Communication is key

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. Someone eavesdropping on a meeting of agents discussing a transaction would quickly become lost as they tried to interpret the acronyms bandied about in Realtor-speak. If you do not understand something your Realtor tells you please ask.

Communication is not effective if we make assumptions. For example, we do not expect that our buyer clients will write a check for our services. Buyers on the other hand, may be left wondering how much they have to pay us. The fact is, buyers seldom pay an agent. It is the seller who negotiates the commission for the listing broker and the listing broker makes an agreement to pay the brokerage who brings a buyer to the property. Because this is customary we may miss explaining it.

Buyers also deserve a plain understanding of the entire process and what their expenses should look like. 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 out of reach. Not to mention the time wasted, the emotional expense can be quite high. The lender will tell you what fees to expect.

Once you and your agent know how much you can invest you can target properties within that range. 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 can not 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. The Purchase and Sale Agreement will include the location and legal description of the property and how you intend to pay for it. 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 $100,000 and you give your Realtor $500 earnest money, you will owe $99,500 to complete the purchase. If you and the seller cannot reach agreement the earnest money will be refunded to you.

If you are purchasing a home or building you may want to have it inspected. 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. You 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 curtains or appliances are included. 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 that 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.