Big Step : First House : Help needed!

[jIM_Ohio]

Re: Big Step : First House : Help needed!

Sorry, but I still don't see your point. Are you agreeing or disagreeing? If anything the fact that your realtor may get *nothing* intensifies potential conflicts of interest because the realtor may push you to buy *something*, even if buying is not right for you.

But -- as I stated, there are many ethical realtors out there, and again, they depend on referrals and repeat business, so it doesn't pay for a realtor to screw you over.

I completely agree with scfr's comments. Get a home inspector. Get an attorney. Ask for recommendations from friends and relatives. Don't go with anyone recommended by your realtor -- that will minimize conflicts of interest.

The realtor would rather get 3% of something than 3% of nothing. In our case our realtor became the buyers and sellers agent when we sold our townhouse... and he even lowered commission when buyer started complaining of everything left and right.

We have sold one house and bought two new contruction.

The builder referred us to the realtor and he sold our townhouse and got a commission from the builder when we closed as well.

We referred same realtor to my Brother in law, he sold their house after another realtor had it on market for 9 months without any action.

I have used a home inspector, home appraiser and handyman referred by this realtor (I agree on using a home inspector). I believe he is ethical, and I am impressed with his customer service. I would refer anyone in Cincinnati to him. First class. First class salesman too.

One thing which impressed me with our realtor is he sets expectations well. We sold when housing market was hot, but he reminded us that condos/townhomes are a niche market. Low maintainance, low move in costs. He has us get a new carpet and paint some walls well before we ever put house on market. Did not take him long to get people coming to the house. First offer fell through, second offer stuck (even though buyer was jacka$$).

[kv968]

Re: Big Step : First House : Help needed!

My only advice to you, more than probably a .25% here or there on the mortgage is that it is a "buyer's market."

Personally, if I was jumping in right now, I'd offer about 10-25% lower than the asking price, depending on where the seller was coming in.

This is definitely something you want to keep in mind. You do possibly have another advantage by being a first home buyer that's often overlooked. You don't have a house to sell. That may not sound like much of a good thing but it can be. If you get into a bidding war with someone who has to sell their house before they can purchase the one you're bidding on, all things equal, you're got the advantage of mobility. Keep that in mind also and you may be able to use it to your benefit when negotiating a price.

[LuxLiving]

Re: Big Step : First House : Help needed!

6feetunder, one thing an agent can do for you is tell you as a first time buyer what kinds of bond money & grant offers are out there available only to first-timers - meaning dollars that come into the deal to make it easier for you to get in a home.

Be sure to ask about them!

[jodi]

Re: Big Step : First House : Help needed!

I agree with Tina: Realtors represent the interests of the seller, not the buyer.

It's possible to construct a buyer's agent agreement but they tend to be rare and the buyer's agent just becomes a "sub-agent" of the seller's agent.

Anyhow, at www.realtor.com, you can do a search on houses, you don't need a realtor to hold your hand through the shopping process. Of course, as you look at the house, the salesman/woman will represent the seller.

My only advice to you, more than probably a .25% here or there on the mortgage is that it is a "buyer's market."

Personally, if I was jumping in right now, I'd offer about 10-25% lower than the asking price, depending on where the seller was coming in.

Don't let the real estate agent say, "Oh, they'll never take that. . ." It's her job to give them the offer and let them say "No" or counteroffer.

Don't make a $10,000 mistake.

Good luck.

