In most cases buyer representation is free of charge. It is traditional that the seller pays for the costs of all commissions of the listing agent and selling agent (buyers’ agent).  This comes from the proceeds of the sale. Sellers are fully prepared to pay the cost of hiring a real estate professional to sell their home.  The agent’s commission is negotiated and noted in a written contract between the sellers and the agent they select to market their home and represent them throughout the process.  Most of time, the commission is an agreed upon percentage of the selling price of the home.  That commission is shared or split with the agent who represents the buyers of the home. 

So there is no commission cost to the buyers for agent representation.  Obviously,  there will be other costs involved with the home buying process such as obtaining a mortgage loan and buyer inspections ect. A knowledgeable real estate agent will be able to explain the whole process to you in detail when you are ready to make your home purchase.

You can find more information for first-time home buyers in our article, Can I Afford to Buy a Home?

~Shea Hutchinson, Realtor Associate, HomesCentralCoast.com Team

The Wall Street Journal printed an article today that backs our May 1st blog.  James R. Hagarty writes in “Home Sales Rise in Hard-Hit Areas
In it, he mentions, as we did, that lenders are pricing foreclosed homes more aggressively and that sales are up in those areas that are hardest hit.  This is the situation for Santa Maria and Orcutt real estate.

Total Sales in the Santa Maria Area for:
April 2008 – 117
April 2007 – 73
April 2006 – 97
April 2005 – 130
April 2004 – 112

Berteaux raises some different and interesting points as to why he believes the market is starting to bottom-out.  Take a look at his article and see what you think: The Housing Crisis Is Over

1. Over the last month, I have started to see a dramatic change in the way banks are treating their bank-owned properties (REOs). Just a few months ago, some of the banks with which I work were listing their foreclosures at prices higher than recommended. Now they are starting to list them for sale at prices under market value.
2. We are starting to see multiple offers on foreclosed homes. Last week, a client I represent was competing against 11 other offers for the same property. Fortunately, my client’s offer was the one that the bank accepted.
3. Multiple offers on foreclosures is driving the prices up. In other words, in order to secure the home they want, buyers are offering more than list price. That is a big sign that we may have reached bottom.
4. The federal government is very anxious to do things that will help the economy and reduce the large number of homes on the market. Interest rates are a big part of that, and they are very low right now. However, that can’t last forever. As soon as they go up again, we are likely to see a slowdown in real estate buying activity.
5. There are a lot of active buyers right now. People have a general sense that the time is right to jump back into the real estate market.
6. Sellers of homes that are not in any stage of foreclosure are very willing to negotiate terms of sale right now. They are willing to pay for things such as closing costs (normally something that the buyer and seller split) or provide an allowance for repairs.

If you are seriously looking to take advantage of the real estate opportunities out there right now, my biggest piece of advice for you is to meet with your lender and get a prequalification letter. Many of the banks who own foreclosures will not consider an offer without it. If you need some recommendations for experienced, reputable lenders, please check out our recommendations at http://www.homescentralcoast.com/mortgage-rates.html.

But as I read it, I remembered that similar requirements were in place when I bought my first home many years ago – dare I say how many?  (Hint: It was in the 1970s.) Precautionary measures and stricter requirments were the norm, and with good reason.  The mortgage mess that the country is in right now is a result of many ignoring the sound reasoning behind those guidelines.

That said, I don’t believe that homeowership is becoming a “nightmare” for “many first-time home buyers,” as the WSJ writer states.  First of all, there are more loans options available to first-time than the article depicts.  Secondly, I meet first-time buyers who have proven that they are responsible borrowers with excellent credit scores.  They are prepared to prove that they can handle the debt and believe that the sacrifices they will be making today will pay off down the road.   When it comes to home ownership, I think that we’ve just come back to the basics, and there is no confusion as to why.

If you are a first time home buyer, you may find our article, “Can I Afford to Buy a Home?” helpful.  You can check it out: http://homescentralcoast.com/first-time-home-buyer.html.