How the MLS System works.

Congratulations on your decision to buy a home! Whether or not youve ever experienced this process before, youll find that the process of searching for a home can be many things. While it can be fun, exciting and challenging, it can also be frustrating, time consuming and tiresome. Hopefully, here, youll find some tips and hints that can make the process less frustrating and more fun. Among all of the resources that people commonly use to find a property, probably your very best source will be your real estate agent. This single resource can prevent you from wasting copious amounts of time and can be a valuable aid in facilitating the entire transaction for you. Lets look at some ways that the agent will be able to assist you, what you should expect, and what your agent will expect of you. Most real estate agents are members of the MLS or Multiple Listing Service. This daily updated system is used exclusively by agents to look up properties for sale, pending, sold, expired, or withdrawn and to post the properties that they may have for sale. It is estimated that over 80% of listed homes are sold through agents using the MLS system. When a seller lists their property for sale, they typically agree to a standard Brokerage fee (6%-7% of the sale price) to sell their property. The agent who lists the property for sale and puts the sign in the front yard is called the Listing Agent. This agent typically offers half of the fee (3%-3.5%) to any agent that brings them the buyers. More often than not, it is not the Listing Agent who actually sells the property. Normally, another agent, who usually works for an entirely different company finds the property for their buyer via the MLS system. The agent that has the buyers and sells the property is generally referred to as the Selling Agent. The beauty of the MLS system is that Joe, from XYZ real estate may list a property that can be seen by Mary at ABC real estate who is working with some buyers in search of a property. Even though these two agents work for different companies, they can both use the MLS to the advantage of their esteemed clients. Typically, if there are two agents, a Listing agent and a Selling agent, each agent will respectively represent their individual client. On the other hand, there are certainly situations where a Listing agent is ALSO the Selling agent. This simply means that the person who Listed the property for sale is also the person who found the buyer(s) for it. It may seem obvious, but the biggest reason why you need JUST ONE AGENT is that if your agent is doing the job for you, they will have almost EXACTLY the SAME INFORMATION that all of the other agents have because of the MLS system. It is, therefore, not necessary to call every agent on every sign on every house that is of interest to you, as you drive through all of the neighborhoods in your city. Just jot down the address, give it to your agent and he or she will be able to get you all of the information that you need and arrange for you to personally view the inside of the home. You will soon find that calling just one number is much better than trying to get in touch with several different, busy, on the go agents. One thing that is very important is to respect the time of your agent. Your agent effectively is working for you when they are assisting you. To put it in perspective, your agent only earns a living when they assist you in purchasing a home. In other words, 1

your agent doesnt earn a dime until you close on your new home! For this reason, it is best to stick with one dedicated and hard-working agent and let them do all the necessary work for you that needs to be done. Naturally then, it is appropriate and polite to advise any other agents that you may happen to speak with that you are already working with an agent. At this point, it is worth addressing the possibility of your finding a property that is not in the MLS system. A little known fact in this business is that your agent can assist you even if you happen to find a property that is FOR SALE BY OWNER. It is a fact that very few by owner home sellers actually do so without an agent (fewer than 10%). There are a variety of reasons for this, but suffice it to say that your agent can be a valuable resource in putting this type of transaction together for you and shepherding it to completion. It is best to have a candid conversation with your agent about how you might deal with this situation should it arise. For your benefit, here are some other points worth considering.. Among many other things, a buyers agent will assist you with the following: 1) 2) 3) 4) 5) 6) 7) 8) 9) Referring you to a knowledgeable and resourceful financing source Schedule showings Write and Negotiate your Purchase offer Arrange home inspections and following up on required repairs Arrange termite inspections Order a survey of the property Select a Title Insurance company Review your estimated closing figures (HUD) Counseling you on ancillary issues

Because of this, your agent will ask the following from you: 1) To work exclusively with your agent 2) To respond to lender and agent requests for documents or information that may be needed along the way 3) To sign appropriate documents 4) To make required deposit(s) on time To get the most from your relationship, let your agent know that you understand how the system works and let them know that you will be using them exclusively as your resource. If you dont feel the comfort level to do this, you may be working with the wrong person. By understanding the tools that your agent has, youll be better positioned to realize the full benefits of what your agent can do for you. When you USE JUST ONE AGENT, youll most likely do yourself a great favor and have a smoother time looking for and completing your desired transaction. If you should have any further

questions regarding this or anything related, please direct them to the person who gave you this or the contact information at the bottom. Meanwhile, happy house hunting! Looking for real estate without having the financing figured out is like blind archery! 2002 Eric Johnson Mortgage Financing 941.713.9307 / 888.390.5697