Sorry, Scanner, I have to call you out on a few things here. First of all, I AM a realtor, so I have a little first hand knowledge (although some might call it a "bias!)
As for saying that a buyer's agent is a sub-agent, that's incorrect. When I introduce myself to a prospective client, I have to explain to them exactly who I am working for - the seller as a listing agent, the seller as a sub-agent, or a buyer's agent. 95% of the time I am a buyer's agent, working SOLELY for the buyer. If a dual agency situation arises (where two agents for the same office represent both the buyer and seller), it has to be disclosed immediately and agreed to in writing by all parties. Then our office would do what is called a "designated" agent, where one agent is assigned to act directly for the benefit of the seller and the other for the buyer. Both sides still have exclusive representation.
As far as saying that the agent showing you the house will be working for the seller, that may or may not be true. If you call a name on a sign in front of a house and ask for that agent, they will be working for the seller, as they have contracted with the seller to list that house. However, if during the course of your conversation you ask about a different house (that is not listed by that agent), they can "shift" to become a buyer's agent representing you for the purchase of that house. I have shifted roles often in working with buyers. It just needs to be disclosed what type of agent you are acting as.
Lastly, as a realtor, it is our job to give advice on price based on current market trends, length of time on the market, etc. Yes, we are obligated to present an offer, even if we think it is too low. However, and this has happened more than a few times to me, I will advise a client if I think a lowball offer might jeopardize his chances of getting a house. If they decide to go ahead, I will write up the offer. Sometimes the seller will get so offended that they refuse to look at any subsequent offers from the buyer. Yes, it happens. I feel that it is my job to be honest with the buyer about the possible consequences of an offer, yet I will honor their wishes if they want to move forward- I have to. I always take the time to draw up a market analysis for both my buyers AND sellers to determine a fair market price for the house. This way, buyers can know if they are getting a good deal or if there is wiggle room to negotiate lower.
As a buyer - I would absolutely recommend an agent. There is no cost to you - at all! Only the benefit. As far as searching for houses online, most listings take several days to make in online. I don't know where you live, but sometime that's all it take to sell a house. When I work with someone, I can set up automatic e-mails from the Multiple Listing Service to send new listings to my clients the minute they are entered. You can't get much faster than that Good luck!

[sweeps]

Re: Big Step : First House : Help needed!

I was wondering when a real estate agent would chime in.

[jIM_Ohio]

Re: Big Step : First House : Help needed!

Sorry, Scanner, I have to call you out on a few things here. First of all, I AM a realtor, so I have a little first hand knowledge (although some might call it a "bias!)
As for saying that a buyer's agent is a sub-agent, that's incorrect. When I introduce myself to a prospective client, I have to explain to them exactly who I am working for - the seller as a listing agent, the seller as a sub-agent, or a buyer's agent. 95% of the time I am a buyer's agent, working SOLELY for the buyer. If a dual agency situation arises (where two agents for the same office represent both the buyer and seller), it has to be disclosed immediately and agreed to in writing by all parties. Then our office would do what is called a "designated" agent, where one agent is assigned to act directly for the benefit of the seller and the other for the buyer. Both sides still have exclusive representation.
As far as saying that the agent showing you the house will be working for the seller, that may or may not be true. If you call a name on a sign in front of a house and ask for that agent, they will be working for the seller, as they have contracted with the seller to list that house. However, if during the course of your conversation you ask about a different house (that is not listed by that agent), they can "shift" to become a buyer's agent representing you for the purchase of that house. I have shifted roles often in working with buyers. It just needs to be disclosed what type of agent you are acting as.
Lastly, as a realtor, it is our job to give advice on price based on current market trends, length of time on the market, etc. Yes, we are obligated to present an offer, even if we think it is too low. However, and this has happened more than a few times to me, I will advise a client if I think a lowball offer might jeopardize his chances of getting a house. If they decide to go ahead, I will write up the offer. Sometimes the seller will get so offended that they refuse to look at any subsequent offers from the buyer. Yes, it happens. I feel that it is my job to be honest with the buyer about the possible consequences of an offer, yet I will honor their wishes if they want to move forward- I have to. I always take the time to draw up a market analysis for both my buyers AND sellers to determine a fair market price for the house. This way, buyers can know if they are getting a good deal or if there is wiggle room to negotiate lower.
As a buyer - I would absolutely recommend an agent. There is no cost to you - at all! Only the benefit. As far as searching for houses online, most listings take several days to make in online. I don't know where you live, but sometime that's all it take to sell a house. When I work with someone, I can set up automatic e-mails from the Multiple Listing Service to send new listings to my clients the minute they are entered. You can't get much faster than that Good luck!

Jodi- your comments echo my experience (limited) in dealing with realtors.

We listed out house (with a realtor whch worked for a company). He listed house on MLS and other companies were walking thru the house (showing the house) with their prospective buyer. A person called our agent, and he worked as buyers and sellers agent (after disclosing to us what was happening) on the transaction.

[Scanner]

Re: Big Step : First House : Help needed!

Jodi,

No offense. . .but I am going to talk openly here.

