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Katz Realty, Inc. Information for Buyers

Is now a good time to buy a home or property?

Simply put....YES! For those of you that are in a position to buy your first home, move up to a larger one or invest in property, now is a great time. There is a large inventory of homes and investment property out there which is forcing prices down. Sellers are more motivated, mortgage rates are down, FHA-Fannie Mae and Freddie Mac loan limits are up and banks are looking for borrowers! In the long term, real estate has proven to always be a good investment, and in this downturn there are many buys that can be had.

Patrick Katz - Owner/Broker of Katz Realty, Inc.

Are loans even available?

YES! Bankers are calling us every week asking for Buyers! Despite what the news has been stating, banks are loaning. The American Recovery and Reinvestment Act of 2009 has definitely helped by adding the $8,000 tax credit that you don't have to pay back (similar to the $7,500 tax credit of 2008 that you do have to pay back over a 15 year term with 0% interest) and by reinstating last years 2008 loan limits for FHA, Freddie Mac and Fannie Mae loans. It has, however, gotten back to the way it should have always been... banks are once again concerned with "can you pay for this"... No more "stated income" or "liars" loans as they used to call them. But for those of you with decent credit, work history and the income to qualify, there are many loan programs are available!

Patrick Katz - Owner/Broker of Katz Realty, Inc.

What about the First-Time Home Buyer Tax Credit?

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

First-time home buyers who purchased a principle residence on or after April 9th, 2008 and before January 1st, 2009 may qualify for a $7,500 tax credit.

Visit www.federalhousingtaxcredit.com for more information.

Courtesy: federalhousingtaxcredit.com
Copyright © 2009 National Association of Home Builders. All rights reserved.

Why should I have a pre-approval before I look for a Home?

Getting a pre-approval before looking for a home is probably one of the smartest things you can do. It can be done as simply as making a phone call, visiting a bank, or filling out information online. A pre-approval will show you what price range you can actually afford, and what price range you may be willing to afford. It will save you, your Realtor® and the Seller's a lot of time and heartache. I have met countless clients who thought they could afford to be in a certain price range, only to find out by doing a pre-approval that they were considerably below what they thought. When you do find a home you like, having the pre-approval will show the Seller that you are not only a serious Buyer, but you can actually afford the home you are putting an offer on. We have recently seen a new trend occurring where the Sellers are now requesting a pre-approval before you can even look at their home.

Patrick Katz - Owner/Broker of Katz Realty, Inc.

Why Use a REALTOR®?

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called Realtors. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. Realtors are committed to treat all parties to a transaction honestly. Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same Realtor again.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a Realtor.

But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:

1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a Realtor some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.

2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.

3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. Realtors can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your realtor can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your realtor, title company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.

7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.

8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

9. Your REALTOR® markets your property to other real estate agents and the public. Often, your realtor can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your realtor markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your realtor acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires Realtors to utilize these cooperative relationships when they benefit their clients.

10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your realtor, you do not have to allow strangers into your home. Your realtor will generally prescreen and accompany qualified prospects through your property.

11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your realtor can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your Realtor is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

Courtesy of realtor.com

© 1995-2009 NATIONAL ASSOCIATION OF REALTORS® and Move, Inc. All rights reserved. Equal Housing Opportunity

How do Realtors® Get Paid?

Although most people think we make an hourly wage or monthly salary, that is definitely not the case. At Katz Realty, Inc. (and "most" other companies) the earnings are commission based only. In other words, if a Realtor represents the Seller, Buyer or Both and the sale actually closes, only then does that Realtor get paid. To go further, the total commission of a sale is paid to the Broker (office), then the Realtor(s) involved gets a percentage of that total amount. The percentage the Realtor gets is whatever is agreed upon by the Broker and that Realtor. If there are two separate offices involved in a sale, one listing office and one selling office, then the commission is split between the two offices. As you can see, this reduces (usually by 50% or more) the amount of funds the actual Realtor(s) receives. A Realtor may spend countless hours of their time and hundreds, possibly thousands of dollars of their own money before they will receive any funds. Most Realtors have to pay for licensing, insurance, MLS fees, Realty dues, specialty designations, desk fees, advertising, signage, auto fees, higher auto insurance and a host of other items. Often times a Realtor may work for months before receiving a check and possibly most of the year before they will see any profit.

