Real Estate Question

[debtfreeme]

AS i get ready to start to look for my first house, i am wondering what kinds of questions to ask a real estate agent or a house builder. I am not sure the kinds of thing to ask, any ideas or suggestions?

I live in CA but would take any advice from anyone who has purchased a house or a real estate pro. I want to make sure i buy a house that is sound, has no problems, is going to be a big investment and i want to make sure i do it right, and i don't want o be to over my head in payments and mortgage issues. Is there any RE agents here who could point me in the right direction? Or mortgage/loan people who can help me make sense of the process?

[sweeps]

For a real estate agent: What commission do you charge? How often can I expect updates on new houses? Do you provide information on For Sale By Owner properties? Do you require me to sign a contract?

For a home builder: When will I begin paying taxes on the property? How much are the taxes? How much are the homeowners association fees? What kind of warranties do I get? How often can I tour the home while it's being built?

Remember, in general, realtors and home builders do not have your best interest at heart. They want you to pay the highest price for the least amount of work. Make sure you get 3rd party opinions on things. That means, if possible, hire an independent mortgage broker, home inspector and real estate attorney.

[Fern]

The home inspector you hire to check out a house you're serious aboutwill be able to point out construction flaws; when you're shopping for a home inspector, ask him if he has a special area of expertise, eg plumbing, electrical, etc., and how many years he was in the business before getting into home inspecitons.

Sweeps is right, don't turn to a realtor to tell you how much you can "afford." You may be happy to go with a smaller home with a more manageable monthly payments while thye may try to show you homes beyond your limit.

Once you determine your price range, stick to that range, even if the realtor says well, that's just the asking price, it'll be less than that, cus you'll end up with a more expensive house than you planned. And you'll live with that decision for years to come, so better to play it conservative.

Don't just ask the realtor what commission they charge, take the initiative from the start and tel them, nicely, that you don't intend to pay more than X% commission. Then ask them if that's out of the question for them, or if are flexible and will consider it. There are gazillions of realtors out there, so no need to stick with one who insists on top dollar. But you need to research (ask friends or others who have recently sold a home) what the going rate is. Here in CT, I've learned it''s the full 6% in my county, but 5% in neighboring county. I was able to get one realtor to agree to 4.5% without much trouble, which tells me i might be able to push a bit more with someone else and get it down to 4%, which is still PLENTY of money, given home prices these days!!

Remember, everything is negotiable, right down to the title insurance fee. (I just read an excellent article on the subject of closing costs recently, and that did come up.)

Good luck!

[debtfreeme]

thanks Fern! If you think of anything else i am listening!

[debtfreeme]

and sweeps player!

[Ima saver]

My husband is a builder. We have letters of reccomendations from everyone we have ever built for. Ask for lots of references and letters. The home is only as good as the builder who builds it. We also build spec houses, and when people buy directly from the builder, it saves all that commission.

[34saving]

I'm probably not going to be very popular with this, but . . . if you're just starting to look, don't use a realtor at all. Shop the open houses, look on the internet. Only enlist the services of a real estate agent if you can't get in to see houses with the listing agents. (I've found some listing agents are very lazy and won't let you into a house for days or weeks.) Why do I say this? At least around here, buying agents are paid on a fixed comission based on the price of the house you buy. These comissions range from 2.7-4.0% and some houses have "quick close" bonuses. I don't care how ethical a person your real esate agent is, he/she is going to more inclined to find a $300,000 house paying 4% more interesting than a $250,000 paying 2.7%. Now, if you don't have an agent, all of the sudden that 2.7-4.0% becomes a negociating point. You very weill might be able to get a discount on the price. If not, the listing agent will probably become a "dual agent" which will make him/her VERY MOTIVATED to sell to you . . .and get concessions from the seller. If you need comps to make sure you're getting a good price check your county taxing authority or http://www.zillow.com Good luck!

[Ima saver]

Real estate commission is 7% around here, on a $300,000, that is $21,000. That is a lot of money. I would try to buy without a realtor also.

