A buyer’s Guide

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Buyer Representation

Buyer Representation is usually free to buyers. In Maine the seller is responsible for paying the real estate brokerage commission. The representation agreement outlines the relationship between you and agent by establishing Duties, Responsibilities, Compensation Policies, And Terms. These are bilateral contracts, meaning promises are being exchanged by both parties (Client & Agent). These agreements and their parameters can differ depending on the agent you are working with and the types of services you are seeking.

Buyer Representation

Buyer Representation is usually free to buyers. In Maine the seller is responsible for paying the real estate brokerage commission. The representation agreement outlines the relationship between you and agent by establishing Duties, Responsibilities, Compensation Policies, And Terms. These are bilateral contracts, meaning promises are being exchanged by both parties (Client & Agent). These agreements and their parameters can differ depending on the agent you are working with and the types of services you are seeking.

exclusive vs. Non-exclusive Buyer representation agreements

Exclusive Buyer representation agreements are assure the real estate agent the sole right to represent the buyer and the sole right to be compensated for the successful completion of any transaction by the buyer for the duration of the contracts lifespan.
Non-exclusive Buyer representation agreements allow clients to have multiple agents representing them, the right to compensation depending on which agent initially showed them the property being purchased. Buyer’s are only obligated to work with them exclusively on properties the agent showed them while under agreement.

An Agent’s Responsibilities

Use their professional skills and resources to locate, negotiate, & close on a property deemed suitable to the buyer’s needs.
Help the buyer determine current market value of properties of particular Interest.
Keep the buyer’s information confidential. Exceptions only being made for the designated broker or their designee for the purpose of seeking advice that would help the buyer.
Help the buyer find property-related professionals for assistance when necessary.

A buyer’s responsibilities

Provide the necessary Personal and financial information that verify the buyer’s ability to buy.
Make independent investigations and make executive decisions.
Maintain obligated loyalty to exclusive and non-exclusive representation agreements.

Involved Professionals

Most real estate transactions include a few different professionals to get the job done well. For buyer’s there are typically these 5 you will become familiar with:

A Real Estate Agent for both you the buyer and the seller. They are responsible for representing their clients best interests as they negotiate, coordinate, and close the transaction. They will be the ones responsible for finding other reliable professionals for you as you need them.
A Lender will be necessary to finance most transaction.
An Inspector is an advisable ally to have once an offer is accepted, they can help assure you of the condition of the property.
An Appraiser, usually hired by the lender, is basically the bank’s risk inspector. They evaluate the value of the property to give the bank confidence in the loan.
The Title Company works on behalf of the buyer and/or lender making sure that the transaction is legally sound. They will be responsible for conducting a title search. This insures that you will be purchasing a clear and marketable title. They will also be responsible for facilitating the closing.

Lending Process

The first step is putting you in touch with a lender. The Following is a brief breakdown of the lending process, from pre-approval to your move in date.

Things to Avoid

Job changes, becoming self-employed or quitting your job.
Making any large purchases like an automobile, furniture, etc.
Using credit cards excessively or being late on payments.
Paying off large sums of long term debt.
Spending money you have set aside for closing.
Originating any credit inquiries.
Making large deposits.
Co-signing any kind of loan for anyone.
Omitting debts or liabilities from your application.
  1. “PRE-QUALIFY” Get pre-qualified by having your credit, income, and assets reviewed. This will help us establish a budget.
  2. “FIND A HOME” After we have reviewed your budget and desires, we will begin house hunting.
  3. “PRE-PROCESSING” Your loan officer may request a few preliminary items from you to begin preparing your file.
  4. “UNDER CONTRACT” A signed sales contract (Offer and Sale Agreement) between you and the seller. Provide the contract to the title company and lender. At this point I will collect any earnest money you might be offering and deposit it safely in escrow.
  5. “LOAN APPLICATION” Meet with your Lender to review and sign the loan application. (Time Sensitive)
  6. “INSPECTION” If you’d like, now is the time to Inspect potential property for structural, electrical, and plumbing issues. (Time Sensitive)
  1. “PROCESSING” Processor receives and reviews documents. Appraisal, title insurance, tax certificates, and verifications are ordered.
  2. “LOAN COMMITMENT” Loan Commitment is provided to Buying and Selling Agents.
  3. “UNDERWRITING” Appraisal report received; Processor will turn in completed file to Underwriter for approval (usually 3-5 days). Underwriter provides a list of conditions to be cleared for closing from all parties.
  4. “LOAN APPROVED”  We will set closing time with the title company.
  5. “CLOSING DEPARTMENT” Closing documents are sent to the title company for a final “approved” Closing Disclosure (CD).
  6. “HUD” Title company draws settlement statements to be approved by Lender and Agents. I will review the statement to make sure the settlement costs are that of which you approved.
  7. “FINAL WALKTHROUGH” We will do a final walkthrough to approve the condition of the property prior to signing closing documents.
  8. “TITLE COMPANY” The title company compiles all paperwork and draws up documents to be signed by all parties.
  9. “CLOSING” Parties sign closing documents and meet funding conditions. This process takes about one hour.
  10. “FUNDING” Title company requests funding from the lender. Once complete, the new owner takes possession. Time to move in and enjoy your new home

Offer & Negotiation

What is in a offer?

There are 5 main components of an offer:

The Effective Date is the official day that the seller accepts our offer and dictates the start date of which all contingencies must be met.
Earnest Money is an amount of your money that will be held safely in an escrow account until closing. At closing it will go towards your initial down-payment. This is to show the seller you are serious.
The Offer Price should be considered based on a variety of market factors.
Due Diligence gives you the right to have an inspection and back out if you find the home unsatisfactory.
The Closing Date should be considered based on your own needs and also the seller’s depending.
Offers & Counter Offers Guide

Inspection

prioritize material defects

This part of the process is intended to make sure there is nothing seriously wrong with the property and that the disclosures are accurate. The focus should be on things that impact the functionality, safety, or structural integrity of the home, especially when they might cost a significant amount to repair.

Home Inspection Checklist

Closing

Before you close we will do a complete walkthrough of the home to ensure everything is as it should be. If you are getting a mortgage, here are a few things you should make sure to bring to closing:

A governments issued photo ID like a driver’s license, state issued ID, or passport.
Cashier Checks, Certified Checks, and Wire Transfer’s in the amount of the anticipated closing costs.
Proof of Home Owners Insurance