Forrester Realty : Information and FAQ

Frequently Asked Questions (FAQ)

Why should I use Forrester Realty as my Realtor®?

Is being Pre-Approved for a loan an Advantage?

What Information do I need for a Mortgage Application?

Who Pays the Commission?

The Seller
In many cases, the Seller has signed a listing agreement with his agent specifying a certain fee to be paid for selling the home. It can include provisions for splitting that fee with the selling agent, regardless of agency representation.

The Buyer
In some cases, the Buyer pays his agent a commission as set out in their written agreement. If the buyer pays his agent from his separate funds, it would not be appropriate for the buyer's agent to also accept part of the fee paid by the seller.

Indirectly, The Buyer Does
However, an argument can be made that the buyer indirectly pays the commission even if it comes from the seller’s proceeds. The assumption is that the buyer could have bought the home for less had it not been listed and the buyer could have dealt directly with the seller.

The Client Determines How the Agent is Paid
The seller agrees to pay his agent in the listing agreement and the sub-agent of the seller who sells the property.

The buyer agrees to pay his agent if buyer agency is elected. In some cases, the buyer directs his agent to try and be paid from the seller’s proceeds.
In any event, each party pays their agent as specified in their written agreement.

Why should I use Forrester Realty as my Realtor®?

1. Our Unique Selling Position

There are a lot of agents available and willing to help you with your home purchase. To make a solid case for letting me help you, we have to provide more services and higher-level services both before the sale and after the sale. We are not just looking for one sale. We want you to consider us as your real estate professionals for life.

The reasons for doing business with Forrester Realty must be so compelling that not only will you not consider doing business with anyone else, you will refer all your friends who are looking to buy or sell a home to Forrester Realty.

2. Neighborhood Knowledge

We’ll know the neighborhoods that you are considering or will find someone who does. I will identify comparable sales, and information on the schools, shopping, crime, demographics, and other things you feel are important.

3. Appropriate Houses to Consider

We’ll look for what you want and can afford in an area where you want to live. We’ll show you all the homes that are available, not just the ones that I have listed. We will look for homes that are not yet on the market.

4. Good Financial Decisions

Every buyer needs basic financial information to make a good buying decision. You’ll know that you qualify for the home, what the payments and the closing costs will be. We’ll also make additional suggestions like making extra principal contributions with your regular payment and suggest an alternative type of mortgage to allow for the least expensive cost of housing.

5. Work Diligently to Find Your Home

We’ll work hard to find your new home. I understand that finding a home is a priority and will consider it the same. We will screen and preview homes so that you will not waste your time, and when we find one that will meet your needs, we’ll show it to you as quickly as possible.
You become familiar with how we work so that you can place confidence in our abilities. You develop rapport necessary to communicate easily and we can come to understand your particular needs. We can afford to make a commitment in time and effort because we can feel assured of helping you get just what you want.

Depend on it!

Is being Pre-Approved for a loan an Advantage?

Applying for a loan and obtaining approval before a buyer finds a home they want to buy can be a distinct advantage. Making a loan application is going to need to be necessary eventually anyway unless they are going to pay cash for the home.

Pre-qualification is a procedure where you get an opinion from a mortgage officer about how much you qualify for. In the process, any obvious difficulties that might cause problems might be discovered. This process is always recommended but it doesn’t have the advantages of a pre-approval.

Pre-approval requires a complete application with credit reports and verifications. The Mortgage Company will issue a commitment subject to a specific interest rate and points and a satisfactory appraisal when the property is identified.

Time limits are usually placed on pre-approval commitments. It is recommended to be ready to look at homes and make a decision after you receive your pre-approval commitment.

The advantages of being pre-approved are:

• Looking at the right-priced homes.
• Avoiding disappointment in deciding on a home that you can’t afford.
• Saving money with a seller who is confident about taking their home off the market with buyers who have a definite loan commitment.
• One less contingency that the seller will be concerned with to get their home sold.
• Closing more quickly the lengthiest contingency is usually the mortgage approval. The appraisal can be done quickly.
• Minimizing the anxiety of not knowing whether or not you qualify.

What Information do I need for a Mortgage Application?

