House Shopping

Kitsune · 05-02-2006, 08:34 AM

The real estate market in my area has finally stretched itself to the breaking point -- you can't drive down a neighborhood street without seeing countless homes for sale and where houses once sat on the market for a mere five days before being purchased, they're now averaging around fifty days. New construction isn't being scooped up, anymore, and there is a surplus. Prices are finally starting to drop. Not a huge amount, but they are going down.

So, any advice for a first time buyer? I'm finally in a decent position: The down payment is there, the loan approval is there, and I won't take any penalty from leaving my apartment lease, early, since they're converting to condos. I'm going to use a realtor, but I've heard many people do this on their own and I'd love to know what the advantages are. Any serious catches to watch out for or advice on the process as a whole?

This all sounds great and all, but...

I start looking tomorrow, but even now the stress has begun (video of the most annoying woman in the world).

twentycentshift · 05-02-2006, 08:44 AM

get a rate that's locked- not a variable rate.

and buy what is right for you. don't be in a hurry. you'll be there for a long time, l so make sure its the right place for you.

my wife and i just bought our first. kind of scary, but well worth it.

glatt · 05-02-2006, 10:21 AM

Quote:

Originally Posted by Kitsune

I'm going to use a realtor, but I've heard many people do this on their own and I'd love to know what the advantages are.

We used a real estate agent too. Drove around with him, looking at a lot of crappy houses. To be fair, crappy houses were the only houses we could afford. We ended up finding the house we bought by ourselves, from the classifieds. When it came time to negotiate on price, our agent wasn't as tough at negotiating as I wished he was. I believe we paid about $5k more than we needed. Not a big deal considering it was a fraction of the price of the house, but still. The guy we used was a guy we picked based of a word of mouth recommendation. We never recommended him to anyone.

When we first saw the house at an open house, the sellers agent offered to knock 3% off the price of the house if we didn't use our buyers agent. That's because we found the house ourselves and saw it first without our agent there. We felt we owed him, since he had been driving us around for a few weekends, even if he didn't find our house for us. So that's your advantage right there. The buyers agent jacks up the price of the house by 3%. Cut them out of it, and save $$$. But this guy walked us through the whole process. He was pretty knowledgeable, and that helped us, as first time buyers, even if we found our house ourselves.

I still wonder about the whole idea of a buyers agent. I mean, this guy gets paid a percentage of the sale price of the house. It goes against his best interest to get you a really good price on the house. He loses money the harder he negotiates for you. Why wouldn't he just phone it in and let the price stay a little high? The whole concept seems a little crazy.

But we bought before the boom, and our house has almost tripled in value in less than ten years. So I'm not bitter at all.

Beestie · 05-02-2006, 11:48 AM

Glatt, the seller's agent broke so many laws its not even funny.

The Seller already agreed to pay a 6% commission to the listing broker. The listing broker is the one offering the 3% to the buyer's agent (out of his 6%) - not the seller. Therefore the seller is completely indifferent to selling to buyers with or without agents since the 6% is "already gone." Besides, think about it - even if the seller "saved" 3% by selling to buyers without agents why would an offer of 100k from you be any different than an offer of 103k from a buyer with an agent? From the seller's position, both offers are identical - he takes in 100k from either. So why, then, did the seller's agent indicate that an offer from a buyer without an agent is preferred? Ohhh could it be that the seller's agent pockets the entire 6% if no other agent is involved??? Nah.

The seller's agent was screwing you by giving you a reason to fire your agent and enter into a transaction without representation. The seller's agent was also screwing his client by telling buyers that the seller would accept an offer below asking price.

If the Virgina Association of Realtors found out about this, that agent would be selling insurance right now.

So, the idea that bringing an agent "costs" a buyer 3% is not correct unless the seller is also without an agent.

