BUYING OR SELLING A HOME?
Representation is a Good Idea

     When you are ready to buy or sell a home, you should consider engaging the services of knowledgeable professionals to give you the best advantage and guide you through the process.

     If you are selling a home, you may not need a real estate broker if you can do it yourself. However, you must advertise it, show it to prospective buyers, qualify buyers, and arrange for the real estate contracts and closing. Depending on your knowledge and time availability, hiring a real estate broker may be a good decision. In most cases, brokers charge a commission to the seller from 5 to 7 percent of the sales price of the property. When you use a real estate broker to sell your home, you will sign a listing agreement which gives the broker the authority to find a buyer and receive a commission.

     There are various kinds of listing agreements, the most common being the "exclusive right to sell" agreement where you agree to pay the broker a commission if the home is sold by anyone during the term of the agreement. You pay the broker's commission even if you sell the home yourself. Another kind of listing agreement is the exclusive agency agreement under which you only pay the broker's commission if the sale results from the broker’s efforts. If you sell your home yourself, you owe no commission. In an open listing agreement you have the right to sell your home yourself, but it also gives you the right to list it with other brokers as well. You only pay a commission to the broker who actually finds the buyer. Regardless of the kind of listing agreement you sign, you should try to avoid signing one for a term more than 90 days. If you believe the broker is making a good faith effort to sell your property, you can always renew the agreement. You will also want to include a provision in your listing agreement stating that no commission is earned by the broker until the sales transaction actually closes.

     Whether you are buying or selling a home, particularly if you are doing it on your own, there are other things you should be aware of to protect your interests. When a buyer puts an offer in writing and it is accepted by the seller, the signed acceptance becomes a binding sales contract. It is generally a good idea to have experienced real estate legal representation to prepare or review the contract before you sign it. Your attorney will address various issues, including terms of the sales contract such as: sales price, what is included in the sale price -- draperies, carpeting, light fixtures, etc., the amount of the down payment, the date of closing and occupancy date, contingencies to the sale--inspections, required improvements, negotiations with the other party's attorney, amount and length of the mortgage loan, interest rate and time limits to secure the loan, title search and insurance, determining which closing costs are to be paid by each party. The attorney may also be present at closing to protect your interests and work out last minute details.

     Some attorneys can act in the capacity of a title company as well as render legal advice. As part of that representation, the attorney searches the title to the real estate, gives an opinion on the title in order to obtain title insurance, clears up or corrects any title defects, prepares the closing package, negotiates any last minute changes or problems on your behalf, closes the transaction, updates title, records the deed and mortgage documents, prepares a final title opinion and obtains the title insurance policy.

     When contemplating a real estate sale or purchase, having the proper professional advice can protect you from entering into a disadvantageous contract and will help make the process go more smoothly.

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