I need advice for a first time home buyer!

Kathleen Barnato, "Kathleen Barnato"
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Kathleen Barnato, "Kathleen Barnato"

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First, when considering bargaining, you need to know value. This is where a real estate professional comes into play. A seller can ask whatever amount s/he wishes. The old adage to knock a certain percentage off the asking price just doesn't work - what if the seller has jacked up the asking price 25 or 30% over the true value of the home? On the other hand, what if the seller has priced it perfectly, for a quick sale? Do you really want to miss out on a good bargain, by bargaining more?
In comparing mortgages, it is a good idea to consider how long you wish to own the property, how much you can comfortably afford to pay monthly (including taxes, insurance, etc.) and whether you are more comfortable know exactly how much you will pay each month (a fixed amount) or whether you like to gamble a little, hoping rates will fluctuate downwards (variable rate loan.) A good lender should be able to quote you rates with several different scenarios.
Good luck. Kathleen Barnato

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July 12 2007

Robin Lynch, "robin398"
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Robin Lynch, "robin398"

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Bargaining for a good price.

Negotiate The Deal

The fun starts now because the real potential for making money starts now. The difference between a good negotiator and a poor negotiator is thousands and often tens of thousands of dollars. Good negotiators are prepared. They know exactly what they want to accomplish. They know their limits financially. They know which points they can bargain and which points they can't. As a buyer, you negotiate from a position of strength. You don't have to buy this property. Compromise is your option. If the deal is not to your complete satisfaction, there will always be new opportunities.

There will always be other deals. You have to know what you want. You have to know what you will and won't accept. You have to be willing to walk away.

One of the first things you should look at when comparing mortgage offers is the interest rate. Generally, the lower the interest rate, the better for you and your expenses. Even a slight difference in interest rates can mean a lot of money over the life of a loan. Make sure you understand if the rate offered includes discount points, which is money you pay up front to lower your interest rate.

But the interest rate isn?t the only rate to look for. Another good benchmark for comparing offers is their annual percentage rate (APR). This figure combines the interest costs and other fees charged by a lender over the life of the loan, and expresses them as a yearly percentage. Make sure to ask for an itemized list of what?s included in each APR calculation, so you know you?re making a fair comparison, as some lenders don?t include all of their fees in the calculation.

Other details matter too: Do the lock in terms vary? Is there a pre-payment penalty? What are all the closing costs and fees? Ask for a read a Good Faith Estimate (GFE) for each loan, and ask questions if something doesn?t make sense.

Last, you?ll also want to consider customer service. Look for a lender who is quick to r

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July 12 2007

carolynbasham
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carolynbasham

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Kathleen,

Did you know that in many areas of the country BUYERS are charge nothing for the services they received from a real estate agent? Here in Florida, MOST agents charge no transaction fees, and our services are once a sale is closed through the listing agent. Did you know that in most areas, a realtor can show you any property, whether it is one of their listings or someone else's? A realtor that prides themselves in customer service can help ease this transaction for you and answer many of your questions: such as what is your best value to consider investing in your first home, and what type home might best fit your needs and pocketbook? They can help you understand the negotiating process, and how to make that decision in what to offer on a piece of property once you find it. They will help you get to lenders that will provide you some of the best financing for your criteria. A good realtor can hand hold you the entire way, keep in you informed of what you are seeking, what you will need for the transaction from start to finish, keep you informed of what is happening along the way, and help you know what to expect. Anything I can do to help or answer, please do not hestiate to contact me. I am in the Panama City Beach, Fl area, so afraid I couldn't be much help for what you are seeking, but if you need me to locate an agent to work with you there, please let me know.

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July 13 2007

Bob Ashauer, "123bob"
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Bob Ashauer, "123bob"

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These are full of good advice, and I'll add two suggestions: Put together a trusted team that works for you. An agent, and most importantly, a loan officer. Meet with them in person and let them learn about you. That's what we do for a living, so take advantage of the help that is available.

