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What they don't show you on House Hunters that could cost you serious dollars in the long run.

With all of the recent focus on real estate, one show that has stood out is House Hunters, where a host highlights the process of a buyer or a couple buying a condo who are escorted around to 3 homes by a agent. After seeing the three homes and a strategically placed commercial break the buyer comes to the agent office to fill out a one page contract form. After another strategically placed break, viola, the buyer has the home and we get the opportunity to drop in on them 1-2 months after they have moved into the property they selected. (Somehow, they always get the one that they selected, but I am getting ahead of myself.) All of this half hour, made for TV house hunting got me to thinking, How realistic is House Hunter as compared to what I do as an agent every day?

Part Three of a Nine Part Series

Lets review. At this point the home buyer has already been working with a agent and has toured 3 homes and they are prepared to make an offer.

The buyers have made their decision and are prepared to make an offer to the seller. The viewers at home have been left in the dark as to which property that the purchasers are considering. This leaves us guessing which one that the buyers are selecting. What we are shown is that the agent has prepared a very thin folder that has a single page contract offer in it that is presented to the buyers. The buyers then sign this one piece of paper and we then are taken to commercial. This begs the question, Is it really that easy? Most first time home buyers that come to us believe that it is that easy and they along with the show could not be further from the truth.

The current NVAR contract form for the base regional contract is 10 pages long. When you consider all of the addendum and contingency forms to the overall contract offer, the entire pacakge is over 20 pages in length. Why so long? Lets take a moment and see what the contract offer is made up of.

The contract offer contains the names of all of the parties involeved in the potential transaction along with the names of the companies that they are using as their agents, the definition of the property and the legal description of what is actually being sold along with all of the items that will be staying or conveying in the property. The buyer will spell out what they are willing to pay for the property along with the financial details with the down payment amount and the mortgage amounts and terms. The buyer may also ask for any closing cost. The offer will also show the seller how much of an earnest money deposit the buyer is depositing with the buyer agents brokerage. The offer will also explain the terms for any home inspections to be performed along with the time frames that the inspections will be done within and the agreed upon remedies that the seller will take if the buyers home inspection reveals anything with the property. The settlement date is also set with both parties agreeing upon the actual date. This will establish when the seller will need to move out and when the buyer can expect to move in, along with when the buyers mortgage company needs to have the loan completed.

So how does a buyer come up with the information as to what to offer? Lets look at the price first. The show never lets you know what the buyer offered or how much the sellers ended up selling the property for. House Hunters also doesn't show you how they came up with the price that they offer.

How it really works: In the real world, the agent will do research to do a comparative market analysis of not only what is active and available on the market, but more importantly, they take a look at what has actually been sold and settled during the past 3 to 6 months in the Northern Virginia Real Estate Marketplace and for the specific community that the buyer is interested in. This gives the buyer a true indication of what home have actually been selling for an what buyers are actually paying. We also get an indication of what subsidies in the form of repair credits or closing cost credits that the home sellers are paying on behalf of the home buyer. This step should ensure that the home buyer is not overpaying for the property of their choice.

20 pages sound like a lot of legalize and information, but, most of the contract offers is designed to a). protect the parties and b). explain what will happen if one of the parties does not do what they promised to do.

Robert Earl - Founder of The Earl of Real Estate Team is a Real Estate Entrepreneur & Real Estate Coach serving the Northern Virginia Real Estate Market. Robert Earl's Site features Reston VA Real Estate & Reston Condos for Sale