Do I need an agent to buy from a builder?

[rps324]

1. Can the lawyer tell you if you are paying what others are paying for a similar property?

I say he should be able to if he is any kind of a property attorney that deals in real estate in the general area everyday. If he does, then you find another lawyer.

Just so I am understanding the position here, your first challenge is not to repeat the "problem" with Buyer's Agents and find someone who is actually competent in their respective field, in this case property law. Second challenge is then they also have to be handling enough deals "in the general area everyday" to know the fast changing market conditions of that particular sub-market.

I understand how a Property Lawyer can help you with legal advice, but I am skeptical of finding one that has current market knowledge.

he actual amount of earnest money will vary I am sure with each particular market. In most instances, I have found, it will represent between 1 to 2 percent of your offer price

.

Just FYI - personally I have never done 2%. 1% is generally at the high end from my experiences. For many buyers cash is limited and they often roll closing costs into the deal to free up cash for moving, furniture, renovations, etc. In some cases the underwriter will allow the buyer to get their earnest money refunded at closing, some times they won't. An experienced good Buyer's Agent can guide you through this whole process so that the Buyer doesn't have to bring much money to closing. Putting too much earnest money down could create a conflict later on if bringing a minimal amount of money to closing is one of your buyer's goals. It would be something you would want to pay attention to at any rate. I am not going to get into a long boring explanation of that right now, but this would be an area I have had to guide the less-knowledable agents in before.

By "option money", I take it as you mean the fee the lease/purchaser pays to enter into a lease/purchaser agreement. The rule of thumb to typically use for the MID% is 10 to 20 percent.

Just for information purposes, the option process is already written into the standard forms. A small fee is paid, on a median priced home it is usually $100, for a 10 to 14 day option period to do all of your inspections, negotiate for repairs, etc. It gives the buyer an unlimited right to terminate during that time period.

Any competent property attorney will protect your interests as a home buyer, and will:

1. Help you negotiate a fair purchase price

2. Help you prepare the Offer to Purchase

3. Help you negotiate a more favorable purchase price if the home inspection uncovers significant problems

4. Draft and/or revise the Purchase and Sale Agreement to protect you and your money

5. Assist you with the mortgage process.

6. Prepare you for the final walk-through of the property

7. Attend the closing and represent your interests.

I am sure any competent Property Attorney would, but so could any competent Buyer's Agent. Of course a Buyer's Agent wouldn't charge you $100 - $150 an hour to do it. Of course the trick is to find a competent one, whether it is the Buyer's Agent or the Property Attorney.

I just feel more comfortable with someone with a Doctorate of Juris Prudence, who is specializing in Real Estate, than the ex Mary Kay or Amway person looking out for my best interests.

If that (an Attorney vs. a Buyer's Agent) is what you would be more comfortable with, then by all means that is absolutely what you should do. Home purchasing is very stressful and people should do whatever they feel they need to in order to make themselves as comfortable with the process as possible. But there is nothing that has been presented to show that these same goals could not be met with a good Buyer's Agent, (heavy emphasis on GOOD) without incurring the legal expenses, which for some could be an issue. How many hours are we talking about to go through the list of the 7 items above at $X per hour?

If someone isn't totally comfortable without legal representation, I would suggest a combination. Why pay an Attorney's rate to set up a walk thru, for example? I don't see that as a very practical expense. Get a good Buyer's Agent to handle negotiations & the general duties, and then have your Attorney review paperwork. Makes more sense to me, but to each his own.

[jscarbor]

OK you are right a "Property Lawyer" knows everything there is to know about the real estate market. In fact, I am going to call 2 "Property Lawyers" that I know tomorrow and see if they can tell me the value of a listing that I am interested in because the lot looks great but I can't figure out the real market value myself. I'll let you know what they say.

And your right, you didn't imply did you. I must look like a real assume (you are so clever to come up with that).

Uh and PS... option is spelled with an "o" not an "e" and you obvioulsy don't have a clue what option money is but I am certain a "property lawyer" does.

Thanks for not getting in a pissing match.

Well I don't see where I implied anything, in fact I usually make no bones about it, and say what I mean and mean what I say. It's a funny thing about being accused of implying something, it takes an assumption by the other party, to read into what someone is saying. And I am fully sure you are aware of the breakdown on the word assume. Now I will address your questions one at a time.

1. Can the lawyer tell you if you are paying what others are paying for a similar property?

I say he should be able to if he is any kind of a property attorney that deals in real estate in the general area everyday. If he does, then you find another lawyer.