Secondly, a buyer agent can help you if things go wrong during the transaction. If everything goes smoothly, it doesn't seem like they do that much but if not, they earn their keep. I can tell you quite a few horror stories (one of which is my story) where a buyer's agent saved his client a lot of money and got deals done that were otherwise dead in the water.

glatt · 05-02-2006, 12:05 PM

Just to be clear about my experience, when the seller's agent offered us half of her 6% commission, she didn't know that we had an agent. We were there at the open house alone. When we mentioned that we had an agent, she dropped it. She didn't push for one over the other.

I still wonder about the buyers agent. They, like everyone, work for money. They get more money if the home sells for a higher price. Why would they be motivated to push for a lower price on the house. They would be shooting themselves in the foot. The only good thing for them to come out of a lower prices is potential referrals in the future from a happy client.

Happy Monkey · 05-02-2006, 12:18 PM

When I bought my place, I had no agent. The seller's agent was interested in keeping her full 6%, so she arranged for me to get (at the time) a below-market interest rate on my loan. I also offered less than they were asking, and I sorta wonder whether there was any pressure on the seller to accept it since I had no agent.

dar512 · 05-02-2006, 01:53 PM

When you get serious, make the deal contingent on the outcome of an inspection by a licensed home inspector of your choice. They'll see stuff you might not - and you can negotiate what the seller has to fix.

glatt · 05-02-2006, 03:37 PM

Quote:

Originally Posted by dar512

When you get serious, make the deal contingent on the outcome of an inspection by a licensed home inspector of your choice. They'll see stuff you might not - and you can negotiate what the seller has to fix.

I would add that this home inspector should not be someone referred to you by either your agent or the buyers agent. Both of those agents want to close the deal ($$$) and will suggest an agent who will rubber stamp the sale of the house.

Find an inspector on your own. Ask friends in the area. Ask at work. Ask at the breaktime forum in taunton's Fine Homebuilding website. We were lucky and found a great inspector. He spent a few hours inspecting the house. Many inspectors will spend just half an hour or an hour. He found a lot of things, and put them all into perspective. Nothing killed the deal, but he discovered a few things that really needed attention, like a furnace with a slight backdraft. Was cheap to fix, but important.

xoxoxoBruce · 05-02-2006, 05:51 PM

I've had 2 people tell me they did their own negotiating then hire a lawyer specializing in real estate to protect their interests at the settlement.

How you'd find that type of lawyer, I haven't a clue.

SteveBsjb · 05-03-2006, 11:09 AM

I love the show "House"

glatt · 05-03-2006, 12:03 PM

I've seen that show a few times. They always show the same episode, though the guest stars change.

05-02-2006, 08:34 AM	#1
Kitsune still eats dirt Join Date: Sep 2003 Location: Tampa, FL Posts: 3,031	House Shopping The real estate market in my area has finally stretched itself to the breaking point -- you can't drive down a neighborhood street without seeing countless homes for sale and where houses once sat on the market for a mere five days before being purchased, they're now averaging around fifty days. New construction isn't being scooped up, anymore, and there is a surplus. Prices are finally starting to drop. Not a huge amount, but they are going down. So, any advice for a first time buyer? I'm finally in a decent position: The down payment is there, the loan approval is there, and I won't take any penalty from leaving my apartment lease, early, since they're converting to condos. I'm going to use a realtor, but I've heard many people do this on their own and I'd love to know what the advantages are. Any serious catches to watch out for or advice on the process as a whole? This all sounds great and all, but... I start looking tomorrow, but even now the stress has begun (video of the most annoying woman in the world).

