[TTexan]

Greetings,

I am purchasing my first home in the next couple months, just wanted your suggestions/recommendations on things to look out for to make sure I get the best deal and don't get taken advantage of.

I've already done the pre-qualification stuff and have been saving for the last two years.

Feel free to post your experiences when making your first home purchase.

Thanks in advance.


-Ryan

[Feyd]

Find a good realtor... stat.


Don't just look go with the first one you talk to. Interview several.... talk to friends/family, etc. who have experience with them.

A good one will get you through... A great one will get you through and get you a better deal.



Also, are you going through a bank or a broker for the loan? In most cases mortgage brokers will be able to get you better rates and have access to different PMI programs, etc. that you won't be able to get from a bank. Again, do your homework on who you use. Most of the time a decent real estate office/broker will have ties to some quality mortgage firms. Remember lots of these douche's are why the economy is in the state that it's in, so be weary just pulling one out of the phone book.

Have fun. It's overwhelming, but awesome.

[TMNT]

See if you qualify for an FHA loan or see if Texas has their own homeownership program. You'll go through more redtape, but the interest rates and low downpayment are helpful if you don't have a lot to put down.

[BayMoWe335]

Don't buy one unless you have 20% and cash in reserve.

Home ownership benefits are there, but highly overrated in certain situations.

[ABQ325i]

Originally Posted by Feyd

Find a good realtor... stat.


Don't just look go with the first one you talk to. Interview several.... talk to friends/family, etc. who have experience with them.

A good one will get you through... A great one will get you through and get you a better deal.

What Feyd said plus don't sign anything up front ie buyers broker agreement. If you aren't feeling confident in your first choice do not have any qualms about moving on to the next.

Also, don't be scared to offer less than the asking price.

[lib]

A good realtor who knows the neighborhood you're interested in and is patient while you figure things out is usually a must have.

There is no need to be in a rush to buy a place right now... Take the time to see a number of places and make sure you get something you'll be happy with.

Remember... At the end of the day this is YOUR money. Not the realtor's. Not the seller's.

There are always other houses to buy.

The first time through the process teaches you a lot and you may easily end up changing what you want after looking at a few places.

Even after a little research, the closing costs will be a lot more than you expect.

[Chest Rockwell]

A good realtor has already been covered and is solid advice.

When you decide on the one you want make a couple trips to take a look at it before making an offer. I got wrapped up in the moment when I made the offer on mine and didn't really realize what work needed to be done. I have had to put on a new roof, front door, remodel both bathrooms and the kitchen and do electrical work. All those things were deep in the back of my mind when I made the offer because I was so excited about the house.

So take your first look and if you fall in love with the house come back in a week and take a second look and make a list of things it's going to need, then make your offer accordingly so you don't end up 50K upside down in the first year.

[Asiann]

Ensure you try and close on the home at the end of the month to avoid paying all of the interest on the home which can save you a ton of money. Also take a look at the COMPS or other homes in that area and compare to see if the price is where it is supposed to be. You Realtor can do this for you and give you better advice. Look at everything when you get a good faith and estimate. Question anything with your REALTOR if you are unsure if it is right or not. For example you should not see a crazy charge like home inspection costing $2000. Simple things like that. You will have closing cost but in the market today, you might be able to minimize that as a buyer and get the seller to pay half or all of it depending on how badly they want to get rid of it. Take a look at the carpet and if it is really bad, ask for carpet allowance. If the house needs paint do the same. Take a look at the shingles if it is an older home. Ask what the utilities were from the Seller to get an idea of what you will be paying and budget accordingly. Have them throw in a 2-10 warranty covering all major appliances and anything else that could go wrong for a full year. This will give you some piece of mind and it really doesn't cost that much to the seller but great for you too have. Ask when the last time the home was assessed. They usually do it about every 5 years. This can be painful especially if there is an assessment due soon as your value of your home will go up and can result in your mortgage payment increasing more than you budget for especially if they for example passed a school bond and passed on that cost to the taxpayer and onto you to pay additionally in your property taxes. www.bankrate.com is a good website to get general answers to questions you may have. Good luck and do your homework now before you buy!

[MrRoboto]

Put at least 25% down.

[08rookie]

Originally Posted by TMNT

See if you qualify for an FHA loan or see if Texas has their own homeownership program. You'll go through more redtape, but the interest rates and low downpayment are helpful if you don't have a lot to put down.

+1....fha loans are in the range of 413k?! am i wrong...im sorry if i am, however, if im correct, id seek out that route. last thing you would want is to drop 20% down and become house-poor 1 year into your mortgage....

[Feyd]

Originally Posted by 08rookie

+1....fha loans are in the range of 413k?! am i wrong...im sorry if i am, however, if im correct, id seek out that route. last thing you would want is to drop 20% down and become house-poor 1 year into your mortgage....