2. Does a lawyer know what certain incentives are being given to buyers for similar properties?

(see above)

3. Does the lawyer know what is fair for earnest moneption money....closing time....any other stuff?

once again (see above). However let me carry that a step further and break this down:

The actual amount of earnest money will vary I am sure with each particular market. In most instances, I have found, it will represent between 1 to 2 percent of your offer price. If you are involved in a competitive bidding situation, an increased amount of earnest money may just make a difference in you being the successful bidder. Your earnest money will be deposited in a trust account or with the escrow company shortly after you go under contract with the Sellers anyway, and it is then applied to your closing costs and is money that you would normally spend anyway, so no loss there. It's not rocket science, and a good property lawyer should know this, keyword being "property" lawyer.

By "option money", I take it as you mean the fee the lease/purchaser pays to enter into a lease/purchaser agreement. The rule of thumb to typically use for the MID% is 10 to 20 percent. You may need to clarify that point some if I missed it. I stay away from those deals all together anyway, just doesn't work for me.

And finally closing time. Hmm, I am fully aware timing and deadlines are very important in real estate transactions. But you should allow yourself enough time in the "Offer to Purchase Real Estate" phase to get an inspection, negotiate the Purchase and Sale Agreement, apply for and obtain mortgage financing, and then set a closing date. Real estate deals often fail based on the inability to meet deadlines set forth in the offer. But I have found 30 days to close is pretty standard, I don't see any hard line negotiation to be made there, and if the seller is in any bigger rush than that, BEWARE! Something maybe wrong in there.

So I really don't see any gain with an agent, maybe it's just me. I don't see the rocket science in it all. Any competent property attorney will protect your interests as a home buyer, and will:

1. Help you negotiate a fair purchase price

2. Help you prepare the Offer to Purchase

3. Help you negotiate a more favorable purchase price if the home inspection uncovers significant problems

4. Draft and/or revise the Purchase and Sale Agreement to protect you and your money

5. Assist you with the mortgage process.

6. Prepare you for the final walk-through of the property

7. Attend the closing and represent your interests.

That's what they do everyday, that why you hired them in the first place. And I am not trying to be little any agents, but it's going to sting some. I just feel more comfortable with someone with a Doctorate of Juris Prudence, who is specializing in Real Estate, than the ex Mary Kay or Amway person looking out for my best interests.

P.S. there's only one "p" in apologize!

Edited October 3, 2006 by jscarbor

[Parrothead]

Goodness, I guess you don't accept apologies very well. Allow me to rescind.

Polly,

Please save yourself some grief and go back and re-read my original post, just below your quote, second paragraph in bold black letters. I sincerely hope you read your closing paperwork more thoroughly than you read these threads.

Actually, I do. It's a lot easier to go over a detailed contract, word for word, than to attempt to decipher your blathering throughout this thread.

rps, excellent points. Nicely written.

[Mark F. Barnes]

Goodness, I guess you don't accept apologies very well. Allow me to rescind.

Actually, I do. It's a lot easier to go over a detailed contract, word for word, than to attempt to decipher your blathering throughout this thread.

You might as well rescind it, an empty apology is worth nothing anyway. You see when you make a mistake and apologize, then turn right around and do the very same thing again, the first apology was fruitless and defecated upon by the the repetition of the same mistake. So you don't think I'm "blathering" again I'll cut to the chase. You first apology was crapped on by you not reading carefully again, before you confronted me again. (Even with the very point you confronted in bold print). So there was no apology to accept.

An since now you decide to take a personal stance against me, and either you are trying to call me an idiot on the sly or an incoherent person. That draws the line in the sand. I will not stoop to attacking you personally through this forum. If you care to take it to a different level, you need no appointment. Like I said before, if you read carefully before you opened your trap, we would no even be to this point.

I have managed to hold an intelligent conversation with everyone else here, even Scarborough, even though I pissed him off a little, he heaved a little sarcasm at me and that was that. I can respect that. But you Paula I have lost all respect for. I made it plain that all my positions taken were my opinion and hold no water with anyone except me. I actually learned a couple of things from some of the points made by rps234, and some of our points parallel each other. So I feel I am not that far off base on a lot of points.

[Parrothead]

It's Polly, not Paula. No real surprise you couldn't get that right.

Since I was not looking to gain your respect, I see no considerable loss by your comments.

Have a great day!

[bachanon]

play nice people.

[jscarbor]

So far one Real Estate Attorney has told me to call him for legal advice and call a Realtor for Real Estate market advice. I'm not going to call another because I think my RE Attorney thinks I am a little crazy; don't need more people thinking that.

And look, do you HAVE to have a Real Estate agent rep you? No! Plain and simple, in that regard Mark is right. It many cases is that a good idea? I don't think so. Mr. Barnes has said many things that are just plain wrong(Some that are correct in all fainess) and that is the reason some people NEED Realtors. There are just too many novice, I bought many houses people who think they know what they are doing that give out horrible advice to non suspecting people.

