even went to high school together!
Things have changed in the last two decades (with the exception of 'word of mouth' which has never changed over the years). In Texas, as in other states, we split up the Realtor roles to "Listing agents" (where agent represents only the seller) "Buyers agents" (where agent represents only the Buyer) to achieve better service and have a FIDUCIARY RESPONSIBILITY to the seller or to the buyer to serve there best interests - by state law. New construction sales people ('sales counselors') are not Realtors and have absolutely no legal responsibility to serve the buyers's best interests like the Realtor does. Realtors often work with 'sales counselors' and share in their commission to achieve a combined effort where the buyer gets not only better service, a quality product, but gets other things like a very, very thorough inspection by a 3rd party, price negotiation, and peace of mind.
We're also a very mobile country now where families live thousands of miles apart, business is conducted in e-commerce on high speed data lines, and we've become an "e-society". We made some mistakes 6 or 7 years ago by making it way too easy to get someone a loan, and now we've tightened up the process. But for either those who have excellent credit - or those who are credit challenged, we've automated many of the things like communications and documentation and data access. We've also found newer and faster ways to 'fix' credit too by 're-building' credit. Now we 'sign' sales contracts on an i-Pad in the kitchen of a new home using Doc-u-sign; search for a property where the 4th bedroom "must be at least 12' long x 12' wide ..." and do all that searching and transaction of business while you are in another state. We can even take the computer with us...and search inside the homes as well as search the History of the homes...all while we are looking at that same home's curb appeal while parked outside on the street (note: the accuracy and capability is 100% only when performed by a licensed Realtor and dues paying member of SABOR). But like in the old days, Realtors still act as a "Bridge" or Ombudsman who interfaces with many facets of the transaction, smooths the process, facilitates the process, and knows what to do when the process gets interrupted or channelled in a different direction.
Realtors can point you to the right place to raise your credit score to the necessary 620+ and if you carefully listen to our coaching on the choices of who to use, we might just find you a lender who will accept a 580. We can also come pretty close to giving you a range of how much of a monthly payment (which includes the taxes, insurance, PMI, etc. - the whole payment). You will do well to use a Realtor from the very beginning with way less stress on your part. Also you may have thought it impossible even to get out of your lease. Sometimes,
If you are on a lease, I as a Realtor and former Loan Officer can negotiate on your behalf (using me as the 'Buyers Agent'- a fiduciary role in Texas) and might be able to get the seller of the home to pay for the remaining 4-6 months of the lease as part of the deal. Are you beginning to see the value of using a Realtor?
But things don't always work smoothly in this new age of the i-Phone and i-Pad. Realtors have to stay two steps ahead acting as a 'bridge' to keep you from being dissapointed in your searching. Think about it: You just moved here from another state and your boss is STILL expecting you to stay on top of your new duties! You have schools to check out or talk things over with, churches to join, HOA's to check out, storage, kids sports - it can seem daunting! , If you are in the 90% like everyone who searches with Trulia, Bing, and Realtor.com then by now you've realized that many of the GOOD houses you've selected were sold before you could see them. Also you don't get the one's that showed up 15 minutes ago - so that you can jump right away on that Pool house you really want! All that work can be Very disappointing. The "Home of your dreams" just went under ACTIVE OPTION two days ago after weeks of your laborious searching on your own, and is now under contract. Sorry, but you didn't start by using your Realtor from the very start who pays quarterly to have access to more immediately available homes due to the well-staffed, new and improved MLS System (not all agents are dues paying members)
Another big dissapointment can be the lenders you have always done your simple banking or insurance with and having established a trust relationship assume they are mortgage loan experts. Some large insurance and financial institutions that have recently decided to get into the 'mortgage business' and are new at mortgage loans are experimenting with streamlining the process using "800#'s" to help their customers with mortgage loans. Sometimes 'streamlining' can backfire when the loan officer/processor is different every time you pick up the phone (presumably their mathematical models must show some sort of cost savings here??).
But you really wanted to meet that Loan Officer face to face when you are new to the city (like in the old days!) After all, borrowing money for a house is only the single largest transaction you will ever make!) and deal with the same Loan Officer you used before to explain those extra troublesome medical bills that showed up suddenly on the credit report only TWO WEEKS before you are about to close! But now you have to explain it all over again to another one. Also you are more than a little upset that they can't/won't count your Bonus money as income. (psst! It's not that way with every lender!) But you just can't seem to break free from this company now because you've invested too much time and emotion into them. See if you can ask a REALTOR for help as an Ombudsman.
You call an 800# Loan company intrigued by their advertisement of "3.75% interest rate" and get a Lender sales person on the phone. She says that you can get a 3.75% interest rate if you are a member of the military, if your credit score is great, and you have a good credit history. You talk to a friend who just obtained a mortgage for 4.25% and you believe you have found the "Valhalla" of mortgage companies!