FHA conforming limits are $417,000 for just about everywhere in the US except for a couple counties in NY/California... Essentially NYC/LA/San Francisco.

[Maestro]

First, Realtors are idiots, very few have any clue about a house or the market or negotiations. They will show you all kinds of analysis and such to make you feel like they know what they are talking about and you're making a good decision, however, it all being done to close the deal, without the deal closing they do not get paid.

Most deals usually fall apart at the table when things are getting signed because the Realtor screwed up something, the goods one will spend most of their time making sure you just sign the paper work and not pay attention to the details, so they get paid.

Also, some states real estate laws prohibit the agent from telling you things about the community or the house which they would consider bias or discriminatory.

Keep this in mind any time a Realtor opens their mouth and says anything to you. The worst negotiated deals are real estate deals and the reason is you got two parties (the selling Realtor and buying Realtor) doing the negotiations who are only into this to get a commission check. It all about what is in it for them, they do not care if you over pay because it is a bigger check for them.

They will tell you they are there to keep the emotions out of it. In some regards that is true since usually the person selling always feels their house is special or they lived in it a long time and it worth lots. The buyer usually could care less. The problem is the selling agent tells the owner what they want to hear which it is worth lots, but in reality it is not, and they will sell you out in a second if it means them loosing the commission.

I have bought and sold a number of houses and I have seen it all from agents and the games they try to play. My advise is do your own home work. If you expect the agents to look out for your best interest you only fouling yourself. From my experience the easiest deals happen on houses which the selling has not lived there a long time, and have probably bought and sold a few times so they understand the transaction.

Also as buyer never ever tell the agent how much you can afford, because before you know it you will be shown homes at the top of what you can afford which may not be a good idea. If you are pre-approved hopefully not through some real estate company since they now know exactly what you can afford. My advise here is find you own loan or mortgage broker. When the Realtor ask how much are you approve for you do not tell them, you tell them how much of a house you want and if the need to know if you are approve you have the mortgage broke say whether you can approved for that amount.

Quick example, if you are approved for a loan for $300K but you are looking at homes are $250K, have the agent tell the mortgage company the price of the home and they are just to confirm you have funds to cover that purchase. Never tell the agent how much you are approved for. Also agents will tell you they need copies of your finances, not true they want it so they know how much money you have. This is none of their business.

The other scam is the home inspection, again most of these guys took online course to become an inspector. They are mostly looking for the obvious things that if you looked yourself you would find. The only nice things is they will walk the entire house and check things if you do not have the time. I usually try and get the other side to pay especially when they say "it is perfect house and there are no problem," so I tell them to put their money where mouth is and pay for an inspection since nothing will be found. Also if they pay and things are found you can hold them responsible to get them fix or knock the price down. This is a good tactic, if they do not want to fix it then offer them a lower price, their choice fix it or lower price most choose to fix.

Anyway, I never tell an agent how much I can afford, I just tell them what we are looking for, and a range of prices we are interest in staying within. Then I just have my bank verify I had a 20% down on that price range and the loan company verify I can cover a loan for that amount. This usually frustrate the hell out of agents but it is non of their business they can only use it against you, it does not help them get you a house for less, hell if they think you can only afford that much they my work to help drive a little higher cost house down by telling the agent you are only approved for X and the other agent will go back to his seller and convince them to drop.

Here are a couple of examples to back this up. I once had a buying agent come to me when I was selling and tell me things why I should accept their offer, and a couple of those items were things my agent knew about our situation, so my agent share with them and I knew him for 10 yrs and referred a number of people to him over the years. So just because he is a friend does not mean they will not sell you out to close the deal. I had another agent tell me I should accept the a lower ball offer since his client was paying cash, I told him I did not care, since all bank checks are good.

One of the best ones was my agent asking me how low or high I would go to close the deal. My stand answer is as high or low as the buyer or seller will go. This is the lesson of never share your reserve price, before you know it that is exactly what you will get or pay.

[Feyd]

Wow... you've clearly had some bad experiences.


While I agree with some of it, I'd be at least 80% of it could have been dealt with by finding/interviewing several agents before you make you selection. There are definitly some idiot agents, but there are also some really great ones.

I can't even tell you how many showings we went to where when we showed up the selling agent had absolutly no idea what they were selling. Reading any details we wanted to know off of the MLS listing sheet, etc. You'd ask them a curve ball question about the property (regarding taxes/special assesments for the development, etc.) and they'd just tell you that they'd have to get back to you on that (which they never did).

Don't lump all agents into the shit category. While there are some complete waste-of-space people out there, there are actually people out there who take their job seriously and who are more concerned with making you a lifetime customer rather than just a quick sale. About (3) weeks in to the search, our agent actually advised that we walk away from a property we were really interested in because the sellers agent/attorney were complete idiots. In the end he thought that their collective impedance would cost us valuable negotiation time/and most likely more money since they were advising the sellers poorly.

