Buying your first home in US. Headache or super fun time?

[silvana.toma 15]

We have decided to contact another realtor, refered by my hubby's assistant, it's a mother-daughter team, so hopefully they will be able to help us more than this other person.

We are meeting with them at 5pm tonight, so i am excited to hear what they have to say.

I will let you know!

[Fandango 1,439]

I don't know about illegal, but it's certainly eyebrow raising to give out codes all willy nilly. Even if the house is vacant. In fact, I never even use a combo lockbox because you cannot control the access to the property. To protect sellers, I ALWAYS use an electronic lb that you can only access if you have the suprakey.

Just based on the fact that you specifically gave your former realtor a set of 'must haves' and she ignored it, I'd say she's not the one for you. I don't grasp her logic with the negotiation you mentioned above, either.

I'm not a mtg lender, but I think offhand, iirc, at a 6% interest rate, every $10k will raise your mtg by $60 a month. Again, this info was from a while ago, and keep in mind I said IIRC, lol

btw - USDA loans are THE SHIZZLE. Did you know that you can loan up to 102% of the appraised value of the home, not the asking price? In case it needs a lot of repairs and you don't have the added cash for that. Of course, keep it within your budget, but I find that particular aspect of the loan to be very interesting.

[Fandango 1,439]

First of all many congrats and God bless you both. The Realtor was right it is normal to make a 20% low ball as a start but banks usually reject the first offer and try to get you to pay the full amount they wanted. The reason they say to start at a 20% low ball is so that you can try to get the house for the 10 percent under. I am glad that you have found the house of your dreams but do not ever let them know that. In fact keep looking at a few more houses just in case. There are usually several houses of ones dreams. Banks want to rid themselves of homes but they also want to make a profit and many just say NO. Be prepared for this.

Don't let who know that? The bank who owns the property? When you make an offer with escrow, you essentially stating you want to buy the home. To what degree you love the house is irrelevant...all the bank sees is a commitment to buy under the terms you've outlined. And if they have already committed to buying a home with an offer that is still within contract dates, to look at other homes would be ill-advised...what purpose would that serve? Let's say they find another one after they put in the offer on house A. They like house B better. They then put in an offer on house B. Now, they've committed to buying two houses, should both sellers accept the offers as is. Which is fine, if they are willing to lose escrow on House A.

The banks are not making profit on any of these homes - they have already lost tons of money. But of course, they want to mitigate their losses as much as possible, that goes without saying.

This is not someone's personal home who may think 'huzzah! they really like it!' This is some asset mgr sitting at a desk, with a number on the file as to how much it'll sell for. It's not a question of having emotions get in the way, or having either realtor convey the 'but they really love it' sentiment.

Also make sure there are no liens at all on the property. Lenders usually make you buy lien protection for this reason. Buy it especially since it is a foreclosure.

This is what the title company does. The deal will not close if clear title cannot be conveyed.

Make sure that the property is appraised

If they are applying for a loan, this is automatic. Saying this is like saying 'make sure you sign your loan application'. The process will not proceed without it.

_____

As to the 'double dipping' aspect that's been thrown around (realtors get more if they bring both sides to the table)....yes, that is true. However, with a pre-foreclosure or a foreclosure, many times there's a decrease in agent commission from the bank if (s)he is handling both sides of the deal. Theoretically, it would be financially more rewarding then, as an agent with both a buyer and a seller, to have them interested in separate properties. That way, there's no commission reduction.

I don't know if that's an aspect of the agent's motivation, or what the terms are....I personally wouldn't try to sway someone to or from a house based on commission...I want my people to be happy and to find the best house possible for them. I only bring this up to add another facet to this conversation, that the original realtor's motivation for showing certain houses may not necc be commision motivated. Dunno why she wasn't showing you what you wanted, and it certainly sounds like something's off, but it may not be about the commission.

[silvana.toma 15]

Don't let who know that? The bank who owns the property? When you make an offer with escrow, you essentially stating you want to buy the home. To what degree you love the house is irrelevant...all the bank sees is a commitment to buy under the terms you've outlined. And if they have already committed to buying a home with an offer that is still within contract dates, to look at other homes would be ill-advised...what purpose would that serve? Let's say they find another one after they put in the offer on house A. They like house B better. They then put in an offer on house B. Now, they've committed to buying two houses, should both sellers accept the offers as is. Which is fine, if they are willing to lose escrow on House A.

