• Hi, I am the owner and main administrator of Styleforum. If you find the forum useful and fun, please help support it by buying through the posted links on the forum. Our main, very popular sales thread, where the latest and best sales are listed, are posted HERE

    Purchases made through some of our links earns a commission for the forum and allows us to do the work of maintaining and improving it. Finally, thanks for being a part of this community. We realize that there are many choices today on the internet, and we have all of you to thank for making Styleforum the foremost destination for discussions of menswear.
  • This site contains affiliate links for which Styleforum may be compensated.
  • We would like to welcome House of Huntington as an official Affiliate Vendor. Shop past season Drake's, Nigel Cabourn, Private White V.C. and other menswear luxury brands at exceptional prices below retail. Please visit the Houise of Huntington thread and welcome them to the forum.

  • STYLE. COMMUNITY. GREAT CLOTHING.

    Bored of counting likes on social networks? At Styleforum, you’ll find rousing discussions that go beyond strings of emojis.

    Click Here to join Styleforum's thousands of style enthusiasts today!

    Styleforum is supported in part by commission earning affiliate links sitewide. Please support us by using them. You may learn more here.

Help me buy a house please!!!!

thetieguy

Senior Member
Joined
Apr 2, 2008
Messages
307
Reaction score
0
The wife wants to buy a house and I have no idea where to start. I need some tips on realtors, applying for a mortgage, what to look for in a house, taxes and anything that could help a first time buyer. What sneaky tactics do realtors use? I don't want to be a foreclosure stat. WHat do I need to know about credit to apply for a mortgage? I appreciate all the help!!!
 

doublebucklemonk

Well-Known Member
Joined
Feb 14, 2009
Messages
72
Reaction score
1
Where are you from? I might be able to steer you towards someone.

The most important things to avoid future foreclosures are.
1. The amount you "qualify" for at the bank has absolutely nothing to do with the amount you can afford. Take a hard look at your income and figure out what you can afford month after month, still pay all your other bills, and still put something into savings. If you can't afford to save something every month, then you can't afford a house because when the water heater breaks, you will end up putting it on a credit card, and when the house needs a new roof, you will need a home equity loan etc. Make sure you could continue to make the house payments for at least 6 months even if you were to lose your job.

2. You need enough cash to pay for about 25% of the home. That way, you can pay 20% down payment, 3% for closing costs, and still have 2% in savings for any fixups the house may need right away. The people who are having foreclosure problems, borrowed 100% (or more) of the value of the home, so when the housing market turned they had no equity and ended up owing more than it was worth. Many also got an ARM (adjustable rate mortgage) and when the interest rate reset (it went higher after a few years) they could not afford the now higher monthly mortgage payment. If you can put 20% down, you can get a better loan without an adjustable rate, and you won't have to pay for lender's mortage insurance.

As far as Realtors, the thing you can do that will protect your rights the most is to refuse dual agency. Typically, an agent is hired by the seller to sell their home, they are then working for (and get paid by) the seller. Buyer's can also hire an agent, that works only for them. However, with a Buyers agent they are normally (but not always) paid by the sellers agent (so it normally doesn't cost you anything). The tricky part is what is called Dual Agency. That is when one agent is working for both the buyers and the sellers. The most common situation is an agent has a property for sale. That property has a sign with their phone number in the front yard. A buyer calls the number to look at the property and the sellers agent (who does not work for the buyer) shows them the house. Now the buyer's want to buy the house so they call the seller's agent to write an offer, and sign a contract with him. The agent is now working for both people (who have opposing interests). Imagine a lawyer who works for both the plaintiff and the defendant, and you can see the conflict of interest. For this to work out, the agent has to act more as a moderator and instead of aggressively negotiating on your behalf, they become more of go-between that can explain things, but can't advise you (because giving you advice would hurt the other parties position and they aren't allowed to do that). The downside to dual agency, is that your agent can do far less for you then when they work solely for you. However, the other thing to consider, is that technically all agents working for the same broker are technically working for you. That means if you sign a buyers contract with Joe Schmo Real Estate, they won't be able to show you ANY property listed for sale with Joe Schmo Real Estate because that would be dual agency

Hope this helps, and like I said let me know where you live (and where you are looking to buy) and I will see if know anyone I can recommend. PM me if you want.

