Dawnette Ham


Buyers Representation Agreement

Buyers Representation Agreement | Buyer Client 


Do you need a Buyers Representation Agreement?  If you are a buyer "client," ask yourself the following questions.  Would you go to court without represenation?  Would you work without a contract guaranteeing you'll get paid?  I wouldn't and neither should you.  Do you know the listing agent represents the seller, not you?  Do you want to know the truth about the property you love and want to buy?  Do you want the best deal you can get?  Do you want someone to protect your interests and accompany you step for step on your buying journey?  You need a Buyers Rep.  Below, you'll find a copy of a letter for my buyers.  It outlines the buying process and details not covered in the Buyers Rep, along with a short "why you need a buyers rep" paragraph.  Call or email me with any questions.


Buyers Representation Agreement Review

This document was generated in an effort to explain all details associated with purchasing a home to our clients and address any questions or concerns which may surface during the buying process.  RE/MAX is the #1 real estate company in the world in all categories and was recently honored with the JD Power’s Award for top customer satisfaction.  Therefore, as RE/MAX Associates, we feel it is very important to hold ourselves to the highest professional standards and present all important information to our potential clients up-front and in writing before asking for a long-term commitment from you.

There is absolutely no charge to the buyer for our services.  Sellers of properties listed for sale or builders of new homes will pay our company a commission for representing you (the buyer).  If you purchase a new home from a builder, you will not be penalized in any way for using a REALTOR.  Nor will you be treated more favorably by any reputable builder or any other seller for not utilizing the services of a REALTOR.  The benefits of representation are numerous and at no cost to you.   It’s a win-win for everyone involved!

1.  Property Search: At the first meeting with your agent, please provide your agent with as much information as possible regarding the type, price, location, and all other preferences or needs of the property you desire to purchase.  Searching can be done one of three ways: in office, face-to-face with your agent, via internet with the agent conducting a search of the MLS for you, or a self-directed search on our website.

2.  Financing: If you have not already done so, we request that you obtain a pre-approval letter from a lender approved to provide mortgage loans before going out to view properties.  We will allocate considerable resources to help you locate and purchase a property; therefore, we ask that you, the buyer, are “Ready, Willing, & Able” to purchase any home we may view which fits all of your search criteria.  This includes viewing properties within your price range or properties with a list price not exceeding 5% of your maximum price range.

If you are paying cash for the home, we will request documentation illustrating proof of those funds available for the purchase.  Please keep in mind that no seller will accept or consider an offer on any property without being provided with proof of funds for a cash sale or a pre-approval letter for financed purchases.

3.  Mortgage Products: Listed below are some of the most common mortgage products available.  Please speak with a qualified lender for more info:

     a. FHA – This loan product is available to the general public and is currently the most popular loan product in the country.  Minimum requirements vary from lender to lender, but most require a minimum 620 mid-FICO score, and a debt-to-income ratio not to exceed 50%.  Minimum down payment on FHA loans is currently 3.5% of the sales price.  FHA allows the seller of the property to contribute up to 6% of the sales price towards the buyer’s closing costs.  Mortgage insurance is required by FHA with the first 60 payments, and FHA does charge a funding fee to the borrower at origination.  Maximum purchase price is $332,500.

     b. VA – This loan product is available to most active duty/reserve members of the military and military veterans.  Minimum requirements vary from lender to lender, but most require a minimum 620 mid-FICO score and a debt-to-income ratio not to exceed 50%.  There is no down payment required when purchasing a home with a VA loan.  VA allows the seller of the property to contribute up to 4% of the sales price towards the buyer’s closing costs as well as approximately $1,000 in fees which the seller must pay for the veteran.  VA borrowers are not charged monthly mortgage insurance; however, VA does charge a funding fee at origination which increases each time the entitlement is used.  Disabled veterans are not charged a funding fee.  Other discounts on rate and origination may apply if combined with TX Veterans Land Board benefits.  Maximum purchase price is $417,000.

