First time home buyer – where do I begin?
December 30, 2019 7:08 AM Subscribe
Please tell me like I’m 5 years old. I’m single, financially stable with no debt (except one car payment), almost 20K saved up, and am committed to staying in the area (Philadelphia suburbs). I feel like there is nothing stopping me, but I am very intimidated by the process. I’ve never been good with making big decisions, especially with something I know nothing about. For those who have gone through it – where do I begin, how do I find a good realtor with little to no social connections, and do you have any general tips?
Before you connect with a realtor, I would spend some time on your own (at least a few weeks) looking through options that are within your price range to get a sense of what you like and dislike. With that amount saved, I’d be looking at houses and condos below $200K (keep in mind some of your savings will need to go to closing costs and the realtor commission, as well as initial repairs on whatever you buy, if necessary). You can use Redfin for this if it’s available in your area—it’s very easy to filter by price and zip code.
You may do this and realize you’d like to save more first before buying.
posted by sallybrown at 7:24 AM on December 30, 2019 [10 favorites]
You may do this and realize you’d like to save more first before buying.
posted by sallybrown at 7:24 AM on December 30, 2019 [10 favorites]
We recently bought a home in Philadelphia, and I can recommend a couple realtors if you PM me.
We started out by going to open houses, going to a first-time homebuyer's seminar, and spending time on Zillow/Trulia/etc. to get a feel for the market, figure out what types of houses were available in which areas, see what we could afford (as real estate taxes are highly variable and you need to take them into account when looking at what your mortgage payment will be).
posted by DoubleLune at 7:28 AM on December 30, 2019 [2 favorites]
We started out by going to open houses, going to a first-time homebuyer's seminar, and spending time on Zillow/Trulia/etc. to get a feel for the market, figure out what types of houses were available in which areas, see what we could afford (as real estate taxes are highly variable and you need to take them into account when looking at what your mortgage payment will be).
posted by DoubleLune at 7:28 AM on December 30, 2019 [2 favorites]
20k translates into maybe 15 k down payment and 5k for various closing costs etc. 15k is 20% of 75k. 20% is the standard down payment.
-Talk to your bank/credit union about FHA mortgages which only require around 4% down. The other advantage of these is that they will not give you a mortgage on a house that does not meet their strict criteria. Find out how much they're willing to lend you for a house/condo.
-Start looking at the various real estate websites -realtor.com, zillow.com, trulia.com- to see what houses and/or condos are in your price range in your preferred area. Or walk around an area you like and take note of everything for sale and look it up online.
-Ask your friends and neighbors about realtors. Or, if you see something you like just call that realtor. Realtos are generally working for the seller, not the buyer. There is such a thing as a buyer's realtor but, in my experience, they generally don't put much effort into helping people at the lower end of the scale. Caveat, I don't know anything about the real estate market in your area, but assume that a 75k home is is in the lower end.
Good luck, and don't be deceived by carefully stages photos.
posted by mareli at 7:29 AM on December 30, 2019 [1 favorite]
-Talk to your bank/credit union about FHA mortgages which only require around 4% down. The other advantage of these is that they will not give you a mortgage on a house that does not meet their strict criteria. Find out how much they're willing to lend you for a house/condo.
-Start looking at the various real estate websites -realtor.com, zillow.com, trulia.com- to see what houses and/or condos are in your price range in your preferred area. Or walk around an area you like and take note of everything for sale and look it up online.
-Ask your friends and neighbors about realtors. Or, if you see something you like just call that realtor. Realtos are generally working for the seller, not the buyer. There is such a thing as a buyer's realtor but, in my experience, they generally don't put much effort into helping people at the lower end of the scale. Caveat, I don't know anything about the real estate market in your area, but assume that a 75k home is is in the lower end.
Good luck, and don't be deceived by carefully stages photos.
posted by mareli at 7:29 AM on December 30, 2019 [1 favorite]
I did this alone this year in DC and it was pretty stressful but doable.
1. As someone said above, go to a first time homebuyer seminar. Everything they say might not apply to you, but it is useful to hear someone spell out the process and considerations in your specific market.
2. Shop around for mortgage lenders. Local credit union seems like a great choice if available, but look around at all of your options. Get preapproved for a loan.
