The Role of the Buyers Real Estate Agent.

As a buyers agent members of the Kevin Lingard Team work exclusively for YOU*, the buyer. We put YOUR needs first, finding suitable homes, arranging showings, negotiation on YOUR behalf and helping YOU through closing and beyond. The great thing for YOU, the buyer, is that all the commission is paid by the seller, and while there will be expenses along the way for such things as inspections, appraisals, brokerage fees and surveys, The Kevin Lingard Team will expect no up-front payments or fees.

The Buying Process

Clients often ask 'how long will it take to find a home?' This is a difficult question to answer! This is down to YOU, it depends on your flexibility and motivation for buying. Some clients are moving from out of state and need to find a home in one weekend visit and close very quickly, on the other extreme other clients want a very specific property type and are happy to wait as long as it takes to find their perfect home. The Kevin Lingard Team consists of professional, full time, agents who are happy to work with both extremes and everything in between!

Once we have found you your dream home the negotiations start. Most people thing that price is the only thing that needs to be negotiated, whilst this is probably the most important there are many other factors to consider. This is where we need to talk about the NC Offer to Purchase and Contract and how it is very different since the beginning of 2011. Previously there were several dates in the contract to worry about and several 'get outs' for the buyer, there were negotiations and arguments about repairs, financing, appraisals etc. Now, like the majority of other states, we have a Due Diligence contract.

In a Due Diligence contract there are only 3 dates to consider, the contract date (when the contract is signed by both sides), the settlement (normally called the closing) date and the due diligence date. Before 5.00pm on the due diligence date buyers can withdraw from the contract for 'any or no reason' and have any earnest money returned to them. By this time you, as buyer, need to be certain that you are in a position to buy the house, you must be sure that you can get a mortgage, you must have done an inspection and (with the help of your agent) negotiated any repairs.

So before 5.00pm on the due diligence date, I, as a buyer, can walk away for any or no reason, what's the catch?

There is not really a catch but there is some things to consider. Firstly is the due diligence fee which is paid by you, the buyer, to the seller to take their home off the market to allow you to do your investigations. The due diligence fee varies and depends upon several factors including how long the house has been on the market, how long the due diligence period is, how popular the house or neighborhood is etc. The due diligence fee is only refundable to the buyer in a few very specific situations. The due diligence period and fee are all part of the contract negotiations, see FAQ below for due diligence strategies. Secondly, by the time it gets to the end of the due diligence period you will have a certain investment in the home, inspections, survey and appraisal fees are all normally paid up front and are not refundable if you decide not to proceed with the contract.

Once the due diligence period is over you should proceed smoothly to closing and home ownership. The Kevin Lingard team has close working relationships with other professionals such as home inspectors, mortgage advisors, home warranty and attorneys who we can recommend to you. These will only be recommendations, you are free to use whoever you want to provide these services.

There are obviously other issues involved in buying a home but we will explain these to you as and when it becomes necessary during the buying process. If you have any questions please feel free to call Kevin, 919 388 4832.

Buyers Frequently Asked Questions (FAQ).

Q. My credit is not as good as it needs to be to buy a home, can you help me?

A. The answer is, probably, yes. It depends how bad it is. Our in house lender, Towne Bank has a credit repair program called Home Ownership 101. To qualify you have to meet with one of our mortgage advisors who will refer you to our credit building specialist. If after an initial consultation he believes he can get your credit score up sufficiently in 6 months you may elect to enroll in the course (cost $200, refundable if you graduate and take out a mortgage with Towne Mortgage).

Q. I have great credit but very little cash for a down-payment, do you have any programs that cam help me get a mortgage?

A. There are a number of 100% financing options including USDA, VA and North Carolina Housing. There are qualifying criteria for all of these, call Kevin, 919 388 4832, to arrange a meeting with a Towne Bank Mortgage Advisor to discuss your options.

Q. How is the due diligence fee calculated?

A. The purpose of the due diligence fee is to 'buy time', the longer you want the due diligence period, the higher the fee. There are several ways of calculating the fee, namely:

1. Zero

2. Based on Seller’s House Payment

3. Based on Monthly Rental Value of Property

4. Based on a Rate of Return of Sales Price

5. Flat Fee Amount

6. Based on Percentage of Sales Price

The correct one to use in any given situation will vary, it will be between you and your agent to decide on the best strategy.

Q. So with the due diligence fee has earnest money gone away?

A. No, earnest money is still a factor but it is not at risk until after the end of the due diligence period, your agent will discuss earnest money and due diligence strategies with you when you come to make an offer on a home.

Q. How much due diligence money and earnest money can I expect to have to put down

A. Historically the average has been about 1% of the purchase price, spilt between earnest money and due diligence money. There are no guidelines, rules or laws governing this so this again is part of the negotiation strategy.

Q. How much below list price can I expect to pay for a home?

A. Historically the sale price to final list price ratio has been between 96-98% and this has not changed over recent years. Some people are expecting in these difficult financial times to be able to 'lowball' offers. In the Triangle this very seldom works, sorry!

Q. I have heard that there are real bargains to be had with foreclosures and short sales, can you help me?

A. The answer is yes, we can! Firstly however you need to realize that the Triangle as a whole does not have the vast numbers of distressed homes that other parts of the country have seen, Cary, Apex and Morrisville have seen very few foreclosures so very few REO properties come up for sale in those areas and any that do get snapped up very quickly. There are some areas of the Triangle that do have 'bargain' properties but you need to know where to look. Kevin has a number of years experience in helping investors find suitable investments, cal him, 919 388 4832 for more information. Also visit the Distressed Property Page.

Q. I could buy a home but can't decide if the market has hit the bottom yet, should I carry on renting or take the plunge and buy a home?

A. Difficult to say! We can not say we will not see lower house prices but the decline has been relatively small in Cary, Apex and Morrisville and prices have remained fairly constant over the recent past. The thing you really need to consider is that mortgage rates are at historic lows. If the mortgage rate rises by 1% this has the same effect on a house payment as a 9% increase in price, on a $200,000 home that would mean payments would go up as much as if the price jumped to $218,000.

Q. I am ready to buy a home, what do I need to do to put myself in the strongest possible position?

A. Obviously the very best position to be in is to have enough free cash to buy a home outright! We appreciate that this is not possible for the vast majority of people. The most important thing to do is to get yourself pre-approved for a mortgage, this means talking with a mortgage advisor and having them pull your credit score and check your income and employment history. If you have no house to sell and a 20% down payment this is ideal but not being in this situation is by no means a bar to buying a home. Credit is the key, if your credit is good and you have a stable job there should be no reason you can not buy a home. Call Kevin, 919 388 4832 to discuss your options.