I know what you are saying is party line but let me tell you a real world experience.

First realtor we met (very locally known for commerical real estate) - we walked in and said, "We'd like to retain a buyer's agent."

He remarked, "Huh!!! In my 20 years of doing this, you are the first people to ever come in here and ask for that. Uh, yeah, I guess I could do that."

LOL. My wife and I still joke about that being fresh and a little green on home buying at 28 y.o. We had just read a book on buying a home - there's the difference between book world and real world.

What happens in reality is that your "buyer's agent" will get together with the seller's agent and the two will often collude and say, "What kind of price can we agree on to get this to go to settlement?"

It's not like your agent will say, "Whoa!!!! $225,000 is way too high. . .I want you to hold out for $200,000. I'm going to play hard ball with these guys."

You see, your incentive (both agents) is in doing business by volume, not necessarily getting your client the best selling or buying price. Because the broker has his/her hands in the pie, and the buying broker has his/her hands in the pie. The commission gets watered down by the time the deal settles.

So, whether the home price is $200,000 or $225,000, it makes little financial difference to you, maybe all that's at stake is a couple hundred bucks. You just need the settlement.

From the buyer's perspective, they just need to be aware of this, that's all. I am not saying, "Don't work with an agent." Selling a house is hard work and we retained an agent for that process. You just need to be careful.

I'm positive we could have gotten more for our old house but the agent helped us price it and we probably lost 25K on the deal.

I don't want the original poster to make the same mistake (on the opposite end - I was in a seller's market).

[jIM_Ohio]

Re: Big Step : First House : Help needed!

Jodi,

No offense. . .but I am going to talk openly here.

I know what you are saying is party line but let me tell you a real world experience.

First realtor we met (very locally known for commerical real estate) - we walked in and said, "We'd like to retain a buyer's agent."

He remarked, "Huh!!! In my 20 years of doing this, you are the first people to ever come in here and ask for that. Uh, yeah, I guess I could do that."

LOL. My wife and I still joke about that being fresh and a little green on home buying at 28 y.o. We had just read a book on buying a home - there's the difference between book world and real world.

What happens in reality is that your "buyer's agent" will get together with the seller's agent and the two will often collude and say, "What kind of price can we agree on to get this to go to settlement?"

It's not like your agent will say, "Whoa!!!! $225,000 is way too high. . .I want you to hold out for $200,000. I'm going to play hard ball with these guys."

You see, your incentive (both agents) is in doing business by volume, not necessarily getting your client the best selling or buying price. Because the broker has his/her hands in the pie, and the buying broker has his/her hands in the pie. The commission gets watered down by the time the deal settles.

So, whether the home price is $200,000 or $225,000, it makes little financial difference to you, maybe all that's at stake is a couple hundred bucks. You just need the settlement.

From the buyer's perspective, they just need to be aware of this, that's all. I am not saying, "Don't work with an agent." Selling a house is hard work and we retained an agent for that process. You just need to be careful.

I'm positive we could have gotten more for our old house but the agent helped us price it and we probably lost 25K on the deal.

I don't want the original poster to make the same mistake (on the opposite end - I was in a seller's market).

But the point you are missing... if the property does not sell neither makes money. I already made that, but it deserves to be restated. Realtors are not viscious sales people... if I want that type of saleman, try refinancing with a mortgage broker.

Second point, if I have a house and I need to sell it (because we want something bigger, we have new job somewhere else, other), then the sellers agent has some work to do. Listing the house, getting it to show correct, suggesting what repairs should be done (or not done). For example, our sellers agent reminded us- we don't want to turn a profit on our townhouse, we want a bigger house. Be willing to do little things (like new carpet and painting 1st floor) to make house move in able the day someone closed.

Our house sold much quicker than our neighbors did. A good RE agent made the difference.

[Scanner]

Re: Big Step : First House : Help needed!

Gee, I hope I am not portraying RE agents as vicious; I am just advising they are not necessarily the best person to get advice on what offer to take, what to price it at, what the market is doing, what to offer, etc.

Their job is move houses.

Plain and simple.

Just keep that in mind - they'd rather rush the deal than have an equitable deal.

I stand by my advice because in the scheme of things . . .