Except for the fact that the sales person is often quoting you the lowest 'buy-down' rate - a rate that you can get if you pay thousands of dollars up front. Of course you are led to assume that 3.75% is the actual rate - until later when it is all explained, usually right before you are signing the contract. This is often when you find out that in fact the rate is 4.25%. You don't need to be jerked around, you need a Realtor.
Your local credit union who advertises low rates seems to be unusually strict and is demanding every disclosure, multiple bank account records, and every document that ever existed. Their DTI (Debt to Income Ratio) is very, very strict 43% - but they can do the loan if you don't mind them raising your interest rate. If you are not 'perfect' for them, those low rates may move up a little, and you found out they take forever to close.
On the other hand, that very same credit union may be 'perfect' for the unique buyer who makes enough money, has a good credit score - but has been turned down by the lender who doesn't like they 'way' the money is made. Talk to a REALTOR, at the very beginning so you can find the 'right' lender for you, and get prequalified.
Or you are a member of the Military who is moving to San Antonio for the first time. You've heard rumors about The 'Texas Vet Loan' (which was invented just for the benefit of Veterans who live in Texas as well as veterans and active military who just moved to Texas!) and you wonder why your favorite lending institution isn't saying anything about it. You are 30% disabled and you heard that you can get a whole half a point off the interest rate (if you qualify). You've been with this lender for many years and don't want to rock the boat (since apparently they don't offer it) and it would upset your spouse to change. Sorry. You are not taking advantage of the Fiduciary responsibilities and guidance provided by a Buyers Agent (A REALTOR for buyers) to help ease your wife's fears.
You are a nurse or a school teacher, or your income is fixed and very low - and you've heard about specific loan programs for those particular occupations or low income families. However, you don't know which institutions do that, and you are embarrassed to ask your lender about them because they are already doing you a favor by overlooking your 3 year old bankruptcy (even though it has been discharged) and charging you only 2 points higher on your interest. Run all that by a REALTOR!
You are talking to a builder salesman/sales counselor (without the aid of a realtor) who is offering certain 'incentives' -as long as you use their particular lender. The contract is rather long and complex. He/She also asks 'what kind of payment can you afford'?? Don't fall for it. Don't be put in the position where you find yourself negotiating the price of a home before you even start to understand what their offering is. To answer that question is to give up your negotiating position from the start and it may be difficult to recover! Remember your REALTOR has a Fiduciary Responsibility to negotiate the deal in your best interests, by TEXAS STATE LAW. The builder's sales counselor has NO such responsibility. You need to know who's 'Dog is in the fight' for you. To handle this from the very beginning - as well as the other tactics that come along later, be sure to Use a REALTOR before you set foot in the builders model home! 80% of the homes that builders sell are through REALTORS on behalf of their CLIENTS!
Welcome to the 'Zoo' of thousands of homes, dozens of lenders and builders, search engines, and eight thousand Realtors in the booming City of San Antonio and The Greater San Antonio area!
To address a few of the above situations mentioned above, if you use a REALTOR while you are using your favorite Search Engines to find homes, he will also look up the home you are interested in to see if it is still available in a dramatically faster and more accurate way using MLS. Using a dues paying member of SABOR (San Antonio Board of Realtors)you yourself can get the benefit of the MLS system which is kept up to date every 15 minutes, by special permission from the Realtor (who will need to represent you) so that you can get early morning listings of YOUR CHOICES OF HOMES, every single morning into your email. That realtor can not only find out if your choice is still for sale, but how many times the price was reduced, the tax records, the days on the market, listing history, even whether or not how recently the roof was repaired, and even if the home has sufficient equity in it so as to ask the seller to pay your closing costs when you put in your offer. (Wouldn't it be nice to know all this up-front before you get your heart set on something with so many potential problems?!)
Be sure you use a REALTOR whom you trust to act as your "BUYERS AGENT" (that's a Realtor who represents you and only you - and not the seller, owner, or both you and the seller simultaneously). If you are not certain, ask to be sure. Also ask if he/she is a dues paying member of SABOR and actually knows how to use the newest, fastest MLS system in history by doing a demo for you and look up homes that have specific parameters you are looking for.
The same thing goes for using a LOCAL Loan officer/Lender (versus an 800# loan officer sitting in Tennessee or Colorado, etc) where you can sit down face-to-face and ask honest, personal questions and get satisfied with immediate answers and results. Realtors not only know other lenders, but can advise you of your right to shop other lenders (as long as it is all done within a 90 day period and you've given the Realtor a short version of your unique financial picture), and this can take the stress away! By interceding on your behalf and introducing you to other Loan Officers acting in his Fiduciary capacity as an Ombudsman, explaining to the prospective lender(s) that 'we' ("I and my clients...are shopping for the right loan for their unique needs...". This puts the Lender on notice that they are being compared to others, and they'd best give the Agent's clients their 'best shot'. Many experienced REALTORS know which banks/mortgage companies do better jobs depending upon your unique situation and their experience. Some lenders put a lot of weight on DTI (Debt to Income ratio's). Others give more weight to credit score and how much income you make, and for how long. Don't be afraid to ask! (especially if they have had previous Loan Officer Experience in Texas. It really always pays to ask a REALTOR.
