×

Step 1: Educate & Initiate

1. Consultation & Alignment
   1. Discuss services, agency, the buying process, and expectations.
   2. Discuss “caveat emptor” in the State of Alabama and how it affects the buyer. (See sidebar: Buyer Misconceptions)
   3. Discuss the benefits of exclusive representation.
   4. Discuss brokerage compensation and who pays commission.
   5. Align on preferred home location, timeline, and key features. (See sidebar: How We Do It)
   6. Discuss pre-approval and financing.
   7. Sign exclusive buyer broker services agreement.
2. Budget Factors
   1. Down Payment: 3.5: – 5% required. Additional loan programs are available for larger down payments.
   2. Mortgage Qualification: Loans are determined by credit reports, assets, income, property value and property location.
   3. Interest Rates: Review current mortgage rates and discuss fluctuations and rate-locking options.
   4. Debt-to-Income Ratio: Between 33-38%
   5. PITI: Between 25-28% of your gross monthly income: Principal on Loan, Interest on Loan, Property Taxes, and Homeowners Insurance.
3. Financing & Pre-Approval
   1. Review mortgage sources and services and identify different mortgage products.
   2. Connect with mortgage lender to obtain pre-approval.
   3. What you need to get pre-approved? (See sidebar: Pre-Qualification vs Pre-Approval)
      1. Social Security number
      2. Two most recent pay stubs
      3. Last year’s tax return (or most recent filing)
      4. Two most recent bank statements
      5. Last year’s W2
4. Estimated Expenses
   1. Earnest Money: Typically, $1,000 to 1% of purchase price
   2. Inspection Fees: Between $500 – $1,000
   3. Appraisal Fee: Approximately $500
   4. Additional Closing Costs: Around 3% of purchase price, including title insurance, lender fees, and homeowners insurance.
5. Current Local Market Conditions
   1. Explain the local market and how inventory and multiple offer situations impact the buyer.
   2. Show statistics on what percentage of list price sellers in the area are currently receiving.
   3. Identify current average days on market.
   4. Share the dangers of using the price per square foot to figure home values.
   5. Explain the concept of absorption rate and how it impacts the buying process.
   6. Indicate current listing months of market inventory (seller’s vs buyer’s market)
   7. Buyers’ Market vs Seller’s Market and how this affects every decision going forward (See sidebar: Strategies for Each Type of Market)

×

Special Warnings

Working directly with the listing agent to purchase a property can possibly put the buyer at a disadvantage.

In almost all cases, a real estate agent who has listed a seller’s property for sale, is working with that seller as their client, a fiduciary who is required by law to put the seller’s interests first, including:

• Assisting the seller in pricing the home at the highest reasonable price the market will bear.
• Holding all information (other than latent defects) in strict confidentiality.
• Remaining loyal to the best interests of the seller throughout the transaction.
• Aggressively negotiating on the seller’s behalf.
• Conducting due diligence on the buyer, his offer and his negotiating position.

Posting information on Social Media

Caution buyer-clients not to post, text, or tweet comments that can easily find their way back to the seller and harm the buyer’s leverage when it is time for negotiation.

Confidential Info

Sellers are not legally obligated to keep offer details or the buyer’s identity confidential. “Sellers or sellers’ representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.” If you desire your identity or the terms of your offer to remain confidential, you must ask the seller to sign a confidentiality agreement before you present the offer. If the seller refuses to sign, you must consider whether to proceed with the offer.

Seller Surveillance During Property Tour

When viewing a property, avoid showing strong reactions or making comments—good or bad—as electronic monitoring devices, like hidden web cams, can be anywhere. Negative comments might insult a seller, while exceedingly positive comments might hurt a buyer-client’s bargaining position.

Fair Housing – Types of Questions I Can’t Answer for You

• Who lives here?
• What kind of people live in the neighborhood?
• Is this a good place to raise a family?
• Is this a safe neighborhood?
• How are the schools here?
• Can you show me a neighborhood with a large "X" population?

