Out to buy my first house. Would to have everyone input. (1 Viewer)

[Mark Leiter]

This is something I did not know. I was under the impression I could be in contact with several agents at a time. If that is not the case then after the process of pre-approval Should I then interview several prospective agents in order to find one I am most comfortable with and who I feel I can trust the most?

Very interesting....

 

[Leila Dougan]

Sure. If she asks you to sign a contract just tell her that you're still looking around and aren't ready to sign yet. She'll probably back off until you're ready.

From what I understand (since I didn't use a buyer's agent), buyer's agents make you sign contracts. If you aren't asked to sign anything, then she's not really a buyer's agent. I could be wrong about this, but from everything I know a buyer's agent wouldn't risk serving you without some formal contract.

I had the intention of getting a buyer's agent but the agent I used turned out to not be one. However, she was honest and trustworthy, as much as possible anyway, and things worked out well. She gave me her opinion on a lot of the houses and a couple she even told me she wouldn't let me buy them, they were so bad. At that point it didn't matter that she wasn't a buyer's agent because she served me well and didn't lead me astray.

Now, if she doesn't ask you to sign anything you're not under any obligation to stick to one agent, however things can get very tricky. If this woman (agent #1) shows you a house that you're not sure about but then you go out with agent #2 and look at the same house *then* decide to buy it, you'll be in trouble with agent #1. Obviously whoever showed you the house first should get the commission.

However, if you go out by yourself, without an agent, and buy a house you found on your own, then you're clear.

Since it can get awfully complicated my suggestion is to stick to one agent throughout the whole process. I still recommend shopping around to find someone you like and trust but don't do any serious looking until you commit.

 

[Jeff Ulmer]

I got my information from the real estate board. It may be different where you are, but up here in Canada, the realtor, whether representing the buyer or seller, is bound, by law, to work in the best interest of the seller, period. That does not mean they aren't obligated to make sure you as a buyer have a good idea of what you are buying, or some of the things to ask about in your offer, but the bottom line is that they are paid by the seller based on the selling price. The higher the price, the better the commission.

I would be careful about what information you divulge with regards to your financing. Although there are generally codes of ethic that forbid a realtor from divulging what you are willing to pay for a property, when agents smell a sale, they can find round about ways of making sure any offer or counter is placed to be acceptable. Giving the agent a price range to look at is one thing, telling them you are approved for $X is another. My buyer's agent did not require preapprovals before taking me on, I simply told her what I was looking for, and she showed me as many properties that were similar to my needs and within a realistic price range. I eventually located my new property myself.

I would also insist on a property disclosure statement being part of the deal, and in many jurisdictions this is law. These allow the buyer some recourse should there be issues that are not discoverable on an inspection, such as leaks, electrical or other problems. This doesn't completely bail you out, but if there are obvious things that are discovered once you own the property, that you have some legal recourse.

As for Dave's point about the commission, this is usually negotiated by the seller up front with their agent. If two agents are involved, the commission is split between them. Some agents do offer a discount if they are the sole agent.

Also, if you do decide to use a buyer's agent, make sure there are sufficient escape clauses in your contract with them. The last thing you need is a slacker waiting for you to do all the work - like many agents. Find out what your options are if you become dissatisfied with the person representing you.

When it comes down to negotiating on a property, pay attention to the type of pressure your agent uses on you to close the deal. These are salespeople after all. Don't rely too heavily on the agent in the negotiation process, use your own judgement, and don't succumb to emotional manipulation. I've been through that before.

Good luck house hunting!

 

[Leila Dougan]

I agree that you don't want to tell the agent the max you're willing to spend because they're likely to just show you houses at that price.

I suggested, though, that you get "pre-approved" for a lower amount than you can actually get pre-approved for. My mortgage company was very willing to lower this number to whatever I wanted for the sake of not getting taken by my agent. So I set my pre-approval for something lower than the max I was willing to spend. I set it in the middle of my range so I had some leverage over my agent. Even if she only showed me houses at my supposed "max" *I* knew that those were spot on.

After a month of looking into houses we decided to up our range so I got "pre-approved" for a higher amount. But of course I knew all along that we were still good for this higher amount.

So I guess the bottom line is that you don't want the agent to know your real maximum, but you can usually get the mortgage company to fib a little for your sake. After all, the realor can just call up the loan officer and have a chat. You do have to give the loan officer permission but I found that it was wildly in my best interest to let the two of them work the closing out than having me be the middle-man for everthing.

 

[Bejoy]

I am in the market for house and here are something’s I learnt/learning.

