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ITT: We give MrG advice on buying a house

post #1 of 40
3/11/10 at 4:28pm
Thread Starter 
As I have noted in some recent threads, MrsG and I are currently in the market for a house. To help us better prepare, I'm hoping to solicit some advice from people who've been through this before. Specifically, I'm looking for advice on things that surprised you when you bought, or maybe things you would have liked to have known that no one thought to tell you.

I looked through some earlier threads on the topic, and there's some good technical information in terms of finance. I've also done a fair amount of research on the topic, so I feel pretty good about that aspect. Though I'm sure I've missed some things, so any advice there would be appreciated as well.

One thing I don't know much about is the negotiation process.

I know my agent/broker will help with a lot of this, but I thought it would be good to get as much advice as possible.

Where we're at right now:

- We have an agent/broker who was recommended by a coworker. She's very experienced and has been selling real estate in our area for 30 years.

- We have a preapproval for a loan that is the most we'd be willing to spend. We were told we'd likely be able to get more, but I don't think we need to. We can get what we want in our price range, and I don't see any need to stretch ourselves thin for more house than we need.

- We've looked at a lot of houses. We saw a couple we liked, but missed out on them. There are two that are great that I saw Tuesday, but MrsG was out of town and couldn't come with. MrsG and I are going with the agent tonight so MrsG can see them. I think she'll like them. If that's the case I think we'll probably make an offer.

So, that's where we stand. Thanks in advance for any help.
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post #2 of 40
3/11/10 at 4:35pm
Most important thing to know: your buy-side broker will not be helpful to you at all in the negotiation process. She will not do her best to ensure you get the lowest price. She will step back and simply tell you to pay what you feel is right and will not get any useful intelligence from the sell-side broker. This is what happens when an agent's incentives are inversely aligned with yours - the more you pay, the more she gets.

Bottom line: do NOT trust your broker with anything remotely important. Ask her to do grunt work, run comps for you, arrange visits, and explain general 101 things to you.
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post #3 of 40
3/11/10 at 4:38pm
Thread Starter 
^^ I suspected that. It always seemed weird to me that the person who stood to benefit from me paying as much as possible was also supposed to help me get a lower price.
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post #4 of 40
3/11/10 at 4:44pm
Quote:
Originally Posted by gdl203 View Post
Most important thing to know: your buy-side broker will not be helpful to you at all in the negotiation process. She will not do her best to ensure you get the lowest price. She will step back and simply tell you to pay what you feel is right and will not get any useful intelligence from the sell-side broker. This is what happens when an agent's incentives are inversely aligned with yours - the more you pay, the more she gets. Bottom line: do NOT trust your broker with anything remotely important. Ask her to do grunt work, run comps for you, arrange visits, and explain general 101 things to you.
Sage advice. I would also suggest that you do some research on your own to find a hard-ass home inspector (assuming FL requires an inspection before sale). The realtors will recommend only inspectors who push the deal forward. You, however, want to know what you're getting into and use it in the final negotiation.
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post #5 of 40
3/11/10 at 4:44pm
Quote:
Originally Posted by gdl203 View Post
Most important thing to know: your buy-side broker will not be helpful to you at all in the negotiation process. She will not do her best to ensure you get the lowest price. She will step back and simply tell you to pay what you feel is right and will not get any useful intelligence from the sell-side broker. This is what happens when an agent's incentives are inversely aligned with yours - the more you pay, the more she gets. Bottom line: do NOT trust your broker with anything remotely important. Ask her to do grunt work, run comps for you, arrange visits, and explain general 101 things to you.
Yeah. Maybe. I am often a buyer's broker and I understand what you are saying, but the amount of money you are talking about being a disincentive is really quite small. Let's say you are going to spend $300K. And let's assume the buyer's broker is in line to collect 3% of that, so $9000 total potential commission. A $10K difference in purchase price only results in a $300 difference in commission. And this is before the brokerage house takes out its cut, probably 20% of the $300. I can honestly say that I have never shied away from helping a buyer get the best bottom dollar deal I could. I'd rather have the buyer call me again in 5 years and say, "Its time for us to move up. Find us a new house and find a buyer for the one you got us a great deal on." MrG: PM me.
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post #6 of 40
3/11/10 at 4:47pm
Yes - and spend the $ on a real full inspection, not just a visual one.

Also, ask every single question that comes to your mind about the house - where's the AC unit, where's the boiler, when was it installed/repair, etc, etc.... Look at everything and think "x-ray" vision to ask all questions about visible and non-visible parts of the house. Ask all possible questions about what may be an issue from a regulation or a neighbour relation point of view.