Maybe ethical standards for Realtors should be relaxed so that they can work over people that choose to represent themselves? Right now I am bound to treat both parties fairly, would a Realtors value be increased if they were to only look out for the client they rep?

[Parrothead]

jscarbor, I believe if you represent a client (under a contract such as a listing or buyer's agreement), you are bound by TREC to only look out for them. I may not be understanding what you are saying...? Do you mean as a builder? Sorry for the confusion.

[rps324]

I may be misunderstanding what JScarbor is saying, but I take it to mean that a lot of times we have to step in and help the other side, especially when they are respresenting themselves, (or have poor representation), when we see them making an obvious mistake that is going to cause a huge problem. Technically we don't have to, but I know I have done it. Maybe if we let them "hang themselves" a few times, then people would understand the value of a good agent. That how I took it, could be wrong.

I know there are many times when I have found myself having to manage the other side a little bit. I think I am better serving my client to prevent stress and something "blowing up" later, like at the closing table. I know people think Realtors have it so easy and it is a no-brainer, and actually sometimes you get lucky and it is. But most times it is like herding cats to the closing table. I try to shield my people from as much drama as I can, while still keeping them informed, and often times it does involve stepping in to correct a problem before it festers.

[Parrothead]

Okay, I gotcha.

Agreed, and LOL to the herding cats analogy...

[jscarbor]

jscarbor, I believe if you represent a client (under a contract such as a listing or buyer's agreement), you are bound by TREC to only look out for them. I may not be understanding what you are saying...? Do you mean as a builder? Sorry for the confusion.

Yes, but you are to treat someone you do not rep fairly, whatever that means.

[crist26]

I think this is an interesting topic, altough I am not going to get into all the discussions you are having, but as someone that is in your shoes as well I feel better having a realtor. and please by all means make sure you get a really good inspection even if the house is brand new.

I just turned out a deal with a property from woodbend buidlers, absolutely beautiful house, beautiful finishes but .... when we did the inspection they did the framing on the second floor wrong and it turns out its deviated 5" !!!!! Needless to say, we got out of that deal as soon as we could.

Anyway, I was also looking at an Aziza townhome and I wanted to know if you finally bought from them, or if anybody can give me any feedback on the quality of their homes.

Thanks,

Crist

[Bacchus]

Apologies for bumping an older thread, but was reading through this and find myself in a similar situation. I am looking at a place built by Aziza and would like to hear any feedback on their inner loop townhomes. A window vendor I had dinner with recently was very negative on their product. That was troubling.

I'm also in the no-agent boat. All of the forms are readily available at the TREC website and seem very straightforward. I've got a good handle on what market prices are by monitoring HAR and by talking to recent buyers in the area. With an inspector on my side as well as an attorney, I see no value brought to the table by an agent. I had an agent the last time I went through this process and he was pitiful. He misspelled my name on every single form.

[jscarbor]

Apologies for bumping an older thread, but was reading through this and find myself in a similar situation. I am looking at a place built by Aziza and would like to hear any feedback on their inner loop townhomes. A window vendor I had dinner with recently was very negative on their product. That was troubling.

I'm also in the no-agent boat. All of the forms are readily available at the TREC website and seem very straightforward. I've got a good handle on what market prices are by monitoring HAR and by talking to recent buyers in the area. With an inspector on my side as well as an attorney, I see no value brought to the table by an agent. I had an agent the last time I went through this process and he was pitiful. He misspelled my name on every single form.

What drew you to Aziza? I see a few mentions of them on this board? And I would not take a window vendors word for quality of house. My guess is Aziza is putting in builder grade double pane low e aluminum windows? They aren't the best but they are pretty good. I'd like to put in vinyl windows but they only come in white and it doesn't look good on my product. Just walk an Aziza at frame to see what it looks like. Maybe hire an inspector for a frame walk? The final inspection is good and all but not really indicative of how good a house is? In fact some inspector items contradict city of houston inspection items.

It sounds like you are fine without a real estate broker but why do you need a real estate attorney?

[Spike101]

I own an Aziza home...well purchased 3 years ago it under Millennium prior to the change of names. I am not sure if they have gone through any "feature" changes since then. I bought a finished spec. My builder was incredible as I had a very small list of cosmetic items. Within the year, their customer service department has always taken care of concerns quickly. Even today they are prompt in answering questions 3 years later.

A home is only as good as the builder I think. If you are concerned, make friends with a construction super somewhere, and have them walk a framed house. Also, make friends with a sales rep for another non competing builder and walk through the home with them. They generally notice more details and know the questions to ask.