Commission: eventho the seller usually pays it, it is 'your' money. What I mean by this is, atleast in Colorado, the commission is 6% and the list price usually includes this. If you go without a realtor, you can knock down 3% of the list price and usually they are willing to accept a lowball offer and take on the closing costs. It is even better if you go for FSBO houses.

If you decide to go with a realtor, try to find somebody who won't ask to sign a contract. Mine didn't and he has been good until now. Helped me to avoid some areas and a few houses with his advice.

Loan: Not sure if you have 20% down ready, but if not there are other options. If you are looking for a small house FHA is good, but I won't recommend it because of PMI. I personally am going for 80/15/5 loan. That is 5 down and 15 second loan. If you look around you can convert that 15% loan to a HELOC later and save a bunch. This way there is no PMI and you get better rates. Also look at 5/1 or 7/1 ARM's, if you don't plan to stay more than 5 yrs in that house.

Always drive around the house you want to see before getting an appointment. The list photos always look good, and you may be surprised at how bad a house look in reality. Also check your county website for more information like zoning etc. My county lists all details and I can even see how many transactions that house had since it was built and at what price etc. It also shows a map with all the details. Pretty cool.

Also be prepared for some nasty surprises, once you start seeing houses. I never understood why anybody wants to list their house for sale and still keep it like a dumpster.

 

[Craig]

There are true buyer's agents here in the U.S., often they're called brokers. However you have to be very careful that you're getting a real buyer's broker. As was pointed out most agents are really just realtors and the moment you make an offer they're obligated to represent the seller's interest. This is true even if the seller already has 'their' agent and you bring 'your' agent with you. In reality they're both working for the seller unless you have a true buyer's broker.

You'll no doubt have a home inspection done. The home inspector is working for you. Really press him on anything that might be wrong with the house. A lot of inspectors will make notes of things, but won't really emphasize them when they go over the inspection report with you. Be sure to ask him (or her) how much each item will cost to fix in their opinion. You can have an escrow account set up to cover repairs or you can have the seller do the repairs prior to closing. However no pre-owned house is perfect and if you get too critical on very small stuff it's possible to lose out on a good house.

 

[Eric_L]

OMG! Another one! This is completely wrong and it is all I can do to not point out such in an insulting manner.

Please, unless you are a real estate professional or a legal professional (familiar with Real Estate laws), try to leave the real estate law to the professionals.

Finally, lest you doubt me and continue to blindly repeat misinformation as fact in perpetuity, I offer you this:
Realtor Code of Ethics
You and anyone else who does not understand the relationship between a Realtor and their customer should pay close attention to article one.

 

[Kevin Stewart]

I've bought and sold five different houses. Each time I used a realtor. When I was selling, the realtor was looking out for MY best interests. When I was buying, the realtor was also looking out for MY best interests. Your realtor will look out for YOUR best interests, period. Every time I was buying, my realor knew what my maximum was, but also knew what I really wanted to spend. They would show me houses in that price range. They had no relastionship with the seller at all and worked hard on my behalf to get me the best price. On one occasion, I really liked a house, but was only willing to pay a certain amount which was about $2000 less than the seller was willing to sell for. My realtor tried hard to get the seller to budge, but they wouldn't so my realtor ended up only taking a 2% commission instead of 3%, so the seller was getting their extra $2000 and I was getting the price I wanted. Almost all realtors represent buyers and sellers. When I was buying the realtors I used also had houses listed and they showed me any of these that were in my price range. If I would have wanted one of these houses, the agents first responsiblity would have been to the seller, but not at my expense. Just be upfront and honest with them about what you want and a good realtor will be honest and upfront with you and will work for YOU.



Stew

 

[Philip_G]

that's funny because it's all I can do to hold back my true opinion of real estate agents.

 

[Claude M]

Go to your local book store and pick up one of Peter Miller's books. This guy is good. You don't have to read it like a novel. Just find the parts that relate to your situation. Here is a link too:

http://realtytimes.com/rtnews/rtcpages/petermiller.htm

Before I purchased my home over 10 years ago here in Northern NJ I read The Common Sense Mortgage and Buy Your First Home Now. It helped me choose the right mortgage and how to purchase the house for my situation. If there ever was a case to be made for "knowlege is power" it's in buying your first house. Good Luck!

 

[Eric_L]

It is one thing to be abrupt when correcting factual errors (especailly repeated ones), and fully another when sharing opinion. All I shared was fact as per the Realtor website.

I happen to have a negative opinion of IRS agents. Does not give me the right to promote inaccurate information as fact, nor to be abrupt in the process.