HOMEBUYER 101

In the past 10 years, homebuyers have experienced a huge increase of information and guidance. By working with an Exclusive Buyer's Agent ("EBA"), buyers are now much more perceptive and have access to so much information that used to be controlled by Real Estate Agents looking to help the seller, NOT the buyer.  Today, investment values are a key factor in buying a home.  This is where an EBA will demonstrate leading-edge and professional guidance to produce for you $ervice, $avings and $atisfaction.

Top "10" Things

1.   Exclusive Agency

Without your very own Real Estate Professional working Exclusively for YOU the Buyer, you risk losing thousands through Conflict of Interest with a Limited-Dual- Agent.  Another agent could be representing the Seller and therefore not representing YOU!

2.   Confidentiality

Know when and what to tell. Your secrets must be secure to obtain the best possible price, terms and conditions.  Don’t show your hand too soon!

3.   It’s Your Money

That you close with.  Don’t feel shy because you might be getting a loan. It’s your cash and credit (all the same as cash at the closing table), that will make the deal close.  So, it is YOUR MONEY that will pay everybody!  We won’t be arrogant about it – but we will not feel weak in negotiations if we don’t have all cash in our pocket.

4.   Conflict of Interest

A Listing Agent represents the Seller. As soon as they ask YOU to let them represent both you and the Seller -- and you agree – Conflict of Interest will live throughout the transaction!  No attorney can represent both sides in a court of law without a conflict of interest any more than a real estate agent can represent both a seller and a buyer in the same transaction without conflict of interest.

5.   Access to Inventory 

We have total access to Inventories throughout the area. In addition to the Tucson MLS, we have access to Bank-owned properties, Estate sales, HUD Properties and new and Custom Built Homes.

6.   What You Deserve

Know that you can have the maximum in $ervice, $avings and $atisfaction with Exclusive Buyer Representation.  The Agency laws of all States give YOU that legal right.

7.   Limited-Dual-Agency

Know that “Limited” does mean Limited.  Don’t be fooled into thinking that all can be “fair” in “Limited Dual Agency”.  You don’t need an agent playing judge, trying to be fair to two opposing sides in a real estate transaction.

8.   Highest Level of Service

You can expect Confidentiality, Accountability, Reasonable Care, Loyalty, Obedience and Due Diligence from APL.  Honest, professional negotiations in your best interest together with Demonstrated Values, Guidance through Offer Writing, Financing options, Inspections and Closing of Escrow are a part of our Exclusive Buyer Agency ("EBA") Package for YOU the Buyer.

9.   One-Stop-Shop

Know a “Catch Phrase” when you see one.  Convenience can be costly!

10.   “Limited”

Means that you are getting less of something than you are entitled to receive.  Don’t go for it! Be good to yourself!! YOU deserve an EBA!!!

VALUE vs. PRICE

What is Value?
 
"Value" is not the same as “Price," except on the day you close and take title to an object of your desire. "Value" implies the “Worth" of a specific thing or group of things, usually expressed in terms of dollars.  Everything has at least two values:  
 
- Basic functional value
- Class: Esteem or psychological value    
 
For Example: 
The least expensive brand new car from any manufacturer has the new smell, and with today's average equipment will deliver the two of us from point "A" to point "B" in a safe and timely manner.  That is considered "transportation".  The same basic function of people transportation can be performed by a vehicle from the same manufacturer, with a sticker price that is double or triple that of the first vehicle; and, we can say we had an added Value of "Class”.  The additional dollars invested for the more expensive vehicle was invested for esteem value, psychological value, (or class).
 
 
How Does Value Work?
 
By analyses In Real Estate, value is expressed in terms of dollars with approaches or definitions:
 
- The Comparative Market Value is determined by "Analysis" (CMA). This tells us the prices for which comparable homes or properties in a comparable neighborhood have sold.
 