The banks are not making profit on any of these homes - they have already lost tons of money. But of course, they want to mitigate their losses as much as possible, that goes without saying.

This is not someone's personal home who may think 'huzzah! they really like it!' This is some asset mgr sitting at a desk, with a number on the file as to how much it'll sell for. It's not a question of having emotions get in the way, or having either realtor convey the 'but they really love it' sentiment.

This is what the title company does. The deal will not close if clear title cannot be conveyed.

If they are applying for a loan, this is automatic. Saying this is like saying 'make sure you sign your loan application'. The process will not proceed without it.

_____

As to the 'double dipping' aspect that's been thrown around (realtors get more if they bring both sides to the table)....yes, that is true. However, with a pre-foreclosure or a foreclosure, many times there's a decrease in agent commission from the bank if (s)he is handling both sides of the deal. Theoretically, it would be financially more rewarding then, as an agent with both a buyer and a seller, to have them interested in separate properties. That way, there's no commission reduction.

I don't know if that's an aspect of the agent's motivation, or what the terms are....I personally wouldn't try to sway someone to or from a house based on commission...I want my people to be happy and to find the best house possible for them. I only bring this up to add another facet to this conversation, that the original realtor's motivation for showing certain houses may not necc be commision motivated. Dunno why she wasn't showing you what you wanted, and it certainly sounds like something's off, but it may not be about the commission.

when we were talking about painting the home and doing some renovation to it she gave us few advices, she told us she "flips" homes, so she knows this kind of stuff. SO maybe those homes were her proprety that she was trying to sell?

Bottom line is yesterday we met with another realtor, mom and daughter team, and they really sounded they know what they are talking about.

As i was telling them about this other realtor lying to me about a proprety that i liked saying it's in a bad area, this girl(realtor) hands me a paper with the picture of the home and asks me:is this the home? i was in shock, i asked her how did she knew? she said based on our home that we liked she pulled few that she thought we might like...i was very impressed.

We told them about the 9k in closing costs(that's how much this other realtor estimated the closing would cost), and our new realtors said the closing costs would only be around 3.5% from the home price so that would make the closing only 5k and not 9k.So when the bank came back with a counter offer said we pay full price for the home and pay 4,700 in closing?? so what kind of deal was that if the closing would be 5k???Did our realtor put down in the contract 9k? so they said they will pay half???

Also they said we should not pay as much in ernest money as we are first time home buyers. This other realtor she said we have to pay 2500.

So last night my husband had to send "the e-mail" to our ex realtor telling her we will not need her services anymore, and she responded saying that is a shame that she was in the middle of negociating a great contract(great for who????) and she hopes she doesn't find out that we are working straight with the seller because that can be subject to a law suit.

Our realtor told us they have to contact her, and if we end up buying this home they might have to give this woman part of the comision... i was upset when i heard that.

What is even more concerning is that one of our mortgage officers recomended her, and i trusted this bank person, as she sounded like she knows what she is doing...why on earth she ever thought this woman is a good realtor i have no ideea...she has 3 subdivisions she works with and when we asked her if there is internet, she said she has to check it out...i mean there are only 3 subdivisions you work in shouldn't you know everything about them? Isn't having internet a popular question when people move in?

I am so happy and relieved that now we can actually ask questions and understand the answer, and i know that they will at least try to get the best deal for us.

Thank you guys for all the help, you really did opened my eyes with a lot of stuff. Thank you sooo much!!

[silvana.toma 15]

I don't know about illegal, but it's certainly eyebrow raising to give out codes all willy nilly. Even if the house is vacant. In fact, I never even use a combo lockbox because you cannot control the access to the property. To protect sellers, I ALWAYS use an electronic lb that you can only access if you have the suprakey.

Just based on the fact that you specifically gave your former realtor a set of 'must haves' and she ignored it, I'd say she's not the one for you. I don't grasp her logic with the negotiation you mentioned above, either.

I'm not a mtg lender, but I think offhand, iirc, at a 6% interest rate, every $10k will raise your mtg by $60 a month. Again, this info was from a while ago, and keep in mind I said IIRC, lol

btw - USDA loans are THE SHIZZLE. Did you know that you can loan up to 102% of the appraised value of the home, not the asking price? In case it needs a lot of repairs and you don't have the added cash for that. Of course, keep it within your budget, but I find that particular aspect of the loan to be very interesting.

