Many people say that by selling your home privately can save a significant amount of money in real estate commissions and since you can put this extra cash right in your own pocket why use the services of a real estate agent?  In the first place the buyer's agent in a transaction shares in the commission paid by the seller so there is no commission cost to the buyer.  The only saving by not using an agent would be for the seller.  A real estate professional has received a license to practice according to the Real Estate Act of the jurisdiction in which he works to assist in the buying and selling of homes.  He has been thoroughly educated to observe the laws and regulations that govern the local real estate market and understand the ethics involved in buying and selling property.  You wouldn't do your own medical examinations or give yourself legal advice because there are trained professionals with expertise in these areas to objectively assist you.  Similarly a real estate agent is a trained professional who can make the buying or selling of real property a much smoother transaction than it would otherwise be.  So while the seller must pay the agents' commission much of the stress of conducting an unfamiliar process is removed.  The agents help to negotiate the sale, complete the various legal forms and write up the contracts. Sometimes, peace of mind is worth more than you think, especially when it comes to what is usually the largest financial transaction a person conducts in their lifetime: the purchase or sale of their home.

 

 

     Once there is an accepted offer in place on a property it is a legally binding agreement that, barring unforeseen problems, has to be honoured. Once a person decides to buy or sell a home the first step is to find an agent he would be comfortable working with.  Real estate agents advertise everywhere from bus stops, to newspapers, on television and radio, and the local Real Estate Weekly listings guide.  Often a personal referral from a friend is a good way to make the choice.  Once an agent has been selected he will explain the terms and conditions of the agency relationship including the way he is compensated and the rights and responsibilities of both parties.  For a seller the agent will help determine the current market value and the listing price of the property which is generally a bit high so that there is room to negotiate.  Next, a process of showing the listed home or viewing prospective homes to purchase will be organized by the agent.  This process will continue until a prospective buyer makes an offer on the listed property or a suitable property to purchase is found by the buyer and an offer is made.

 

 

    

Most real estate contracts contain conditional clauses that must be removed before the contract becomes firm and binding.  Conditional clauses may include: subject to the buyer approving a building inspectors report, or subject to the buyer arranging suitable financing. There is a specified time allowed for removing the conditional clauses.   Once there is a firm and binding offer a good faith deposit of is normally required.  The deposit is usually 5-10% of the purchase price of the property.  The possession date usually closely follows the closing date quite and is when the buyer is actually able to move into the subject property.  Once all of the completion papers have been signed by both parties the adjustment details, including the advancement of mortgage funds, closing and legal costs, property transfer tax, municipal property tax, etc., are determined, the appropriate amount of money is given to the seller and title is transferred to the buyer.  Once all this is done the buyer moves in.

 

 

     In this complex process, how does the bank or other mortgage lender fit in?   When a buyer applies for a mortgage he will be talking to a banking professional who will be extremely interested in the buyer's credit and work history which will be evaluated to determine the amount of money the buyer qualifies to borrow as a mortgage.  If this procedure is done in advance it is called a pre-approval.  It can be a huge relief to go through the pre-approval process before finding a home as the buyer can zero in on properties in the price range he can afford.  It can be very disappointing for a buyer to locate what he considers to be his perfect dream home only to discover that the bank won't approve a high enough mortgage loan.

 

 

     A buyer has taken all of the necessary steps, found the dream home and the bank says no. Is this the final answer?  A mortgage broker may be able to find a bank or other lending facility that is willing to offer higher risk buyers mortgage loans in return for earning a higher interest rate.