- The Replacement Value expresses in terms of dollars how much it would cost you to buy a comparable building site, in a comparable community, and to build or to develop a comparable home or set of improvements on the land.
 
- The Income Approach to Value expresses in terms of dollars what a specific property is worth based on an investor's criteria for investing.  The EBA will provide the analyses and perform the due diligence regarding your selected property.  As we proceed with our work, you will say when it's enough.
 
How Can It Help Me?
 
An astute Buyer wants to buy value not price!  It is the desire of most Buyers to get good value for every dollar invested.  When we get a return in excess of normal expectations, for the dollars invested, we have made a good deal.  Paying too much can be like buying hot air in a balloon.  It can go away quickly.  A good motto is to pay price only when equal value is demonstrated.   Pay over value only when your esteem value kicks in.
 
 
Consider Other "Values":
 
- "Shelter Value" is very basic.  A roof over one's head while one eats, sleeps, entertains and on and on according to one's “Lifestyle” has value.   Anything beyond basic value is psychological or esteem value.  "Budget” usually determines how much esteem value or class we can build into a shelter package.
 
- "Investment Value" can be very important if you decide to sell in three to five years.  You may be thinking primarily about a roof over your head.  However, if you can save your money and build in "Future” values or benefits as we go you would be making a smart investment.  Your EBA will provide you with the information needed to make calm, sound business decisions regarding Investment in Shelter.
 
- "Confidentiality Values” and "Loyalty Values" are your motivation and secrets that are secure with an EBA.  You give the instruction. The EBA follows your instruction.  Together, we will find your comfort level and affordability limits.

THE HOMEBUYER'S GLOSSARY

Agent - One who is authorized to perform an action or duty for, or in the stead of another.

Amortization - A chart or log showing details of paying off the principal and interest of a loan. Equal monthly payments over a chosen number of years with periodic principal balances indicated are a standard form.

Buyer's Agent - A licensed real estate professional that practices single agency representation exclusively for the buyer in a real estate transaction.

Choice - The exercise of one's right and ability to select one option from two or more options. No choice is a choice to take whatever happens!

Close of Escrow - "Close of escrow" is, signing of all pertinent documents, payment of all costs incurred and recording of the title and loan documents.

Commission (Fee:) - That portion of a "full purchase price" that is designated by a seller, in Its listing agreement, as the money to be paid to licensed and qualified real estate marketing professionals to perform agency services for the seller and the buyer.  Any bona fide appraisal performed by a certified appraiser, for HUD, FHA, VA, FNMA, or conventional lending purposes includes a brokerage or marketing fee.  That fee is set by negotiations between principals and agents and neither by the government nor any of its agencies, nor by any Realtor® association.

Conflict of interest -  (as in "Agency"); Where an agent must choose between options that would solely benefit an agent's principle or, try to serve two masters in the non-fiduciary capacity of dual-agency.  Proposing and waffling to find an acceptable meeting of the minds.  Dual-agents either work in the "conflict of interest" environment or "disclaim agency and/or representation" to either party.  Neither party wins!  The double-agent does this in order to reap payment of commission for both selling and buying activities in the same real estate transaction.

Contract - A legally binding written agreement by and between principals.

Counter Proposal - A seller's legally written response to an Offer to Buy stating acceptance of the Offer in certain exceptions stated, under which if accepted by the buyer, a legally binding contract would exist.

Limited-Dual-Agency - Where the agent (or agent's office) is authorized by both the seller and the buyer in a transaction, to be a non-fiduciary.  A Limited-Dual-Agent may waffle between seller and buyer trying to find a middle-ground where each party is persuaded by the Limited-Dual-Agent that it's a "fair-deal".  The Limited-Dual-Agent's goal might result in the Agent being paid both sides of the commission -- and not necessarily working for the best interest of the buyer!

Deed of Trust / Mortgage - A security and foreclosure document used to take back the property that is being pledged as security for the note, in the event of default on the note.  If you don't pay, you can't stay!

