Free Home Buying Guide for Atlanta Buyers
Looking for the perfect home to buy in the Atlanta Metropolitan area? This comprehensive guide walks you through the entire home buying process.
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About The Book
Buying a home can be a daunting task. This book details the buying process in any market, with strategies and advice to help the process go as quickly and smoothly as possible.
These strategies have helped thousands of people buy their homes in a timely manner — and most importantly — for a reasonable, or even amazing, price. It’s time to find your dream home!
Learn the best ways to search for your desired home, how to compare your needs versus wants, price negotiation tips, what to look for in a home loan, steps to take during a home inspection and a full rundown of the closing process.
Choosing the Best Atlanta Real Estate Agent
When you’re ready to buy a home, the last thing you want to do is go it alone. You need an Atlanta real estate agent who not only knows the local market, but understands the art of negotiating with sellers and their selling agents.
As a buyer, your goals are to find the home of your dreams and pay the fairest price possible for it. That means knowing about comparables, current market conditions and how to get sellers to pay for things like repairs and closing costs.
Sounds daunting? Then, you need the help of a professional agent with a network of other professionals, vendors, lenders and nonconventional lending sources. Turn to an agent that has what it takes to help you close escrow fast.
In this book, I’ve provided an effective guide for you to have the most successful real estate transaction possible when buying a house.If you don’t have time to implement all of the strategies discussed in this book, I’d be more than happy to provide my expertise and services to help you buy or sell your home.
Owning vs renting
Owning your own home might be one of the defining qualities of the “American Dream.” This represents the set of ideals that includes opportunities for prosperity and success and upward social mobility for the family and children, achieved through hard work.
Homeownership is surely ingrained as one of the strongest representations of that vision — 66% of Americans own their own home, and more hope they will or wish they did.
Something about homeownership plucks a strong chord with Americans. Financial security, permanency, status, and pride are values many of us seek.
Your Needs vs Your Desires
Imagine your dream house. It fulfills both your needs and desires. It fits the need for a good roof over your head, a sturdy structure, modern fixtures and appliances, living space (i.e., bedrooms, living room), and functional rooms (i.e., kitchen, bathroom[s]).
Your needs fulfilled, you turn to your desires. Perhaps you envision a home on the beach or in the woods, a gourmet kitchen, a wood-paneled den, a crystal chandelier over a banquet table in the manor-sized dining room or an Olympic-sized swimming pool with a hot tub and sauna.
Your priority in any home purchase should be ensuring all of your needs are met. Sometimes, you won’t find everything you desire in a home and if you do, you may not be able to afford it. It’s important to prioritize the things you want in a home by how important they are in your search.
Taking the Big Leap Toward Buying a Home
After you’ve decided to buy a home, what sort of home it will be is your next decision point. It’s a better approach to have a concrete vision in mind of what type, features, and amenities you want in your home, rather than a “shotgun look” at every listing that’s out there in your price range.
What’s inside
Agent
Choosing the Best Real Estate Agent
Decision Making
Owning Your Home vs Renting from Others
Priorities
Deciding Between Your Needs and Your Wants
Mortgages
Shopping for the Best Home Loan for You
Home Buying Programs
Learn the Programs You May Qualify for as a Buyer
Escrow Education
Learn What You Need to Know About Closing
Chapter 1
How Real Estate Agents Help Homebuyers
I’ll come right out at the start and tell you I’m a real estate agent — proudly so! Nice to meet you! I’m not trying to sell you anything, but I’m pleased to be of service.
In fact, generally, real estate agents for buyers are paid for out of the listing agent’s commission. So, I’m not looking to get any money out of you.
Instead, I’m giving you the benefits of the experience and advice I have accumulated throughout my 14-year career buying, rehabbing and selling houses and being in real estate transactions — for both sellers and buyers.
If you want me to help you find a house, I would love to help. Call me if you need me.
Technology has changed the way homes are sought and bought today. In this “Information Era,” most buyers are first introduced to the home they eventually purchase via the internet, through Zillow, Trulia, Yahoo! Homes, Realtor.com, Redfin or one of the hundreds of other real estate websites.
The reason to use a real estate agent is to find a home and show homes available for sale, right? So, that means there’s no real need for a buyer’s real estate agent, right?
If a buyer can find and visit a home on the web all on their own, why involve another party?
WHY A HOMEBUYER NEEDS A REAL ESTATE AGENT
Ah, not so fast, with all due respect. The reasons to use a real estate agent today are as valid as yesterday. The ease of online transactions and proliferation of services to assist buyers in handling their own real estate transactions came about recently, throughout the last decade.
