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What do I need to know about buying a house?

I plan on buying a rental house.  Do I need my own agent and if so why?  I will pay 20% of the cost and use the equity of my house to cover the costs of the new home.  I have never bought a house before.  What are the possible fees that I will expect to pay?  What are possible pitfalls?
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September 09 2012 - Portland
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Answers (18)

The most important thing is to talk to a lender and get all your ducks in a row.  This way you will know what your price range is.  Then have fun looking and finding your dream home knowing you can afford it.  Use a good Realtor that has your best interest at heart and that you trust is real important too.
A Realtor with at least 100 deals under their belt.   
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April 03
There were a lot of good comments here, but I thought I should add one important thought on representation. Just because you don't have an agent, doesn't mean the seller's agent will represent you by default. In fact, in many cases it means you become an unrepresented entity. Anything you say about your real estate needs, wants, and negotiating power goes right back to the seller, by law. If the seller was already planning on paying a buyer's agency commision, then you won't pay any additional fees, so I would recommend having an agent.
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December 10 2013
You don't need to hire a realtor to represent your interests in buying a house.  If you have a TON of time on your hands you can go it alone, running after individual agents who list individual properties.  If that house doesn't work, you can reinvent the wheel with another listing agent and you can take the time to tell every one of them about your real estate needs.  

If you find a house you want, because you don't have a realtor representing you the seller, you'll work with a realtor who is representing both you the buyer and the seller. You'll hope you get the lowest price for the house when that agent is also trying to get the highest price for the seller.

Bottom line; buyer realtors are the best deal going because you don't even pay them to help you with your house.  The seller pays them out of the total commission when the house sells.  

Other than that, you'll pay the attorney to represent your interests, and the bank that gives you the loan and if you're smart, you'll pay a home inspector about $500 on average to take a trained look at the condition of the property so you don't buy a lemon.   

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November 19 2013
A good Realtor is a must when buying any house. There are too many pitfalls to list in one place when you are talking about representing yourself. The good news is when you are purchasing a property, in most cases, the Realtor is free to the buyer because they are paid by the seller.  
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November 19 2013
I am holding a series of workshops in the DFW area to answer these questions and more. Registration is free and online at [Removed by Zillow Moderator. Please see our Good Neighbor Policy.]
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August 15 2013
If you are in Oregon definitely use an agent as it is free to you - the seller pays the commission.  First decided on an investment strategy.  You could buy a fixer and increase the value by renovating it, buy in an area you think will appreciate faster than the market as a whole, you could buy a property that seems to be renting for less than the market rate and increase the rent.... the list goes on.  The main point is to define your goals up front and pick a strategy that aligns with your goals and competencies.  Once you find a house and get it under contract you'll generally have 10 business day to do your due diligence.  Don't skimp on the inspections.  Have it professionally inspected, do a sewer scope, do a radon test, have the property swept for underground tanks.  All of these thing will probably cost you about $500-600 up front - this is the cost of doing business though and can save you $ in the long run.
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May 18 2013
Another point to consider carefully in today's SELLER'S market- buyers are often finding themselves competing against other buyers/ offers. The reputation and relationships your Realtor has (or doesn't have) with other Realtors in the community can often mean the difference between getting your offer accepted over the rest. If your agent is highly experienced, understands how to write and negotiate a winning offer, and has a proven track record for getting deals CLOSED, you will likely win (not necessarily paying the most either!)  On the flip side, to protect my Sellers, I would counsel to accept an offer from a Buyer represented by a Realtor over  a non-represented Buyer all day long- the odds of a successful close are just that much better. Good luck in your home search! 
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April 30 2013
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You have to take help of real estate firms to make profitable investment in Property market. [content removed by Zillow moderator]  firm  will help you to find rental homes in every region like marble-arch.
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September 24 2012
There is some great advice here on the post so rather than re-iterate what you've already heard I'd like to go over just a couple of items. First, you can buy with 20% down payment but if you can swing it 25% will get you a better rate. Second, CASH FLOW FOR GOSH SAKES! I can't emphasize this enough. When you go to make this calculation make sure you factor in the cost of the financing of your home as well. What I see here is someone who will be either at or close to 100% financing. Just because the financing used isn't on the same property your buying doesn't mean the interest charges can be ignored. Don't make the mistake that many have made and think you can just carry a property because it will go up in value or that the tax benefits make it a good deal. Trust me, you don't want to get burned like lots of other people before you did.
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September 23 2012
Profile picture for Dunes ..
You got to the point you're at in your life because you became informed....from school to the job interview you learned the process, what worked, what to watch for,  ect.
Buying at any age, stage of life is a Huge Financial Decision, obligation and comes with many things that can impact your life in a positive or negative way..you do not want negative especially at your stage of life

GET INFORMED!
The First thing you do IS NOT run out and just use any ol Lender/Agent....

