The first step to buying real estate is to get a mortgage pre-approved in writing; unless you are buying real estate for all cash, you will most likely need a loan. For simplicity, let’s presume you are buying a primary residence single-family house, condo or a small income property where you will be the owner-occupant of one unit. These are the easiest properties to finance. They also are usually the most profitable if they are sound, well located and in an appreciating area with rising values.

Before looking for a property, it is best to get pre-approved in writing by an actual lender. Don’t worry about shopping for the best mortgage terms yet. You can do that later after you’ve tied up a home purchase with a firm contract. The important thing is to get pre-approved in writing so you can shop with confidence as a very strong buyer.

Purchase Bob Bruss reports online.

Don’t get suckered into “mortgage pre-qualification,” a term that means absolutely nothing! Pre-qualification is just a preliminary statement by a mortgage broker or actual lender that means, “We think you can get a mortgage, but we really haven’t checked your application closely and we aren’t willing to give you a firm written mortgage commitment. In other words, a mortgage pre-qualification is worthless and a waste of time.

Smart home buyers need a mortgage lender’s pre-approval letter before starting the home purchase quest. It will probably include a few reasonable contingencies, such as (a) satisfactory appraisal of the property being purchased, and (b) re-verification of the borrower’s employment and credit report. The actual lender’s pre-approval letter is often valid for 45 or 60 days, and it can usually be renewed or extended.

Don’t give up if you can’t get a lender’s pre-approval letter or certificate. Today, there is a way for virtually every person with a reliable income to buy a house or condo (even if you have horrible credit!). There are many alternative home finance methods, such as a lease-option to tie up a home while you clean up your credit report over the next year or two; seller financing; buying “subject to” an existing mortgage; and assuming an existing mortgage (lenders are often far more liberal about allowing a mortgage assumption than when making a new loan).

THE SECOND STEP – FIND A HOME YOU WANT TO OWN AND UNDERSTAND WHO REPRESENTS WHOM. With an actual lender’s mortgage pre-approval letter in your hands, now it’s time to shop for a house or condo. This might take a week or two. But some home buyers take six months or longer. A savvy buyer’s agent can speed your home search if that buyer’s agent is knowledgeable about the local home sales marketplace.

With your pre-approval letter, you’re a strong buyer. Buyer’s agents covet you! But it’s usually best to work only with one agent at a time. If that agent doesn’t treat you right, however, such as by phoning you several times a week about new listings and price reductions, drop that agent and find a better buyer’s agent.

Unless a buyer’s agent comes very highly recommended by a trusted friend or business associate who has actually bought a property through that agent, I suggest not signing a buyer’s agency contract with that agent. If you do sign such a buyer’s agency contract, I recommend it be for not longer than 30 days (just in case the buyer’s agent turns out to be a dunce!).

That leads us to the ultra-important topic of who represents whom in the transaction. If the house, condo or other property is listed for sale with a “listing agent,” that agent obviously represents the property seller. But who represents the buyer? Without getting into a long boring discussion of real estate agency (entire books have been written on this topic!), there are several possibilities:

1 – Listing agent also represents the home buyer. This is called a “dual agency.” A dual agency can arise quite innocently without much thought, such as when a buyer meets a nice listing agent at a Sunday afternoon Realtor’s open house. Obviously, it is an inherent conflict of interest for one licensed real estate agent to represent both the buyer and seller in the same transaction. However, dual agency is legal in all states (that’s because the Realtors want it that way so one agent can “double end” the transaction and not have to share the sales commission with an agent from another brokerage).

Or, suppose one licensed agent shows you a listing of another agent who works at the same real estate brokerage. This is also a dual agency because both agents work for the same real estate broker. In some states, the agent who obtains a buyer is called a “transaction agent” to avoid the dual agency problem.

2 – Buyer’s agent represents the buyer only. Sometimes called a “buyer’s broker,” this situation is usually best for the home buyer or investor. The reason is a buyer’s agent can be brutally honest with the buyer whereas a dual agent, or a transaction agent, is limited as to what information can be shared with the buyer.

THE THIRD STEP – UNDERSTAND WHAT SHOULD BE IN A WELL-WRITTEN PURCHASE CONTRACT. Finally, we get to the “meat and potatoes” of our topic.  If you are working with a sharp buyer’s agent, he or she should have given you a copy of the printed purchase contract that agent recommends. It might be published by the local Realtor group. Or it could be from an independent forms company. I hope it’s not one of those dreadful stationery store forms!

Please be aware if you are the buyer you have the right to present your purchase offer on the form you want. Don’t be intimidated by a seller’s listing agent who says purchase offers must be made on a specific form. If the listing agent refuses to present your purchase offer on the form you or your realty agent prefers, just say, “Well, I guess I’ll have to file a complaint about this with the state real estate commissioner for your failure to present all offers to your principal.” Smart listings agents soon become very cooperative when they hear that.

If you have any doubt about the ability or the enthusiasm of your buyer’s agent to present your purchase offer fairly to the property seller, be sure to include a phrase such as, “This purchase offer to be presented to property seller only in the presence of the buyer.” That means you, the buyer, then get to go with your buyer’s agent when your offer is delivered to the seller. But I suggest you do not use this phrase unless absolutely necessary because buyer’s agents are usually much better negotiators when the buyer is not present. Remember, your buyer’s agent and the listing agent are usually highly motivated to negotiate a successful transaction to enable them to earn their commissions.

(For more information on Bob Bruss publications, visit his
Real Estate Center


Send tips, feedback or a letter to the editor to or call (510) 658-9252, ext. 124.

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