KIM COOPER: Ask for direction

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It is true with any occupation that, as your experience grows, your communication style changes. In many occupations, acronyms are used as words and although peers understand what you mean, no one else does. Realtors are no different. If you do not understand something your Realtor tells you please ask them to clarify.

We do not expect our buyer clients will write a check for our services in most instances. Buyers may be left wondering how much they have to pay us if we don’t explain it right up front. The fact is, buyers seldom pay an agent. It is the seller who negotiates the commission with the listing broker and the listing broker makes an agreement to pay a percentage of that commission to the brokerage who brings a buyer to the property. Because this is customary, we may miss explaining it. Your Buyer’s Representation Agreement will clarify how the broker is paid in a variety of situations.

A buyer’s first step, before looking at houses, should be to interview lenders and see where they can get the best mortgage and with whom they feel comfortable. Some buyers will look for property, find the perfect listing and then discover that it is priced out of reach. Not to mention the time wasted, the emotional expense of this discovery can be quite high.

Tell your agent if you don’t want to invest as much as you are qualified for. Knowing what you want and can afford will prevent you from becoming emotionally involved with properties you cannot afford or may empower you to aim higher than you thought you could.

When you identify the perfect piece of real estate, you will tender an offer. Usually, you will include “Earnest Money” with your offer. This money is used to demonstrate to the seller that you are earnest in your offer and will be credited toward the purchase price. If your intended purchase is $200,000 and you give your Realtor $500 earnest money, you will owe $199,500 to complete the purchase. If you and the seller cannot reach agreement the earnest money will be refunded to you.

When you are about to buy property, you will want to have it inspected. Even if it is bare land, you should inspect, possibly even getting a recent survey. In at least one case last year, a buyer discovered a neighbor had built a shop on the wrong side of the property line. The seller and their neighbor were able to correct the defect prior to closing the transaction so the buyer did not inherit this encroachment. A survey and lot line adjustment was the remedy.

In Idaho, inspections are not required except for specific types of loans where the inspector’s fee is included in the loan. For most buyers however, the inspection is optional and usually at their expense. Your Realtor will advise you about lead paint, mold or radon gas inspections you may also want to conduct. These too are at the buyer’s discretion and expense. Once completed the inspector will give you a written report detailing the property’s defects, if any. If you choose, you may ask the seller to remedy the defects. Should they refuse, then you have an option of making the repairs yourself after closing the sale or rescinding your offer. When you rescind an offer for cause, you will receive a refund of your earnest money.

The purchase and sale agreement also outlines other terms and conditions such as whether personal property, like non-attached or appliances are included. The most recent iteration requires that TV wall mounts be left while the TVs need not remain after the sale. This PSA as we call it, will also indicate who pays which closing costs and whether or not the seller will pay for repairs required by your lender. Lender-required repairs are not optional and will need to be performed before the loan will be funded.

After all terms of the PSA are agreed to, the transaction goes into escrow. This means a title company officer will begin searching for defects of the free and clear title to the property. Typically, there will be a mortgage that will need to be paid and several recorded easements showing who has access to the property like; the power company, street or road maintenance, cable or telephone, etc. If there are any incurable defects the buyer has the option to rescind their offer and receive a refund of their earnest money.

Once the title has been perfected, the funds transferred and the new deed recorded at the courthouse, the transaction is closed. It is only when the documents are recorded, not when they are signed, that the “closing” takes place. If these or any steps of the process make you wonder, ask questions. Remember, the only stupid question is the one unasked.

Trust an expert…call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.

• • •

Kim Cooper is a real estate broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling (208) 667-0664.

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