Buyers Representation Agreements

Buying a home usually represents your single biggest investment – and debt.

The home buying process is one of the most exciting, and frequently stressful, experiences you’ll ever go through. This holds true whether you’ve bought many homes or you’re looking to buy your first, whether you’re in the market for a new primary residence, an investment property or that perfect 
vacation getaway.  I hope this Home Buyers Guide will assist you with your purchase.

Today’s real estate market can offer more opportunities, yet
 can be filled with more risks than ever before. There are a multitude of factors to consider and decisions to make. When buying, it’s crucial to have all the available resources necessary to make a well-informed decision, together with the time required to make use of them. It’s important to enlist the help of a trusted real estate professional who’ll be able to provide expert guidance at each step of the buying process.

Finding and purchasing a home includes the following steps, which we’ll examine in more detail throughout this Home Buyers Guide:

1.) Define your goals, research your options, make your plans

Given that buying a home is such a big step, it’s very important to educate and prepare yourself as much as possible, and that is why we have prepared the Home Buyers Guide. It means clearly determining the reasons you’re buying and what kind of home you’re looking for. Since buying and financing a home are so closely related, it also means examining your current financial situation and projecting how much you can afford.
Once you’ve answered these questions, even tentatively, you’ll be in a better position to research housing and mortgage options, and create an action plan and timelines for moving forward. Although it is possible to do this yourself, you may benefit by consulting an experienced real estate professional right from the start.

See our complete Home Buyers Guide for a Homebuyer’s Glossary of Terms.

2.) Contact a real estate professional – Contact the King!

Buying real estate is a complex matter with many factors to consider since no two homes or transactions are alike. Moreover, with all the unique opportunities and potential pitfalls of the current market, it’s more important than ever to contact a real estate professional once you’ve decided 
to buy.  This Home Buyers Guide is no substitute for a Real Estate Professional.
When choosing a real estate professional to guide you through the property search, financing, negotiation and transaction processes, you should consider their local market knowledge, experience, and track record.

I feel that I need to talk for a minute regarding Buyers’ Representation Agreements.  This is contact you sign with a realtor that effectively ties you to that agent for a period of time, usually 6 months.  The agreement says that that Realtor is entitlee to receive a set percentage of the Sales Price for any home you buy during the contract period.  I have hundreds of Real Estate Transactions under my belt and have discussed real estate with thousands of contacts and clients.  I have NEVER signed a Buyers’ Representation Agreement.  I believe that most people that sign them, do not understand them.  There are times that a Buyers’ Representation Agreement is necassary, but I believe that 98% of the time, this is an over-reaching practice at best and dishonest at it its worst.  If my service doesn’t keep you with me, I did not earn your business.  Here is a copy of a typical Buyers’ Representation Agreement.

3.) Get pre-approved for a loan

We recommend that you get pre-approved for a loan before you start viewing homes with the serious intention of buying. The pre-approval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. On the basis of this examination, the lender may provide you with documentation detailing the amount you can borrow to buy a home.  When you are ready to make an offer, they can provide you with a prequalification letter that demonstrates to a protential Seller, that you have the ability to purchase their property. ofConsider looking online to see what different lenders offer, or contacting your local bank or credit union.

The benefits of pre-approval include:

You’ll know what you are eligible to receive and be able to plan accordingly
. As a qualified, motivated buyer you’ll be taken more seriously when you make an offer.  Lenders can tell you if you qualify for special programs that will help you afford a better home (particularly if you’re a first-time buyer).

Real estate financing is available from many sources, and an experienced real estate professional will be able to suggest lenders with a history of offering excellent mortgage products and services.
  For more information about the benefits of pre-approval and the loan process in general, see -
The Loan Process – Financing Your Home Purchase, on page 14 of our full Home Buyers Guide.

See my list of Recommended Anchorage Lenders

Federal Housing Administration (FHA) Mortgage Limits

One Family     Two Family     Three Family     Four Family     Median Sale Price     Limit Year
$396,750          $507,900         $613,950            $763,000          $345,000                        2017

The Federal Housing Finance Agency (FHFA)/Fannie Mae

One Family     Two Family     Three Family     Four Family       Limit Year
$636,150          $814,500         $984,525           $1,223,475           2017

4.) View homes and select THE ONE

Simply put, the key to the home search process is knowing what you’re looking for. Among other things, that means distinguishing between “must-haves” and “like-to-haves”. To help you to target your search and define your home preference priorities, this guide includes a Home Search Worksheet on page 23 of our complete Home Buyers Guide.

