MidCitiesOnline.com Bob Miller

Real Estate How To's




Get tips from the articles included on this page. Click on the headline to learn more about each topic.

How to find the right agent
A competent real estate agent can be the key to finding the right home at the right price.

Understanding extra fees
From appraisals to closing fees, the tab could add up to more than $900. See how much each fee could cost you.

How to make an offer
Learn what factors to use while formulating an offer. What is earnest money? How much time should the seller have to respond? What's included?

How to avoid renter pitfalls
The rights and wrongs of renting -- from the application process to renter's rights to security deposits.

How To Find the Right Agent

When buyers do find a property that interests them, a skilled agent can put the deal together and help the buyer negotiate the best possible price.

When it comes time for you to buy a home, finding the right real estate agent is not unlike selecting any other professional: your attorney, accountant, financial planner or doctor. The key is to find someone you feel confident in and are comfortable working with.

A buyer's agent should be able to access information on all available properties for sale, help you choose the best possible financing package for your new home, guide you through an offer, and finally, close the transaction.

Finding an Agent

The best way to find an agent is to ask for referrals from people you already know and trust.

Another suggestion is to look through the real estate ads and see which companies are marketing a lot of listings, then call those companies and ask the sales manager or broker-owner to refer you to an agent.

One agent may specialize in condominiums and town homes while another may specialize in lower-priced single-family homes or new project sales.

If the first agent you are referred to doesn't work out - sometimes there's just not a personality match - ask the sales manager for help in finding a different agent.

Exploring Options

Methods of finding qualified real estate agents include looking for agents who have earned professional designations such as Graduate Realtors Institute (GRI) or Certified Residential Specialist (CRS). Ask potential agents how long they have been in the business, how long they have worked in the specific area or price range of properties the buyer is interested in, and the amount of business they have done.

Ask For References

Another suggestion is to ask the agent for references, specifically, the names and phone numbers of past clients. Once buyers have selected a real estate agent, they should expect the agent to guide them step-by-step through the home-buying process, beginning with a preview of homes available for sale, explaining the various financing options, and eventually drafting an offer to buy then closing the transaction.

Buyers' Agents

While most real estate agents are available to serve either buyers or sellers, an emerging trend in the industry is agents who represent buyers exclusively.

The National Association of Realtors has recognized this trend and recently created a new professional designation to recognize agents with specific expertise in representing buyers: ABR, or Accredited Buyer's Representative.

Flat-Fee Brokers

Another new variation on buyer representation is the "flat-fee broker," a real estate company that lists properties for sale but does not usually participate in the Multiple Listing Service and does not pay a commission to buyer's agents. Instead of charging a commission based on a home's sales price, a flat-fee broker charges a set fee agreed to by the seller up front, regardless of what the home is finally sold for.

If a buyer is already represented by a real estate agent and wants to make an offer on a property listed by a flat-fee broker, the buyer will be expected to pay the agent a commission, a different approach than traditional brokerage when the seller pays all commissions.

Return to top

Understanding Extra Fees

When buying a home, buyers should be aware of the fees and expenses that will be incurred over and above the amount of a buyer's down payment.

These fees vary slightly among lenders, with the greatest variance occurring in the closing, or underwriting, fee. The origination fee is generally 1 percent but that can vary. Some banks charge less than a 1 percent origination fee, but charge an extra 1/8 or 1/4 percent on the interest rate.

Another potential fee is a "discount point," which is an optional fee a buyer pays to reduce the interest rate. For example, if the interest rate is 8 percent with a 1 percent origination fee, a lender may charge a 1 percent discount point to reduce the interest rate to 7 3/4.

Most lenders will allow a buyer to "lock in" an interest rate for 30, 45 or 60 days. That means buyers are guaranteed the quoted interest rate as long as they are able to close the transaction within the lock period.

Buyers can sometimes negotiate a lower interest rate if they are willing to accept a shorter lock period. Rates may also be negotiated for higher-volume mortgage loans, such as those exceeding $100,000.