1. Employment
Names and addresses for two full years
Gross monthly income
W-2s for two years, if available
Year to date pay stub
Proof of income from rentals, investments, etc
Proof of retirement, disability or Social Security
Proof of child support or alimony paid/received

If self-employed:
Two years Federal Income Tax Returns
Current year profit and loss statement

2. Creditors
Each creditor's name, addresses and type of account
Account numbers for each
Monthly payments and approximate balances
Amounts of child care expenses

3. Banking
Names and addresses of banking institutions
Account numbers for all accounts
Type of accounts and present balances

3. Miscellaneous
List of assets in stocks, bonds, and property
Life insurance cash value (documented if used as cash down payment)
If applicant is selling a home, a copy of sales contracts
Social Security numbers for all parties
Veterans - Certificate of Eligibility & DD-214
Cash or check to pay for application fee

4. Property
Copy of sales agreement
Copy of listing on property
Instructions on how appraiser is to gain entrance

What do you mean by “closing costs”?

Closing Costs
The bundle of fees associated with the buying or selling of a home are called closing costs. Certain fees are automatically assigned to either the buyer or the seller; other costs are either negotiable or dictated by local custom.
Buyer closing costs When a buyer applies for a loan, lenders are required to provide them with a good-faith estimate of their closing costs. The fees vary according to several factors, including the type of loan they applied for and the terms of the purchase agreement. Likewise, some of the closing costs, especially those associated with the loan application, are actually paid in advance. Some typical buyer closing costs include:

• The down payment
• Loan fees (points, application fee, credit report)
• Prepaid interest
• Inspection fees
• Appraisal
• Mortgage insurance
• Hazard insurance
• Title insurance
• Documentary stamps on the note

Seller closing costs
If the seller has not yet paid for the house in full, the seller's most important closing cost is satisfying the remaining balance of their loan. Before the date of closing, the escrow officer will contact the seller's lender to verify the amount needed to close out the loan. Then, along with any other fees, the original loan will be paid for at the closing before the seller receives any proceeds from the sale. Other seller closing costs can include:

• Broker's commission
• Transfer taxes
• Documentary Stamps on the Deed
• Title insurance
• Property taxes (prorated)

Negotiating Closing Costs
In addition to the sales price, buyers and sellers frequently include closing costs in their negotiations. This can be for both major and minor fees. For example, if a buyer is particularly nervous about the condition of the plumbing, the seller may agree to pay for the house inspection.

Likewise, a buyer may want to save on up-front expenditures, and so agree to pay the seller's full asking price in return for the seller paying all the allowable closing costs. There's no right or wrong way to negotiate closing costs; just be sure all the terms are written down on the purchase agreement.

Prorating
At the closing, certain costs are often prorated (or distributed) between buyer and seller. The most common prorations are for property taxes. This is because property taxes are typically paid at the end of the year for which they were assessed.

Thus, if a house is sold in June, the sellers will have lived in the house for half the year, but the bill for the taxes won't come due until the following year! To make this situation more equitable, the taxes are prorated. In this example, the sellers will credit the buyers for half the taxes at closing.

What is “flipping property”?

One of the newest trends in real estate is "flipping properties," or buying a property at a low price then hoping to sell it for a tidy profit, usually in a short period of time. Even though it sounds like a comparatively simple way to make a lot of money quickly, keep in mind that “there ain’t no free lunch”. Turning property or “flipping”, is not recommended for the novice investor or the fearful.

Successful "flippers" must depend on more than just luck. In the beginning, they must be prepared to spend time researching the real estate market in the area in which they want to buy, as well as determining which property types (vacant land, single-family homes, condos etc.) present the most lucrative investment opportunity.

Second, experience shows, you must create a realistic business plan. This plan must come complete with a contingency plan should problems occur. It’s also important to put together a team of professionals that includes a real estate agent, attorney, accountant, home inspector and contractors to advise you on various matters, such as legal issues, financing and tax consequences.

As its name implies, flipping can bring instant rewards, but many experts agree that, traditionally, real estate performs better when held as a long-term investment. If flipping properties appeals to you, you'd be wise to carefully investigate and understand the risks and responsibilities that come with flipping before you take the plunge.