Buyers with inaccurate information on their credit report may have a hard time

obtaining financing, or be offered loans at higher-than-market interest rates. The Fair

Credit Reporting Act gives consumers the right to a free credit report from each of the

three nationwide credit reporting companies every 12 months. Visit

NAR research shows that 77 percent of all recent buyers used the Internet to search for

homes. Not all real estate Web sites are created equal, however. Buyers who provide

personal information online to be referred to a network of real estate professionals are,

in effect, authorizing the owners of that site to sell their information to third parties. To

also houses the most comprehensive listings database in the country.

Many buyers use the Internet to research mortgage lenders. Be careful when sharing

financial or other personal information over the Web – predators can steal this data and

the user’s identity. Realtors® can refer buyers to reputable, reliable lenders.

Many mortgage products are available in today’s market, but not all of them work for all

buyers. NAR warns consumers against exotic loans and predatory lending practices that

can poison the home buying process and trap unsuspecting borrowers into years of

read the brochure, “Shopping for a Mortgage? Do Your Homework First,” and consult a

Realtor® to learn about different financing options and their implications over time.

According to Fannie Mae, mortgage fraud has increased five-fold in the past 10 years.

Unsuspecting home buyers who aren’t familiar with an area’s property values can be

victimized by scam artists who have bought a property at a bargain-basement price and

have made minor cosmetic changes to sell the home for much more than it’s worth.

People with blemished credit can also fall prey to unscrupulous individuals who pose as

real estate agents or mortgage brokers, offering promises of a new home and mortgage

qualification. These buyers end up assuming a loan they can’t afford, and the lender

forecloses.

To protect yourself, work with a Realtor® who knows the local market, and check his or

her credentials with the Realtor® board or association in your area.

When you’re buying a home, would you know what to do if your financing fell through

the day before closing, your home inspection found a termite infestation, or your future

neighbors had just built a wall on your property?

As a buyer, you want someone who knows the market and who has experience handling

the particular needs of home buyers, whether it’s identifying homes and neighborhoods,

negotiating for the best deal, or coordinating the 20+ steps between contract acceptance

and closing.

Realtors® who have earned the Accredited Buyer Representative (ABR) designation

have demonstrated their commitment to and expertise in serving home buyers. To earn

the ABR designation, Realtors® must successfully complete a two-day designation

course that covers agency, service delivery, marketing and promotion, and negotiation

and risk management; take an approved elective course, such as buyer representation in

new homes, second homes, or relocation; and have completed five transactions in which

he or she acted solely as a buyer representative.

Some real estate professionals offer rebates or may work on a fee-for-service basis, in

which buyers may be responsible for their own property searches, negotiating

strategies, or other tasks. These different business models give consumers a degree of

choice in deciding how they want to work with their real estate professional. Just make

certain you know what services are provided and what you can expect from the business

relationship.

Remember that you’re not just buying a home; you’re investing in your future.

Beware of companies offering to buy your home to save you the “hassle” of putting it on

the market – these companies often profit at the seller’s expense. Ask several Realtors®

in your area for a comparative market analysis, or CMA. These real estate professionals

will analyze recent sales and market conditions to provide a realistic assessment of your

home’s value, and can suggest strategies for the best sale.

Don’t allow random passersby into your home unescorted. A serious buyer will be

working with a real estate professional or should be willing to contact your agent to

schedule an appointment. Lock valuables away before an open house – the agent onsite

will be monitoring traffic, but it’s impossible to be everywhere at all times.

A Realtor® can help evaluate purchase offers and advise you on counteroffers and

contract acceptance. It is important to know how contingencies such as appraisal,

financing and inspections will affect the transaction, and understand their implications

for you as the seller. Remember, a high price offer is worthless if the buyer never makes

it to the settlement table.

Relying on the experience of a real estate agent makes financial sense. An NAR survey

of recent home buyers and sellers found that the median home price for sellers who use

a real estate agent is 16 percent higher than a home sold directly by an owner; $230,000

vs. $198,200.

Today, home sellers can choose from nearly 80,000 real estate brokerages and more

than 1.2 million Realtors® with a number of different business models, including full

service, fee-for-service, and discount brokerage.

Full service brokerage is just that – agents handle all aspects of the transaction,

including marketing the home, qualifying buyers, negotiating offers, and coordinating

settlement.

Discount brokers typically offer a reduced package of services at a lower cost to the

seller. This may be a good choice for experienced sellers or those who do not need to sell

immediately – a recent study by Pennsylvania State’s Smeal College of Business and the

University of Texas at San Antonio found that homes listed by discount brokers are 12

percent less likely to sell than those listed by full service brokers.

The fee-for-service business model offers consumers a variety of services for specific

fees. Major facets of the buying or selling transaction, such as competitive market

analysis, counseling and negotiations, are separated.

NAR encourages innovation and competition, and recommends that home sellers

interview at least three Realtors® to evaluate their qualifications and fit. Examine each

professional’s level of experience and service, ask for referrals and talk to past clients.

Don’t make an agent’s commission the sole deciding factor – you wouldn’t put your life

in the hands of a doctor because he or she had the lowest fee; why would you want to do

that with your largest financial investment?

The recent real estate boom has encouraged an explosion of real estate licensees. But

getting a license and succeeding as a professional in the industry are two very different

things. To find a true real estate professional – one who will represent your interests

and provide valuable insight and advice regarding what is likely your biggest investment

– follow these steps.

Drive around your neighborhood or the area you’d like to live in, and make note of the

active real estate agents in the area. Call local brokerages for agent recommendations,

and specify whether you are buying or selling a home.

visitors to search for either a specific Realtor®, or for those who specialize in specific

neighborhoods or have specific certifications and designations.

friend, neighbor, or relative.

Ask each about their business approach and philosophy (do they offer full service, or

will you have to assume some responsibilities in the transaction); experience;

designations and advanced training; and referral network (home inspectors, lenders,

contractors, etc.). Home sellers should also ask about the number of homes sold in the

past year, length of time on market, average sales price in relation to asking price, and

the agent’s marketing plan.

A Realtor® is a licensed real estate professional who is a member of the National

Association of Realtors® and subscribes to its strict Code of Ethics, which obligates

Realtors® to be honest with all parties involved in a transaction, whether it is the buyer,

seller, or cooperating agent.

Realtors® also have access to educational opportunities and training in real estate

specialties that are not available to other licensees. This includes accredited

subspecialties such as buyer’s representation (ABR), residential real estate expertise

(CRS), or Internet readiness (e-PRO).

Through membership in NAR’s affiliated institutes, societies, and councils, Realtors®

devote themselves to continuous study of the most recent trends in their fields to stay

abreast of industry developments in their specialized areas and better address industry

issues.

A real estate licensee has passed an exam; Realtors® are real professionals.

Copyright NATIONAL ASSOCIATION OF REALTORS®

Headquarters: 430 North Michigan Avenue, Chicago, IL. 60611-4087

DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020

1-800-874-6500