Return to top

How To Make an Offer

After months of going to open houses, tooling around town with your real estate agent and poring over the classified ads, you have finally found your dream home and are ready to make an offer.

You need to know that there is a lot more to making an offer than just telling the seller how much you're willing to pay.

A competent real estate agent can draft the offer for you and submit it to the seller or seller's agent. If you choose not to work with an agent, a real estate attorney can prepare your offer.

Making An Offer

One of the most critical elements of your offer is, of course, the offering price. While the goal is usually to make the best possible deal without losing that dream home to another buyer, many buyers are unsure how much to offer. The best way to arrive at an offering price is for the buyer to do a comparable market analysis on the property. The buyers and their agent should review other listings and do a comparable search of all homes that resemble the one they're buying. You check to see what similar properties are selling for or have sold for in the past.

The primary criteria would be the home's location, style, square footage, size and type of garage and the number of bedrooms and baths. Sales closed in the previous six months give a buyer the most accurate idea of the property's market value.

Another way is to just make a really low offer that the seller won't accept - often called "lowballing," Then you wait to see what counteroffer the seller makes. While lowballing might begin a negotiating process with the seller, many agents warn against using this strategy.

The danger of low-balling is that the seller may take it personally or emotionally, as an insult even. It can harm the negotiating process. Sometimes a seller won't even counter a lowball offer because they don't see a person who makes a lowball offer as a serious buyer. A lowball often hurts more than it helps.

Earnest Money

Another element of the offer is the earnest money deposit, often referred to as a good-faith deposit, to demonstrate the buyer's serious intent to purchase the property. Typically, the average earnest money deposit is around $1,000, but there is no magical number. The amount depends on whatever the buyer is comfortable with.

The earnest money deposit is held by the real estate company in a trust account until closing. In the event the transaction does not close, the earnest money deposit is either refunded to the buyers or paid to the sellers, depending on the contract and why the sale is canceled.

For example, buyers often will make an offer subject to obtaining financing. If the buyers are unable to get a loan, then the earnest money will be refunded to them. But if the buyers do get loan approval and then change their minds about buying the house, they may be in jeopardy of losing the earnest money.

Special Contingencies

Buyers often have other circumstances that affect their ability to purchase a home, such as waiting for an inheritance or insurance settlement that will provide the down payment.

These special contingencies should be included as a condition of the offer. The offer becomes subject to the contingency being met by a certain date, if the event does not occur - such as the inheritance not coming through - then the buyer can usually cancel the contract without penalty.

Special contingencies should always contain a definite expiration date. Otherwise, the contract could drag out forever. Contingencies can weaken a buyer's offer, since the seller knows the offer can be canceled if the contingencies aren't met. Many counteroffers will include a 48-hour clause that gives the seller the option to continue taking offers on the property until the buyer's contingency is satisfied.

Under the 48-hour clause, if the seller gets another acceptable offer, the first buyer will have 48 hours to release their special contingency and proceed with the sale. Otherwise, if the buyer is unable to remove their contingency, the seller can cancel the buyer's contract and accept the other offer.

Response Time

One question buyers face is how much time to allow sellers to respond to an offer. The typical response time for sellers on an offer is 24 hours. If the seller needs any longer than that, an explanantion is usually needed.

Once an offer is accepted by the seller it is a legally binding contract. An offer can be withdrawn by the buyer at any time prior to the seller's acceptance. But once the offer is accepted by the seller, it becomes a contract and the buyers can't change their minds.

A number of special contingencies can be built into an offer to give the buyer an opportunity to cancel the contract without penalty. Examples would be making an offer subject to a spouse's or parent's inspection of the home, or subject to the contract being reviewed by the buyer's attorney.


Most offers contain a provision that allows a buyer to have the home inspected within a designated time. If the buyer is unsatisfied with the results of an inspection, he or she can usually cancel the contract. There are professional home inspectors who will go through the house and check it over from top to bottom and fill out a complete disclosure.