Second, on bargaining, I suggest to my buyers that they answer an important question first: Do I want to buy this home and live in it? Use the listed price to consider the question. Then, and only if it's yes, work with your team to bargain for the best purchase. Too many people get wrapped up in the bargaining process and lose focus on their real purpose. Your team of professionals know that it is not just the purchase price that is important, but the total cost of the purchase to you during the buying process. Keep your eye on the ball and have a team of professionals support you. Asking these questions is a good start, but choose some people you can look in the eye to get the answers. Good hunting!

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July 13 2007

sas912
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Mortgages are full of hidden "closing costs" so get a "good faith estimate" from a reputable mortgage broker or bank and tell them that if you go with them, you will hold them to the charges. However, don't let a lot of lenders run your credit because it lowers your credit score - get them to give you estimates first subject to your credit. And always hold back a little money for the things you can't anticipate when you buy your first home - like blinds, or drapes. Many retail RE agents will offer an insurance policy on the major appliances, and it can be a really good deal when buying a used home that does not have a warranty. Good luck!

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July 14 2007

Charles Owen, "Home Inspections"
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A few things to think about. 1) Are you looking for a neighborhood that is liberal or conservative. 2) Are you looking for a neighborhood where the neighbors are older or younger. 3) Find a home and get out and ask the neighbors about the neighborhood. 4) And most important, have a home inspection. You don't want to inherit the owner's problems. If possible, get a warranty.

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July 14 2007

workinre4u
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workinre4u

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I agree with some of the above answers. I think your best bet is to be armed with as much information as possible before starting the battle! The best way to get this information is with representation from a Realtor in your area. Be sure to ask for referrals from friends, associates, relatives because sometimes that in and of itself can be picking a needle out of a haystack. Be very careful with your mortgage choice as well. I personally am a Realtor AND a Licensed Mortgage Broker because I grew tired of seeing my real estate clients being taken advantage of. Definitely get a good faith estimate and compare all fees being charged (ie application fee, origination fees etc.) most of all you want the best interest rate as well. It can be very overwhelming purchasing a home whether it's the first time or the fifth time but if you rely on experts in the business I'm sure you will do fine.....take care & best of luck to you!!!

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July 15 2007

Kay Osman, "lovehawaii"
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Kay Osman, "lovehawaii"

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Way to go, I love to see young people like you thinking of owning instead of renting. I will address first your mortgage choices. Be prepared & understand the process,and do your home work in advance to avoid any costly mortgage surprises or disappointments. Do not waste your time looking at homes prior to finding out how much loan you will be able to qualify for and most important, what type of loan. There are specials for first time buyers, or may be FHA with lower down payment etc. You want to be careful in finding the right mortgage to make your dream a reality. When shopping for a loan, if it sounds too good, do not rush into applying for that loan, check other lenders, learn the different types of mortgages, current rates, compare and verify (be sure there is no prepayment penalty provision in the mortgage document).

When the lender looks at your credit report, the lender checks out if you are maxing out all your cards, also verifies your payment habits, and any late payments or problems with credit. Your interest rate is determined by factors such as credit score, cash down payment, and other compensating factors that affects the lenders risk.

Since the interest rate offered to you is affected dramatically by your credit; check out your credit report before contacting a lender, if you find wrong information, or challenges in your credit report, be sure to contact the credit bureau and make the necessary corrections. Your loan officer may be able to guide you through this process.

Once you provide your loan officer with your information, he/she will be able to give you an idea about how much you can borrow, depending on the current interest rates and your credit score.
Always compare apples with apples, take the good faith estimate, type of loan you got from a lender, and check out other lenders , compare, ask questions, and try from all of this, to know the type of loan that is best for you, and what is the interest rate & closing cost.

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July 15 2007

Rbarber
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i would also ask your home inspector to order an environmental report to make sure there's no contamination nearby or from a past use.

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July 16 2007

kdankiewicz
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kdankiewicz

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Ya, Real Estate is a great investment. I will just restate getting a local realtor to help you is the best place to start. I don't know about Missouri, but in California our services are free to the buyer. Find a realtor that is willing to work with you, wether that means writing a lot of offers to get you the best price, or finding you the home of your dreams. Not all realtors are created equal. We all have different strenghs and weaknesses.