Be aware that they will likely preapprove for a bonkers high number. Do not base your homebuying plans around that number. Instead figure out realistically how much you want to be spending on housing every month and do that math. Set a firm upper cap. Do not let people sway you to spend more money than you feel comfortable spending.
(I asked my mortgage lender to break down for me how much money I would need to have at closing -- for down payment and closing costs which can be $$$$$$$$$$ and that helped me figure out how much I could afford. Don't feel bad asking the mortgage lender to explain minute details to you over and over. It is literally their job.)
3. Find a realtor. Meet a few different ones. I made a bad choice here and went with the first one I met. Don't be like me. He sucked! The realtor will be paid (by the seller...) when you actually buy the property so you do not need to pay for this service when you initially get one.
4. Go look at properties. Look at a ton. Figure out what items are non-negotiable for you (I was NOT going to buy a place with an electric stove or carpet for example) and don't stray from this. Be firm!
5. When you like something in your price range and can imagine living there for at least 5 years, make an offer. This involves some paperwork which your realtor should talk you through. Do not waive the inspection contingency under any circumstances.
Not sure how the market in Philadelphia is but expect some emotional turmoil if you put in an offer and the seller doesn't accept it. Have wine or tea or snacks on hand to stress consume when this happens.
6. At some point one of your offers will be accepted and you will have to put down a good faith money deposit and also then do an inspection. Make sure you get a good home inspector. Secret problems could be lurking. Do not buy a place that's perfect looking but has weird electrical issues. You don't want to deal with that (I have some friends dealing with that, it's not great).
7. If the inspection goes well, everything goes through, then on your closing date you will have to go sign a million papers. Then they give you the keys. Woooooo homeownership!
(I am sure that I'm forgetting some details, but these are the general basics I think...)
posted by aaanastasia at 7:53 AM on December 30, 2019 [12 favorites]
1. As someone said above, go to a first time homebuyer seminar. Everything they say might not apply to you, but it is useful to hear someone spell out the process and considerations in your specific market.
2. Shop around for mortgage lenders. Local credit union seems like a great choice if available, but look around at all of your options. Get preapproved for a loan.
Be aware that they will likely preapprove for a bonkers high number. Do not base your homebuying plans around that number. Instead figure out realistically how much you want to be spending on housing every month and do that math. Set a firm upper cap. Do not let people sway you to spend more money than you feel comfortable spending.
(I asked my mortgage lender to break down for me how much money I would need to have at closing -- for down payment and closing costs which can be $$$$$$$$$$ and that helped me figure out how much I could afford. Don't feel bad asking the mortgage lender to explain minute details to you over and over. It is literally their job.)
3. Find a realtor. Meet a few different ones. I made a bad choice here and went with the first one I met. Don't be like me. He sucked! The realtor will be paid (by the seller...) when you actually buy the property so you do not need to pay for this service when you initially get one.
4. Go look at properties. Look at a ton. Figure out what items are non-negotiable for you (I was NOT going to buy a place with an electric stove or carpet for example) and don't stray from this. Be firm!
5. When you like something in your price range and can imagine living there for at least 5 years, make an offer. This involves some paperwork which your realtor should talk you through. Do not waive the inspection contingency under any circumstances.
Not sure how the market in Philadelphia is but expect some emotional turmoil if you put in an offer and the seller doesn't accept it. Have wine or tea or snacks on hand to stress consume when this happens.
6. At some point one of your offers will be accepted and you will have to put down a good faith money deposit and also then do an inspection. Make sure you get a good home inspector. Secret problems could be lurking. Do not buy a place that's perfect looking but has weird electrical issues. You don't want to deal with that (I have some friends dealing with that, it's not great).
7. If the inspection goes well, everything goes through, then on your closing date you will have to go sign a million papers. Then they give you the keys. Woooooo homeownership!
