Home Buyers Guide

The Realtor plays an important role in the home hunting and purchasing process. They are responsible for coordinating many of the elements essential to a smooth sale. So selecting the right Realtor to assist you throughout this process is important. You will be working very closely with this person to find the home that's just right for you. In preparation of your first visit at the Realtor's office, you should take a little time to review the following information, so that you'll be better prepared to make the most of your time together.

The Disclosure Form:

Before you begin to look at properties, your Realtor will ask you to sign a Disclosure Form. This form is required by New York's Department of State; the licensing authority for the real estate industry. The form's purpose is to advise you about the relationship you have with the Realtor you have chosen. In most instances, the Realtor will be acting as a "Sellers' Agent." This is the most common practice on Long Island. It means that the Realtor is being paid by the seller to find a buyer for the home. Sellers' Agents are obligated to represent the sellers' best interests. "Sellers' Agents" have a "fiduciary," which means a legal responsibility to work in the best interests of the seller. Their job is to try to get the best price and terms they can for the seller. However, this doesn't mean they won't work hard to find a house for you. Sellers' Agents must be fair and honest with the buyers they work with.

Some Realtors work as "Buyers' Agents, or Buyers' Brokers. As a "Buyers' Agent," the Realtor is paid by, and is legally required to represent the best interests of, the buyer. However, likewise Buyers' Agents must be fair and honest with the seller.

It is also possible, but not common, to have a Realtor act as a "Dual Agent." This means that the Realtor is representing both parties, and must operate in the best interests of the buyer and seller. Most often this type of arrangement is made when the Realtor is the listing agent and selling agent for a property, or he or she has a personal interest in the sale that might not fit appropriately in a Buyers' or Sellers' Agent agreement.

It is important that you know whom the Realtor is working for in advance. This is why the "Disclosure Form" exists. If you have any questions, ask the Realtor to clarify whom they work for, before you begin looking at homes or engage in negotiations for the purchase of a home. Your understanding of the nature of your relationship with your selected sales professional will help avoid any misunderstandings down the road.

The Department of State requires that both you and the agent sign this agreement, before proceeding further.

Determining Your Criteria:

When you sit down with your Realtor, he or she can search for properties that meet your needs by entering your criteria into their computer. Before you arrive at a real estate office, do your homework. Sit down with all family members and determine the answers to the following questions:

• How many bedrooms do I need - How many would I like versus how many must I have.
• How many baths do I need? Is one enough, or must I begin with more. Am I able to tolerate one bath, if there is room to add others?
• What other necessities are there? Must the home have a basement? A garage? A large yard?

Start with a list:

At the top of a pad, draw two columns. At the top of the first column, write, "NEED." This is a list of the items the house must absolutely have in order for a house to be considered for purchase. For example, you may say that you "need" 3 bedrooms as a minimum, or that you need at least 2 baths to accommodate your family. Whatever you do put in the "Need" column, make sure it is something that you absolutely cannot live without. You will probably find that if you are a first-time buyer, the list may be very short. If this is your second or third home, you may be adding a few things that were not on the list the first time you bought.

NEED WANT  At least 3 bedrooms  2 baths    fireplace    finished basement    pool    walking distance to schools and shopping

Think through these carefully, the salesperson you work with will refer to this list repeatedly to ensure that your bottom-line "Needs" are met before considering showing a property to you. Mistakes here could mean you might miss out on a really good house, so write your "Needs" sparingly.

At the top of the second column, write, "WANT." These are the items you would really like to have. For example, you may want a fireplace or a pool, or a finished basement. However, you're willing to consider homes that do not offer all of these items. Every home is different. Keep in mind that while it may not have everything you want; often you will find something that may have several of the items you've identified as being desirable and a few surprises that really appeal to you. For instance, you may not list a Jacuzzi as a want, but your Realtor may show you a home with one and you find it very appealing. This happens often. Treat the experience as an adventure. Try not to place too many expectations outside of your core requirements and then look at each property individually, weighing its individual assets and drawbacks.

After you have your criteria ("Wants" and "Needs") lists, your Realtor will need to know what price range you qualify to purchase within. You will need to consider how much of your savings can be allocated for the purchase of a home. You'll also need to provide information about your annual earnings, as well as additional financial responsibilities like loans and other monthly payments.

If you have a bank or financial institution that you already have decided will be your mortgage lender, you can sit down with a loan counselor there and they can perform a pre-qualification report for you. This will enable you to have a clear understanding of how much mortgage you are able to qualify for. Coupled with your downpayment, this will establish the total amount you could look to pay for a home. Once you have been pre-qualified by a mortgage lender, you will receive a printed mortgage pre-qualification certificate that you can take with you to the Realtor. This certificate is helpful in establishing a price range of homes to look at, and can be very helpful when you are ready to make an offer.

If you haven't selected a mortgage lender, your Realtor can also help you arrive at a comfortable price range if given some financial information. In fact, the MLS computer system has a program through which your Realtor can simply input your personal information and the program will tabulate a price range for you. Realtors offer a myriad of services that will help you throughout the homebuying process, as you'll see described throughout these chapters.

From The Homebuyers' Guide, by Laurie J. Bloom,
© 1999 The Multiple Listing Service of Long Island, Inc. All rights reserved.