Things to watch out for in a bad agent.

• Gratutious use of hair gel
• $100k car
• Rolex (white faced Datonas mostly, but the green bezeled LE Submariners are a tell-tale signs of sales people).
• < 25 years old
• Unavailable when you need them.
• Try to talk you out of a showing because it's inconvienent to get to, etc.

[Blake]

1. good realtor
2. better inspector
3. pit multiple banks against each other
4. it's a buyer's market right now. you can get what you want with the right amount of patience.

i just bought my first home about a month ago. just be patient and you'll get what you want. also don't get too emotionally attached to a home. be ready to walk at any time if the seller isn't willing to make a concession or fix something important. calling the listing agent to pull out of the contract got the seller extremely motivated to make $20k in necessary repairs. also, there's plenty of inventory around, so look at everything. i was shown at least 40 homes before i made my mind up.

[MediaArtist]

Don't do FHA. If you can't afford the 20% down or more, you probably shouldn't be buying the house.

[DenverJayhawk]

fyi.... Your agent doesn't have to be a "Realtor". Realtor just means an agent is a member of the local chapter of the Board of Realtors (BOR). This doesn't mean you'll get better service. . To be a Realtor, you have to already have your Real Estate license and then go through the BOR's orientation, pay your annual dues, and cite an ethics pledge. Then you can call yourself a "Realtor". The BOR is just a lobbying body that represents agents in the political scene in Washington. Most agents are "realtors" because the office they associate with requires them to do this. But a realtor can't do anything more than what a normal real estate agent can do.

As long as your agent has his/her license to practice, is in good standing, is familiar with the neighborhood, and comes with good referrals, you should be okay. Also make sure you get a good home inspector after you're under contract. Your agent will guide you through this.

Make SURE you do a sewer pipe scan and radon test. These items, if not working properly, will cost thousands of dollars to fix at your own expense. Better to learn of a problem during inspection and then list them in the inspection report and have the home owner correct it as part of the closing agreement then dealing with it after you've moved in.

Lastly, lots of agents also provide loan services. It can be convenient for the client to go with one person for all their needs. But know you are not obligated to go with their loan services. You can choose any lender you desire. So make sure you go with the lender providing the best rate. I prefer fixed year loans (30 year, 15 year, etc) versus the junk loans like ARMS, Balloons, Interest Only, Reverse, etc because I know the principle and interest will never change. But you're free to do whatever you like. Just make sure you fully understand the loan you're getting into and the benefits/drawbacks of each.

[Kroy]

Good advice. Make sure you do your due diligence. This is your money and your future home. Assume your agent wants to make as much money from you as you will allow. A good number of agents will talk BS and not know what they're talking about. They're professional sales people, nothing more. Don't be afraid to walk away from a deal; they need you MUCH MORE than you need them. This goes for both seller/agents. Buyers market right now, have fun shopping.

Don't give out your financial info/ss# to everyone.

Check out zillow.com to do some minor research into potential house/neighborhoods. It estimates the value of your property based on recent sales in the neighborhood. By no means is this very accurate, but it gives you an idea.

[TTexan]

Thank you all for the advice, all noted and I've actually printed these out.

I've been researching properties/neighborhoods for about 6 months on my own. I am taking to heart, the interviewing of realtors. I would prefer to find a bulldog that doesn't mind putting in and fighting for a lower price.

I will also do my best to not get emotional about a house and be able to walk away from any property.

Thank you for the advice thus far, much appreciated.

[ABQ325i]

I have my real estate license and I am also a Realtor. I also had to join the board of Realtors so I could 1. Access the local MLS and all the information that only Realtors see. 2. Get a lock box key so I could show houses. True you don't need a Realtor to write up your contract but you do need one to get you in the houses and find out all the background information such as disclosures and history.

As several people posted there are plenty of lazy and incompetent Realtors out there. The only reason I got my license if because I was in the market to buy and was getting sick of all the local Realtors. I also figured out that if I got my license I would get a commission check which would double the money I had to put into getting the license in the first place, I would also get educated and have the ability to go look at houses when I pleased and also make money helping my friends and family when they bought or sold houses. Now I just use it to help people I know and their friends get good deals on houses, I really don't do more than a couple of transactions a year.

Loans have absolutely nothing to do with a Realtor. I do not advise buyers which mortgage to get and who to get it with, it is against the law for me to do so and no Realtor should be doing it. They don't need to know what you make, what you do, where you got the money, just that you qualify for the amount needed to pay for the house you want to buy. Their job is to find you a house, make sure it suits your needs and get YOU the best possible deal for the least amount of money.