[homeCooking]

34saving
I totally agree. Last time I bought a house I did it without a realtor so I was able to discount 3% from the purchase price. The seller didn't care since he would have to pay that money to the agent anyway. I saved a lot of money!!
I really don't know what a realtor do for you especially if you are a buyer. You can look to the MLS for free on the internet and if you want to see the house call the LISTING AGENT. Make sure that you talk to the listing agent only. One time I call for info in a house and another agent from the office wanted to show it to me to be "my agent". It was very annoying.

[jodi]

WHOA! Can we stop the realtor bashing please???

All of us are not horrible, money grubbing people. I often advise my buyers NOT to buy for the top amount that they were preapproved for, unless they want to be "house poor" and unable to afford anything once they get into the place. I will take the time to go over different types of mortgages with them, figuring out the approximate monthly payments for each (including principal and interest, taxes, homeowners insurance, and PMI). I will also go over the closing costs with them so there are no surprises at closing. A good agent will be able to do these things with you. However, I also tell my clients to talk to different lenders to get specifics, as I can only give estimates. Lenders can plug your info into a wide variety of mortgage programs to see what best meets your needs.
I do not ask my clients to sign buyer's contracts. If they like my business, they will stay with me (and they do). However, if they want to buy a For Sale By Owner home, who am I to tell them they can't? I will negotiate on their behalf if either the seller or buyer offers to pay me, but I put myself in their shoes. If I found the perfect house for myself, I would not want to pass it up. And i have lost clients this way, but I would lose sleep instead if I prohibited my clients from being happy in a house. For that reason, I never push someone to buy a house, but I am honest with them about whether I think they will lose the house if they wait.
I don't know how this works in other areas, but here in central NY the seller pays the entire commission. Half of the commission is paid to the listing agent, and the other half to the selling agent. So there is no incentive to NOT work with a buyer's agent - it doesn't cost you a cent! Around here, almost EVERYONE buying a house has a buyer's agent. The listing agent is working to get the best deal for the SELLER - do you think they will work to get the best deal for the buyer too? Sure, there is dual agency, but it's a concept I don't believe in (designated agency, where two agents from the same office represent two different sides of a sale, is fine) - but how can you have one person represent both sides of a sale fairly?? I have done deals where a buyer bought the house through me as the listing agent, but only after I disclosed to them that I was a seller's agent and working for the seller - explaining to them that I would treat them fairly and honestly, but that my loyalty was with the seller. They understood and chose to buy through me anyway. Any of this making sense? Just be sure to get a realtor who discloses to you which side of the deal they are working on, and honestly, be a little wary of anyone who is trying to work both - they are probably still working for the seller, even if they say they aren't.

I understand the inherent contradiction in working to get a buyer the lowest price, even if it means a lower commission for you...but that's how I operate, and I know there are other agents out there like me. A few words of advice: ALWAYS get a home inspection. ALWAYS use a lawyer. If you are not comfortable with an agent, there are probably at least a few hundred more in your area. Look around. Don't sign any contracts unless you are really comfortable with an agent.
In response to the person who wondered what an agent really did:
Pre-qualification, referral to a lender for pre-approval
Assistance in determining monthly payments, closing costs
Referral to local qualified home inspectors, pest inspectors, lawyers, home insurance, etc.
Personalized listings sent directly to you via e-mail, fax, phone calls, etc. I have the MLS set up to automatically e-mail clients with listings that meet their specific criteria as soon as it hits the market - so they often see the houses before I do.
Personalized showings, arranged at your convenience (some agents will drive you around too and waste their gas!)
Someone to draw up the contracts and negotiate on your behalf
Someone to attend to all the little details along the way: home inspection negotiation, removal of contingencies, closing details, even the little things like finding local service providers, guidance in switching utilities, etc.
Someone to attend closing with you on your behalf to address any last minute issues
I could go on...but if the seller pays for the entire commission in your area, why would you pass this up for free? And if not, you will have to decide if it is worth your money or not...we're not all bad

I guess I got off on a little rant there...but if you want to find a good agent, ask them about the above things and what they will do for you, how they will communicate listings, how often they will be available to show houses (a good agent should not have so many clients as to be spread too thin - then you risk not being able to get into hot properties before they sell). Good luck!