Don't Go It Alone When Buying A New Home

Part of the problem that caused the recent housing slump is that many home buyers have been taken advantage of. They have bought homes without a licensed real estate agent looking after their best interest. State License Law require that licensed agents act in the best interest of their client whether they be house sellers or buyers. This is called agency, and a large part of the State Licesing examination deals with knowledge of this subject. Basically agency is the "golden rule", the agent will act for their client exactly like they would act for themselves. In a few cases a real estate agent will represent both the buyer and seller of a piece of real estate. This is called dual agency and a very tricky situation because the agent is being asked to represent both sides of the transaction in their best interest. The agent has to disclose and get the written approval of both clients before they can move forward in this dual agency transaction. Sale persons for new home developments do not have to be licensed. They are paid by the developer to sell homes and are expected to perform. When a new home buyer comes in the door these independent sale persons do not have to disclose dual agency. In this situation there are many cases where the true cost of that new home are not disclosed. These understated costs have included a significant understatement of future real estate taxes, the high cost of adjustable rate mortgages, the future cost of neighborhood association fees, the under-escrowing of future association provided maintenance costs, or the amount of closing costs involved. Too often buyers think they are saving money by not being represented by an agent. This is not the case because in Indiana the agent's fee is paid by the seller, not the buyer. In conclusion don't go it alone, make sure there are no financial surprises in your new home a few years down the road, use a licensed real estate agent in your home purchase.