I agree with Maestro, I always ask the seller to pay for inspections. Your house is great - prove it! Same with appraisals, your house is worth that much? Prove it! Have them pay for as much as you can, if your Realtor wants to advise you not to, tell them you'll have someone else write the offer.

Biggest thing for you to remember right now is, NEVER, EVER, EVER sign anything tying you to a Realtor as your Buyers agent. No matter what spiel they give you it is not worth it. Walk away from anyone who wants you to sign a buyers agent agreement.

[TK-421]

Originally Posted by MediaArtist

Don't do FHA. If you can't afford the 20% down or more, you probably shouldn't be buying the house.

this.

[lib]

Originally Posted by MediaArtist

Don't do FHA. If you can't afford the 20% down or more, you probably shouldn't be buying the house.

^ This

[Maestro]

Originally Posted by Feyd

Wow... you've clearly had some bad experiences.


While I agree with some of it, I'd be at least 80% of it could have been dealt with by finding/interviewing several agents before you make you selection. There are definitly some idiot agents, but there are also some really great ones.

I can't even tell you how many showings we went to where when we showed up the selling agent had absolutly no idea what they were selling. Reading any details we wanted to know off of the MLS listing sheet, etc. You'd ask them a curve ball question about the property (regarding taxes/special assesments for the development, etc.) and they'd just tell you that they'd have to get back to you on that (which they never did).

Don't lump all agents into the shit category. While there are some complete waste-of-space people out there, there are actually people out there who take their job seriously and who are more concerned with making you a lifetime customer rather than just a quick sale. About (3) weeks in to the search, our agent actually advised that we walk away from a property we were really interested in because the sellers agent/attorney were complete idiots. In the end he thought that their collective impedance would cost us valuable negotiation time/and most likely more money since they were advising the sellers poorly.

Things to watch out for in a bad agent.

• Gratutious use of hair gel
• $100k car
• Rolex (white faced Datonas mostly, but the green bezeled LE Submariners are a tell-tale signs of sales people).
• < 25 years old
• Unavailable when you need them.
• Try to talk you out of a showing because it's inconvienent to get to, etc.

Actually I never had a bad experience, since I knew what I was doing and did not let the agent get in the way, most of the time I did my own negotiations with the other party where possible the agents hate this because it a control thing, and they know I will out them on the miss information they passed back and forth.

Originally Posted by ABQ325i

I have my real estate license and I am also a Realtor. I also had to join the board of Realtors so I could 1. Access the local MLS and all the information that only Realtors see. 2. Get a lock box key so I could show houses. True you don't need a Realtor to write up your contract but you do need one to get you in the houses and find out all the background information such as disclosures and history.

As several people posted there are plenty of lazy and incompetent Realtors out there. The only reason I got my license if because I was in the market to buy and was getting sick of all the local Realtors. I also figured out that if I got my license I would get a commission check which would double the money I had to put into getting the license in the first place, I would also get educated and have the ability to go look at houses when I pleased and also make money helping my friends and family when they bought or sold houses. Now I just use it to help people I know and their friends get good deals on houses, I really don't do more than a couple of transactions a year.

Loans have absolutely nothing to do with a Realtor. I do not advise buyers which mortgage to get and who to get it with, it is against the law for me to do so and no Realtor should be doing it. They don't need to know what you make, what you do, where you got the money, just that you qualify for the amount needed to pay for the house you want to buy. Their job is to find you a house, make sure it suits your needs and get YOU the best possible deal for the least amount of money.

I agree with Maestro, I always ask the seller to pay for inspections. Your house is great - prove it! Same with appraisals, your house is worth that much? Prove it! Have them pay for as much as you can, if your Realtor wants to advise you not to, tell them you'll have someone else write the offer.

Biggest thing for you to remember right now is, NEVER, EVER, EVER sign anything tying you to a Realtor as your Buyers agent. No matter what spiel they give you it is not worth it. Walk away from anyone who wants you to sign a buyers agent agreement.

As ABQ325i pointed out the agents are the only one who can get you in the house, unless you are willing to knock on the door yourself and talk to the owner on your own. In this day and age this does not work that well since the seller has no idea who you are and you could be casing the joint. They are told not to let anyone in the house without an agent or without them calling ahead of time.

However in some states you have to have a License agent to transact a deal, some times there is no way around it. I had a friend who did the exact same thing as ABQ325i who got his own license so he could do his own deals. One one transaction the selling agent refuse to give up half the commission since he was the buyer and agent and the selling agent argue he was acting as both the seller and buying agent since this guy never told him he had his own license, also most blew the deal.

Yeah the whole buyer agent is a gimmick, They want you to feel like they are doing something special for you. I have signed them and they are not the worth the paper they are written or enforceable in many cases, since all you have to show is they agent failed to do what you wanted. They try to do this so you do not try an attempt to cut them out of the deal.