Does it make a difference if a RE inadvertantly screws me or a buyer on $25,000 up front or a mortgage broker intentionally screws you on .25%?

I would vote A, because I can always refinance down the road. As a buyer, I can't go back 5 years later and say, "Golly gee willikers, I think I overpaid you by 25K - give it back."

[jodi]

Re: Big Step : First House : Help needed!

Jodi,

No offense. . .but I am going to talk openly here.

I know what you are saying is party line but let me tell you a real world experience.

First realtor we met (very locally known for commerical real estate) - we walked in and said, "We'd like to retain a buyer's agent."

He remarked, "Huh!!! In my 20 years of doing this, you are the first people to ever come in here and ask for that. Uh, yeah, I guess I could do that."

LOL. My wife and I still joke about that being fresh and a little green on home buying at 28 y.o. We had just read a book on buying a home - there's the difference between book world and real world.

What happens in reality is that your "buyer's agent" will get together with the seller's agent and the two will often collude and say, "What kind of price can we agree on to get this to go to settlement?"

It's not like your agent will say, "Whoa!!!! $225,000 is way too high. . .I want you to hold out for $200,000. I'm going to play hard ball with these guys."

You see, your incentive (both agents) is in doing business by volume, not necessarily getting your client the best selling or buying price. Because the broker has his/her hands in the pie, and the buying broker has his/her hands in the pie. The commission gets watered down by the time the deal settles.

So, whether the home price is $200,000 or $225,000, it makes little financial difference to you, maybe all that's at stake is a couple hundred bucks. You just need the settlement.

From the buyer's perspective, they just need to be aware of this, that's all. I am not saying, "Don't work with an agent." Selling a house is hard work and we retained an agent for that process. You just need to be careful.

I'm positive we could have gotten more for our old house but the agent helped us price it and we probably lost 25K on the deal.

I don't want the original poster to make the same mistake (on the opposite end - I was in a seller's market).

Well, first of all, what are you doing buying a house from a commercial real estate agent? I sell residential and know nothing about commercial real estate - and I will be up front about that if I am ever asked for help on a commercial sale. I know very few agents who do both, and I don't know if "buyer's agents" are typical in commercial transactions. They may not be. It's an entirely different type of selling.
Second, can I ask when you bought your house? Buyer's agents are a relatively new phenomenon. I have been selling for about 5 years, and although I know that the concept has been around at least that long, I don't think it really gained popularity too long before that. Things have changed dramatically in the last few decades, or so I am told by agents who have been doing this for much, much longer than I have. It used to be that the only type of agents WAS a seller's agent - but the buyers didn't understand that when they spoke to the agent, they were not truely on their side. Hence, agency disclosures, buyer's agents, etc. were born.
I guess I don't really get your objection to agents. You feel that you lost money when an agent priced your house - why, then, did you agree to it? I have priced houses low and been told by seller's that they would not list for that price - so I took the higher listing. At some times, I was pleasantly surprised when it sold for more than I thought it would. Agents give ideas and feedback - but the seller (or buyer) is in the driver's seat. I have told buyer's before that I think a house is priced too high. An example - a co-worker who wanted to buy in an area where home prices were declining. I did a market analysis and told him what I thought the house would sell for, if he decided to resell in the future. My estimate of value ended up lower than the selling price, but he was willing to pay more because he wanted the house. I do this for all my buyers - I want them to know that they are getting a fair and reasonable price on a house. I show them data on past closings to support my analysis.
Sure, not all agents are working for the best interests if their clients. Yes, there are crooked agents. The agent I took my licensing class from actually bragged about shaming some clients into buying a house that they didn't want. That's why it is so important to ask around, get referrals, find an agent that specializes in residential real estate, in the area you want to live in. They will help you get the most for your money.
No offense taken, I never mind a spirited debate I do understand that there is an inherent contradiction in getting your buyer the best price, yet maximizing your commission. I do put my clients first, though, and I'm not the only one

[Scanner]

Re: Big Step : First House : Help needed!

Jodi,

We were new to town and didn't know he specialized in commercial. He was upfront about it though. We still see each other around town and I like the guy.

Interestingly enough, he sits on our zoning board too.

I don't have an objection to agents. . .I think I have said that twice.

I just think it's better to think of them as employed salesmen/women vs. a representative to your interests. The next time I will use them in that capacity, that's all.

