Realtors are a bit like a big family of people, but the professionals are often at odds with one another.
Here’s what you need to know about real estate brokers, who are a family of seven.
Real estate buyers are more likely to get into trouble.
There are no secret recipes for success in the real estate industry.
But there are some tips to follow, says Bob Burtch, president of Burt’s Real Estate in Fort Lauderdale, Fla.
“You need to be very careful, because you can get into a situation where you’re just going to get in a jam.”
For instance, if you don’t have a home inspection, the agent might ask for an inspection.
“And you can’t get an inspection without having a home,” says Burt.
That’s because real estate agents are trained to look for problems before you even walk into the office.
The best advice, Burt says, is to do everything you can to make sure that the agent isn’t looking at your credit score or other factors that might affect your ability to buy a home.
“If you can make a home-inspection at the beginning of the process, you should be OK,” says Robert C. Bowers, chairman and CEO of Bowers Group, a real estate brokerage.
If you have a bad credit score, your agent can try to make you buy a house.
The more time you spend at the realty store, the less likely you are to buy the house that’s advertised, says Michael F. Sperling, president and chief executive officer of Sperlings Associates.
“There’s a risk in buying a home that you may not live in for a while, and that’s where the real value of the house can be built.”
That’s why many real estate brokerages require that you have at least a 3.0 on your credit report.
The average credit score for a new home is 590, but that can change, says Sperles.
In other words, if your credit history is bad, you may need to refinance your mortgage, or sell.
But he adds, “You can’t make a bad decision about a home with a bad score.”
Some agents use the house as leverage.
If a buyer doesn’t pay in full, the broker can get an extension on the mortgage and a percentage of the sale price.
This tactic can be particularly helpful when the seller doesn’t want to pay for a home or when the buyer is looking to move out of state, says Jeffrey D. Peltier, president-elect of Sotheby’s International Realty, a major brokerage.
If the buyer agrees to the extension, the buyer may get a refund on the purchase price, but not the mortgage payment, which could make things worse.
“It can be really important that the seller does not take a negative view of the buyer, and we’re going to help them,” says Sothebys CEO Jeffrey Dank.
You need to pay attention to all of the options.
If your agent offers a loan modification or sale option, you have to make a decision whether you want to buy or not, says Bowers.
The agent will offer you an offer, and you have three choices.
You can either accept it or reject it, he says.
The first option is to accept it, says Kallman.
If I go with the negative, I will be a bad buyer, but I will get a loan.
If, however, I go along with the positive, I can do more damage to the seller’s reputation.
The second option is not to accept the offer.
“I can’t accept the mortgage unless I can make the buyer pay for it, and the buyer can make him pay, but if the buyer goes along with it, I’m going to be an even bigger problem,” he says, adding that he can’t do anything to prevent the buyer from taking the offer and defaulting.
The third option is a no-risk move: If you don, the realtor can sell the home at the end of the deal.
This will result in a big loss for the buyer.
If that happens, the sale will be more than 100 percent funded, but no money will be returned.
The buyer can ask to have the mortgage serviced and the realtors’ fees and taxes paid.
This could mean a significant down payment or refinancing, or even a sale.
Beware of the home inspection.
Realtors can charge you fees for home inspections, says Peltiers.
If an agent says he’ll pay you a fee, he should be very clear about that, says Coughlin.
“The broker should know what’s on your file, what’s going on, and what your history is,” says Croughlin.
If it’s a $10,000 inspection, then he’ll probably be asking