Home Buyer Education

Begin your homebuying journey with confidence through our Home Buyer Education Page. Here, we offer answers to frequently asked questions, free consumer guides providing valuable insights, and a comprehensive understanding of the Buyer's Representation Agreement.  Explore the pages of our "Complete Guide to Buying a Home," enhanced with a comprehensive step-by-step Homebuyer Guided Journal Workbook, and an enriching online educational course designed for both new and seasoned homebuyers. Empower yourself with knowledge as you navigate the path to homeownership.

GENERAL FREQUENTLY ASKED QUESTIONS

Do I Have to Sign a Buyer's Representation Agreement?
It is important to note that each office operates independently and may have its own requirements regarding this agreement. Effective July 1, 2024, following recent lawsuit settlements involving the National Association of Realtors (NAR), the local California Association of Realtors (CAR) is taking immediate actions before the courts final rulings - CAR is making it a requirement for prospective home buyers to sign a Buyer's Representation Agreement with their brokerage prior to showing any properties. Opting for this agreement empowers buyers with dedicated representation, legal protection, and a streamlined, professional homebuying experience.

What is a Buyer's Representation Agreement? Click here

Do I Pay Commission to an Agent to Help Me Find a Property?
Each office is independently owned and operated. Real estate agents are independent contractors within their respective offices, working solely on a commission basis. Before moving forward, it is now crucial to address commission arrangements with your agent. Buyers should understand that if the seller does not agree to pay the buyer's brokerage commission, that they will be responsible for paying.  Commissions are paid through escrow and each buyer is responsible for communicating with their agent to explore options on how commissions can be paid. 

How Are Agents Paid?
In real estate transactions, for many years sellers typically cover commissions for the sale of their property. The seller pays one fee to the listing brokerage, who then shares a portion of the commission with the buyer's brokerage. Example: The seller is charged 5% to sell their property. This 5% fee is sometimes shared 50/50 between the listing brokerage and the buyers brokerage, giving each side 2.5% - the 2.5% on each side is then split again 50/50 with the brokerage keeping 1.25% and paying the agent 1.25%. In this scenario, each agent is paid 1.25% - the entire full 5% is not solely paid to one agent even if they conduct a dual representation. The agents works for the brokerage and the buyer's agent brokerage is paid from the cooperating listing brokerage and the brokerage then pays the agents involved in the transaction. The agents use their earnings of 1.25% to pay their own staff, offer credits if any, get reimbursement for any out of pocket incurred expenses, and essentially helps to keep their business going and take care of their families.  

The National Association of Realtors (N.A.R.) introduced the Cooperative Compensation Agreement to regulate commission sharing among real estate professionals, ensuring fair compensation for both listing brokers and selling agents. However, recent rulings may impact sellers' willingness to pay the buyer's brokerage commission, potentially leaving the buyer responsible for covering their agent's brokerage fee. While this option for sellers may seem new, it has always been part of the listing process.

Can an Agent Assist in Finding Off-Market or For Sale by Owner Properties?
Yes, an agent can indeed help you discover off-market and For Sale by Owner (FSBO) properties. However, it's essential to note that in off-market and FSBO scenarios where no seller compensation agreement has been established, the buyer may be responsible for paying the brokerage a commission fee.

Additionally, buyers should be aware that if they request the agent to conduct special property marketing campaigns outside of their usual marketing efforts, where the agent may incur extra upfront costs, the buyer may need to cover or reimburse the expenses related to those efforts. These expenses may include database lists, paying staff for overtime, marketing materials, postage, etc. It's essential to understand that while these efforts are undertaken diligently, they are not guaranteed to yield immediate results.

Are There Any Out-of-Pocket Expenses I Should Consider When Buying a Property?
Beyond the down payment and closing costs, buyers should be aware of additional expenses. Depending on the property, you may need to budget for essential home inspections such as General Home inspections, Termite Pest Control Inspection, a Roof Inspection and fees associated with your loan such as credit check fees and home appraisal. These inspections ensure a thorough assessment of the property's condition, helping you make informed decisions during the home buying process.

Can I Ask an Agent to Give Me Buyer Monetary Credits?
Real estate laws and brokerages may have restrictions on giving monetary credits. Real estate agents and brokerages are not obligated to provide client credits. Each office operates independently, so buyers should discuss credits directly with their agent.

Am I Charged Extra by the Seller to Purchase their Property?
When a property is listed on the market for sale, the listing price is based on current Market Value and Market Trends based on recent Comparative Sales in the neighborhood. Hiring an agent to represent you is essential to make sure you are making the best offer and not paying above the appraised or market value.

What is a Buyer's Premium?
A buyer's premium is an additional fee that buyers may encounter when bidding on properties through an auction. This fee can be negotiated into the offer price, but it's essential to discuss these fees with your agent before bidding. Generally, there are no hidden fees in property transactions. Legal requirements mandate that all fees associated with the purchase or sale of a property are disclosed to both parties on their HUD-1 or sales estimate before and during the escrow process.

Essentially, buyers are responsible for various fees associated with their loan, including loan origination fees, appraisal reports, money deposits toward the property purchase, down payment, and their portion of any closing costs and escrow fees. It's important to note that there are no hidden fees. You'll receive a preliminary estimate of buyer fees and a breakdown of all costs associated with your purchase before and during the escrow process. Your lender can provide a list of estimated fees during your loan consultation, and we'll discuss them further during our buyer consultation.

How can I buy a newly constructed home instead of a resale home?
You have options! We have a network of new home builders throughout California. Contact Us for more information. 

Free Consumer Guide:
WHAT YOU NEED TO KNOW ABOUT BUYING YOUR FIRST HOME

If you are thinking about buying your first home or another home, then this guide is for you. We delve into understanding the right time to buy; is buying the right decision for you and comparing renting vs buying. This short guide will give you enough information to ask any real estate agent the right questions to help you get started with the home buying process.

Complete Guide to Buying a Home

Complete Guide to Buying a Home: Your roadmap to successful homeownership. This comprehensive guide provides essential insights and practical steps for homebuyers. Navigate the homebuying process with confidence, from understanding the market to choosing the right loan and securing your dream home. Maximize your investment and achieve a successful homeownership journey. This book includes a companion Homebuyer Guided Journal Workbook and an online educational course to enhance your learning experience.

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