Home buying tips: Buyer representation

By Diane Walker - bio | email
Posted by Terry Alexander - email

RICHMOND, VA (WWBT) – What you don't know, does hurt - when applying for the home buyer's tax credit. Weeks after our investigation, we still get e-mails about 'Ryan Homes' and the couples who blame the builder for putting them in debt with the IRS and at risk for jail time.

Our Ryan Homes investigation exemplifies why people need realtors, according to one e-mail. Some people looking to buy a home mistakenly believe the builder's site agent is working on their behalf:

Two couples say they were instructed to get the $8,000 tax credit, pay off their bills to boost their credit score, and use the rest as the down payment.

They got the free money but, their homes have never been built. Their loans were denied. Those in real estate say this would not have happened if the couples were represented by a realtor.

"The person who greets you at that open house is representing somebody else. They're representing, in this case, the builder," said Laura Lafayette, Richmond Association of Realtors, C.E.O.

A buyer's agent, looks at what you earn, what you owe, they pursue a lender and get you qualified, first.

"So, you won't have that 'Uh Oh, I found a house, I fell in love with the house and I can't afford it.'" Lafayette said.

Lafayette's advice to anyone looking for a home is to seriously consider a buyer's agent.

"Not that you have nothing to lose, you have everything to lose. The buyer's agent would have said, here are the steps in order to properly apply for and receive the credit" Lafayette.

Meantime, Tracy and Edward Hayes, and Kamyele and Jerron Dennis are hopeful. An attorney will offer to help through this ordeal. They have to pay back the IRS and they face jail time too.

"What if they try to prosecute me like I did something intentionally," said Kamyele Dennis.

"There was no intent in this instance to engage in any kind of fraud, so I'm hopeful. I can't speak for the IRS but one would like to think the IRS recognizes what happened and these folks work out a payment plan," said Lafayette.

It's also important to note, the buyer's agent gets paid from the sales proceeds. Lafayette says it's a common misperception that people have to pay extra and out of pocket for realtor.

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