This has caused buyers to wonder if using a real estate agent is no longer necessary or if it’s an expense that can be avoided. While doing the work yourself can save you money if you buy a “For Sale By Owner” (FSBO) house and the seller agrees to reduce the price by 3% (half of what a listing agent would receive), for many, a do-it-yourself (DIY) home purchase might be pricier than a real estate agent’s commission in the long run.
Besides, a buyer generally doesn’t directly pay any commission to an agent on a house purchase. On most home sales, there is a listing agent (the agent engaged by the seller to sell the property) and a selling agent (the agent who introduces the eventual buyer into the transaction).
What is a Buyer’s Agent?
The selling agent is sometimes called the “buyer’s agent” because he or she is often working on a certain buyer’s behalf. And it’s easier than explaining that the selling agent is not the listing agent but really the buyer’s agent.
There are some real estate agents that market themselves as “buyer’s agents,” “exclusive buyer’s agents,” or “buyer’s representatives.” These real estate agents have chosen to make a business of finding homes for prospective buyers and handling the negotiations and transactions required to complete the purchase.
So, why do these agents advise that a potential buyer should not go directly to the listing agent when they purchase real estate?
Conflict of Interest
A buyer who goes directly to the listing agent and allows that agent to “manage” both sides of the transaction is dealing with an agent who has conflicting responsibilities. Their job is to get a good price for the seller. Therefore, they cannot zealously represent the interests of the buyer.
Those who market themselves as buyer’s agents indicate they’re only working for the buyer in a real estate transaction. That means the buyer’s interests are the agent’s priority, not the seller’s.
Costs Buyers Nothing
If working with a buyer’s agent costs you nothing, then how does the agent make money? Good question. It generally works like this:
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Buyer signs agreement with buyer’s agent
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Agent successfully finds buyer a home
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Buyer’s agent negotiates with seller’s agent to get best deal possible for buyer
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Transaction is completed and seller’s agent receives commission from seller
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Seller’s agent splits or shares a portion of that commission with the buyer’s agent
So, basically, the buyer’s agent’s commission is paid by the seller, with rare exceptions. They either get paid directly by the seller or set up the transaction so that the seller provides a “credit” to the buyer for how much the real estate commission is — then the buyer pays the commission. Or, the seller pays the listing agent a commission, who shares that with the buyer’s agent.
A proverb in real estate is: “No matter how it’s set up, the buyer still walks away with the house and the seller still walks away with 94% of the purchase price.”
MORE ACCESS TO THE REAL ESTATE MARKET
A real estate agent will have better access to the market and special knowledge of local conditions. The agent is a full-time liaison between sellers and buyers.
An agent will have ready access to other properties listed by other agents that consumers don’t always have access to. Buyers’ and sellers’ agents know how to negotiate in order to put a successful real estate deal together.
Your buyer’s agent will:
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Track down homes that meet your criteria
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Contact sellers’ agents for inquiries
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Secure appointments for viewing the homes
On their own, buyers have a more difficult time with these things. This is even more so the case when a buyer is moving due to relocation or an employment opportunity and does not engage a buyer’s agent to handle matters.
NEGOTIATING IS HARDER ON YOUR OWN
A real estate agent will keep the transaction “at arm’s length,” such that personalities and emotions do not become involved. Price negotiations take a special skill and understanding of the psychology of offering and counter-offering.
Agents keep the transaction dispassionate and rational. For example, a buyer (you) might like a home but despise its wood-paneled walls, shag carpet, and lurid orange kitchen. When you work with an agent, you can express your opinions on the current owner’s decorating skills and complain about how much it will cost to upgrade the home without insulting the owner. Your agent will translate that to the seller — that you very much like the property but can see having to spend a certain amount in decorating costs, and thus can offer that much less.
CONTRACTUALLY SPEAKING…
There are many contracts and documents involved in purchasing a house. The stack is more than an inch thick.
Unless you’re a real estate lawyer or title agent, these documents will be foreign to you. Yet, they require detailed and accurate completions. Buying a property is not necessarily a “fill-in-the-blanks” transaction. One mistake, let’s say in title work, could haunt the buyer well down the line after purchase. This very situation happened. A property that sat on a double lot was put on the market. The neighbor bought it to carve off a bit of the second lot to expand his own yard.