DISCLAIMER: I am a REALTORÂ
00ae.png
licensed in Minnesota. All situations are different, and you should talk to someone local to get specifics etc.
 

Douglas

Stupid ass member
Spamminator Moderator
Joined
Aug 17, 2007
Messages
14,243
Reaction score
2,166
You and the wife are like, two years late to the party.
 

thetieguy

Senior Member
Joined
Apr 2, 2008
Messages
307
Reaction score
0
I have only been married for a few months and the wife wants to get pregnant, so we are going to need a house. I am in the Detroit area.
 

boo

Senior Member
Joined
Mar 26, 2006
Messages
665
Reaction score
1
Keep in mind for a buyers agent that the financial incentives aren't much different. The more you pay, the greater the commission earned. If there is no deal, the buyer's agent doesn't receive a dime. This will limit how tough their negotiation on your behalf will be.
 

NorCal

Distinguished Member
Joined
Jun 3, 2007
Messages
9,979
Reaction score
4,670
Originally Posted by dcdenim
sound advice but



If a realtor has a listing contract for a property and he/she puts a sign up and a buyer calls him/her, they have to deal directly with the agent who would represent both sides and collect the full commission. There is nothing wrong with this and like you said, most cases a realtor would advertise their listings and bring new clients directly to their listings and work for both sides.

There is no conflict of interest, since both sides are trying to work towards the same goal, the buyer wants to buy and the seller wants to sell.

with only one selling agent, there is also a better chance them lowering their commission from 6% to 3% to close a sale but with two agents both parties want to get paid so there is less room for negotiation.


I don't think you are right about this.
I am studying real estate and brokers in law school right now and our professor, who is a developer and broker as well as a lawyer, has stated on more than one occasion that dual agency is rife with problems. The agent faces a lot of potential conflict of interest and ethical issues and the buy or seller is not going to be as well represented by an agent that initially represented the other party. What happens when you (as an agent) owe a fiduciary duty to both sides?

To the OP, In Detroit aren't they giving houses away with every full tank of gas you buy?
Really, make sure you have enough $ to put down a good down payment and make sure you're job is secure. But don't just buy because you think you have to. I used to wish I had bought but now I really see that renting has a ton of advantages. No property tax, no repair bills, and I can leave when ever and why ever I want to.
If you are really serious about buying, get a book on the subject and learn the basics and the lingo.
 

doublebucklemonk

Well-Known Member
Joined
Feb 14, 2009
Messages
72
Reaction score
1
Originally Posted by dcdenim
like you said, most cases a realtor would advertise their listings and bring new clients directly to their listings and work for both sides.

I said that was the way things are commonly done, it doesn't mean that that is the way that is best for the buyer or seller.

Originally Posted by dcdenim
There is no conflict of interest, since both sides are trying to work towards the same goal, the buyer wants to buy and the seller wants to sell.
.


This argument is incomplete, because although they both want to buy and sell respectively, they want to do it at the best possible price (which is not the same for each party), and that is where the conflict is. In a dual agency role, the agent is working to find the middle ground and put the deal together (regardless of whether or not it is a good deal for both parties). If an agent is working for only one party they have the freedom to tell their client that this is a bad deal and they should walk away. If a dual agent writes an offer for a property they can't tell the seller "hey this is a really low offer" because that would be hurting their other client (the buyer). Likewise, if a dual agent is working with a buyer who wants to write an offer, they can't say "this house is worth much less than they are asking" because that would be hurting the seller.

I have worked as a dual agent (after very long conversations with both buyer and seller), and know that either party could have gotten a better deal if they were working with a dedicated agent. I know they could have gotten a better deal, because the buyers told me they would be willing to pay more, and the sellers told me they would be willing to accept less. If I had been working exclusively for either party (even though I didn't know the acceptable prices of the other party), I could negotiate harder for my client and likely save them money.

I'm not saying dual agency is a bad thing. I think in commercial deals, and deals with experienced investors etc. it can be a big advantage (as both buyers and sellers normally have quite a bit of experience). But, for a first time home buyer, who is nervous about the process, I would recommend against it.
 

x26

Senior Member
Joined
Oct 4, 2007
Messages
622
Reaction score
0
Originally Posted by NorCal
I don't think you are right about this.
I am studying real estate and brokers in law school right now and our professor, who is a developer and broker as well as a lawyer, has stated on more than one occasion that dual agency is rife with problems. The agent faces a lot of potential conflict of interest and ethical issues and the buy or seller is not going to be as well represented by an agent that initially represented the other party. What happens when you (as an agent) owe a fiduciary duty to both sides?

