Buy Hawaii Real Estate

How Buyers’ Agents Earn Their Commission

By Julie Engelhardt

You’re interested in purchasing real estate. Whether a veteran investor or a first time buyer, it is best to use a licensed and professional real estate agent for a variety of reasons. Agents hold a vast amount of knowledge that need be considered during the purchasing of property. Professional agents and reputable real estate brokerages will help you understand and weigh the many factors involved with home ownership. When shopping for property, there is more to consider than meets the eye. Agents understand the shopping process and can help locate ideal properties for you. They are experienced with mortgages, tax exchanges, and escrow proceeds and can prove invaluable during the crucial time period of the transaction.

First step is to shop around. Your agent will do much of the foot work, literally and behind the scenes. An experience real estate agent can guide your choice in house to meet your real estate needs. They match these real estate needs with available properties. Agents can help you decide what features and size you need in a house. They pair down a list of real estate to only those that meet your criteria. Agents contact the listing (seller’s agent) real estate agent and make appointments to see these houses. You can send your agent on your behalf to preview a home to see if they consider it worthwhile. A knowledgeable agent will ask questions for you. Send a list with them of your questions and request that they ask any questions that they themselves note about a property.

Once you’ve found a property you like, it’s time to take a closer look. They will make sure you receive a copy of the seller’s disclosure statement and go through each item line-by-line, to make sure you fully understand the property’s condition. You can ask them to refer you to a qualified home inspector and other house related local business, like staking. Have them make multiple appointments with out the owners there and walk through the property many times. Take careful note and inspection of the vital areas of the house and get professional opinions.

You’ve decided to make an offer. Your agent will write up a contract (in the State of Hawaii it’s called a DROA – Deposit Received, Offer Accepted) to submit to the owners. You will need to make a deposit, a sum of money that goes towards the purchase price and adds weight to the seriousness of your offer. Your real estate agent will act as an intermediary and submit the offer for you. You will never need to have contact with the owners of the property. This contract is legal binding and specifically states the purchase price, the funding, the terms of sale, including any conditional terms. If the seller accepts your offer, they will sign the contract and your agent will open escrow on the property.

Escrow companies hold monies and titles of properties until all issues have been settled and all funds have been disbursed. Escrows charge a fee for the handling of the transaction. This fee is called “closing costs.” Have your agent provide you with an estimated closing cost statement before you agree to buy. Once this occurs, the escrow company transfers the title from the seller to the buyer. Usually it is a painless process that takes between 30 and 90 days. The process and timeline is outlined by the DROA. The timeline of a transaction is very important. Your agent will provide the escrow company with all necessary papers and fulfillments on a timely basis in order to stay within this contract and avoid any pitfalls. They can direct you to local lending offices, however, are not able to act on your behalf. You must secure funding.

Before closing and recording escrow, monies are exchanged and part of that money is the commission to your agent. Depending on the state and kind of property, commission rates vary widely. After reading this article, you will have a better understanding of all that is involved in the sale of a property and what a real estate agent does to earn his or her commission.