Same goes for lenders. Find someone who will work with you, giving you options that you are comfortable with. Get a good faith estimate, and know the loan you are getting. Ask lots a questions.

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July 16 2007

William Armstrong, "dollarbill"
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William Armstrong, "dollarbill"

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Try and get a realtor to help you out. Ask them for comps on what you are looking to purchase. ALWAYS offer lower than what they are asking for. If they are desperate to sell and not getting much activity, they will be more willing to negotiate. As far as a mortgage goes, stay away from internet companies that do mortgages. 99% of those loans do not get funded. Get yourself a fixed rate mortgage. Do not let your lender talk you into an adjustable rate or god forbid a stated loan so you can buy something more expensive. Loan officers get paid on the dollar amount of the loan, and the unethical ones will try to put you into a larger loan because it benefits them, not you. Good luck with your purchase.

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July 16 2007

altadutch
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Besides this great site "Zillow" there is Realtor.com where you can compare properties for sale.
I would stick with a fixed rate mortgage; that way you know exactly your monthly cost for the future and not get burned later when rates go up.
Try to avoid impound accounts which is where the mortgage holder collects your taxes and H.O. insurance for payment at the due dates and avoid loans with prepayment penalties in the event you wish to refinance or pay off the mortgage.
Also, don't forget additional monthly cost like property taxes (which ALWAYS go up), Insurance, association dues and utilities.
Condominiums and gated communities have many restrictions and cost.
Fixer uppers homes are a great way to build equity if you do much of the work yourself while you live in it.
Good luck with your first home purchase!

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July 27 2007

Wendy Bartlett, "MusicalRattie"
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BEWARE of condos, read about the pros and cons on the internet before thinking of them. You say you are "starting" a 40k job. How can you qualify for financing when you might not have good enough or long enough credit history? What if you find you hate the place you moved to? Do you NEED so much to instantly take on home ownership at the same time as a new job? Please be careful, it's a huge - and expensive commitment...

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July 31 2007

LawFitz
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A. don't buy now b/c prices will be coming down over the next 2-5 years. Patience will be a virtue that will be immensely rewarded in this credit crunch.

B. Save as much as possible to put yourself in a better position when the buying opportunity eventually presents itself.

C. Analyze and address your credit report: make sure your credit card balances are <30% of you limits and don't be late on payments!

D. research your community. Ziprealty.com is the best free site for accessing MLS listings in order to become more knowledgeable about what is and what isn't a good deal. This will also guide you as to when and when not to bargain.

E. UNDERSTAND your mortgage. Negative amortization and variable rates are not inherently bad, but they can be toxic when not understood and utilized properly.

F. Find a good realtor and a good mortgage broker or learn to do it yourself. Despite what realtors on this site will tell you, you can DIY if you take the time to learn. Don't be scared. It's not rocket science.

And BTW, it is not free to use a buyer's agent despite the typical realtor claims. You pay for it indirectly by not being in a better offer position due to the additional middleman.

E. Understand your budget and account for all housing expenses. Principal + Interest + Property Taxes + Insurance + Maintenance - Tax Benefit = Total cost of ownership.

F. Don't get caught up in emotion. Yes it is a home, but it is also a highly levered investment. For most of us, it is by far the biggest investment of our lives.

Good luck and God bless,
LF

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July 31 2007

Kara Phadael, "Kara Phadael"
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Kara Phadael, "Kara Phadael"

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Yes, in Connecticut most agents do not charge buyers anything, and, you do not pay for it indirectly by having an additional middleman. The commission the seller pays is negotiated between the seller and the seller's agent. The commission stays the same regardless of whether there is another agent involved in the deal or not. So, whether you made the offer, or your agent made the offer, it would be an equal offer in the eyes of the seller.

Having a real estate professional will allow you to have someone working for you who will look out for your best interests. And, it won't cost a thing.