To the OP, In Detroit aren't they giving houses away with every full tank of gas you buy?Really, make sure you have enough $ to put down a good down payment and make sure you're job is secure. But don't just buy because you think you have to. I used to wish I had bought but now I really see that renting has a ton of advantages. No property tax, no repair bills, and I can leave when ever and why ever I want to.
If you are really serious about buying, get a book on the subject and learn the basics and the lingo.



Good post, NorCal!
And to the OP: Don't put down more than 10%--put the other 10% in a Bank CD for emergencies.
 

doublebucklemonk

Well-Known Member
Joined
Feb 14, 2009
Messages
72
Reaction score
1
Originally Posted by boo
Keep in mind for a buyers agent that the financial incentives aren't much different. The more you pay, the greater the commission earned. If there is no deal, the buyer's agent doesn't receive a dime. This will limit how tough their negotiation on your behalf will be.

A good agent realizes that most of their business comes from word of mouth advertising (referrals). I know that through my career, I will earn far more if I get the best deal I can for my clients because they will be happy with me. In a few years when it is time to move up to a bigger house, I can then sell the house they are living in, and help them buy their next. Those clients are also going to recommend me to friends/family etc. In reality, saving the buyers $1000 is probably only going to cost the buyers agent about $15-$20 in commission. I would rather give that up now, and have multiple repeat clients and referrals, than get the $20 and lose the future business.

When you are talking to agents, you will be able to tell the good from the bad by the advice they give. A good agent will tell you what you need to hear even if you don't want to hear it, and even if it runs contrary to the agent's own interests.
 

Dakota rube

Stylish Dinosaur
Joined
Jan 14, 2005
Messages
13,306
Reaction score
237
Originally Posted by NorCal
...dual agency is rife with problems. The agent faces a lot of potential conflict of interest and ethical issues...

...make sure you have enough $ to put down a good down payment...


+1 on the Dual Agency thing; I try to avoid it at all costs. It isn't a horrible thing for either the buyer or the seller, but an agent acting as a dual agent is just asking for trouble.

To the down payment point: I'd try to get in for the least amount possible right now. FHA requires 3.5% down + closing costs; I wouldn't put a whole lot more hard asset into the transaction just now.
 

GQgeek

Stylish Dinosaur
Joined
Mar 4, 2002
Messages
16,568
Reaction score
84
Originally Posted by doublebucklemonk
A good agent realizes that most of their business comes from word of mouth advertising (referrals). I know that through my career, I will earn far more if I get the best deal I can for my clients because they will be happy with me. In a few years when it is time to move up to a bigger house, I can then sell the house they are living in, and help them buy their next. Those clients are also going to recommend me to friends/family etc. In reality, saving the buyers $1000 is probably only going to cost the buyers agent about $15-$20 in commission. I would rather give that up now, and have multiple repeat clients and referrals, than get the $20 and lose the future business.

When you are talking to agents, you will be able to tell the good from the bad by the advice they give. A good agent will tell you what you need to hear even if you don't want to hear it, and even if it runs contrary to the agent's own interests.


I think that all good sales people understand this as a fundamental truth. Unfortunately, they are rare. My guy at a high-end men's store was like this. He got paid 10% commission, but he'd always push me towards what looked best as opposed to what he'd get the highest commission on. I stayed with him for years. Most people just don't get it though and try to push their commission as high as possible today instead of taknig the long-term view of building a loyal client base.
 

dtmt

Distinguished Member
Joined
Nov 15, 2006
Messages
2,272
Reaction score
42
Originally Posted by thetieguy
I have only been married for a few months and the wife wants to get pregnant, so we are going to need a house. I am in the Detroit area.

You know, you could just rent a house... now that the housing market has crashed and GM and Chrysler are going out of business, I'd imagine that there would be hundreds, if not thousands, of houses in the Detroit area with no hope of selling that the owners would be happy to rent out for as long as you wanted. Check craigslist or something.

