If you are buying your first home, or haven’t bought a home in recent history, you might be surprised when the real estate agent you choose asks you for some very personal information before they will show you a home. There are reasons for these requests, and they can vary by agent and office, but here are the things you should expect from most agents when you speak with them the first time.
Identification and Public Meeting Place
Unfortunately safety is at the top of agents minds these days after multiple recent homicides of agents that met unknown potential clients at homes. Your agent will ask you to meet in their office first in order to protect their safety, and yours, and go over paperwork and how they work with clients. Some agents may ask you to send a copy of your drivers license before meeting, especially if you have requested a last minute showing of a home and they are able to make it work.
A Pre-Approval Letter or Proof of Funds
When someone is selling their home, they must do a lot to prepare it for showing, often including leaving the home with children and pets. When buyers schedule viewings for homes they cannot afford, it can be frustrating for both the sellers and buyers. Real estate agents also only earn money when you buy a home, they do not get paid for showing you houses. In order to avoid frustration on everyone’s part, your agent will request proof that you can afford the home you want to see. If you are paying cash this means a letter from your bank or bank statement showing you have the funds. If you plan to pay with a loan you will need a letter from the bank you plan on using that says how much you have been approved for based on their initial credit and income query.
Many buyers don’t understand why they need to be approved for a loan before seeing a home, and while we could write an entire article on the reasons, be prepared for many agents to not want to work with you if you are not willing to get pre-approved. Your agent can help you get in contact with a loan officer if you do not already have one.
Signed Buyers Agreement
In VA, and many other states, agents must let you know their role in the real estate transaction, meaning who they are representing, under what capacity, and what that means to you. Before showing you a home they will discuss and have you sign a buyers agreement that spells out how they are representing you and the compensation they expect.
In Virginia, the seller typically offers to pay a certain amount to the buyers agent, but if that amount doesn’t cover what your agent has contracted with you, you will have to pay the difference. For instance if you sign a contract saying you will pay them $3000 and the seller is only offering $2800 to the buyers agent then you will have to pay the $200 difference. Your agent will let you know if this could happen based on the homes you want to see. The contract protects the agent’s income for all the work they will be doing for you, including driving you around to see homes, and protects your interests by making sure the agent is working for you unless you are comfortable with dual agency where they represent both you and the seller.
Real estate agents today are bound by many laws and ethics concerning protecting both buyers and sellers. Call us if you have any questions on buying a home.