Reality on Realty

When you watch television, and you see a commercial about a Realty Firm helping families buy a new home, it's a nice vision that puts a smile on your face seeing the family happy in their new home; the reality is, it's all bullshit. My family is in the market to buy a new home, and I have firsthand seen the evil side of the Real Estate Business. I had always thought that the men and women who worked in the Real Estate profession where people who took pride selling and buying homes for families. I was dead wrong. It's all business, your agent will try to screw you and "pressure" you to buy a home as soon as possible, and there are so many cost to account for. Buying a home is not an easy process, it's a very expensive one, and mistakes can be costly.

My family's Real Estate Agent...

He's somewhat new to the business, he speaks our language, and comes to our home unannounced (I find that very annoying). Well, we found a home that we were going to buy and we were very interested in, we placed a $1,000.00 down payment to show we were serious, we check the house again, and we noticed some problems we hadn't noticed before and declined to buy the home because there was no basement and there was a stench that came from under the house (my mom and small brother also have breathing/allergy problems). So you'd think that OUR agent would be on OUR SIDE and help us continue looking for a home, wrong! He was furious, an argument erupted between my parents and him, and now we only keep minimal contact through E-Mail (I'll explain later). Just to throw in a little fact, he was our agent for about 2-3 years and you can only imagine why he would be angry, but continue to read before you judge.

Suddenly, we started looking at the situation and we start freaking out a bit. First of all, the $1,000.00 deposit was at a trust account at HIS FIRM! I'm not going to mention the Real Estate Firm or our agent name out of respect. So, I, in request from my parents, they asked me to keep in contact with him through E-Mail and to find out how we can get our money back. Thankfully, he was a somewhat of a gentleman and was kind enough to explain that the money was held in an Escrow account, it is an "Earnest Money Deposit" as they call it. To get the deposit back, all we had to do is sign a termination form at his Real Estate Firm, and we should get a check back within a week, I'll keep you updated on this.

More facts: The home that we were about to buy was accepted for us to buy which was priced at $120,000.00. If we were to buy it, he would have made a 6% commission which amounts to an easy $7,200.00. PLUS including interest, he and his mortgage guy, altogether would have made over $20,000.00 (that amount, I was told by my father). So for him to get upset and to get into an argument with us was a bad decision. Not only did he lose a client, but he also lost a great deal of money in the future. I understand why he would be angry, but there are times you just have to let it go. Just to note, we are serious buyers, and we want to get out of this hellhole, so called, Hamtramck as soon as possible.

Five tips/tricks you need to know...

Since I have learned so much about the Real Estate Business in such a short amount of time, it would be wise for me to share some of my knowledge with you all. Here are five important tips, things you have to do and watch out for which will help you out greatly:

• First of all, if you're in the market to buy a new home or to sell yours, it is a good ideal to get an agent. However, finding the first agent and hiring him/her would be a bad idea. I recommend you interview a couple, find out what they can offer you, and make sure you are comfortable with them. Also, look up things to ask an agent, don't worry, there are many guides and suggestions online. Also, look him/her up and find out as much as you can about him/her. In addition, I would recommend you hire someone who has been in the business for a long time because that shows that he/she has experience, but also they tend not to be money hungry as the newbies, and they will be more patient with you and your search for your perfect home. Make a mental note, experienced agents are like the mafia, they know people and that could be very helpful for you in the future. The one thing that you must remember is having the right agent can make a world of difference.
  

• Second, if you're buying a home, make sure you know what you want. You need to know where you want it (the location), the square area of the house, the annual taxes, the price, if you want your home to be a ranch/non-ranch, the number of bedrooms/bathrooms, year it was built, etc... This is all important because out of thousands of homes that are on sale, you eliminate so many, and those that are left are those that fit your criteria. So make a list, do a little research about homes, also, look up information about mold (mold is a serious issue that homes have and it can make you sick, it can even be FATAL).
  

• Third, when you find your home, it is recommend that YOU CHOOSE to have your Earnest Money Deposit with a third party, do not give it to the seller or your agent and his/her company). This is where we made the mistake and things got even more complicated with our agent. I have found an article online that recommends you have it with either the Title Company or a Escrow Company. Also look up what rights you have to that money, you'll be surprised to know that you don't have many. Knowing how Earnest Money Deposits work can help you save hundreds, if not thousands of dollars if you decline to purchase your home after you made your deposit.
  

• Fourth, when you are going to buy a home, expect to pay many fees which may or will include the following: Loan Origination Fee, Loan Discount Fee, Appraisal Fee, Credit Report, Final Inspection Fee, Processing Fee, Flood Certification Fee, Tax Related Service Fee, Application Fee, Underwriting Fee, Escrow Waiver Fee, Closing or Escrow Fee, Title Insurance, Recording Fee, Survey, and Pest Inspection.
  
• I've gotten these fees from a document on estimating the amount for a loan for a property; something like that, even I'm not fully sure. I doubt you'll be paying for a every fee, but just keep in mind that you will have to pay for many (which may not even be listed here), and try to negotiate, if possible, to reduce or remove the unnecessary ones. Looking them up would be a great way to find out which are the useless ones that will cost you extra money. Yes, it is a pain, but a little research can pay off big time.
  

• Fifth, before you purchase your new home or even make a down payment, I would recommend you hire a Home Inspector. I should have placed this tip earlier, but since it is optional, I'm placing it at the end. Home Inspectors aren't expensive, maybe less than $500.00 (we hired a guy for $350.00), and the one thing we found out is that they take their job seriously. They will find imperfections that you may have missed and they will even take their time and write a very detailed report for you. You can even use the report from the Inspector, if he/she finds many faults with the house to lower the asking price of the home you intend to buy, which can be a great investment in the end.

The Real Estate business is evil, make no mistake about it. Being an informed buyer/seller can make a big difference and you even might save money and time. So, take a few days, do a little research about anything that relates to buying and selling homes, and you will be better off than most people. Have you ever heard the saying, "knowledge is power?" That is true to the heart. The more you know with what you are dealing with, the better understanding and control you have. This is just some advice that I can offer you, the rest is for you to discover and learn. For those who are in the search for a new home or selling their own now or in the future, I bid you all the best of luck.


"Knowledge is power."