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TRINITY DEBT MANAGEMENT HOUSING COUNSELING, SECTION II

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Working with a Real Estate Professional

An experienced agent or broker who works primarily in the area where you are interested in purchasing a home, and who has access to the multiple listings service (MLS) can help you find a home to match your requirements.  Make sure the real estate professional is a member of the National Association of Realtors by checking realtor.org, and is identified as a realtor.

The relationship between a homebuyer and a real estate professional is unusual in that you usually pay nothing for the agent’s services. Instead, agents are paid by the sellers and often represent the seller’s interest in the transaction.

A real estate professional can provide you with a broad range of services: 

  • Use your wish list to generate a computer printout of houses that meet your specifications
  • Show you houses that meet your requirements
  • Provide you with information about a community, including the prices and characteristics of houses in the area, the location of schools, property taxes, and availability of community services
  • Present your offer to the seller
  • Advise you on mortgage lenders, real estate settlement agents, professional home inspectors and title companies

Negotiating the Purchase Price

When you find a house that you like in your price range, you will still want to proceed carefully. No matter how perfect the house may seem, don’t make your decision without going back to take a closer look. Visit the neighborhood at different times and on different days. Are the weekends quiet on Sunday afternoons? Talk with prospective neighbors. Avoid the temptation to jump into a deal for fear that another buyer will buy it while you’re investigating. Make sure to never sign any papers or put any money down on a house without careful consideration.

In deciding how much you should offer, there are several factors to consider.

Market Value of the House

How does the asking price compare to the market value of the house based on recent sales of comparable homes in the area?  Ask where the listing agent prepared a comparative market analysis on the property. This is a written report that reviews prices of comparable homes on the market or under contract that have sold in the past several months.

Condition of the House

Before making an offer, you should be aware of the major problems of the house. You should have inspected the house and questioned the sales agent and the owner about the structural soundness and condition of the basic systems.  Both sellers and real estate professionals can be held liable if they fail to tell the buyer of any known defects. If you are buying an existing house rather than a new house, a home inspection should be one of the contingencies in your sales contract.

Earnest Money

This is a good faith payment that you submit with the offer to show the seller that you are serious.  There is no set amount that is required, and what is customary differs by location.  The check should not be made out to the seller directly.  Rather, it should be made out to the brokerage firm of the real estate sales professional.  Earnest money should be deposited in an escrow account to be returned to you if the seller does not accept your offer within a specified number of days. You forfeit the money if the seller accepts the contract and then you back out of the deal.

The Offer Should Include:

  • A complete legal description of the property
  • The amount of earnest money accompanying the offer
  • The price you are offering
  • The size of your down payment and how the remainder of the purchase will be financed
  • Any items of personal property the owner indicates will stay with the property, or that you want to be included
  • A proposed closing date and occupancy date
  • Length of time the offer is valid
  • The satisfaction of contingencies

When you and the seller have agreed on all the contract provisions, you are ready to shop for a loan.  The lender will want a copy of the signed contract when you apply for a mortgage.  If you reach an agreement with the seller on the final purchase price and the terms of the contract, then the next step is to obtain financing! 

Submitting the Offer

You make an offer by submitting to the real estate professional a signed offer to purchase the house for a given price under specified terms.  The document is called a “purchase and sale agreement.” The agent is required by law to deliver your offer to the seller. 

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As you face the difficult challenge of paying down excessive debt, you will be making many important decisions. Before you determine which approach is best, talk to Trinity first. The Trinity team can assist you during this difficult time. We’re ready to do a complete analysis of your financial situation and formulate a strategy that best suits your needs. Remember, the choice you make today will affect your credit rating now and in the future.