That said, here are a few recent facts about the search process that might put your experience in perspective:

Nearly 95% of buyers use the internet or mobile apps to search for homes. 
The typical buyer searches for 12 weeks and views 12 homes, 
97% of buyers view real estate agents as important in the home search process.

There are many benefits to starting the search process at a real estate website like You can view many homes and their details, take video tours and access neighborhood info.

However, it’s also important to view homes in person. Make sure you have a Real Estate Professional that likes to show homes!  While the property details may seem similar online, homes can be very different in terms of layout, design, workmanship and other aspects. What you see in a photo, is not always what you get.  Photos over/understate homes ALL the time.  Ideally, you should view homes with the help of an experienced real estate professional who’ll notice things you might miss, provide expert analysis, and act as an impartial sounding board.

5.) Make an offer and negotiate with the seller

Once you’ve found the home you’d like to buy, it’s time to make an offer. In Anchorage, the Anchorage Multiple Listing Service (MLS) uses contracts that are approved by the State of Alaska Real Estate Commission that are generally used for transactions in your area. These contracts enable you to specify a sale price and also allow the inclusion of clauses specifying various terms of purchase, such as the closing and possession dates, your deposit amount, and other conditions.  In general, these MLS contracts are written in a neutral fashion between Buyer and Seller.

You should carefully review these clauses with your real estate professional to be sure that they accurately express your intended offer. In addition to drawing up the contract, your real estate professional will be happy to address all of your questions about the offer process.  See our Home Buyers Guide for more information.
Once you’ve written the offer, your real estate professional will present it to the seller and/or the seller’s representative. At that point, the process will vary somewhat depending on the market you’re in.

Generally speaking, the seller can accept your offer, reject it, or counter it to initiate the negotiation process.

Successive counter-offers, with deadlines for responding and meeting conditions, may be exchanged between you and the seller until a mutual pending agreement is reached or the negotiations breakdown.  Dates are important.  Offers and counter offers expire, but no worries, live ink can make them live again!

Negotiations involve many factors specifically relating to different market conditions, homes and sellers, some of which are examined in – Successfully Negotiating The Deal – on page 18 of our complete Home Buyers Guide.

6.) Secure your financing

Once you have a pending agreement, it’s time to return to your chosen lender to finalize mortgage details in order to close the deal. This means now making a full application, finalizing your down payment amount, interest rate, regular payment schedule and all other financial conditions associated with the closing.
As the saying goes, ‘let the buyer beware’. Unfortunately, too many buyers suffer negative consequences from not fully understanding their financing decisions. Thus, it’s crucial for you to work with people you can trust. In this regard, a good real estate professional can become a true friend for life.  For more information on the loan process, see – The Loan Process – Financing Your Home Purchase, on page 14 of the complete Home Buyers Guide.

Close the deal!  If you’ve efficiently taken care of everything connected with purchasing your new home, taking ownership should be a positive joy with no surprises.  Key steps to the closing, also referred to as the “escrow” or “settlement”, include:

Getting a title search – you will need a historical review of all legal documents relating to ownership of the property – to ensure that there are no claims against the title of the property. It’s also necessary to purchase Title Insurance for protection in the event of errors in the records or mistakes in the review process.  This is performed by a Title Insurance Company and they will provide you with a policy to insure and defend your title.  Never purchase property without Title Insurance.

The final walkthrough – you will be given the chance to look at the home one last time to make sure it’s in the same condition as when you signed the sale agreement and any negotiated repairs are done to your satisfaction.

Closing and Recording – typically, on the Closing Date you’ll meet with your Realtor at the Title Company to verify and sign all the paperwork required to complete the transaction. Funds, including lending documents for mortgage funds, will need to be in the form of Certified Funds will include your closing costs, legal fees, prepaid expenses like taxes and insurance and other costs associated with your transaction.  Any earnest money paid in advance will be credited to you at closing.  Recording normally happens the following day.  This is when the deed transfering title to you and mortgage documents and recorded at the State of Alaska Recorders Office.  When the property is recorded, you now own it.  This is also the time you normally take possesion and one more thing – you’ll get the keys!

In most cases, Possession Date will fall within a few days, and you will be able to move into your new home.


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