I didn't know about the USDA...can you give me more info on it?

We are planing to do the agricultural loan, because that is 100% plus we don't have to pay MI- so that saves us about 100 in our monthly mortgage. This typoe of loan is given out only for few areas, and this house is in the area we would qualify for that type of loan. BUT for some reason if we can not get this loan, i would like to have more info on this loan you mentioned. i will also ask our loan guy about this.

Thank you so much Lisa!!!

YOu guys gave me more info than the people who actually get comision to do this.

[silvana.toma 15]

Ok, one more question.

We are talking to two different loan officers, and one of them told us our interest rate is 5%, and in order to get that we will have to pay more in closing costs or just money down(i forgot) in order to get that interest rate. Now i am so confused because last time we spoke to her she told us the interest rate is 4.8%.I know interest rates change everyday, but 5% it's a bit high, don't you think? My husband's credit score is good, and also our DTI ratio for the home we are looking into buying is 25% so we are good.

We are also talking to someone from suntrust, he seems more on the ball, but we will see which one will be better for us.

[milimelo 4,486]

Ok, one more question.

We are talking to two different loan officers, and one of them told us our interest rate is 5%, and in order to get that we will have to pay more in closing costs or just money down(i forgot) in order to get that interest rate. Now i am so confused because last time we spoke to her she told us the interest rate is 4.8%.I know interest rates change everyday, but 5% it's a bit high, don't you think? My husband's credit score is good, and also our DTI ratio for the home we are looking into buying is 25% so we are good.

We are also talking to someone from suntrust, he seems more on the ball, but we will see which one will be better for us.

If you don't put any money down, the rate will be higher. In most cases, they'll even ask for the mortgage insurance. If you want a lower rate, you want to come up with a good downpayment, work with a mortgage broker and lock in the rate they offer you.

Glad to see you got rif od the wrong realtor - the new ones sound like they know their game.

[milimelo 4,486]

And an appropriate mortgage article from today's Yahoo!

http://finance.yahoo.com/loans/article/112007/10-major-mortgage-mistakes-to-avoid?mod=series-m-article-b

[pixie77 2]

If you don't put any money down, the rate will be higher. In most cases, they'll even ask for the mortgage insurance. If you want a lower rate, you want to come up with a good downpayment, work with a mortgage broker and lock in the rate they offer you.

I agree with this totally!! My husband and I have been house hunting in Florida in the last year and agreed on a 20% or 25% downpayment if we find a house we really like. We're working with 3 different realtors and told them exactly what we like sometimes they show the same house, but it's amazing what they can come up with if they know you're working with other realtors and you have a mortgage approved already. They're willing to negotiate a lot of things on our behalf like closing costs etc.. just to seal the deal. At the moment, we are not actively looking in Florida and I have fallen in love with New England..LOL...am trying to convince my husband to shift our focus there.

Try to do some house hunting on your own and whatever list of houses your realtor gives you check it out on www.zillow.com [if you have an iphone they have an app which we actually use when we go see the house to confirm and reconfirm stats that were given to us]before you actually go to view the houses. You can see the 10 year history of the house, taxes, how much it was sold, check the location and how much the going rates are for the houses around it. If they know you did your research they will be wary of what they offer you because they know you are knowledgeable.

When our 2nd mortgage was approved last year we got the 15 year fixed at 3.625% and they offered no closing cost. My house hunting experience was fun all in all. My husband and I agreed that I focus on the aesthetics of the house and he'll focus more on the technical aspects of it. So when we go to a viewing I know what to do, he does and at the end of the day we compare notes. We discuss the finances together always.

Good luck and hopefully you find your dream house soon.

Edited February 9, 2011 by pixie77

[Fandango 1,439]

I didn't know about the USDA...can you give me more info on it?

We are planing to do the agricultural loan, because that is 100% plus we don't have to pay MI- so that saves us about 100 in our monthly mortgage. This typoe of loan is given out only for few areas, and this house is in the area we would qualify for that type of loan. BUT for some reason if we can not get this loan, i would like to have more info on this loan you mentioned. i will also ask our loan guy about this.

Thank you so much Lisa!!!

YOu guys gave me more info than the people who actually get comision to do this.

It's my pleasure!

It sounds to me like we are talking about the same loan - USDA - US Dept of Agriculture. It's a fantastic loan, that I would recc to anyone, if available.