Also when you use a Realtor, see if he/she has backup. Any good Realtor needs an organization with back-up staff and Associates on his/her team. (I've got 27 associate Realtors, a salaried staff of 8 people to help me as well an another Broker Associate help me if I run into a snag)
Having several BROKERS within a Realty organization is important. Weekly meetings where a Realty organization keeps up with the latest State and Federal changes, constant training and updates assures you of quality control in all that we do and gives you a checks and balances process for all documents. This will assure you of a good experience. Utimate Realty is not so big it becomes unwieldly, but is about the right size to give maximum service with less bureaucracy.
Take time to Interview and pick a REALTOR who seems to be able to work with you and look for the experience, the organization behind him, the tools, and track record you feel you need.
As far as those many search engines, there's just not enough staff to keep all 7,386 actively listed homes on MLS as of 10:30am 10/22/2013, up to date each day and every day after those properties are sold or expired or modified in some way. Manpower is needed. - which is why I almost always use MLS. I can also email you special reports daily (as long as we have some kind of a working relationship)
Here is a short list of the many things a Buyer needs his Realtor to do:
A BUYER needs a Great Realtor to know about:
Local Laws Plumbing & electrical VA rules Information Landscaping Flood insurance
Engineering City codes, Deed restricted Land use
Loans & Credit aid Tax and tax history Texas Ag
Surveys Foreclosure process Short sales
Appraisals Listing history bank owned
Handymen Mineral rights Relocation
Home warranty Flood maps HOA rules
Legal descriptions Real estate laws Negotiating
Code enforcement School data Staging homes
CLUE reports (ins) Recreation areas Local Wildlife
Lets just take "Loans and Credit aid" on the upper left hand column:
If your Realtor has Loan Officer experience along with computer expertise along with the many other duties you the buyer have a better chance at finding and closing on the home you like in a more comfortable way and in a shorter period of time!
The bond that I have with my resources is important to YOU. If you are new to San Antonio those relationships are going to be a goldmine to you the new homebuyer years later. This isn't anything new. The people I introduce to you will remain your friends for years afterwards..
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So as you can tell, my clients really aren't looking to me so much as to search for a home but for knowledge and customer service. Knowledge and Customer service answers the questions: "Is this a good investment for me?" "What am I not seeing here?", "Help me to negotiate the price, and set me up with a good lender", etc. "What is the deadline for locking in the rate ?" "Does this home inspection report have the force of Law?", and "What if I don't like the HOA rules after I've already signed the contract?" And what about the Seller? Often little problems crop up, maybe the seller is not a citizen, where now the buyer would be liable for the taxes the seller owes, unless the correct papers are filed. Maybe even an ecroachment on the property - the seller gave his neighbor 'the right' to keep his boat on the NE corner going on for 10 years now. How does that affect me?
But more about the Texas Law of Buyer Agency that requires a FIDUCIARY RELATIONSHIP with the buyer. Even when buying brand new homes, don't be fooled - no builder or seller has the same responsibility or duties to the buyer. Making a small mistake here is much easier to do given todays fast pace, and with bigger repercussions. When you don't have an extra pair of eyes and brain that is trained and committed to look out for the details of the product, the process, or the loan itself for all those things listed above - and all going on at the same time you take a big risk! Don't forget you may be enrolling your child in school, working with your military unit, or many personal details while this is all going on.
With new homes, not only those extra pair of eyes, ears, and brain are important but whatever you think you'll gain by not having a Realtor from the get-go, will be lost in other ways you usually won't find out about until 6 months after the transaction has already been completed. That 'extra-incentives' the builder offers you is usually hidden in the Lender higher rates they have chosen for you. New homes are NOT built by builders they are built by "crews", who make mistakes and omissions like everyone else. Having an e-PRO Realtor, ex-TX Loan Officer who is trained in new Construction is a great help and costs you the buyer nothing if you use a Buyers Agent. Just as in Pre-owned homes, the seller pays the commission- not you. A trained Realtor is an enabler, and not a hindrance. . Essentially it's all free, and now you have the Texas Real Estate Commission behind you (TREC) when you deal with a builder. 80% of NEW Home builders get their business from Texas Licenced Real Estate Agents. Don't get left out of the extra pair of eyes and ears and experience provided you by law.
An experienced techno-savvy Realtor can get you pointed in the right direction immediately- And there are some of us Realtors who are very hard working people who are willing to meet you on your schedule. Ask them if they would like to help evenings, Sundays? It never hurts to ask....
Use the mortgage calculators below to assist you in making some decisions around financing your new home.
This calculator will help you determine how much money you qualify to borrow. The results are informal. You will be subject to a credit approval from your financial institution taking into consideration existing debt load, amount of down payment, income and other variables.
This calculator will help you determine what your mortgage payments will be based on purchase price, interest rate and mortgage term, as well as other factors. The amortization table shows what the interest and principal payments will be over the term of the mortgage.