Q.  When you work as a Buyer’s Agent, how do you get paid?

Typically in residential real estate, the brokerage fee is paid by the seller.  A seller agrees to pay a commission at the time they list their home for sale.  A portion of that commission is paid to the broker/agent who helps the buyer purchase the seller’s home.  Almost always the commission paid by the seller is the only payment required by the buyer’s agent. 

Q.  When we work with you, can we only buy homes with John L Scott signs on them?

No.  To some people this may sound like a funny question, but it’s not.  Almost every real estate sign from every real estate broker has the word “exclusive” on it.  Many people don’t know that that merely means the seller has agreed to pay a commission to the broker who has listed it, regardless of who brings the buyer who purchases it.

I can show and help you buy any home listed by any real estate company.

Whether my John L. Scott office, another John L. Scott office, or Windermere, Coldwell-Banker, ERA or any other company is the listing broker, I can show you a home and help you purchase it.  (Likewise, when I list your home for sale or another seller’s home for sale, I welcome the agents from all the other companies to show those listed homes to their buyers and hope that they will present us with winning offers.) 

Q.  What is Earnest Money?

Earnest Money is a deposit you make to provide evidence to the seller of your good faith intent to complete the transaction.  You provide this deposit when your offer to purchase ("Purchase and Sale Agreement" - sometimes called an "Earnest Money Agreement") is prepared for presentation to the seller.

Q.  What is needed for Earnest Money?

Earnest money should ordinarily be between two and five per cent of the purchase price.  The larger your earnest money, the greater confidence the seller will have in your offer.  If your loan program is one providing for a lower down payment, a smaller earnest money deposit is sometimes acceptable.  It should be in the form of a personal check made payable to “John L Scott Trust Account”.

Q.  What happens to my earnest money?

Your earnest money check will be deposited in our broker trust account and credited toward the total amount of money you will need to pay at closing for your down payment and closing costs.  It is not an additional cost for you - it is applied towards the total purchase price and closing costs of purchasing your home.

In the event that an inspection is part of your purchase agreement, your earnest money will not be deposited until after the structural inspection has been satisfied.

If your agreement is contingent on your getting financing for a home purchase loan, and through no fault on your part, you are unable to acquire a home purchase loan; generally your earnest money would be returned in full to you.

If a buyer elects not to purchase after waiving a satisfactory inspection (if one is part of the terms) and after being approved for a loan for the home, then the earnest money is forfeited to the seller as compensation for their loss of opportunity to sell to another buyer.

Q.  What is a structural (home) inspection and should we plan to have one?

With very few exceptions, a buyer will always want to have the home they are buying inspected by a professional inspector.  We recommend inspectors who are independent of any other contractors, fully trained and qualified to identify the condition of the structure and systems in a home.  

A good inspector will want the buyer present during at least part of the inspection period. I also highly reccommend the buyer attend so that the general condition and common maintenance issues and questions can be pointed out and explained by the inspector directly to the buyer.  If there are items needing correction, those will be addressed as well.  A good inspection will result in the buyer knowing much more about their next home.

Q.  What will an inspection cost and when do we pay it?

Typically an inspection will cost between $300 and $400 depending on the inspector used and the size of the home.  The fee is paid directly to the inspector at the time of the inspection.

Q.  How do we find and schedule an inspector?

As your agent, I will help you by identifying inspectors who have reliably done work for my clients in the past and I will provide you a selection of other recommended inspectors as well.

Together, we will arrange for the inspection appointment to fit everyone’s schedule.

Q.  What is Escrow?

The escrow closer is a neutral party who holds and disburses the parties’ funds, prepares an accounting of the transaction and prepares certain documents according to the terms of the purchase and sale agreement. 

The terms “escrow” and “closing” are often used interchangeably although there are differences.  An escrow officer or service, for example, is sometimes called a “closing agent.”

Q.  What happens at Closing, and what are the buyer's requirements?

Closing is the final stage in a real estate transaction, when the seller receives the purchase money, the buyer receives the deed, and the transfer of title is recorded.  The closing (escrow) agent who performs this service verifies that all contract conditions have been met; collects all funds due, disperses the funds as agreed, prepares and supervises signature of all required documents, and issues a settlement statement to both parties.

Usually a few days before the contracted closing date, the closing agent contacts the buyer to schedule an appointment.  At that appointment, the agent presents documents for signing, and collects funds from the buyer for the down payment and closing costs, less the amount of the earnest money deposit.

Q.  What are closing costs?

Closing costs are the expenses incurred in the transfer of real estate in addition to the purchase price of the property.  The buyer and seller share some costs, such as the fee for escrow services, and the cost of title insurance. 

In addition, the buyer pays the fee for appraising the property.  The buyer reimburses the seller for any prepaid taxes, prorated to the date of closing.  The buyer pays the lender for discount points, if any, and may be required to deposit reserve funds for taxes and insurance on the property.  In addition, the buyer will pay for recording the property transfer. 

The closing agent will provide you with a complete list of costs, prior to the signing appointment, and will notify you of the funds you’ll need to pay your portion of the costs.

 Q.  What is Title Insurance?

Title insurance is a means for the seller to provide you, the buyer, assurance that you have full ownership of the home.  In the event that another party makes a claim to the rights of the property, the title insurance company will provide legal measures to protect your rights or if necessary, provide financial compensation for rights you might lose.  This seldom happens, but the insurance does provide you with peace of mind.  When the purchase is being financed, it is not optional as your lender will require title insurance.

There are two policies usually involved with a purchase.  The seller provides one to you as the buyer.  You provide the second one, with a much smaller premium, to your lender to insure that the lender’s interest in your property (as security for their loan) is protected.

Q.  When can we move in to our new home? 

You get your keys and can start occupying your new home on the "Date of Possession,” as specified in the Purchase and Sale Agreement.

If your contract specifies "Possession on Closing,” you will be given your key the day after the transaction is recorded.  Otherwise, you may take possession on the "Date of Possession" specified in the contract.