Patrick Katz - Owner/Broker of Katz Realty, Inc.

Why may a Realtor® ask for a Buyers Agency Agreement?

Before we answer that question, let me first say that the agents at Katz Realty, Inc. and "most" other offices are paid on commissions earned only. If you haven't read the above paragraph, it will enlighten you as to how Realtors actually get paid. So, let me run you through a couple of scenarios that we have seen a lot....

A Realtor is contacted by a client stating that they are looking for a home in the Realtor's service area. The Realtor then spends his or her time researching properties, making appointments to show, previewing properties, showing properties to the prospective Buyer, and in some cases even assisting them in locating financing, home inspectors, etc. In one case the agent spent 5 months finding the right property, helping them with their financing and getting it to the "making an offer stage". At that point the Buyer had a "friend" write the offer. The agent who spent all that time received no compensation for his services.

Another scenerio: A Realtor from out of our service area was contacted by a client who was looking for a property in our service area. The Realtor did not want to take the time to show properties away from his service area, so he instructed the client to use us, then come back to him after they found a property. In this case, our agent spent over two weeks with client until they found "the right" property. The client then went back to the other Realtor to have him write the offer. Again, our agent received no compensation for services.

There are many other scenarios I have seen, but I think you get the idea. We are a service industry, and we are here to help people, but we must also receive compensation for our services in order to fund giving our services.

So, what exactly is a Buyers Agency Agreement? A Buyers Agency Agreement is an agreement between the Broker/Agent and the client that, in its simplest terms, states that if the Broker/Agent brings a property to a clients attention and that client purchases that property, then a commission is due to Broker/Agent. Typically, that commission is paid by the Seller. It is basically a "trust" policy between Broker/Agent and client that says "I will help you if you allow me the compensation that I earn". Again, this is in its most simplest of terms. There are many factors and many variables to go over, so when any Realtor asks you to sign a Buyers Agency Agreement, make sure they explain how that particular agreement works and make sure you understand it before you sign it. Also, they are required to supply you with a copy of the Law of Real Estate Agency Pamphlet which explains the duties of agency and how they pertain to different situations.

Patrick Katz - Owner/Broker of Katz Realty, Inc.

What is a Multiple Listing Service or MLS?

A Multiple Listing Service (MLS) is a suite of services that (1) enables brokers to establish contractual offers of compensation (among brokers); (2) facilitates cooperation with other broker participants; (3) accumulates and disseminates information to enable appraisals; (4) is a facility for the orderly correlation and dissemination of listing information to better serve broker's clients, customers and the public. A multiple listing service's database and software is used by real estate brokers representing sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller's broker in finding a buyer for the property. The listing data stored in a multiple listing service's database is the proprietary information of the broker who has obtained a listing agreement with a property's seller.

The additional benefit of the MLS system is that an MLS subscriber may search the MLS system and retrieve information about all homes for sale by all participating brokers. MLS systems contain hundreds of fields of information about the features of a property. These fields are determined by real estate professionals who are knowledgeable and experienced in that local marketplace. Whereas public real estate websites contain only a small subset of property data.

In Washington State, a licensed real estate salesperson can list and sell properties anywhere in Washington State. There are, however, many different MLS's throughout Washington State, so at this time, most Realtors or salespersons only have access to the MLS or MLS's that they have joined. It is hoped by some that one day there will be one MLS to cover the whole state. It is believed this would best suit the clients needs while searching multiple areas. In belief of this, Katz Realty, Inc. has joined the largest MLS in Washington State, The Northwest Multiple Listing Service.

Excerpt taken from wikipedia.com

Why should I get a Home Inspection?

The purchase of a home is probably one of the single largest investments you will ever make. You should be as informed and educated as you possibly can when considering a home purchase and a home inspection can provide that education. Also, the FHA and the VA, as well as many other mortgage lenders, recommend that a home inspection be performed.

A home inspection lets you know the condition of the property as well as identifies the need for any repairs before you buy, so that you can make an informed purchasing decision. A home inspection also informs the buyer of the positive aspects of the home, as well as any maintenance that may be recommended to keep the house in good shape and to keep all major systems operating smoothly. After the inspection, you will have a much better understanding of the property you intend to purchase.