The seller then put the home back on the market, and it sold. Months later, through a property tax notification, it came out that, in preparing new deeds for the properties, the expanded yard area was correctly in the name of the neighbor; however, the house had been transferred to the home buyer. The new homeowner now owned both houses, and the neighbor owned his expanded driveway and yard.
Fortunately, they were good neighbors and settled the matter with a few signatures.
A real estate agent deals regularly with these contracts, conditions, and unexpected situations and is familiar with which conditions should be used, when they can safely be removed, and how to use the contract to protect you.
YOU WON’T NECESSARILY SAVE MONEY
The point of not using a real estate agent would be to save money, right? Otherwise, why would someone turn down professional assistance in finding a home?
However, it’s unlikely that both the buyer and the seller will reap the benefits of not paying real estate agent commissions. It works like this: An owner selling on his own (FSBO) will price the house based on the sale prices of other comparable properties in the area. Many of these properties will be sold with the help of an agent; therefore, the seller profits in getting to keep the percentage of the home’s sale price that might otherwise be paid to the real estate agent (usually 6%).
Buyers looking to purchase a home sold by owner without an agent may believe they can save money on the home by not having an agent involved, and so they look solely at FSBO houses. They might expect money to be saved and make an offer accordingly. Unless the buyer and seller agree to split the savings, they can’t both save the commission — and that’s if the listing price was not already lowered by near the commission amount to make it more market-attractive.
Here’s a short list of the advantages that using a real estate agent can bring to your buying experience:
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Education and experience
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Neighborhood knowledge
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Price guidance
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Market conditions information
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Negotiation skills and confidentiality
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The ability to handle paperwork
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The ability to handle closing questions
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Relationships for Future Business
It’s extremely important to know the “ins and outs” of real estate agents before you bring one along with you to help in your search for a home, just so that you might know what to expect, and what will be expected of you.
WHO A REAL ESTATE AGENT IS
Simply put, a real estate agent is someone licensed to list and sell real estate, including homes, multi-family properties, commercial, and industrial buildings. A Realtor®, however, is somewhat different. A Realtor® is a member of the National Association of Realtors®. While an agent is always a real estate agent, a real estate agent isn’t always a Realtor®.
As mentioned, real estate agents who work on behalf of the best interests of the buyer are commonly called buyer’s agents. All listing agents represent the seller, but other agents who don’t have buyer-agency agreements with prospective buyers — even though they may show homes to those buyers — are working on behalf of the seller and must obtain the best price they can for the seller.
In contrast, buyer’s agents work on commission, which is contracted in the listing agreement. When a buyer’s agent brings the buyer, the listing agent must split the contracted commission with the buyer’s agent.
HOW TO CHOOSE THE BEST AGENT FOR YOUR NEEDS
You might feel the urge to pick the first real estate agent who appeals to or approaches you, but that’s something to avoid. As with any professional, there are degrees of professionalism, dedication, and experience. The “wow factor” will simply wear off.
Meet with prospective buyer’s agents in their offices. A good buyer’s agent will want to know whether you’re preapproved for a loan by a financer, what kind, and the terms of the loan you’re getting. They should spend adequate time to discover what you’re looking for in a house. They should listen as much as talk and ask questions. Watch to see if the agent makes notes.
If the agent doesn’t broach the topic, ask for an explanation of his understanding of agency relationships and obligations to you. The law requires agents to explain whether they’ll be working for the buyer or the seller whenever they have substantive contact with a customer or prospective client. If the agent doesn’t offer you a buyer’s agency agreement, that agent is representing the seller, not you. If the agent can’t explain agency concepts to you, then move to the next agent.
Be sure that the agent will be showing you all listings or properties on the market that meet your requirements, and not only listings that are handled in-house. Buyer’s agents have the legal duty to put the buyer’s needs ahead of their own. Even when an agent will be paid more for selling an in-house listing, they must inform you about other available, suitable listings and take you to see viable prospects.
A good buyer’s agent will provide a home-buying education. The listing agent will point out all the features of a home; a good buyer’s agent will point to the faults — or advise when they can be overlooked.
Competent buyer’s agents help their buyers to think clearly as the home-buying process unfolds. For example, if a house is a good buy, a buyer’s agent might suggest looking past the dated bathroom and kitchen and look at the space above the garage that will make the perfect art studio you desire. Likewise, a cute house with all the amenities but with knob-and-tube wiring or a 40-year-old roof might not be worth the asking price. According to the San Francisco Chronicle’s Home Guide, if you decide to buy with the intention of building an addition, the agent should advise you to check the zoning before making an offer.
