by Michael D. Holloway
Buying a home is the single largest investment you will make in your life and will become the foundation of your financial future. If done correctly you will make money. If done incorrectly you will lose money. It’s better to make money. This month I’ll begin to provide an outline of how to buy a home, a game plan if you will. (If you become a regular reader of this column, you will discover that I’m only knowledgeable about real estate and basketball, with an occasional foray into politics.) If you save this article and compile it with others that follow you will eventually have a pamphlet on how to buy a home. Like much of what I do, my comments are “from the fringe.” In this instance, this is my position relative to how the traditional real estate system works. I am a licensed real estate broker as I must be to run my business, Homebuyer Associates. Since 1986 I’ve represented over 750 homebuyers in the purchase of their home. My comments are not intended to offend but to enlighten. When you make a financial investment you are deciding how best to use your money. There is a reason rich people are rich besides inheriting money — they understand money. You must begin to understand the real estate system and the home buying process to make a wise real estate purchase. The real estate system is comprised of buyers, sellers, real estate agents, mortgage lenders, and attorneys. We all know what buyers and sellers are, and each should have their own best interests at heart. Lawyers, if hired by each party, have a fiduciary interest to represent their clients — the buyer’s or seller’s – interests. Real estate agents most often represent the seller’s interests. The “listing agent” is the agent with the lawn sign. Any other agent involved still works for the seller. The real estate agent’s job is to sell real estate for his clients — the seller. If a real estate agent is good at his job then he will sell a home for the highest price possible as quickly as possible. While that may not be in the home buyer’s best interest, any agent you speak with works for the seller unless you have a signed contract with the agent. The agent is only doing his job. If you have a buyer’s agent contract with an agent who works for a company that sells homes, be careful. Believing that it helps you to have a signed contract with a buyer’s agent who works for a company that sells homes is similar to believing a car salesperson is going to work for you and against the car dealer because the car salesperson has a contact with you. In fact, keep in mind that the relationship you have with a car salesperson when you buy a car is similar to the relationship you have with a real estate agent when you buy a home. So rule number one is: Know who works for whom in the real estate transaction. Michael D. Holloway is a Riverwest resident and president of Homebuyer Associates. He spent 12 years working in housing and housing rehabilitation in city government. Michael lives on the geographic fringe of Riverwest and he acknowledges that at times, he may be on the political fringe of the Riverwest community.
by Michael D. Holloway