Sounds like your ex realtor was a witch, tbh. She gives the rest of us a bad name! Glad you found a team you are comfortable with...I truly believe that makes all the difference in making this a fun & exciting experience from a horribly stressful one!

[Fandango 1,439]

I agree with this totally!! My husband and I have been house hunting in Florida in the last year and agreed on a 20% or 25% downpayment if we find a house we really like. We're working with 3 different realtors and told them exactly what we like sometimes they show the same house, but it's amazing what they can come up with if they know you're working with other realtors and you have a mortgage approved already. They're willing to negotiate a lot of things on our behalf like closing costs etc.. just to seal the deal. At the moment, we are not actively looking in Florida and I have fallen in love with New England..LOL...am trying to convince my husband to shift our focus there.

Try to do some house hunting on your own and whatever list of houses your realtor gives you check it out on www.zillow.com [if you have an iphone they have an app which we actually use when we go see the house to confirm and reconfirm stats that were given to us]before you actually go to view the houses. You can see the 10 year history of the house, taxes, how much it was sold, check the location and how much the going rates are for the houses around it. If they know you did your research they will be wary of what they offer you because they know you are knowledgeable.

When our 2nd mortgage was approved last year we got the 15 year fixed at 3.625% and they offered no closing cost. My house hunting experience was fun all in all. My husband and I agreed that I focus on the aesthetics of the house and he'll focus more on the technical aspects of it. So when we go to a viewing I know what to do, he does and at the end of the day we compare notes. We discuss the finances together always.

Good luck and hopefully you find your dream house soon.

Many times, Zillow has incorrect information regarding 'market value'.

I hope I don't come across as snarky here, but I have to speak up here. I think it's unfair to work with three separate realtors. Our business is obviously commission based, so two of the agents you are working with are pretty much wasting their time with you. Of course, one could go with the mentality that if you find the 'one' you would be willing to work exclusively with that person, therefore you haven't found the 'one' yet. And it's awesome that (I'm inferring) they know they are working in competition for your business.

One thing that keeps coming up which I find curious - how agents seem to come up with different property. I've seen it mentioned here, and irl many times. I don't understand it, tbh...because let's say someone's looking for a 3/2/2cg, block home no pool, under a certain price range, I will pull up everything that comes up. We'll go thru each and every listing on the computer, then they weed out the undesirables, and then we go see them. It's that simple, there's no 'withholding' certain listings. Of course, if you say 'i MUST have a 2 cg' then the search will obviously not bring up anything below a 2 cg. If then you think 'I can deal with a 1 cg' then obviously that will change the search. Much like setting a price limit - $200k? It won't pull up the PERFECT house that could be listed at $200,000.01. Of course, what's the chances of it being a penny higher? but I am using that as an example. The search is what you set it to be.

Anyway, in short, please keep in mind that we realtors make our living off this, and if you're not planning on working exclusively with one, (s)he should know that. Personally, I wouldn't even turn the key in my car unless that's clear. While I don't mind a bit of healthy competition, I'm certainly not looking to fight with a fellow local realtor over customers, procuring cause, etc.

I just got off a 5 hour floor shift at work, showed 6 houses, and made 7 new leads. And now I'm here, talking shop. I need to stop, lol.

[Rebecca Jo 1,962]

Many times, Zillow has incorrect information regarding 'market value'.

I hope I don't come across as snarky here, but I have to speak up here. I think it's unfair to work with three separate realtors. Our business is obviously commission based, so two of the agents you are working with are pretty much wasting their time with you. Of course, one could go with the mentality that if you find the 'one' you would be willing to work exclusively with that person, therefore you haven't found the 'one' yet. And it's awesome that (I'm inferring) they know they are working in competition for your business.

One thing that keeps coming up which I find curious - how agents seem to come up with different property. I've seen it mentioned here, and irl many times. I don't understand it, tbh...because let's say someone's looking for a 3/2/2cg, block home no pool, under a certain price range, I will pull up everything that comes up. We'll go thru each and every listing on the computer, then they weed out the undesirables, and then we go see them. It's that simple, there's no 'withholding' certain listings. Of course, if you say 'i MUST have a 2 cg' then the search will obviously not bring up anything below a 2 cg. If then you think 'I can deal with a 1 cg' then obviously that will change the search. Much like setting a price limit - $200k? It won't pull up the PERFECT house that could be listed at $200,000.01. Of course, what's the chances of it being a penny higher? but I am using that as an example. The search is what you set it to be.