Agree to sign a buyer’s agency agreement after you have met with an agent. Some people sign an agency agreement after attending a showing given by the agent. Working with a seller’s agent is a mistake, according to an article by Amy Fontinelle of Forbes’ Investopedia. Any information you reveal will become leverage that the seller can use in a purchase negotiation. A buyer’s agent is legally required to maintain your confidentiality, disclose material facts to you, and maintain loyalty to you. These are fiduciary duties.
LOOK FOR PROPER CREDENTIALS
You wouldn’t trust a doctor who didn’t have the proper credentials and licensing. Don’t trust a real estate agent who doesn’t present theirs or doesn’t have them at all. It’s easy to find real estate agents who can take the job, but finding agents with special credentials — those who have gone that extra step to take additional classes in certain specialties of real estate sales — is worth looking into.
Here are just a few credentials within real estate that you should be on the lookout for:
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Accredited Buyer’s Representative (ABR): Completed additional education during representation of buyers in their transactions.
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Certified Residential Specialist (CRS): Completed additional training during the handling of residential real estate, such as houses and apartments.
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Seniors Real Estate Specialist (SRES): Completed training for the purpose of helping sellers and buyers 50+ years old.
Similarly, if you choose to use a real estate agent who’s also a member of the National Association of Realtors®, it will be a bonus. However, ensure they have credentials that are relevant to your need(s).
RESEARCH LICENSING
Your state will have a license board for all active Realtors® and agents, which you can easily access. You will also be able to see their contact information, disciplinary actions, complaints, or any other information that you’ll need to help influence your decision — especially since most of the information is now posted online.
GIVE THE “WHAT ELSE” TEST
A good agent will know about all the other properties for sale in the area. Also, a good agent always does their research regarding the events in the current market, and those homes that are out there for the taking. In short, you want an agent who’s an expert of the current market, and someone who always stays on top of things.
RESEARCH THEIR BUSINESS ACTIVITY
Learning the type of market presence that a real estate agent has is the best way to figure them out. Ideally, you’re going to want an agent who specializes in one or two real estate markets, and who understands which types of homes and amenities are available within your price range. You can unearth this information by asking them or by asking the state licensing authority if you’re not comfortable with asking the agent directly.
You’re better off with an agent who’s engaged actively in one area and price range — e.g., residential homes around the $200,000 to $250,000 range or the $400,000 and up range.
GOING THE BUYER’S AGENT ROUTE
So, you’re ready to take the plunge and look for a place to call “home.” To get the most out of it, use a buyer’s agent to avoid a flurry of paperwork, stampedes of buyers competing for the same property, and other challenges. Home buying can be exciting and exhilarating, but it can also be complex and stressful — which is why having a pro by your side can make an enormous difference.
As discussed, you’ve probably heard of buyer’s agents, seller’s agents, listing agents, and so on. You’re a buyer, so what’s a buyer’s agent? True to the name, buyer’s agents assist home buyers every step of the way; they can also save you both time and money on the road to homeownership. When you find the right one for you, these real estate agents will work day and night to ensure all your needs and requirements are met when it comes to finding the right home.
WHAT BUYER’S AGENTS DO FOR YOU
Your buyer’s agent will have a vast knowledge of the current real estate market for the area, which will include neighborhood amenities and conditions, the law, zoning issues, price trends, negotiations, taxes, financing, and insurance.
Once you meet with the buyer’s agent, they’ll generally help you determine your needs and wants when it comes to finding a home and a neighborhood. The agent will teach you what you can afford, help you set a budget, provide some insight on the current conditions of the market, and explain what you should expect while shopping for a home.
During the shopping period, you’ll meet with your agent for tours of homes in which you might be interested.
They will give your insight into the floor plans, the home’s pertinent selling points, and the overall crime rate of that neighborhood. They will also give you the rundown for local activities, restaurants, shopping centers, and schools nearby.
Your agent is responsible for ensuring inspections of the homes are complete, as well as the disclosures therein.
They’re also in charge of ensuring coordination and completion is done through the roof inspector, attorneys, lenders, and all other professionals involved with the purchase of the home.
If bargains need to be made over the price, you won’t have to negotiate yourself. Your buyer’s agent will do that for you, along with signing the final closing documents. They will be present whenever there are documents to go through and sign.
DUAL AGENCY: THE BASICS
A “dual agency” relationship occurs when a buyer is being represented by a brokerage firm that controls the listing. Once an agent represents both the seller and the buyer within the same transaction, the situation is known as “dual agency.” In multiple states, this is illegal because of the conflicts of interest that can arise regarding the broker.