Earnest Money - An amount of dollars that accompanies a serious Offer to Buy, that demonstrates sincere intent on the part of the offering. This is usually applied toward the purchase price of the property at closing of the escrow.  A buyer could lose money if the buyer defaults on the contract.

Escrow - A legal entity set up for a specific (usually a one-time) event, directed by an impartial, licensed escrow officer, whose purpose is: to accept, hold and disburse funds; and accept, develop, secure signatures upon, record and deliver documents in accordance with mutually signed instructions as established by the principals to a transaction.

Escrow Officer - An impartial, licensed, legally authorized natural person who directs an escrow.

Exclusive or Single Agency - Where the principal has the Agent in his or her corner working exclusively for the principal.  A truly fiduciary relationship where the Agent performs all responsibilities and duties for the Agent's principal with 100% full and complete Confidentiality, Accountability, Reasonable Care, Loyalty, Obedience, Advocacy and Due Diligence, keeping the principal fully informed.  Directed by the principal.  The Agent experiences zero conflict of interests and zero dual-agency herein.

House/Home - A structure, usually situated on land that provides a specific location for human shelter, creature comforts, functions and body benefits.  This does not exclude psychological benefits. 

Lifestyle - What and how one lives with respect to environment, habitat, patterns of behavior, community, comfort level of design, facade and floor plan of a structure (not always a house); that which compliments and enhances one's values.

Market Value - Worth expressed in terms of dollars with respect to a specific property.  This is usually done by a bona fide, certified appraiser.  An EBA will determine for the buyer that amount of dollars that would be the top of the market.  Offering usually starts lower than that amount and skillful negotiations ensue to a meeting of the minds and opening of escrow with a mutually signed contract.

Offer to Buy - A buyer's legally written document stating price, terms and conditions under which the ready, willing and able buyer will buy a specific property and close the transaction by a certain date.  If an Offer to buy is accepted by a seller, as written, it becomes a legally binding contract.

Parties - Principals in a real estate transaction (a buyer; a seller).

Physical Inspection - Buyer usually pays for a qualified home-inspector to make a general inspection of the physical aspects of the property being purchased.  Buyer pays to avoid "conflict of interest" by allowing the seller to engage and pay for the inspection.  When deficiencies are discovered in the inspection, proper documentation should pass between the parties resolving such matters.  It is time for negotiations between the parties to get the deficiencies cured; the price adjusted or gets the contract dissolved and parties restored to their prior state before the offer became a contract.  Inspections are a very common occurrence in most states today.

Possession - The Keys to the property are usually not delivered to the buyer until "confirmation of funding" and "confirmation of recording" has been communicated to the people involved.

Principal or Client - The director and chief performer in a real estate transaction; One who engages the contract services of, and authorizes an agent to carry out the principal's decisions.

Promissory Note - A loan document for an amount of money borrowed by the buyer, usually evidenced by a "promissory note" bearing the loan amount needed to complete the purchase price for acquisition of a property.  The down payment and the loan amount together with all loan closing, escrow, title and one-time non-recurring prepaid costs, equal the amount of funds needed to "close escrow" and get the keys to the home.  The promissory note is usually secured by a mortgage or a deed of trust against the subject property.  Your promise to pay. 

Qualification - One's ability to pay for a house with one's own funds or to generate the funds needed, through meeting lender requirements of credit, employment or assets held.

Retainer Fee - A dollar amount paid as good faith money to secure the contract services of an EBA at the signing of an Exclusive Buyer Agency Agreement.  Such money is usually designated to be credited toward any commission or fee earned in the transaction defined in the contract.  It is not uncommon for a portion, if not all, of the retainer fee to be returned to the buyer at close of escrow. When buyer's agent fees are established by contract and the agent receive more than the contract amount at closing, the surplus goes to the buyer on the HUD-1 Settlement Sheet.