05-02-2006, 08:44 AM	#2
twentycentshift change three times Join Date: Apr 2006 Location: texas Posts: 214	get a rate that's locked- not a variable rate. and buy what is right for you. don't be in a hurry. you'll be there for a long time, l so make sure its the right place for you. my wife and i just bought our first. kind of scary, but well worth it. __________________ "Get out there and get peace. Think peace, and live peace and breathe peace, and you'll get it as soon as you like." -John Lennon

05-02-2006, 11:48 AM	#4
Beestie -◊\|≡·∙■·∙≡\|◊- Join Date: Feb 2003 Location: Parts unknown. Posts: 4,081	Glatt, the seller's agent broke so many laws its not even funny. The Seller already agreed to pay a 6% commission to the listing broker. The listing broker is the one offering the 3% to the buyer's agent (out of his 6%) - not the seller. Therefore the seller is completely indifferent to selling to buyers with or without agents since the 6% is "already gone." Besides, think about it - even if the seller "saved" 3% by selling to buyers without agents why would an offer of 100k from you be any different than an offer of 103k from a buyer with an agent? From the seller's position, both offers are identical - he takes in 100k from either. So why, then, did the seller's agent indicate that an offer from a buyer without an agent is preferred? Ohhh could it be that the seller's agent pockets the entire 6% if no other agent is involved??? Nah. The seller's agent was screwing you by giving you a reason to fire your agent and enter into a transaction without representation. The seller's agent was also screwing his client by telling buyers that the seller would accept an offer below asking price. If the Virgina Association of Realtors found out about this, that agent would be selling insurance right now. So, the idea that bringing an agent "costs" a buyer 3% is not correct unless the seller is also without an agent. Secondly, a buyer agent can help you if things go wrong during the transaction. If everything goes smoothly, it doesn't seem like they do that much but if not, they earn their keep. I can tell you quite a few horror stories (one of which is my story) where a buyer's agent saved his client a lot of money and got deals done that were otherwise dead in the water. __________________ ♠ ♥ ♣ ♦

05-02-2006, 12:18 PM	#6
Happy Monkey I think this line's mostly filler. Join Date: Jan 2003 Location: DC Posts: 13,575	When I bought my place, I had no agent. The seller's agent was interested in keeping her full 6%, so she arranged for me to get (at the time) a below-market interest rate on my loan. I also offered less than they were asking, and I sorta wonder whether there was any pressure on the seller to accept it since I had no agent. __________________ _________________ \|...............\| We live in the nick of times. \| Len 17, Wid 3 \| \|_______________\| [pics]

05-02-2006, 01:53 PM	#7
dar512 dar512 is now Pete Zicato Join Date: May 2003 Location: Chicago suburb Posts: 4,968	When you get serious, make the deal contingent on the outcome of an inspection by a licensed home inspector of your choice. They'll see stuff you might not - and you can negotiate what the seller has to fix. __________________ "Against stupidity the gods themselves contend in vain." -- Friedrich Schiller

05-02-2006, 12:05 PM	#5
glatt ™ Join Date: Jul 2003 Location: Arlington, VA Posts: 27,717	Just to be clear about my experience, when the seller's agent offered us half of her 6% commission, she didn't know that we had an agent. We were there at the open house alone. When we mentioned that we had an agent, she dropped it. She didn't push for one over the other. I still wonder about the buyers agent. They, like everyone, work for money. They get more money if the home sells for a higher price. Why would they be motivated to push for a lower price on the house. They would be shooting themselves in the foot. The only good thing for them to come out of a lower prices is potential referrals in the future from a happy client.

05-02-2006, 05:51 PM	#9
xoxoxoBruce The future is unwritten Join Date: Oct 2002 Posts: 71,105	I've had 2 people tell me they did their own negotiating then hire a lawyer specializing in real estate to protect their interests at the settlement. How you'd find that type of lawyer, I haven't a clue. __________________ The descent of man ~ Nixon, Friedman, Reagan, Trump.

05-03-2006, 11:09 AM	#10
SteveBsjb Operations Operative Join Date: Mar 2006 Location: Moved from Manhattan to Edgewater, NJ. Posts: 713	I love the show "House" __________________ "It's only an internet community."

05-03-2006, 12:03 PM	#11
glatt ™ Join Date: Jul 2003 Location: Arlington, VA Posts: 27,717	I've seen that show a few times. They always show the same episode, though the guest stars change.

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