An important first step in purchasing real estate is your selection of a real estate agent to represent you. We would suggest that you interview several agents and ask them how they work with buyers and what services they provide – and get several references from each agent. Your selection of an agent will determine how well you meet your needs in the purchase. It is essential that you like, trust, and feel you can have an active give and take conversation with your agent about everything in the buying process. You want an agent who will keep you well informed, represent your interests with intelligence, and keep your confidential information confidential.
The Realtor® you select will help you search, keep you informed about all possibilities, and discuss the pros and cons of each property you consider. Your Realtor® will also manage the entire process, from searching to settlement, help you find a good loan officer and settlement company, anticipate and solve problems, and protect your interests in each part of the process.
Once you and your agent determine that you are a good business match and you want this Realtor® to represent you in your purchase, your agent will ask you to read and execute a Buyer Agency Agreement. This agreement spells out the agent’s obligations and duties to you as well as the terms of representation and compensation. In a typical transaction, the seller pays the compensation to the buyer’s agent as part of the transaction and the amount of compensation is spelled out in the MLS property listing’s offering of cooperation to other agents.
In Virginia, the legal and ethical responsibilities of your agent are established by Virginia statute and by the rules and regulations of the Virginia Real Estate Board and these are reflected in this agreement. Additionally, Realtor®s subscribe to a national Code of Ethics that govern professional behavior and actions. Real estate professionals are regulated and proactive in the promotion of ethics and best business practices in real estate.
If you do not wish to be represented in a transaction, an agent can represent the seller in the transaction and provide you with information and certain services. In this case you will be asked to sign the Virginia mandated Agency Disclosure acknowledging that you are not being represented.
Steps In Buying Process
The buying process has some predictable steps and a logical sequence. However, we would like for you to know that within this sequence every transaction is unique, every transaction has customized processes that reflect the needs of the buyers or perhaps even certain aspects of the property itself.
That being said, there is a certain flow to the average transaction, as shown below.
- Start the qualifying and financing process before looking at properties
- Search for home or land
- Make an offer on a property
- Finalize a contract with all terms in writing
- Work closely with lender to complete the loan process
- Remove any contract contingencies, such as home inspection
- Obtain property insurance
- Finalize financing approval
- Schedule settlement (typically your agent sets up settlement based on available time slots)
- Order utility services
- Conduct final walk through
- Obtain certified funds for settlement
As you can see, over a period of time you are going to do a lot of talking and thinking with the agent who represents you in buying a property.
How Buying In The New River Valley May Differ From Other Areas
The greater New River Valley area includes cities, towns, rural areas, lakes, state, national and local parks and a rich variety of activities. Because some classifications of real estate, such as Claytor Lake properties, can be found in multiple zip codes and counties, there is just no substitute for working with a Realtor® who has strong local knowledge and involvement when you are searching for a home or for land. Many buyers actually end up choosing homes or land in areas that they would not have considered or known about without the help of their agent. Commuting travel time, views of the mountains or valleys, future plans for land, and lifestyle are just a few of the considerations that go into making a good buying decision about a property.
In Virginia, agents write contracts for residential real estate, not binders. Sellers and buyers negotiate through their agents, in writing, and reach contractual agreements. Virginia is a Statute of Frauds state, meaning that contracts for real property must be in writing in order to be enforceable. Either party – buyer or seller – certainly may choose to have an attorney review any document for them before signing it, but in practice relatively few find it necessary to do so. The contract used by Realtor®s in this area is the product of many years work by the Virginia Association of Realtor®s and attorneys and has been regularly updated to reflect the issues found in the field as well as Federal law, State law, and any needed legal changes.
Because the contract is a comprehensive one, all of the terms of the sale, with the exception of any modifications arising from inspections, surveys, and title searches, are negotiated up front. It is very important to go through the contract terms with your Realtor® and discuss various options and possibilities up front.
Many properties in the New River Valley are on well water or have septic systems, or both. Inspections of these systems are part of the contractual obligations of the seller. Additionally, this is a high radon area and radon tests and remediation, if required, are frequently part of the contract for sale.
Some homes are on private roads that must be maintained by the property owners bordering or using that road. It is important that maintenance and right of way or easement agreements, if applicable, be investigated and deemed satisfactory.
These details and possible complications are all part of the information and due diligence process that you and your agent will work through.
Important Information about the Buying Process
Lenders are a crucial part of the process. You want to work with a good local lender who has business roots in the area and a reputation for good work. Your agent can recommend some lenders, and you should choose one and start the process early. Discuss rates, payments, down payment and closing cost needs, and loan options. You are going to live with and pay this loan for a long time, so get information and choose wisely.
You definitely want to have a termite inspection on your new home. Even many condos need to be inspected. The termite inspection will be a visual examination of the accessible areas of the property, and if there are signs that warrant a deeper level of inspection your termite inspector will put it in the report. The basic contract used by Realtor®s in this area includes a provision for a termite inspection. The lender will also require a termite inspection.
The lender will also require a property survey to be performed. This will verify the property lines and the position of the existing structures on the property.
Even if you pay cash for a property and aren’t interested in the physical condition of the house or structures, you still want to have a survey. Surveys can turn up some interesting information about a property, including whether or not it is where you think it is! Fences are frequently NOT on the property line, and sometimes people fence in land that is not actually their land.
The lender will require a certification of the septic system, if there is one. This is also in the contract.
As part of the contract process, you may ask the seller to provide, or you may choose to purchase for yourself, a home warranty. Home warranties cover many systems in the home for a period of one year. Ask your agent for some information about home warranties.
If the property is part of a Home Owners or Property Owners Association, or is a condominium or cooperative, you have the right to receive information and then cancel the sale within a period of time if there is something in the documents that you do not like. Additionally, if the seller has any outstanding violations of the regulations, such as a needed repair or unpaid fees, these must be remedied by the seller.
If the property was built prior to 1978, the seller must give you any information or reports concerning lead based paint that he may have. You should also carefully read the HUD Lead Based Paint booklet. If you choose to purchase a property built prior to 1978 you may want to have the property inspected for lead based paint and this condition should be part of your offer to purchase.
At Mabry & Cox, buyers prefer to have us represent their interests in the buying process. They want our advice and judgment at every step in the process. They want an experienced, professional advocate representing their interests, and they want their business interests and information kept confidential. When buyers choose us to represent them in a transaction, we prepare and review a written Buyer Representation Agreement with our buyer clients. This agreement sets forth the major parts of our obligations and the buyer’s responsibilities in the process.
During the home buying process you are going to deal with some things that you may never have encountered before. We hope that this information will help you get started. We strongly encourage you to discuss these items and more with you agent as you get involved in the process. Informed decisions are the goal.