Why did I agree to it? I don't know. We probably felt the pressue of needing the money for equity for a new house construction. That's why I said I didn't want the same mistake to happen to the original poster. To me, this is where the money is at vs. fretting over a 1/8% of interest.

[boomeyers]

Re: Big Step : First House : Help needed!

I work for a real estate office and I can say 100% use an agent. Just find a good agent. The good agents are not necessarily the ones that have the most listings. You probably would want to go with a buyers agent. Good agents will actually answer their phone when you call or call you back promptly. There is no reason why you should be left out hanging. An experienced agent can save you time and money. They can see problems before you even need a home inspector, they can fish around and see why the seller is selling and offer advice to price, the can also lead you too a local reputable mortgage company if need be and they will help you through the entire closing process, which can be tedious.
I would shop around, talk to friends and an agent and get preapproved for your loan, so when you want to make an offer, you are completely ready to go and do not have any contingencies on your offer.
I agree you will probably hit around 6% and definintly avoid paying PMI!

[jodi]

Another tip, although one I *shouldn't* be saying as a realtor - I would never sign a buyer's contract to work with an agent. This is gaining a lot of popularity around here, as buyers tend to "agent hop" (for lack of a better word). It's frustrating when you show a buyer 10 houses, then they turn around and buy a house from someone else, but it happens a lot. Either they wander into an Open House and buy from the agent who's there, or they buy a FSBO (For Sale by Owner) without you. What a lot of agents have started to do is require any buyer that they work with to sign a Buyer's Contract, stating that they will buy through you and ONLY you, even if it's a FSBO (and not all FSBOs are willing to work with agents). I have never asked me clients to sign one because if they are not happy with me, then I don't feel the need to obligate them to me. I strive to keep my clients happy so they WANT to work with me.
Anyway, the point of this is don't sign a contract to work with one specific buyer's agent unless you are absolutely sure you are going to stay with them, and even then, sign it for a limited time period (maybe 1-2 months). It limits your ability to work with other agents. I have talked with people who signed a contract, only to find out that their agent was no good after the fact.
I realize we got a little bit far off the original topic...I hope this is still helpful to the OP!

[jIM_Ohio]

Another tip, although one I *shouldn't* be saying as a realtor - I would never sign a buyer's contract to work with an agent. This is gaining a lot of popularity around here, as buyers tend to "agent hop" (for lack of a better word). It's frustrating when you show a buyer 10 houses, then they turn around and buy a house from someone else, but it happens a lot. Either they wander into an Open House and buy from the agent who's there, or they buy a FSBO (For Sale by Owner) without you. What a lot of agents have started to do is require any buyer that they work with to sign a Buyer's Contract, stating that they will buy through you and ONLY you, even if it's a FSBO (and not all FSBOs are willing to work with agents). I have never asked me clients to sign one because if they are not happy with me, then I don't feel the need to obligate them to me. I strive to keep my clients happy so they WANT to work with me.
Anyway, the point of this is don't sign a contract to work with one specific buyer's agent unless you are absolutely sure you are going to stay with them, and even then, sign it for a limited time period (maybe 1-2 months). It limits your ability to work with other agents. I have talked with people who signed a contract, only to find out that their agent was no good after the fact.
I realize we got a little bit far off the original topic...I hope this is still helpful to the OP!

Our RE agent required us to sign something like this when selling our house. I think it was a 4 month or 6 month contract. He said if we are not happy, he would tear the contract up.

I agree finding a GOOD RE agent is much different than finding the one with the most listings or whatever. A Good agent is one you trust, is of sound business sense, and knows the lay of the land.

Selling a condo is different from a single family house. Selling and moving within same community is different than selling and relocating. Know what you need.

As a customer, I also learned to listen. Taking his advice saved much stress, IMO.

[baking23]

Hi everyone, -- Any other advise for a first time home buyer?

Good for you. A friend of mine who was 23 at the time bought a house, and still has it 1.5 years later, and I don't think she makes much more than 30,000/yr. She's half the reason I'm feeling old and behind. I'm four years older, never had a full-time job, wasted money on a MA I don't use, etc...

As soon as I get a full-time job that's what I'll be doing house hunting. I look forward to reading this thread.