Anyway, in short, please keep in mind that we realtors make our living off this, and if you're not planning on working exclusively with one, (s)he should know that. Personally, I wouldn't even turn the key in my car unless that's clear. While I don't mind a bit of healthy competition, I'm certainly not looking to fight with a fellow local realtor over customers, procuring cause, etc.

I just got off a 5 hour floor shift at work, showed 6 houses, and made 7 new leads. And now I'm here, talking shop. I need to stop, lol.

I think a buyer has not only the right, but a duty to themselves, to "shop" around for a realtor who understands their needs and listens to them. No way should they feel beholding to the first agent they have contact with if it doesn't "click".

[silvana.toma 15]

Lisa,

I really appreciate you coming from work and stoping by visajourney...I got so much info and all in all it's amazing how much you find on your own from other people then you find from the people that actually work for you.

The team we are working with now said the same thing- one bad realtor gives the reputation to all realtors, and it is so unfair, so as far as i am concerned i am happy we chose to let this realtor go, and try other realtors, this way not only we will have a better experience ...better deals, but also i will not have this bad impresion about realtors.

We are working just with these two women, and as loan people we have two...and they both know we are working with one more. As far as that is concerned, i think it's healthy to have more than one just so you make sure you get the best deal.

My hubby LOVES this home, so on saturday he wants us to go with the inspector, and on monday to put the second offer. I told him we should wait ...because once we bring the inspector they will know how serious we are, and maybe will even show we are desperate to get this home...and that's not really got for negociating, am i right?

The home is 154k and we offered 154k and for the bank to pay the closing costs. They came back and said we pay 154k and they pay 4700 in closing. Isn't that their part of the closing? So what deal did they gave us anyway?

I am still confused when it comes to closing.

Our best case scenario would be to pay the asking price and for them to pay ALL closing costs? Do we ask for too much? Our ex realtor though so.

Thank you so much for all the help!!!

[Fandango 1,439]

I think a buyer has not only the right, but a duty to themselves, to "shop" around for a realtor who understands their needs and listens to them. No way should they feel beholding to the first agent they have contact with if it doesn't "click".

I certainly never said a buyer doesn't have the right to 'shop' for a realtor...on the contrary, I totally believe in finding the one who is a perfect fit, and working with that person.

I don't, however, believe in working with multiple realtors simultaneously without them knowing. That's really not very nice. If you don't click with them, by all means, move on to the next.

[Fandango 1,439]

Lisa,

I really appreciate you coming from work and stoping by visajourney...I got so much info and all in all it's amazing how much you find on your own from other people then you find from the people that actually work for you.

The team we are working with now said the same thing- one bad realtor gives the reputation to all realtors, and it is so unfair, so as far as i am concerned i am happy we chose to let this realtor go, and try other realtors, this way not only we will have a better experience ...better deals, but also i will not have this bad impresion about realtors.

We are working just with these two women, and as loan people we have two...and they both know we are working with one more. As far as that is concerned, i think it's healthy to have more than one just so you make sure you get the best deal.

My hubby LOVES this home, so on saturday he wants us to go with the inspector, and on monday to put the second offer. I told him we should wait ...because once we bring the inspector they will know how serious we are, and maybe will even show we are desperate to get this home...and that's not really got for negociating, am i right?

The home is 154k and we offered 154k and for the bank to pay the closing costs. They came back and said we pay 154k and they pay 4700 in closing. Isn't that their part of the closing? So what deal did they gave us anyway?

I am still confused when it comes to closing.

Our best case scenario would be to pay the asking price and for them to pay ALL closing costs? Do we ask for too much? Our ex realtor though so.

Thank you so much for all the help!!!

I certainly think it's right and fair to shop around for the best loan rates, with multiple mtg reps, and I totally am so happy for you that you found a team of agents whom you are comfortable with.

To me, it sounds like they are giving you a closing cost contribution. Please check the fine print though. Each side has his own closing costs, so I highly doubt the bank is going to be spelling out that they are paying their own costs, that kinda goes without saying.

$4700 sounds about right, or at least close to what you would be paying to close, barring any unforseen expenses, loan origination fees, etc. Again, check the fine print.

And it is my pleasure <3 I love what I do; I especially cannot help myself when I see a stressed out first home buyer. This should be an exciting time for you!!!