The Home Buying Process in Colorado Springs – Step 2

The Home Buying Process in Colorado Springs – Step 2

The Home Buying Process

Step 2 – The Role of a Buyer’s Agent

So, you have made the decision to buy a home. Congratulations on growing your wealth. It is a known fact that homeowners grow their wealth faster than those who rent. If you aren’t convinced, read the article Rent Vs. Own on my website.

If you have never purchased a home before, it is important to have an experienced advocate that can guide you throughout the process. A buyer’s agent has a fiduciary responsibility to the buyer, not the selller. In Colorado, agents can only represent the buyer as a fiduciary when a Contract to Buy Listing Agreement is signed by both the buyer’s agent and the buyer(s). This is a contract, but the purpose is so that the buyer’s agent can provide advice to the buyer, show properties and negotiate a contract on behalf of the buyer. This may differ in other locales, so if you’re elsewhere in the country (such as South Carolina) consider speaking with a local firm such as Lowcountry real estate to help you through the process. It should be similar, however.

The other option is to have the agent work as a Transaction Broker. This occurs when the buyer is purchasing a listing and the agent works as a neutral party to both the buyer and seller. This works well when both the buyer and seller know each other but is not recommended when the buyer is a first-time buyer and needs advice from their agent.

If this is your first time to purchase a home, it is important to understand that my role as a buyer’s agent is to assist you through every step of the home buying process

As a buyer’s agent, I get paid by the seller at closing for bringing the buyer for their house. The buyer is not obligated to pay me unless they ask me to represent them in a For Sale By Owner transaction where the seller does not always pay the buyer’s agent, but there is a way to negotiate this as part of the offer.

Some of my more important duties as a buyer’s agent include:
Guide and educate the buyer through the process
Provide referrals to vendors such as lenders and home inspectors
Understanding the buyer’s concerns and property requirements
Educate the buyer on the local real estate market
Fiduciary responsibility to the buyer – maintaining buyer confidentiality
Provide advice on making an offer based on local real estate trends
Help the buyer negotiate the best deal possible with a goal of win/win for both the buyer and the seller in most cases
Solve problems by working with the buyer and the seller’s agent

One of the first steps is setting up a property website for the seller to “shop” online eliminating and selecting homes to view. So, when you are ready for this step, I will need your top 4-5 criteria for your new home. You can email me this information or complete the Perfect Homefinder Form on my website.

We also need to verify that you can afford to purchase a home, these are the costs that occur prior to closing. Even though you may qualify for a 100% loan, such as a VA loan, you need to plan to have cash up front for earnest money (typically 1% of the value of the home) and any inspections (home inspection, radon, furnace, roof, etc.). Particular types of home inspections, like testing for radon for example, that have been conducted before you move in could help to prevent serious health risks from occurring. If abnormal levels of radon is found in your home, then professionals who can perform radon mitigation will reduce these levels so any health risks, such as those to your lungs, can be prevented. Paying extra upfront for these inspections could prove to be vital. Some lenders may also require you to pay for the appraisal in advance.

Colorado requires all buyers to be properly represented in writing with a Buyer Agency Agreement, also known as a Contract to Buy Listing Agreement, prior to viewing the first property. This protects the buyer, buyer’s agent, and seller in the event of an accident or mishap. It also allows the agent to provide advice to the buyer, such as if there is a need for Foundation Inspections, and requires the agent to protect the buyer’s motivation for buying and financial information. This is a contract between the buyer and the agent, but the agreement can be canceled by either party as long as the buyer is not under contract with a property.

Murray & Associates also provides a Buyer Guarantee so if you are transferred within 6 months or you are not happy with the house or neighborhood, we will list the home for sale and charge only the 3% seller agent fee plus $500 marketing fee.

At our first meeting, we will give you a buyer book that includes tabs for viewing properties, for your loan information, and other official documents. I typically give you a copy of the Contract to Buy, so you have an opportunity to review the document before we write an offer.

Visit the next step in The Home Buying Process:

Step 3 – Qualifying for a Loan