August 2018 Posts

August 27, 2018

It’s not uncommon for buyers and sellers to have plenty of misconceptions about real estate agents. From the way they work to what they get paid, there are several myths floating around out there.

Before we get into some of the myths you should ignore, it’s important to understand, most real estate transactions probably involve two real estate agents. One agent will represent the buyer, and one will represent the seller. Now, let’s look at five of the most common real estate myths you should ignore.

Myth #1 – Once You Start Working with an Agent, You’re Stuck with Them

When you sell your home, you will sign a contract with a brokerage and an agent. Typically, the terms of this contract will last for six months to a year. While you may be stuck with the agent after signing a contract, it’s not always the case. Often, if things aren’t working out with the agent, you may ask them or the manager of the brokerage to release you from the agreement.

When you buy a home, you will often sign a contract with a brokerage and an agent. The terms of this contract will last for three to six months. Most buyers’ agents will work free for you until you find a home. While this process may take some time, the agent won’t get paid until you purchase a home, and the seller usually pays your agent’s commission too!

Myth #2 – All Real Estate Agents are Created Equal

Often, buyers and sellers think of real estate agents as the same as each other. However, they are not all as good as each other, and some are far better.

Sometimes, the agent you choose will be better at what you need than anybody else in town. For example, if you’re a physician and you’re relocating, choosing an agent that specializes in working with relocating physicians will be far better than just choosing any old agent.

In addition, a local agent provides advantages, and some simply work harder for you than others. Not all agents are created equal, and you will find this out if you hire an agent that doesn’t work as hard as another.

Myth #3 – Agents Get Paid a 6% Commission Every Time

Many buyers and sellers assume the agent they work with is making 6% of the deal no matter what. This isn’t the case.

First, the seller often pays the commission, and it will likely be split four ways. Each agent will get a portion, and so will each brokerage involved. In addition, the brokerage commission isn’t set in stone, and sometimes can be negotiated, if you are a repeat client or will complete more than one transaction with the agent.

Myth #4 – It’s Fine if You’re a Buyer and You Use the Home’s Listing Agent

Simply put, the listing agent for the property doesn’t represent you as the buyer. Unlike many things in our world today, real estate cannot just be purchased with a smartphone; especially if you want a good deal.

It’s important, as a buyer, to find your own real estate agent to represent you. Without proper representation, you may not get the best deal on the property you’re interested in.

Myth #5 – FSBO (for sale by owner) Homes are Off Limits if You have an Agent

This is simply not true. While some sellers of FSBO homes may prefer not to work with an agent, the majority will work with an agent if the deal is the right deal. Many FSBO sellers today understand it will be much harder to sell their home without allowing the buyer to have a real estate agent.

When you’re ready to buy or sell a home, make sure you have the right real estate agent on your side. The right agent can make a huge difference. Don’t believe everything you hear and before you believe a myth about agents, make sure you get the full story.

August 20, 2018

The decision to own or rent greatly depends on where you are in your career. Whether you’re a new resident or you’ve retired from practice will have a huge impact on the decision to rent or own as a doctor. For most doctors, after residency, it will make sense to buy, but not always.

Those in residency have a much different decision as they may be moving as soon as they complete their residency. There are several factors to consider before deciding to buy or to rent. Here’s a look at some of those factors to help you decide if it’s the right time to buy a home or if you should continue to rent.

How Permanent is your Position?

For many doctors or future doctors, moving is just a part of the territory. You may have moved when you went from your undergraduate degree into medical school and you may be preparing to move again as you complete your residency. Even once you’ve entered your field of work; it’s possible you could move every few years, depending on the opportunities and the type of medicine you practice.

One of the biggest factors in the decision of a doctor to rent or buy is how permanent the position you currently hold is and will be in the future. If you believe you will be working at the same location, in the same city for several years, buying makes sense. However, if you’re unsure if you’ll still be working at the same place, renting may be a better choice.

What’s your Financial Situation?

The financial situation of a physician changes over time. Often, you’re dealing with paying off massive student loans when you first graduate from medical school, but these loans won’t be there forever. Your financial situation will also play a rather large factor in the decision to rent or buy.

However, it may not play as big of a role as you might think. With the ability to use what is known as a doctor loan or physician loan, you may be able to buy with little or no money down, even if you have huge student loans to pay off and you don’t make a ton of cash yet.

The doctor loan program mitigates the risk for the lender by using future earnings as a factor. They come with several benefits, such as no need to purchase mortgage insurance and you don’t necessarily have to have paystubs to prove your income. Often, these loans will use an employment contract showing proof of future earnings and you will likely be required to keep an account with the lending bank for automatic electronic payments.

There are benefits to buying a house and renting a house for doctors. Not every situation is the same. However, if you plan to stay put for at least a few years, it makes more sense to buy than rent, in most circumstances.

Buying a home is an investment and allows you the ability to actually put your money into something you own instead of something your landlord owns. However, if you’re not sure how permanent your current position is, renting until you have a more permanent situation might be the right choice.

There is no wrong or right answer, but doctor loans do make it much easier to buy. When you buy, you also have the opportunity to turn your first property into a rental property when you’re ready to upgrade. This is also possible if your situation changes and you need to relocate for a new position.