Things Buyer Needs to Do on Their Own

• Check the sex-offender registry and crime statistics for the neighborhood.
• Review school stats.
• Learn more about the neighborhood prior to making an offer.

Talking to the Seller/Listing Agent

Be cautious when giving the seller or listing agent feedback during or after a showing. Too much information could be harmful to your negotiating position.

Love Letters to Sellers

Some agents recommend their buyers should write a “love letter” to the seller to indicate their interest in the property – in hopes of giving them leverage against other offers. Bellator Expert Real Estate Advisors highly discourage this type of tactic, as it can trigger fair housing concerns and also innocently reveal personal information that could harm the buyer’s negotiating position or lead to implicit bias.

Fairhope Single Tax Corporation

Everyone buying a house on Colony land or leasing unimproved land is required to attend an orientation session where you are informed that, although you own the house and any improvements, you are leasing the land. Every time a property transfers, a new 99-year lease is issued. The Rent paid by lessees to the Single Tax Corporation includes taxes that are due to state and local governments. Lessees do not make any direct payments to state and local governments. The FSTC office forwards the amount paid for taxes on to the Baldwin County Revenue Office.

×

Strategies for Each Type of Market

A critical factor to understanding your negotiating position is knowing whether it is a buyers' market, a sellers' market, or somewhere in between. This crucial assessment will not only inform your initial offer but also your counteroffer and the negotiation of contingencies. Below are some strategies for the different kinds of markets:

Strategies for a Buyers’ Market

• Keep up-to-date on price adjustments.
• Request contingencies, allowances, or extras, such as a home warranty.
• Ask the seller to help with closing costs.
• Shorten the time for the seller's acceptance.
• Request credit or repairs if inspection reveals needed repairs.
• All cash or an underwritten mortgage approval is a benefit in all markets.

Strategies for a Sellers’ Market

• Obtain an underwritten mortgage approval before making an offer.
• Offer the list price or more.
• Put down a larger amount in earnest money.
• Make the first offer the best offer as there may not be a counteroffer or another opportunity to negotiate.
• Minimize contingencies and do not ask the seller to help with closing costs or financing.
• Prepare for a multiple offer situation by considering:
  • Ways to give the seller more “wins” (quicker closing time, delayed move out with a lease back clause…)
  • An escalation clause.
  • A backup offer.

×

Buyer Misconceptions

1. The laws in Alabama will protect me if there is a problem with the property.
2. I will automatically get a discount if I buy straight from the seller/listing agent.
3. The listing agent will protect my best interests in order to get the deal closed.
4. I can always get my earnest money back if I decide not to close.
5. Sellers can no longer pay for my buyer representative’s fees.
6. Prices/interest rates are falling. I will get a better deal by waiting on them to come down first.
7. My lender or title agent can just walk me through the buying process and protect my interests.
8. My lender can provide all the legal documents I will need to complete the purchase.
9. My emotions (attachment to the property) will not affect my decision making or negotiating position.
10. The seller can’t record me during my property tour.
11. I’ll save time and money by just searching for homes on my own.
12. All the homes I need to see are already on Zillow.
13. The media says I don’t need an agent anymore. They must be right!
14. Zestimates are the same thing as a Realtor’s comparative market analysis (CMA).
15. The house down the street sold for $X/per square foot. I can just base my offer price on the same amount per square foot.
16. The seller is required by law to disclose all known property defects.