Why? Because this is a very Large Business Transaction and the Selection of an Lender/Agent is an Important one for a lot of different reasons..
Select wisely and take the time to be sure you find the Best Lender/Agent for you...
Become informed..be smart with your money...if there is a good Deal be able to recognize it, if there is a Bad Deal be able to recognize it

Check out all this information from the Dept. of Justice Web Site...
Competing Models of Real Estate Brokerage

Consumers Can Save Thousands of Dollars in Commissions

Competition and Real Estate... Real Estate Laws in Your State

You could also make use of the Fed Gov and Banks Sites they have created to allow the Public to view their Properties for Sale/Foreclosure/REO..Get a feel for Prices and different Options

Sites like...HUD Homes...Fannie Mae
You can find the links to all the Gov sites here...Link

Bank sites like....Bank of America...Wells Fargo
You can find links to Bank sites here...Link

For finding Public Records, Property Records, Tax Sales posted ect. you may find this Public Records Search Engine helpful...Check it out
Free Public Records Search Directory

When you are sure purchasing is the right move..move
You have options..become familiar with them..Protect yourself
Shop Smart & Good Luck
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September 10 2012
Excellent time to buy a rental home. I would simply add: make sure it is convenient for you. Buy a home that isn't too far away. Buy a home that looks like it will be easy to maintain. You do not want a headache, you want an investment. Choose carefully. 
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September 10 2012


Your first step would be to speak with a few lenders, I would suggest going the mortgage broker route, versus a traditional bank, as they may have a larger investor pool to get you financing for what you are trying to do. Someone below had mentioned that your representation being free was not true and that the commission was calculated on top of the sales price and then passed on to you. The way it works is this: the seller signs a listing agreement for "x%" with the listing brokerage. That listing brokerage decides how much of that listing fee will be paid to the buyer's agent. The seller has already committed to the commission amount with the list agent. So whether you use an agent yourself or not that commission will be paid to the list agent entirely or between them and your agent; that is unless you can convince the list agent to reduce their contracted fee with the seller J In short, the help is there if you need it, or want it and is paid out of the sellers proceeds from the sale. The fee is not tacked on over and above the sales price, and if the property does not appraise you should have the option of dissolving the purchase agreement at no cost to you. Best of luck!

 

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September 10 2012
I suggest that you talk to a Realtor and a loan officer at 2 local banks, to determine if what you want to do can be done.  Such as, I have not seen an investment home loan at less than a 25% down payment.
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September 10 2012
There are two meanings of "ignorant".  One is, essentially, "stupid".  The other is "unaware".  The fact that you asked your question shows you are not "stupid" but you are certainly "unaware" of a whole host of issues, as would any first time buyer likely be. Buying a rental is an excellent idea if you have the capital.  Done right you will likely find a greater return on your money than CD's or bonds or other financial instruments.   I just completed work for a client who bought two rentals in Portland for that reason and I'd be happy to help you as well.

The first thing you need to do is meet with a mortgage broker or bank lender (or several) to understand the best financing option for you.  You will most likely be required to put 25% down, but I don't understand how you plan to "use the equity of my house to cover the costs of the new home".  Do you mean you expect to take out a mortgage on your present home to cover the balance of the purchase price of the rental?  Meet with at least two lenders before you go any farther.

I can't imagine why you would even consider shopping for, much less buying, a house without representation by a Realtor.   Almost anyone knows of a sad story of someone who did. 

Just last month another agent in my Portland office listed a home for which the seller had not had a home inspection (when she was the buyer).  The new buyer did, and it found $12,000 in repairs.  So the seller saved $400 when she was a buyer, and it cost her $12,000 when she sold. 

Buying a home is a very complex process, even if you've been through it dozens of times, as most Realtors have.  On my web site there is a 16-page Guide to Buying a Home.   I think you will find it helpful. 

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September 10 2012
Profile picture for Dunes ..
"Buyer's agent's commission are typically paid for by the seller so your representation is free."

The seller pays the commission of the Agents after you pay them
A smart seller includes the commission in the sales price ...passes the expense along

"your representation is free."
Simple case of Sales Pitch trumping the Truth imo


Here is why some use Zillow to Fish for Referral Leads..
What Really Happens When Your Agent Refers an Agent To You?
Article written by a Realtor





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September 10 2012
Thanks for posting your question on Zillow.com!

Buyer's agent's commission are typically paid for by the seller so your representation is free.

What will your buyer's agent do for you?  They will answer all of your questions you just asked for one, make sure both parties adhere to the contract which was created for your protection, keep deadlines met, negotiate using their experience and more.

Good luck, and if you need a good referral, I would be more than willing to help.
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September 10 2012
I know a very good Portland Oregon Real Estate Agent. [removed by Zillow moderator]
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September 09 2012
I always recommend you are represented by an agent. The sellers typically covers the cost. The fees may vary where the lender is concerned but your title fees should be fairly consistent. Taxes and hazard insurance may also be colleted. You can bump up the interest rate on the loan a bit to help cover the fees with a lender credit or even include them with your offer to be paid by the seller. There are a hundred and one variables so I would sit down with a trusted mortgage professional as your first step.
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September 09 2012
 
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