Rube - I knew you would react to this statement but this is not personal, nor is it about my experience only. Every home buyer I know had the same experience - know what you can get out of a broker on the buy-side - it's very different from what one should expect from a broker on the sell side. Where they both meet is that their sole focus is to make sure the deal gets signed.
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post #7 of 40
3/11/10 at 4:48pm
Never get caught up in a certain property and never bid against other buyers. Every deal is a deal you can walk away from and another deal is just around the corner.

Do not settle.

Go to the tax roles and look up construction quality and various assessments. Go to the GPS and find out if you are in a flood plain, near an airport flight path, etc.

Go visit the house on a Friday night. See what the neighborhood is like once the sun's down. Thoroughly check out your potential neighbors. If you get names, run some free internet checks on them.
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post #8 of 40
3/11/10 at 4:51pm
Quote:
Originally Posted by gdl203 View Post
...a neighbour relation point of view.

I don't know what this is, but it is against federal law for a real estate agent to speak about neighbors. Related to red-lining, block-busting, that sort of thing.

It can open an agent to all kinds of Fair Housing-related stuff.

I tell a buyer to drive through, or into, the neighborhood at three different times of the day and just look around. Pay attention to the comings and goings.

I do, however, research and print out for the buyer a complete list of all police calls to the neighborhood, and a map of registered sex offenders.
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post #9 of 40
3/11/10 at 4:53pm
It's about anything that could be installed or hanging across a neighbor's property or could creat neighbour issues in the future. Does the current owner have all the rights necessary, etc...?
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post #10 of 40
3/11/10 at 4:53pm
Quote:
Originally Posted by gdl203 View Post
Rube - I knew you would react to this statement but this is not personal, nor is it about my experience only. Every home buyer I know had the same experience - know what you can get out of a broker on the buy-side - it's very different from what one should expect from a broker on the sell side. Where they both meet is that their sole focus is to make sure the deal gets signed.

You've not dealt with ethical buyer's brokers, then. Like I said, the difference in commission income isn't enough to piss around with; you're only talking a few hundred dollars.
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post #11 of 40
3/11/10 at 4:54pm
Quote:
Originally Posted by gdl203 View Post
It's about anything that could be installed or hanging across a neighbor's property or could creat neighbour issues in the future. Does the current owner have all the rights necessary, etc...?

Okay. I think I understand what you are saying here.
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post #12 of 40
3/11/10 at 4:55pm
Quote:
Originally Posted by Piobaire View Post
Never get caught up in a certain property and never bid against other buyers. Every deal is a deal you can walk away from and another deal is just around the corner.

I hate that advice. I would say quite the opposite - go for something you guys really really love, not for the best financial deal. It's where you will live and have your family life, not just a line in a portfolio. Don't be scared by competitive auctions, as long as you know exactly how much it is worth to you and set a maximum price you're willing to pay.
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post #13 of 40
3/11/10 at 4:56pm
Quote:
Originally Posted by Dakota rube View Post
You've not dealt with ethical buyer's brokers, then. Like I said, the difference in commission income isn't enough to piss around with; you're only talking a few hundred dollars.

Remember where I live - I'm not talking hundreds of dollars here. Again, this is not about me. I actually liked my buy-side broker - she was good for what she was, that is not a negotiation advisor.
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post #14 of 40
3/11/10 at 4:58pm
Quote:
Originally Posted by gdl203 View Post
I hate that advice. I would say quite the opposite - go for something you guys really really love, not for the best financial deal. It's where you will live and have your family life, not just a line in a portfolio. Don't be scared by competitive auctions, as long as you know exactly how much it is worth to you and set a maximum price you're willing to pay.

Maybe because you are reading into it? I didn't say not to buy something you don't really love and keep this 100% financial. In fact, I gave an entire line to, "Don't settle," meaning, "Do not settle for a piece of property that you are less than enthralled with." Just know, there's more than one property you can fall in love with and no need to pay more thinking there is only one "soul mate" type crap.

Last time we were house hunting, we'd fall in love with a different house every weekend.
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post #15 of 40
3/11/10 at 5:01pm
Quote:
Originally Posted by Piobaire View Post
Maybe because you are reading into it? I didn't say not to buy something you don't really love and keep this 100% financial. In fact, I gave an entire line to, "Don't settle," meaning, "Do not settle for a piece of property that you are less than enthralled with." Just know, there's more than one property you can fall in love with and no need to pay more thinking there is only one "soul mate" type crap.

Last time we were house hunting, we'd fall in love with a different house every weekend.

But these statements are contradictory. Why should you "never bid against other buyers" if that's a place you love? Good for you that you can fall in love every weekend. We saw probably 100-120 apartments over two and a half years, liked 3 to the point of making an offer and only really loved one.
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