Realtors, Commissions and Closing Costs

Posted by  on Apr 16, 2009
 
Realtors, Commissions and Closing Costs — What You Should Know Prior to Signing

Because the process of buying a home is very complicated there are measures that need to be taken in order to ensure a smooth transaction. First of all you need to be educated on the process, and you need to have somebody to help in the stressful times ahead. All in all realtors help to deal with all the problems and hassle that arise during the process.

What the Realtor Makes

A realtor is paid for the services rending of helping to guide you through the house buying process, including the basics of looking for the home of your dreams. Before you enlist a realtor though, find out exactly what services they will provide and their going rate. Often even if you do not purchase a home through them, but have used them to help you find a home or even just look around you will need to pay them at least a small amount. Many realtors exist so shop around to try to pay the lowest amount possible.

What are Commissions?

If you need to obtain a loan to help finance the purchase of your home, most likely you will be using some type of broker. This person will help to acquire you the best loan, but will be expecting a certain percentage of the loan amount in return. Try to find out a lenders rates first so you have the ability to shop around and not pay too much for the amount of work there going to do.

Also, if you have worked with a previous lender sometimes it helps to go back to them. If you go back to the same lender over and over they might be willing to lower the costs of their services because they know if they do you’ll be more inclined to come back to them again. Generally these fees can be anywhere from 5%-7%.

What are Closing Costs?

As the final step approaches you need to take into consideration every actual fee you need to pay when the deal is finalized. These are called closing costs and include lenders fess as well as other arbitrary fees. Legal advice during this step can help to spot unethical or unreasonable charges that are hidden to help others make money. The closing costs for a home can vary between 3% to 4%, depending on the lender and on the situation.

Although buying a house is a fun exciting process, you need to watch out for anything that might be a snag in the final steps. Even though most people seem to have good intentions at heart you still should pay careful attention along the way to avoid any extraneous charges.

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