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August 01 2007

Lisa Jones, "Lisa Jonz"
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Lisa Jones, "Lisa Jonz"

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There have been A Lot off good points mentioned here, and I would just like to add that using an experienced Realtor (r) to represent you would definately be in your best interest. Shop around for mortgages, learn all you can, and find out if you qualify for any down payment assistance programs. A good agent should be able to provide assistance in finding these programs and help you find a number of respectable lenders to interview (kickbacks or referral fees from lenders to agents and vice versa are illegal).

You may want to rethink the condo. Generally speaking, a single family home is a more profitable investment in the long run. If you do decide to buy a condo, be sure that the condo does not have and will not allow the rental rate to exceed approx. 10%. Too many renters in condos spells lower rates of return on the investment.

Bets of luck to you.

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August 01 2007

Melissa Griggs, "Melissa Griggs"
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Melissa Griggs, "Melissa Griggs"

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Buyer's Agents are not "middlemen," we offer value to the transaction for the Buyer by being a knowledgeable professional in the areas you are searching for a home in.

I will reiterate that the SELLER pays the Commissions, NOT the Buyer. The Commissions come from the proceeds the Seller receives. Many people are gravely misinformed regarding Buyer's Agents commissions, and exactly what we do.

We counsel with Buyers to know what their needs are and then their wants. Then we search for their home. We don't waste their time by sending them listings that aren't within THEIR search criteria.

We also recommend professional Home Inspectors, Termite Company's, Lender's (when needed), Home Warranty Company, etc... We also contact the Home Inspector, Termite Company, Home Warranty Company, and fill out all necessary paperwork for the Buyer. When it comes down to inspections, we voluntarily go out with the Inspectors to represent our Buyers so that they don't have to take time out of their schedules to be there. That's our job!

We are also responsible for negotiating the price for the Buyer and making recommendations on what to offer. We fill out the necessary paperwork for an offer, we fill out the counter offer paperwork, we pay for the paper and ink. We chase down the Listing Agents to make sure they know that an Offer is on it's way, then once a Counter Offer is made, we contact our Buyer to give them advice on how to counter back, or to accept the counter offer.

So you see, just because the Seller pays the commission, we actually ARE working for the Buyer...we are bound by the Buyer Brokerage Agreement to perform for the Buyer as a Listing Agent is to the Seller.

Wendy brought up a valid question...you need at least 2 years work history in the same industry to even think about a mortgage. Whether or not you are a 1st time home buyer!

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August 02 2007

Renau
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On Move.com, there are many selections to choose from for first time home buyer information, including sections related to Home Finance and Moving. In addition to that, there are also blogs on the site that you can reference that cover a variety of first time home buyer topics.
http://www.move.com/

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August 21 2007

jason717
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i think hiring a professional realtor will help you alot, a realtor knows the market and the industry. it is also important you do the research yourself, know the selling price of the houses in that area, talk with your realtor on how you would do the bargaining, communication is a very good tool that you can use to win in the bargaining process. good luck

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August 26 2007

Vicky Chrisner, "vchrisner"
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Vicky Chrisner, "vchrisner"

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Find a real estate agent, and be sure they are representing YOU. Your agent will help you through the entire process - finding a loan officer, finding your home, finding the right financial balance.

To find a good agent, try to get a referral - either from your new employer or someone in that area that you know, OR if you (or your parents/friends) know an agent in another area, see if they can connect you with someone in your new area, but ask for personal references only - no blind referrals.

The savviest of real estate investors knows that a good agent is worth their weight in gold. Anyone with a different opinion hasn't found a good real estate agent yet.

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June 19 2008

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am a recent college grad moving to Missouri. My new job is going to pay about 40,000 a year and we could afford to spend about $800-850 per month. We are considering a condo that costs about $100,000.

That was your first mistake .... you never tell anyone outside your family how much you earn or willing to spend... Do you want Realtors to jack up prices on what otherwise would sell for half...How do you think people got into overpaying for all these years... More free money via risky loans the higher the prices got (amoung other things)...

You need to take ownership of what you want to see and how much you are willing to spend...

Only your bank needs to know how much you earn when your in the process of getting a loan.

Use the internet to scope our your interests... and use zillow for price history over the past 5-10 years to nail the right price... if your in a non-bubble region then use comps if prices rose only with inflation...