     c. USDA – This loan product is available to the general public for the purchase of rural properties.  Minimum requirements vary from lender to lender, but most require a minimum 620 mid-FICO score and a debt-to-income ratio not to exceed 50%.  There is no down payment required when purchasing a home through a USDA loan. Mortgage insurance is required by USDA, and USDA does charge a funding fee to the borrower at origination.  Maximum income restrictions do apply.

     d. Conventional – Products vary greatly from lender to lender.  Typical requirements are a minimum 5% down payment and minimum FICO score of 720.  Generally, there are no funding fees associated with conventional loan products; however, mortgage insurance is normally required on any loans originated with the borrower making a down payment less than 20%.

4.  Offers: After identifying the home you would like to purchase, your agent will guide you through the process of placing an offer on that property.  The first and most important step is to determine the value of the subject property and base your offer on that figure, rather than list price.  Your agent will perform a comparative market analysis on the subject property to determine fair market value.  Typically, offers below 10% of the list price are not considered reasonable and may not be seriously considered by the sellers.

5.  Closing Costs: Closing costs on a financed purchase normally run between 4-6% of the purchase price, depending on several factors.  Your mortgage lender will provide you with a break-down and estimate of these costs.  Typically, the majority of these costs can be paid by the seller or rolled into the purchase price.

6.  Inspections: An inspection of the home you are going to purchase is not required but highly recommended.  Ideally, the inspection is conducted during the termination option period of the contract.  The buyer may request the seller repair any deficiencies in the property found by the inspector; however, the seller is not obligated to perform any repairs other than those noted in the appraisal and required by your lender.  We feel the buyer is entitled to any repairs which may affect the structural integrity, systems function, or safety of the property.  Please note that cosmetic improvements may not be considered by the seller; therefore, the cost of such improvements should be taken into consideration by the buyer when calculating a fair offer.

7.  Homeowner’s Insurance: It is the buyer’s responsibility to gather quotes on insurance from their carrier or any other company they choose.  Typically, the annual premium will be divided into 12 monthly payments and made part of the buyer’s monthly mortgage payment.

8.  Property Taxes: In Texas, property tax rates are considered to be some of the highest in the country, and can greatly affect the affordability of a property.  Please figure this into your monthly payment and cost of home-ownership.  Tax values and rates in Bexar County can be found at www.bcad.org. Medina County tax information can be found at TaxNetUSA.  Typically, as with insurance premiums, 1/12th of your annual tax bill will be added to your monthly mortgage payment and collected by your lender.

9.  Fiduciary Responsibilities: Responsibilities and representations of the buyers and their agent are outlined in the Buyer’s Representation Agreement, but we felt the following are noteworthy:

     a. It is the responsibility of the agent to represent the buyers honestly and ethically, all the while making every effort to assist the buyer in purchasing their desired property for the lowest cost possible.

     b. After starting the home-purchase process, we ask that the buyers make themselves available to view properties as often as possible until they identify one they would like to purchase.  We also request that buyers keep in constant communication with their agent and begin the buying process as quickly as possible after identifying a property which they would like to purchase.  Please keep in mind that time is of the essence in making a great deal on your home purchase, and the best valued properties always sell first.

     c. Buyer’s Representation Agreement – In order to properly allocate adequate resources to meet your needs during the purchase period, we will require a written commitment from you in the form of a Buyer’s Representation Agreement.  This agreement allows us to properly and legally represent you as a client, and can be terminated without penalty if your needs suddenly change or if the services of your agent do not meet your expectations.

10.  Business Partners and Other Info: If you do not have a preference for any of the various vendors you will be utilizing during the purchase of a home, please ask us for a referral.  In most cases, we are not rewarded for referring business to any of our partners; however, we deem each of them to be reliable and trustworthy, therefore often making the home-buying experience much smoother and pleasant for all of us.  We recommend you shop around for the best rates available to you with regards to items such as interest rates, insurance premiums, inspection costs, etc.  All the information you will need can be found at www.DawnSellsTexas.com.