×

How We Do It

What We Do	How We Do It	Why We Do It
Find suitable property	Use MLS pre-list Sellers not ready Other offices Previous clients Private listings	Not all properties you see on the internet are available and all available properties are not on the internet.
Show Property	Point out features/benefits Remind you of your wants and needs Help you compare properties	Sellers 'stage' their homes for a reason. We need to look at things that don't change - and how difficult it may be to change others.
Analyze the Market	Utilize MLS analytical data Trained on how to analyze the data Do CMA for you	You want to buy a house - not just make an offer. Strategies are very different if it's a buyers or sellers' market. I help you get the property for the best price and terms whatever the market.
Write the Offer	Go through the contract to structure your offer to your benefit	We need to be the 'chosen one'. A poorly written contract can be totally rejected. Must be sure it meets your needs while also satisfying the seller to the extent they choose your offer.
Negotiate on Your Behalf	Trained in negotiating to get you the best price, terms and conditions for the current market	We don't want to leave anything on the table. Working with a trained negotiating expert assures you will know all your options and the pros and cons of all your decisions.
Follow Through to Closing	Monitor due-diligence dates Work with home inspector and assist with any issues Work with other agent and appraiser if needed Coordinate activities with all parties to get your transaction to closing.	Offer acceptance is only the beginning. Getting to the closing with all the players moving the right direction is my responsibility. It's the quarterback's job to get the ball in the endzone and I will be your quarterback.

×

Pre-Qualification vs. Pre-Approval

Pre-Qualification	Pre-Approval
Estimated income and savings, often self-reported. Estimated savings and assets, often self-reported. Informal inquiry into credit rating, though some lenders may run a quick check. Employment not typically verified. Typically completed within a day, if not sooner. Estimated loan eligibility amount provided at conclusion.	Exact income, verified with documentation, such as pay stubs and W2s. Exact savings and assets, verified with documentations such as bank records. Formal inquiry into credit rating with credit reports from credit bureaus. Employment verified. Typically takes days and sometimes multiple weeks. Exact loan eligibility amount provided at conclusion.

×

Step 2: Locate

1. Search Setup
   1. Develop search criteria based on the key features of your desired home/condo (See sidebar: So Many Things to Consider)
      1. Location – school systems, work commute, neighborhood amenities, etc.
      2. Size & Property Type
      3. Property Condition (and willingness to make improvements)
      4. Features & Amenities
      5. Price Range
   2. Determine which home features can be compromised on and which are non-negotiable.
   3. Search for potential homes online.
2. Property Pre-Screening
   1. Screen off-market and coming soon listings through Bellator’s vast agent network.
   2. Attend private broker open houses and view new listings in advance.
   3. Contact listing agents to inquire about property details and seller needs.
   4. Investigate the home, neighborhood, and other key features.
   5. Does location of home qualify for alternative loan types (USDA) or require additional insurance (flood coverage)
3. Property Tours
   1. Schedule private showings with the listing agent.
   2. Attend showings and open houses.
   3. Note considerations and potential red flags while viewing.
4. Property Review & Comparison
   1. Narrow down options based on:
      1. Interest level.
      2. Issues that may affect value or resale.
      3. Seller’s disclosures.
      4. Additional costs of ownership.
      5. Comparative Market Analysis.
   2. Other important issues to the buyer (neighborhood info, crime statistics, sex-offender registry.)
   3. Special considerations for investment properties and second homes.
   4. Special considerations for condo properties, like: review of Condo Association board meeting minutes, financial info, current and upcoming assessments, transfer fees, insurance and rental management company agreements.
   5. Seller Needs
   6. Offer Terms

×

So Many Things to Consider!

Community

• Detailed development information (floorplans, etc)
• Knowledge of past, current, pending litigation
• Schools data
• Buyer Lifestyle
• HOA specifics
• Comps – knowledge of current listings, sales, pending, etc
• Major employer data
• Nearby amenities and services (restaurants, lakes, hospitals)
• Emergency Services
• Public or Private Utility Services (well/septic/grinder pump...)
• Safety and crime rates
• Future development plans
• Medical facilities
• Environmental concerns

Property

• Knowledge of the builder
• Development specific info (quality of build, class action suits)
• Trends in Property Values
• Property Tax Information
• Buyer Lifestyle
• Deed Restrictions
• Zoning Regulations
• Land Use Restrictions
• Investment Potential
• Flood Zone Review
• Water Rights/Access/View
• Rights on Ingress and Egress
• Historic Preservation Restrictions
• Overlay District Restrictions
• Seller’s disclosure review
• Boundary survey/encroachments
• Previous Inspection Review
• Research property ownership and deed type
• Fairhope Single Tax (Colony Property)
• Non-real property items not transferring with the sale

