Common Myths About Working With Real Estate Agents

It is important to understand the buyer-agent relationship.  Get started by avoiding these common myths about working with a Real Estate agent.

Home Buying Myth Number 1
I'll get the best deal on the house if I call the agent listed on the For Sale sign.

Maybe, maybe not. That agent represents the seller and is contractually bound to get the best deal for the seller. That doesn't mean the agent can't work with you in a fair and professional manner as a dual agent, but it does mean you should not disclose confidential details to the agent, until you are assured that the agent will keep your information confidential.

Bottom Line
If you tell a seller's agent the top dollar you will pay for a house, the agent must pass that on to the seller.

A dual agent cannot do that. Agency laws differ in every state, so take time to learn about agent duties and loyalties before you enter the home buying market.

Home Buying Myth Number 2
The agent told me I had to sign a Buyer Agency agreement before he would work with me, so I did, and now I'm unhappy with the relationship.

You might know you are a good match with an agent on the very first day you meet, but what if you aren't sure? If an agent asks you to sign an agency agreement before you feel comfortable about it, try one of these alternatives:

·  Ask the agent to work under a verbal buyer agency agreement for a short time. Some states allow this, giving you time to become familiar with the agent before you sign a formal agreement.
·  Ask the agent to write a buyer agency agreement that covers a very short period, a day or a week.
·  Find out if the agent can offer a non-exclusive buyer agency agreement. The agent would be your buyer's agent, but you would not be tied exclusively to her.
·  Let the agent continue to be a seller's agent--just don't disclose confidential information.

Bottom Line
If the agent will only work with you if you immediately sign a lengthy buyer agency agreement, you might be better off seeking another agent.

Home Buying Myth Number 3
I can find more homes for sale by calling lots of agents.

Maybe--but maybe not. If you are home shopping in a specific area, and the agencies belong to Multiple Listing Services, it means they all have access to the same properties.

Ask agents what areas they cover. Small-town agents might work a multi-county area. Agents in a city might restrict themselves to certain neighborhoods or subdivisions.

If you sign agreements with more than one buyer's agent, make sure the contracts are worded so that areas and duties do not overlap. For instance, Agent X works for you only in County A. Agent Y works for you only in County B.

Bottom Line
Researching and showing properties is time-consuming, so you'll get better service if you find an agent you like (within a given area) and stick with that agent.


If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.

         408.687.2026 |  Julie@JulieWyss.com | www.JulieWyss.com

Are You Really Pre-Approved for a Mortgage?

Most home buyers will hear these terms during their search for a home:

• Pre-Qualified
• Pre-Approved
• Loan Commitment

Sometimes even real estate agents are confused by the terms, so it's no wonder that home buyers and sellers are, too. Although related, the three terms each signify a different level of approval from a lender.

Pre-Qualified
You can be pre-qualified by a lender, by an agent, by yourself. The term means that someone has taken a general look at your income and expenses and plugged them in to a debt-to-income ratio formula. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your potential to buy a home.

Bottom Line: Pre-qualifying yourself before you start looking for a home will give you a general idea of the price range you can afford.

Pre-Approval
When you are pre-approved, it means a lender has looked closely at both your credit report and your income. The lender will tell you the maximum amount of loan they will offer, and which loan programs you qualify for. You'll also have a better idea about your interest rate, or you might lock-in a specific rate.

Bottom Line: Now you can go shopping for a home with confidence about your buying power--but it still doesn't mean the bank will approve the loan. Your income and credit report will be checked again before closing, and the home itself must be approved.

Loan Commitment
The bank will not issue a loan commitment until it has approved both the house and you. The home appraisal must meet the lender's guidelines--usually meaning the home must appraise at or higher than the sales price.

The bank may require more information if the appraiser mentions anything the bank feels should be checked.

A comment such as "observed a crack in the foundation and basement appears wet," will raise a red flag to the lender--and likely generate a structural inspection (which you must pay for unless the seller agrees to share or absorb the expense).

If the bank reads "home accessible only with a 4-wheel drive vehicle," you can be sure they'll want to know more about ongoing road maintenance. Where I work, we have thousands of mountain roads that are maintained by groups of home owners. Many lenders verify that there's a written road maintenance agreement before they will lend. Other banks don't seem to care as long as no derogatory comments are made about the road.Other things that affect a loan commitment:
The home's title must be cloud-free, meaning there are no problems associated with it (no outstanding liens that can't be paid at closing; no right-of-way problems; no litigation in progress, etc.).

Your credit profile will be checked again to make sure it hasn't changed in a negative way.Bottom Line: The loan commitment letter is issued only when the bank is sure it will lend, so the commitment date on your contract to purchase should normally be closer to closing than to the date you make the offer. The home seller can demand to see that letter as soon as the date has passed, so question anyone who tries to insert an early commitment date in your contract.

Since terminology sometimes differs in different regions, ask your lender to explain all of the terms associated with their approval process.


If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.

408.687.2026 |  Julie@JulieWyss.com | www.JulieWyss.com