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The 5 most frequently asked questions…
What’s the difference between a List and Selling Agent?
Listing Agents usually represents the seller in the real estate transaction.
Selling Agents (also known as the buyer’s Agent) deal with the home buyer. Although their fee (usually 2.4-3%) is paid out of the seller’s commission, the selling agent represents the buyer.
Why should I use Triangle Home Team Realty?
TO BE REPRESENTED! A real estate agent is not just a sales person. They act on your behalf, providing you with advice. Whether buying or selling, the agent uses their knowledge and experience to provide you with the guidance you need.
Advice doesn’t just come within the contractual negotiations. Triangle Home Team Realty is with you every step of the way. They can help you shop for all the services needed when buying a house. From selecting the best mortgage to finding a quality attorney to close your loan and record the deed, THTR does their best to provide a stress-free transaction.
What is the difference between Due Diligence and Ernest Money?
There are usually two checks a buyer will submit when presenting an offer to purchase real property.
- Due Diligence- This is an amount the buyer pays for the opportunity to purchase. This is a negotiated sum and time period and is made payable to the seller no later than the next business day after all parties have signed. The Due Diligence period offers the buyer the opportunity to complete all inspections and appraisals and negotiate repairs needed. The buyer can terminate the contract at any time for any reason prior to the Due Diligence deadline. However, this amount is nonrefundable, even if the transaction does not close.
- Ernest Money- Although Ernest Money is deposited into a trust account, usually after all parties have signed, it does not become relevant until the end of the Due Diligence period. If the buyer terminates before the Due Diligence deadline the Ernest Money is completely refundable. If the buyer can not follow through with the purchase and does not terminate before the Due Diligence deadline, the buyer would forfeit the Ernest Money deposited.
What makes an Offer to Purchase more desirable to a seller?
There are many things included in an Offer to Purchase. In a competitive seller’s market (when demand typically outweighs the homes available for purchase) it is necessary to submit an offer that is attractive to the seller. Key items within an Offer to Purchase are:
Sales Price– Price is KING. Nothing is more attractive to a seller than the highest Sales Price. In a competitive market environment, it is important to put your best foot forward.
Financing Terms– This is usually divided into 2 categories; what type of loan program is the buyer using and what is the buyer’s LTV (loan to value)?
There are several types of financing options available for most buyers. The most popular is a conventional mortgage. This is a typical loan originated by a lender and offers no government backed insurance. FHA, USDA, and VA financing requires a more thorough appraisal process and these loan programs can sometimes cause a delay in closing.
The lower the LTV (ratio of Loan Amount to Sales Price) a buyer represents in the Offer to Purchase, the more attractive their terms are to a seller. A low LTV is more desirable to a lender and thus offers the best chance for approval during the loan process. A low LTV also gives the potential buyer more flexibility in the event the property does not appraise at sales price.
Contractual Dates– This category can sometimes make the difference in a seller accepting your Offer to Purchase. There are 2 important dates.
The Due Diligence date is the time period that the buyer has to do all inspections and appraisals. A seller typically would prefer for the due diligence period to be short (preferably 21 days or less). This gives the seller an opportunity to get their property back on market quickly if the buyer chooses to terminate.
The Close Date is when the keys actually change hands. A buyer’s flexibility in close date can be very desirable to a seller. Knowing when the seller would like close is important in a competitive market.
How does a buyer get Pre-Qualified?
Perhaps the first step a potential buyer should take is meeting with a loan officer to determine your home budget. The loan officer can issue the buyer a letter stating they are qualified to meet the mortgage requirements for loan approval. This approval is called a “Pre-Qual” letter and is often required when submitting an Offer to Purchase. It is beneficial to have this letter available so it does not delay the presentation of an offer.