×

Step 3: Negotiate

1. Offer Submission
   1. Craft an offer based on the property and your needs, including:
      1. Price
      2. Timeline
      3. Earnest Money
      4. Contingencies – Financial, Appraisal, Inspection, Home Sale.
      5. Seller Concessions (Sidebar: Common Contingencies and Concessions)
   2. Submit a written offer in the form of an Alabama Association of Realtors (AAR) Purchase and Sale Agreement.
2. Negotiation of Terms
   1. Present your offer to the listing agent, which is either accepted, rejected, or responded to with a counteroffer.
   2. If needed, negotiate contract terms.

×

Common Contingencies & Concessions

Buyer Contingencies

• Attorney review.
• Inspections; full house, mold, pest infestation, etc.
• Mortgage financing approval within a specified interest rate range.
• Sale of a current home.
• Receipt and approval of homeowner association documents.
• Title review.
• Early occupancy (with payment of rent) or furniture move in.
• Appraised value not lower than offered amount.
• Home warranty.
• Personal property included in the sale (e.g., appliances, window treatments).
• Subject to determination of affordable homeowners' insurance.
• Subject to determination of flood plain issues.
• Verification that all improvements were made with proper permits issued and all certificates of occupancy were issued.

Seller Concessions

• Permitting the buyer to move in quickly.
• Helping with financing.
• Paying some of the buyer's closing costs.
• Paying for improvements such as exterior painting, installing a new furnace, or repairing defects discovered during inspections.

×

Step 4: Coordinate

1. Escrow & Title
   1. All parties accept and sign the Purchase and Sale Agreement, making it a legally binding agreement.
   2. Set a timeline on the contract date.
   3. Deposit Earnest Money
   4. Initiate a title report for the property and review any terms of note.
2. Financing & Appraisal
   1. Initiate the financing process with the lender.
   2. Order and schedule an appraisal.
   3. The appraiser analyzes the condition of the property compared to recent sales prices for similar properties in the area.
   4. Review the appraisal report, discuss discrepancies, and negotiate a low appraisal with the listing agent, seller, and lender if necessary.
   5. Review and sign appraisal and finance contingency removal documents.
   6. Confirm financing and appraisal sign-off with the lender.
3. Disclosure Review
   1. Review all disclosures and reports.
   2. Request additional written disclosures or inspections, if needed.
   3. Sign all documents.
   4. Provide copies to the respective parties in the transaction.
4. Property Inspections
   1. Coordinate and schedule inspection appointment, setting a timeline based on the contract date.
   2. Coordinate access to the home with the listing agent.
   3. Receive and review a copy of each inspection report.
   4. Review the inspectors' notations or concerns, and possibly request additional items or additional inspections.
5. Survey
   1. Discuss the importance of a survey and what it may reveal about the property, including but not limited to encroachments, overlaps, boundary line disputes, flood zones, and matters not of record.
6. Negotiations or Credits
   1. Discuss findings from the report as well as next steps such as negotiations for repairs or credits, if needed.
   2. Draft, review, and sign addendums and contingency removals.
   3. Sign all documents.
7. Home Warranty
   1. Discuss a home warranty as an option and explain warranty coverage and benefits.
   2. Home warranties may be a negotiable item and may be paid by the seller.

×

Step 5: Close

1. Preparations
   1. Provide any additional documents requested by the lender or the title company.
   2. Secure homeowners' insurance for your new home.
   3. Arrange for utilities to be turned on the day of possession.
   4. Arrange funding for buyer closing costs, taking precautions to avoid wire fraud.
2. Final Walk-Through
   1. A final walk-through appointment is scheduled.
   2. Address any issues or concerns with the property post-inspection and prior to closing.
3. Signing & Funding
   1. Sign final loan documents and closing disclosure from lender.
   2. Send required closing funds via wire transfer (usually 24 hours prior to closing).
   3. Purchase title insurance to protect against losses from issues that would affect property ownership.
   4. Sign closing documents.
   5. Transfer the deed from seller to buyer.
   6. Celebrate!

