If you have never purchased a home before there are several things in which you must be made aware: whether Santa Clarita Real Estate or other areas in which Paris911 Serves:
1. It is not "normal" to pay your agent a commission in order to have them help you find a home and write the offer.
As a rule of thumb our commission, when representing buyers, is paid by the Seller. That is the price of admission to having owned real estate and wanting to sell it. As a seller you will bear the responsibility of paying both Agents commissions. The one that you have chosen to represent you and market, subsequently bringing the other agent and buyer to your home and successfully closing escrow. You also pay the Other agent that brings the buyer. In most markets this fee is 6%, which is allotted 3% per agent or side of the transaction. A seller will also pay their own fees as they relate to title and escrow. Usually one (1%) percent of the sales price for each fee - These are set fees and have little wiggle room. So rough numbers has a seller paying 8% total to sell a home without considerations and discounts.
2. Your fee’s as a buyer or closing costs are going to be about three things:
A. Your part of Title fees (Usually 1 % of the purchase price or there abouts)
B. Your part of Escrow fees (Usually 1 % of the purchase price (this is an estimate))
C. Your Lender’s fees (the origination fee for your loan - Appraisal - Document preparation - The list goes on and on depending on the Lender and their Hunger)
3. You can pay your closing costs in a few different ways:
A. Cash
B. Check
C. Borrowing the money from a relative or friend
D. Having the closing costs incorporated into the loan.
E. Have the Seller Pay the closing costs.
Let me bring your attention to #3-D, "having the closing costs incorporated into the loan". This is by far the most popular option for most new home buyers. IN A HOT MARKET. OTHER WISE KNOWN AS A SELLERS MARKET. Understanding that for every $10,000.00 financed your payment will change in the area of $50.00 to $75.00 a month - You have a decision to make regarding the hard money you have saved in the bank - Which, for that matter, is not very easy to save and having the closing costs incorporated into the loan.
Another option regarding closing costs is, #3 -E, "having the seller pay the closing costs". This option is what is the most prevalent at this time in this market and date of this post. This is a Buyers Market without a doubt. So in this market you make an offer of let us say $300,000.00 and then ask the seller to pay your closing costs which rough numbers would be 3%, or $9,000.00. You would still Borrow $300,000.00 to purchase the home, the seller would then clear $291,000.00 (300,000(purchase price) - 9,000(your closing costs) = 291,000(Seller’s Net).
We have to explain and stress the fact that as a buyer your don’t pay our commission, the reason that this chaps my hide and is so stressed upon by Paris and I is because we have had a huge amount of clients in our office that did get conned into paying their agent an additional fee when just buying a home. Usually their first home and thereby that agent made more than their "own fair share".