Or, if you're really set on buying, find some houses you like, make a lowball offer on one, and if the buyer isn't willing to come down that much walk away and do the same thing on the next house, repeat as necessary. Again, since you've probably got ridiculous inventory levels there right now, the odds are pretty good that you will eventually find a seller that is desperate enough to be rid of the house and has enough equity to make it happen. Plus there is a chance that a seller who previously rejected your offer might come crawling back after a few weeks when they don't receive any other offers. However, keep in mind that some realtors balk at making lowball offers, so again same strategy here, if your realtor isn't willing, ditch them and get another. Since there is such a glut of realtors looking for buyers right now, there's no reason for you to stay with one you aren't totally happy with.
 

Faded501s

Distinguished Member
Joined
Feb 14, 2007
Messages
1,238
Reaction score
4
Originally Posted by doublebucklemonk
I'm not saying dual agency is a bad thing.
I think you might be being a little too tactful. Dual agency is a terrible thing in RE... almost akin to hiring your spouse's divorce attorney.
 

constant struggle

Distinguished Member
Joined
Feb 21, 2007
Messages
5,083
Reaction score
112
When I finally go shopping for a house or apartment to buy, I am going to find a distressed home owner looking to get rid of his home he can no longer afford, I am going to scoop it up like an MC PSA Frenzy, I am going to be very strict on the price I want to pay, if they want to negitioate to raise it, I will stay with my initial price, I will lowball them big time, and I will buy their house at my price, because they will need to sell it. I will also put 20% down and not buy a house more than 3x my annual income.
 

shoreman1782

Distinguished Member
Joined
Jul 29, 2004
Messages
8,728
Reaction score
6,883
Originally Posted by thetieguy
The wife wants to buy a house and I have no idea where to start. I need some tips on realtors, applying for a mortgage, what to look for in a house, taxes and anything that could help a first time buyer. What sneaky tactics do realtors use? I don't want to be a foreclosure stat. WHat do I need to know about credit to apply for a mortgage? I appreciate all the help!!!

Stuff I've learned in my recent houseshopping, a lot of which is FHA-mortgage-related...

-FHA (Federal Housing Administration)-backed loans are the easiest financing to get right now, and one of the only options for people who don't have 20%+ to cover down payment/closing costs (many first-timers don't, especially in better markets). For FHA, credit doesn't have to be great (although ours is very good), and FHA allows you to put down as little as 3.5%. Closing costs and interest rates with FHA can be higher than traditional (loan orig fee and mortgage insurance cost).

-FHA is pretty swamped right now. They'll want full documentation of your income and assets (not surprising, just letting you know you'll likely need recent paystubs, bank/investment/retirement statements, and 2 years of W-2s, plus a lot of worksheets). And once they get it they can take some time to process it all.

-One more FHA note--not all condo developments are approved by FHA--still, it's possible to get spot approval for a condo.

-Closing costs can be pricey. You can negotiate with sellers to help cover them, BUT when you're lowballing people by 20%, they're less likely to throw in that cash. Our closing costs are estimated to be in the area of 4%.

-There's a lot of inventory on the market right now (at least here), but a lot of it is CRAP that's overpriced and has been on the market awhile. Desirable properties are still selling, IMO; below list, but still selling. Find a good online search engine to search for properties (trulia, zillow, etc. are nice but not as up-to-date as some realtors' sites).

-Taxes are all local. We looked at homes in 3 states and several counties/cities, and both real estate transfer taxes and real estate taxes were wildly different, with little relationship to the home's value (of course taxes are related to the home's value; but a $285k home in one city can have higher taxes than a $350k home in another area).

-The stimulus package is still shaking out, but the latest is that there is a tax credit available to first-time buyers. Currently, it's 10% of the purchase price up to $8k. There are income limits--$75k for single payers and $150k for married couples.

-Ask friends who have bought for realtor referrals.

A lot of this might seem like common sense, but I figured it was worth mentioning to another first-timer.

Good luck.
 

Featured Sponsor

How important is full vs half canvas to you for heavier sport jackets?

  • Definitely full canvas only

    Votes: 55 36.7%
  • Half canvas is fine

    Votes: 59 39.3%
  • Really don't care

    Votes: 15 10.0%
  • Depends on fabric

    Votes: 26 17.3%
  • Depends on price

    Votes: 26 17.3%

Forum statistics

Threads
505,130
Messages
10,578,704
Members
223,885
Latest member
Garyypangburn
Top