Profile picture for adavis331

How much money should I have before speaking to a real estate agent?

I'm a first time home buyer who has just finished paying off his credit card debt.  I have some money saved up but I'm curious as to how much I should have saved before talking to an agent, I don't want to waste their time if I'm talking to one too early.  I'm thinking that I want a house in the $70k - $130k range.

Here's my financial stats

Gross Income: $45k base, at least $55k with mandatory overtime
Credit card debt: 0!
Student loans : $8,000, no current payment as I'm in school half time
No current bills for school since my job pays for my classes
Auto loan: $14,000 left, $345/month
Credit Score: Checked a month ago and it was 791

I currently have $4000 saved and am depositing $1000 bi-weekly.
  • March 04 2011 - US
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Answers (15)

Aaron,  Please take the advice given to talk with a lender as the primary step in the loan process.  And/or, contact your local HUD sponsored housing counseling non-profit and attend their First Time Home Buying class.  

Dependent upon the area/community you live in and/or want to purchase in; there may be down payment assist loans.  A lender will be able to answer those questions and provide you direction and insight in the steps to take to accomplish your goals.
  • March 06 2011
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First of all, please consider finding a Realtor that you feel comfortable with. Explain your situation to them and let them know your goals. Your Realtor should have several recommendations for you regarding banks/mortgage brokers you can choose.

A loan officer is trained to evaluate your financial situation and help you to achieve your homebuying goals. Even if your situation is less than perfect, it is not a question of "if" you can buy a home, but when. If credit repairs or other financial improvements are necessary, they will tell you what needs to be done and help you to do it. When you choose your Realtor,  you should feel like you have a team of professionals working for you- because you do!
  • March 05 2011
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Profile picture for Ealand
Just make sure that you are qualified to make the purchase. With the great FHA loan programs and a good agent you can make a purchase with very little cash. Good Luck.
  • March 05 2011
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If you are serious about home ownership you need to sit down with a lender in your area.  Mortgages change almost daily if not hourly.  You maybe surprised with all the programs that are available you.  Good luck on you home ownership.
  • March 05 2011
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It's not how much you have but more importantly how much you can or should be able to comfortable afford on a monthly basis including the taxes, insurance, hoa's and (1% of home's value annually for required maintenance) based on your income and length of employment and other obligations you currently have and type of loan you are qualified for.  I have homes with 3% closing costs and 3% downpayment paid by seller for qualified buyer.  So in that instance, you would need $450 for FHA appraisal and a few other costs... 
  • March 05 2011
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This is aloan officer job so get someone whom yo u can trust and try also the government loans as well ! Good Luck !
  • March 05 2011
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All great things that you have done congratulations on minimal debt and great credit. The main issue is you need to sit down with a loan officer and get pre approved for a loan. That person can tell you how much down payment, closing costs and other incidential costs will be required of you. There will be inspections that cost money and are paid outside of closing. That should be your first step. You could start by contacting an agent in your area and have them refer you to a great loan officer. Great agents surrond themselves with other professionals and make the process easier for you.
  • March 05 2011
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Aaron - 

The number of variables that answer that question fully are way too many to address here. Buying a home is a process. It should always begin by speaking with at least 3 lenders, preferably face-to-face, and let their guidance help you determine which loan is best for your situation. A REALTOR really is not qualified to help there. Once you understand the type and amount of loan that you qualify for, A REALTOR can step in and help you find the right home in your price range, hopefully a bit less than the maximum loan approval amount, so you can enjoy the home and afford to make it your own.
  • March 04 2011
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Profile picture for CMooreHousesOK
Aaron,
The sooner you are able to obtain and apply professional advice, the better.  In our market, I can sometimes get a buyer into their first home for less than $1,000 out of pocket.

Your best course of action is to speak with a professional real estate agent and a lender.  Find a Realtor you trust and get their recommendation for a lender to speak with (or vice versa).  With both contacts, you can put a full plan together including financing and what types of homes will be available within your goals. 

When we do our respective jobs with excellence - your experience should be smooth, fun and rewarding...
  • March 04 2011
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Depending on where you buy and if you meet the qualifications, USDA loans can be a great fit for people with little or no money. you can borrow up to 105% of the appraised value. I would talk to a Lender that does USDA loans in your area to see if that might be a good fit.

  • March 04 2011
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I agree to talk to a lender first however it wouldn't hurt to talk to an agent to find out whats out there in your area. There might not be anyhting in your price range that you like. Any agent can set you up with an email with the properties that fit your criteria. Good luck, it's exciting buying your first home.

  • March 04 2011
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Everyone here as their own prospective which is good. But,  I believe you should start with Savings for Emergency  and  Retirement first before considering buying property. In this type of market you need a financialy Strong to deal with the Unexpected. I Also suggest you check with a company called Consumer Credit Counseling Service. They have programs for first timers online or appointments to show how to save money, purchase home, credit card issues, etc.
Google the name and see if it is in your area. This is a Nonprofit and National

Good luck!
  • March 04 2011
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Profile picture for the_country_hick
Even if it will be a year or 2 before you buy it is not to early to talk to a real estate agent. Just be up front on what your time line is for buying a house. They can help you now to be better prepared when the time comes to buy.

You can save $2,000 a month or $26,000 a year.

If you save as much as possible in 5 years you could buy with cash. It is much better to be as debt free if possible. However, it all depends on what rent costs compared to buying. You could always pay extra towards the principle owed and might be able to pay the house off as quickly or maybe even quicker.

Make sure you get a fixed rate mortgage. That way you get no expensive nasty surprises when the interest rates increase as they must in a few years.

However, to the question you asked you would want to save at least $10,000 before buying a house with credit. That way you will have enough for the down payment, closing costs, and a bit extra in case something breaks. Going to $20,000 or more would save you money as no mortgage insurance has to be paid for (by you) when you have 20% down.

Before buying see what makes the most sense for you. It could be either way. This shows you how to look at the numbers to decide.
"Does it make more sense to buy, or to rent? Here is the way to find out for sure."

This gives a very different perspective on why renting might be better for some people in some situations.
"Why rent if you could buy for less money? Valid reasons inside."

Once you have decided to buy a house this gives the basic house buying process.
"Its your first home and you are looking for something but are not sure where to start to look or about loans."

There are more useful links for house buying information on my zillow profile if those were helpful. 

We still have falling prices in most of the country. Perhaps the site below can be helpful in this area.
http://www.housingpredictor.com/
  • March 04 2011
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You need to talk to a mortgage lender before talking to an agent. They can guide you on your financial status, look at your credit and see if you are eligible for any first home buyer programs. Conventional loans will require 10-20% down. FHA 3.5% down.
  • March 04 2011
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Profile picture for nwhome.us
Before you speak to a real estate agent, speak to a lender and give THEM your Personal Financial information.
  • March 04 2011
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