Buyers should also do a termite inspection, now required by most mortgage lenders. If there is evidence of termite infestation a buyer should also check for structural damage. The cost for a termite inspection is about $90.

Fixtures and Appliances

Buyers should know which fixtures and appliances are included in the sale. A home to be sold with all appliances may fetch a higher offering price. Fixtures are usually defined as items permanently attached to the home and become part of the real estate - sinks, carpeting, built-in bookshelves. Appliances are usually freestanding or removable. Washers and dryers are seldom included except in cases of an estate sale or if the seller is moving to a furnished condo. Sellers have the right to reserve specific items and will list exclusions on the disclosure form provided to the buyers.

Return to top

How To Avoid Renter Pitfalls

Renters: heads up. If you're seeking a place to rent, there are a few things to know as you get started, and some things to know to protect yourself down the road.

When looking for a rental unit, many seeking rentals turn to the classified ads in the newspaper as their primary source of available rentals. Another good way to find out what units are available is to call the property management companies listed in the phone book. However, often only a few companies specialize in residential rentals. Another way is to check bulletin board notices in the lobbies of apartment buildings.

Rental Applications

Once a tenant locates a desirable unit, many owners or managers will ask them to fill out a rental application. The application usually asks for details on the tenant's employment, previous rental history, personal references, income and credit history.

"The first thing we do is run a credit report," one property manager explained. "If (a potential tenant) has bad credit, we pretty much turn them down at that point. You've got to have a tenant who will pay the rent." They also verify employment and check references.

Occasionally, a potential tenant will offer to rent a unit for less than the owner's asking price. It's then up to the owner whether or not to accept the lower rent. It is recommended that tenants always sign a rental agreement, or lease. A lease is a contract between two parties and should outline the rights and responsibilities of both owner and tenant. Be cautious about using a lease drafted by the owner. If you get a custom-made lease, it may not apply to state laws. If you ever get into court, the judge may have to interpret it and the contract may not even be valid. A standard lease is neutral and fair and protects both parties.

Tenant Rights

Get to know your rights as a tenant by reviewing a copy of your state's landlord-tenant laws. Also ask for the name and telephone number of a person to contact in the event of an emergency, such as a water main breaking or the furnace going out. Some rental companies require tenants to carry renter's insurance, and it is recommended that all renters do so.


A landlord cannot insure the personal property of a tenant, so a renter's policy insures contents and also has some liability in case the renter does something to damage the unit, such as overflowing a bathtub. Renter's policies are generally inexpensive, with premiums for basic policies running from $50 to $200 per year.

Security Deposits

At the time of signing a lease, a tenant will usually be expected to pay one month rent in advance, along with a security deposit that the landlord or manager will keep to pay for any damages to the unit, unpaid rents, or to cover other expenses such as the cost of evicting a tenant for failing to abide by the terms of the lease. State laws determine the maximum amount an owner can charge for a security deposit. This security deposit is separate from a "previous month's rent" charge.

If a tenant fulfills all of his or her obligations under the lease and leaves the unit in good condition, the landlord must return the security deposit within thirty days of the end of the rental period. To ensure that tenants receive their deposit back, the best thing is to leave the property in the same condition as when you move in. There is always normal wear and tear but if you have any damage you will be charged for it out of the security deposit.

Many owners and managers will require tenants to fill out an inspection report at the start of the rental period. The report is a detailed, room-by-room accounting of the unit's condition that later can be used to prove whether or not any damages were pre-existing or were caused by the tenant. Always do a thorough inspection, even if the owner or property manager doesn't give you a form. Do your own inspection immediately even if no form is provided to avoid any liabilities down the road.

Return to top


Calendar of Events

DerekNib Sep 7 - Aug 4

<< Jun 2018 >>
          1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
Add an Event

Carousel Books 120x240