All agents hold the same responsibility, which is to inform their clients of all potential risks that could arise due to conflicts of interest. Legally, agents are not allowed to work on both sides of any transaction without consent from the clients.
If you’re selling your home and you don’t want your agent to also work with the buyer of your home, it’s your right to say so in the listing agreement. This is also true for buyers. A buyer can get out of an agreement with an agent if they are interested in purchasing a home their agent is listing.
When it comes to dual agency, there are definite advantages for the seller.
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Trust has already been gained with your listing agent, so representation for the buyer has been established.
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Your agent brought you the buyer knowing that you’re selling, even if your property has not yet hit the market.
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Your listing agent will have already covered and researched your neighborhood’s market to gain buyer inquiries, which means your agent will be working from all sides of the deal to sell your house faster, and with more incentive.
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Your agent works together with corporate relocation buyers who need to find a house quickly, and they will ensure it’s your house that’s bought.
There are also cons for the seller when it comes to dual agency, and they are:
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You can’t be advised by your agent as thoroughly when they must act as a dual agent because impartial facilitation is required.
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Your listing agent is not allowed to negotiate the best or highest price for you if also negotiating both the best and lowest terms for the buyer.
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Earning a full commission, if the opportunity arises, may tempt the agent to coerce a deal that you might not accept otherwise.
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Your agent may inhibit all access to your listing through buyers with agents.
To avoid surprises or missteps in a dual agency sale, always ensure you have clarified important details with your agent ahead of time. You can do this by using an exclusive buyer agency agreement, or a listing agreement.
HOW REAL ESTATE AGENTS ARE PAID
The National Association of Realtors® 2017 Profile of Home Buyers and Sellers states approximately 8% of homeowners opted to put their homes up for sale in 2017 without using a real estate agent or Realtor®.
A handful of For Sale By Owner (FSBO) transactions dealt with sellers and buyers who previously knew each other or were directly related; 87% of buyers chose to work with a real estate agent or Realtor®, on the buyer’s side.
Real estate agents and Realtors® — unlike professionals in different categories who bill by hourly rates or earn a salary — get paid through a transaction (commission) at the end of each sale.
For example, if an agent has worked with a seller or a buyer for months, they don’t get paid for the time spent if there is no transaction during that period.
Agents receive a commission once the transaction goes through to settlement (closes) based on the selling price of the home. At that point, the commission is earned.
The commission itself is negotiated — in most cases, between the seller and the agent. Typically, an agent will earn a commission of 6% from the sale price, but some brokerages have commission discounts for the sellers with whom they work.
Essentially, the listing agent and the buyer’s agent will split the commission. That can bring forth some issues. For example, sometimes the split might not be negotiated evenly. A seller could have agreed to pay a commission of 5.5% that, if further divided, the buyer’s agent would receive 2.5% while the listing agent receives 3% of the commission.
Even though some agents are associate brokers, or brokers in general, all commission payments are instructed to go through to the broker who’s managing the brokerage where the agent is working. From there, the commission is then split to the agent and the broker, according to the agreement that’s been made. The split will vary; sometimes, newer agents will earn a small portion of the commission compared to the experienced or successful agents who generally sell more expensive properties or homes.
PAYING THE COMMISSION ITSELF
The overall commission is paid for at the settlement period by the seller. The fee is taken from the proceeds of the sale of the home or the property. However, the buyers pay the commission because they’re literally paying to purchase the house, while the sellers take the commission for the agent into account during the process of determining the price for the listing.
From there, the commission is then divided during the settlement process between the buyer’s agent brokerage and the listing agent’s brokerage. Afterward, the agents who made the real estate sale are further paid by their brokers
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About the Author
Kereen Henry is a state-licensed REALTOR® with Keller Williams® Realty, Inc. She provides real estate consulting services to buyers, sellers and investors within the Atlanta, Georgia metropolitan area.
As an Atlanta local, she is proud of her reputation for providing quality real estate services, while setting a high standard for those around her. Real estate continues to evolve, just like us.
But one thing remains the same, when you partner with Kereen Henry REALTOR® you work with a woman who values the market and you as a client. That’s the Keller Williams way.
The Keller Williams portfolio of closed sales and listings includes some of Georgia’s finest luxury homes. As a team, they offer ‘best-in-class service’ that ‘disrupts the status quo.’ They continue to claim the #1 spot in the state in three areas: units volume, sales volume and agent count.
Kereen Henry REALTOR®
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