Fannie Mae Foundation: How to Buy a Home

Expected outcomes of
Lesson 2

1. To learn several ways to find out about houses on the market.

2. To name the role of a real estate agent and the services he or she can offer.

3. To read and interpret housing ads.

Vocabulary
classified ads, asking price, open house, multiple listing service, commission, buyer’s agent

Warm-up
1. Ask students to list ways to find a home to buy. Write the list on the board.

2. Have students read the headings on these pages. Compare them with the ideas on the board.

3. Read the text on these pages. Ask students if they or any people they know have found houses using one of these methods.

4. Bring in samples of newspaper ads and shoppers’ guides to show students.

Using a real estate agent
1. Discuss the role of a real estate agent using the list on this page.

2. Emphasize that the real estate agent most often represents the seller, not the buyer, although the buyer may actually spend more time with the agent than the seller does. Explain that the real estate agent receives his or her commission from the seller. Explain that it is important to let the real estate agent know the general price range you are able to afford, but you should be careful about revealing the “bottom line” for a home you wish to buy. Contrast this with the role of a buyer’s agent. Define the role of a buyer’s agent.

Going further
1. If possible, see if you can get copies of some MLS listings to bring into class.

2. Invite a real estate agent to the class to answer questions and to describe how the MLS listings work.

3. In some areas, real estate listings or even more detailed housing
descriptions and photographs may be available through the Internet. Ask a local real estate sales professional how to locate them. If you have access to the Internet, you may want to demonstrate this to your students.

4. Call your local real estate sales association to see if any buyer’s agents work in your area. Refer to your local Yellow Pages for contact numbers of real estate agents. Invite them to visit your class.

Unit 2: Finding your dream home

Lesson 2: How to find the right home

For sale - priced to sell Now that you have an idea of what kind of home you might like, how do you go about finding it?

The first step is to find out what houses are currently for sale or on the market. There are many different sources of information. Here are a few of the most common methods home buyers use.

Word of mouth

It’s important to let your friends, the people you work with, and others know that you are interested in buying a home. Sometimes, you can be lucky and find a house that is just coming on the market.

“For sale” signs

You may see “for sale” signs just by driving or walking around neighborhoods you like. This is often a good way to find houses that are being sold by owner. “By owner” means that the seller is selling the house on his or her own rather than using a real estate agency. The sign will usually give a telephone number that you can call to reach the owner.

Newspaper ads

newspaper listing The real estate section of your newspaper lists classified ads for homes every day. The ads will describe the home and often give an asking price. This is the price the seller is asking for the home. Homes are often sold for less than the asking price. Sometimes the ads will list an open house. During the times given for the open house, anyone can walk in without first making an appointment to see the house. Going to a few open houses is a good way to get to know the market.

Shoppers’ guides

Shoppers’ guides have pictures and descriptions of houses that are for sale. You can find these small magazines in supermarkets and at newsstands. They are usually free.

Using a real estate sales professional

using a real estate professional One of the best ways to find a real estate sales professional is by asking your friends or co-workers for recommendations. You may also meet real estate sales professionals as you go to open houses. Or you can contact your local Realtors’® association.

It’s important to find a real estate sales professional who has experience and who knows the neighborhood where you would like to buy a home. It also helps to find an agent who has access to a computerized MLS. This can speed up the process because the agent can print out a list of houses that meet your needs and continue to check for new houses that come on the market through the MLS.

Although you may contact the real estate sales professional to help you find a house, you are not always the one to pay for his or her services. Remember, the real estate sales professional usually works for the seller. He or she is paid a commission (a percentage of the sales price) by the seller after the house is sold. The higher the price of the house, the higher the commission. In addition, the real estate agent may be bound by certain rules. For example, he or she cannot tell you the seller’s “bottom line” or mention other things that might not be in the interest of the seller. Similarly, you should be sensitive to what you tell the real estate agent, such as your “bottom line,” because the agent may communicate that to the seller.

A small percentage of real estate agents will work as a buyer’s agent. In this case, you can be sure they will represent your needs. But you might have to pay some or all of the commission.

A real estate sales professional can:

1. Help you decide the price range of houses you can afford.

2. Use your “wish list” to print out a computerized list of houses that might be right for you.

3. Show you houses that meet your needs.

4. Give you information about house prices and property taxes in a neighborhood.

5. Tell you about the schools and other community services in the area.

6. Give the offer you make to the seller.

7. Give you information about mortgage lenders, professional home inspectors, and other
professional services that you will need.

Your right to fair housing

The best protection against discrimination is to learn as much as you can about the home-buying process and about your right to fair housing. In addition to mortgage lenders, there are housing counselors in every community. Many are certified by the U.S. Department of Housing and Urban Development. Neighborhood development groups and lenders often have classes to help you learn how to buy a home. They may also be able to give you tips on choosing a real estate sales professional and on understanding your local housing market.

If you feel you are being discriminated against, contact the U.S. Department of Housing and Urban Development at 1-800-669-9777. If you want a referral to a local organization, call the National Fair Housing Alliance in Washington, DC, at 202-898-1661. Tell them where you live and ask them for the address and phone number of the office closest to you.

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