×

Step 1: Duties of Your Agent

• Recommend a local mortgage lender who can dramatically improve the outcome of your home buying experience.
• Advise you on current market conditions and trends that could affect your buying power and set expectations based on your budget.
• Represent you and your interests and work as your trusted advisor from start to finish.
• Assure you that all communications, contract negotiations and transfer of funds (earnest money and down payment) will be conducted in secure and encrypted environments (0365/Zix, DotLoop, Payload).
• Discuss all “Special Warnings” you should keep in mind during the buying process. (See sidebar: Special Warnings)

×

Step 2: Duties of Your Agent

• Set up home search on MLS with auto-notifications for listings that fit your criteria.
• Search for exclusive coming soon listings and research new developments and off-market opportunities.
• Schedule and accompany you on all showings.
• Follow up on your inquiries or questions for homes of interest.
• Contact the listing agent to inquire about property details and seller needs.
• Obtain and review property disclosures with you.
• Review all feedback from showings and adjust search parameters as needed.
• Monitor the market for fluctuations.
• Note aspects of the property that may impact value/resale (lot specifics, home features, zoning restrictions, school district, future developments, nearby nuisances...)
• Verify costs and charges (in writing), such as property taxes, impact fees, assessments, HOAs, local income taxes, and other cost factors that could impact your decision.
• Gather all important information regarding HOA/COA, dues, fees, assessments.
• Provide Comparative Market Analysis (CMA) on homes you are seriously considering to help you formulate a competitive offer.
• For investment properties or second homes, gather data that will materially affect your purchase decision (cap rate, income projections, local ordinances...)
• Communicate with the listing Agent to get the best information possible about competing offers and sellers’ preferences regarding terms, their timeline for offer submission and required move date.
• Provide a comprehensive "Buyer’s Cost Estimate" prior to any and all offers/counteroffers.

×

Step 3: Duties of Your Agent

• Provide timely communication between you and the listing agent.
• Advise on how to write the most attractive offer given the market and property conditions that still fits your requirements.
• Collect Earnest Money in a secure manner (educating you on wire fraud)
• Prepare and present offer package (in person or via DotLoop) including cover letter, pre-approval letter, agency documents, and any other key paperwork.
• Submit all documentation for seller and listing agent consideration.
• Receive and review counteroffers or addendums, if needed.
• Professionally negotiate multiple-offer situations in your best interest.

×

Step 4: Duties of Your Agent

• Recommend title company, local lender (if needed), local service providers for inspections, surveys, home improvements, repairs, maintenance, and moving.
• Present a list of the types of inspections available/recommended.
• Prepare appraisal comparables and provide insights and notable property features to the appraiser, if needed.
• Create a detailed timeline for the transaction and ensure all deadlines are met, protecting you and your earnest money.
• Schedule inspections.
• Provide resources for Homeowners’ Insurance
• Address concerns, questions, or clarifications with the listing agent.
• Provide resources for repairs and write repair proposals, if needed.
• Ensure all inspections and repair requests are completed within the contract’s due diligence period.
• Ensure all required documents are signed and all terms of the contract are met on time to be ready for closing.

×

Step 5: Duties of Your Agent

• Ensure all paperwork is signed and ready for on-time closing.
• Accompany you on the final walk-through of the property.
• Create a plan with the listing agent to address any questions or concerns that arise during the final walk-through.
• Recommend movers, interior designers, landscapers, general contractors, gardeners, cleaning services, and home maintenance services, as needed.
• Provide resources for a Home Warranty Policy.
• Attend the closing to answer any final questions.
• Continue to support you, from moving checklists to ongoing property valuation updates.