Home Buying in Westwood>Question Details

Bob, Other/Just Looking in Kansas City, MO

For the Kansas City market, two questions, one, is there an advantage (besides price) to buying a home that is not in pre-foreclosure, foreclosure or

Asked by Bob, Kansas City, MO Mon Nov 30, 2009

bank owned? Many homes listed are vacant. We are thinking of using a buyer's agent, how do they get paid?

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Buyer's Agents - If an offer is made on a property listed by a Realtor the agent will normally be paid by the commission offered by the seller. Everything is negotiable though so it has happened that the buyer agreed to pay some or all of the buyer's agent commission. If the property is not listed (FSBO) the buyer's agent will normally build into the offer that the seller will agree to pay the agent's commission. The Buyer's Agency agreement states, though, that the agent will be entitled to a commission so it is possible that the buyer will be responsible. Talk through this with any agent you consider before signing a buyer's agency agreement.

Foreclosure vs. non-foreclosure properties... I think the most important issue for you to know is that mortgage guidelines require that the appraisal on the property show that the home is in average to good condition. Many foreclosures will require repairs and normally (not always) the Bank will NOT be willing to make repairs prior to closing. If you are willing to purchase a property in its existing condition when it will not meet appraisal requirements your financing options change. You always can pay cash but if you need financing you will want to consider a "re-hab" or "construction" loan which will be obtained through a local bank or, if it is for your primary residence, you could consider an FHA 203 K type of loan which is also referred to as a rehab loan. Hope this helps you in your decision making.
1 vote Thank Flag Link Fri Dec 4, 2009
All good answers here Denise ... let me add if you are putting an offer on a foreclosure or short sale, it can be a very long time before you have an answer (more so with a foreclosure) and remember,these things: anything can happen at the last minute that will prevent you from closing; you may have to pay more fees up front for a foreclosure (turn utilities on, repairs required by insurance company), your deposit money is tied up for a potentially long time. And the 'deal' you may get is not that much off the list price--maybe 5-10%..
With so much on the market, you may be able to get just as good a deal, without the hassle and headaches, from a regular resale transaction.
Mary Hutchison
http://www.maryhutchison.org
1 vote Thank Flag Link Mon Nov 30, 2009
Denise,

As stated by the other answers typically the seller pays a buyer's agent unless otherwise stated in the contract. When buying a home that is not a foreclosure and is owned by the actual occupant you will find a seller's disclosure which discloses the property condition along with past and current problems. These home are typically not being sold "AS-IS" meaning that if there is or was something wrong with the home the seller can be held accountable for either making the repairs, renegotiating a new sales price or paying for more of your closing cost. As a buyer you are always advised to get a home inspection but a lot of "Foreclosures" simply will not repair anything. Buying a Foreclosure can be a great deal but the process can be very frustrating depending on the listing agent and the bank that owns it and always takes more time than a home that is not in Foreclosure. Remember, regardless to GET A HOME INSPECTION! Visit me at http://www.HomeLoanKC.com .
1 vote Thank Flag Link Mon Nov 30, 2009
Denise,

Yes, the price/repair ratio is much better. An individual seller will be easier to deal with than a bank.

The Buyer's Agent gets paid from the proceeds of the Seller.

I always like to answer questions like this with a "If it was me" reply so, if it was me I would look for resale and deal with the seller's agent.

Hope this helps.

John P. Thompson
816.820.4471
jthompson@truhomesolutions.com
1 vote Thank Flag Link Mon Nov 30, 2009
Hello Denise;

A buyers agent is paid by the seller from the proceeds of the sale, or as otherwise defined in the contract with the agent.

Pre-foreclosure or short sales can be a great deal, but they can also be frustrating because of the time involved. Most lenders are looking for multiple offers and will wait for them. They often respond with a request for "highest and best offer".

This will mean that you are actually in a bidding competition with other buyers and usually do not know what their bids are.

D. Ben Edsall
Broker – ARM, AEREP
Turn-Key Properties LLC
7312 E 67th St.
Kansas City, MO 64133
816-313-8876
http://www.turnkeyproperties.org
http://www.batescountyrealestate.com
1 vote Thank Flag Link Mon Nov 30, 2009
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