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How the MLS System works.
Congratulations on your decision to buy a home! Whether or not
youve ever
experienced this process before, youll find that the process of
searching for a home can
be many things. While it can be fun, exciting and challenging,
it can also be frustrating,time consuming and tiresome. Hopefully,
here, youll find some tips and hints that can
make the process less frustrating and more fun.
Among all of the resources that people commonly use to find a
property, probablyyour very best source will be your real estate
agent. This single resource can prevent you
from wasting copious amounts of time and can be a valuable aid
in facilitating the entire
transaction for you. Lets look at some ways that the agent will
be able to assist you,what you should expect, and what your agent
will expect of you.
Most real estate agents are members of the MLS or Multiple
Listing Service.
This daily updated system is used exclusively by agents to look
up properties for sale,
pending, sold, expired, or withdrawn and to post the properties
that they may have for
sale. It is estimated that over 80% of listed homes are sold
through agents using the MLSsystem. When a seller lists their
property for sale, they typically agree to a standard
Brokerage fee (6%-7% of the sale price) to sell their property.
The agent who lists theproperty for sale and puts the sign in the
front yard is called the Listing Agent. This
agent typically offers half of the fee (3%-3.5%) to any agent
that brings them the buyers.
More often than not, it is not the Listing Agent who actually
sells the property.Normally, another agent, who usually works for
an entirely different company finds the
property for their buyer via the MLS system. The agent that has
the buyers and sells the
property is generally referred to as the Selling Agent. The
beauty of the MLS system isthat Joe, from XYZ real estate may list
a property that can be seen by Mary at ABC real
estate who is working with some buyers in search of a property.
Even though these two
agents work for different companies, they can both use the MLS
to the advantage of theiresteemed clients.
Typically, if there are two agents, aListing agentand aSelling
agent, each agent
will respectively represent their individual client. On the
other hand, there are certainly
situations where a Listing agent is ALSO the Selling agent. This
simply means that theperson who Listed the property for sale is
also the person who found the buyer(s) for it.
It may seem obvious, but the biggest reason why you need JUST
ONE AGENT isthat if your agent is doing the job for you, they will
have almost EXACTLY the SAME
INFORMATION that all of the other agents have because of the MLS
system. It is,
therefore, not necessary to call every agent on every sign on
every house that is of
interest to you, as you drive through all of the neighborhoods
in your city. Just jot downthe address, give it toyour agentand he
or she will be able to get you all of the
information that you need and arrange for you to personally view
the inside of the home.
You will soon find that callingjust one numberis much better
than trying to get in touchwith several different, busy, on the go
agents.
One thing that is very important is to respect the time of your
agent. Your agent
effectively is working foryou when they are assisting you. To
put it in perspective, youragent only earns a living when they
assist you in purchasing a home. In other words,
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your agent doesnt earn a dime until you close on your new home!
For this reason, it is
best to stick with one dedicated and hard-working agent and let
them do all the necessary
work for you that needs to be done. Naturally then, it is
appropriate and polite to adviseany other agents that you may
happen to speak with that you are already working withan agent.
At this point, it is worth addressing the possibility of your
finding a property thatis not in the MLS system. A little known
fact in this business is that your agent can assist
you even if you happen to find a property that is FOR SALE BY
OWNER. It is a fact
that very few by owner home sellers actually do so without an
agent (fewer than 10%).There are a variety of reasons for this, but
suffice it to say that your agent can be a
valuable resource in putting this type of transaction together
for you and shepherding it to
completion. It is best to have a candid conversation with your
agent about how you
might deal with this situation should it arise.
For your benefit, here are some other points worth
considering..
Among many other things, a buyers agent will assist you with the
following:
1) Referring you to a knowledgeable and resourceful financing
source2) Schedule showings
3) Write and Negotiate your Purchase offer
4) Arrange home inspections and following up on required
repairs5) Arrange termite inspections
6) Order a survey of the property
7) Select a Title Insurance company
8) Review your estimated closing figures (HUD)9) Counseling you
on ancillary issues
Because of this, your agent will ask the following from you:
1) To work exclusively with your agent
2) To respond to lender and agent requests for documents or
information thatmay be needed along the way
3) To sign appropriate documents
4) To make required deposit(s) on time
To get the most from your relationship, let your agent know that
you understand
how the system works and let them know that you will be using
them exclusively
as your resource. If you dont feel the comfort level to do this,
you may beworking with the wrong person.
By understanding the tools that your agent has, youll be better
positioned torealize the full benefits of what your agent can do
for you. When you USE JUST ONE
AGENT, youll most likely do yourself a great favor and have a
smoother time looking
for and completing your desired transaction. If you should have
any further
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