(I am sure that I'm forgetting some details, but these are the general basics I think...)
posted by aaanastasia at 7:53 AM on December 30, 2019 [12 favorites]
Oh also, in DC I was able to only put 5% down with a conventional mortgage. This may or may not be what fits your financial situation but flagging that the old 20% down thing is not necessarily the firm rule. Also see if there are any first time homebuyer benefits and try to take advantage of all of them.
posted by aaanastasia at 7:55 AM on December 30, 2019 [3 favorites]
posted by aaanastasia at 7:55 AM on December 30, 2019 [3 favorites]
Is that almost $20K saved up total, or almost $20K saved up expressly for the purpose of buying a home? If total, I'd strongly suggest waiting until you have much more money saved to pursue buying a house. Home ownership is full of surprise expenses -- appliances dying and needing to be replaced, or a minor disaster like a flooded toilet that requires a bunch of repairs to flooring, etc. Even with homeowner's insurance, you will have a fair amount of out-of-pocket expenses.
When buying you'll need to pay out of pocket for inspections and things like appraisal that can add up to a few thousand dollars.
You'll also want cushion if you get laid off or whatever and need to continue making mortgage payments while looking for new work. So - I'd be cautious to approach buying a home if you don't have a bigger cushion.
If the $20K is for homebuying exclusively and you have a good savings cushion beyond that, then I'd start doing homework and researching home buying, talk to some folks in your area who've been through the process before.
FWIW I got a mortgage person before I talked to realtors to see what my options would be. I basically got my mortgage lined up before looking at a single house, then started looking in my price range. Get a good mortgage person first, and then go from there. Note that I started from that step once a few years before I bought, and the mortgage person basically waved me off buying at that time. I could have qualified for a mortgage, but I was in a weaker position. Waiting a few years has likely saved me quite a bit of money.
posted by jzb at 8:00 AM on December 30, 2019 [6 favorites]
When buying you'll need to pay out of pocket for inspections and things like appraisal that can add up to a few thousand dollars.
You'll also want cushion if you get laid off or whatever and need to continue making mortgage payments while looking for new work. So - I'd be cautious to approach buying a home if you don't have a bigger cushion.
If the $20K is for homebuying exclusively and you have a good savings cushion beyond that, then I'd start doing homework and researching home buying, talk to some folks in your area who've been through the process before.
FWIW I got a mortgage person before I talked to realtors to see what my options would be. I basically got my mortgage lined up before looking at a single house, then started looking in my price range. Get a good mortgage person first, and then go from there. Note that I started from that step once a few years before I bought, and the mortgage person basically waved me off buying at that time. I could have qualified for a mortgage, but I was in a weaker position. Waiting a few years has likely saved me quite a bit of money.
posted by jzb at 8:00 AM on December 30, 2019 [6 favorites]
First step is deciding if you WANT to buy. I like owning my house, but it has exposed myself to a lot more work and risk and drama than renting. There's no need to buy just because you CAN, if you're happy renting.
Also, just so you know it may be an option, I didn't use a realtor. This may or may not be viable for you depending on your market. Not using a realtor brought down the price of the home a bit, reduced the amount of awkward small talk I was subjected to, and avoided the bad experiences so many of my friends had with realtors (especially when buying modest homes rather than high-commission ones). Obviously it means doing more work on your own and there are other downsides, but want to make sure you know it's sometimes an option.
posted by metasarah at 8:07 AM on December 30, 2019
Also, just so you know it may be an option, I didn't use a realtor. This may or may not be viable for you depending on your market. Not using a realtor brought down the price of the home a bit, reduced the amount of awkward small talk I was subjected to, and avoided the bad experiences so many of my friends had with realtors (especially when buying modest homes rather than high-commission ones). Obviously it means doing more work on your own and there are other downsides, but want to make sure you know it's sometimes an option.
posted by metasarah at 8:07 AM on December 30, 2019
Seconding the suggestion to look for first time homebuyer programs that you might qualify for. Nerdwallet has a handy list of links by state.
posted by aka burlap at 8:15 AM on December 30, 2019
posted by aka burlap at 8:15 AM on December 30, 2019
Most folks have covered everything, I think, but bowties spouse and I just went through this this year! The things that I thought were most helpful, from an anxiety-relief perspective, were:
- Doing a first-time buyer seminar through our county - this was affiliated with the first time buyer subsidies/assistance programs, which we didn't qualify for, but I appreciated having the chance to ask questions of someone who was never going to get my business.
- Figuring out really really clearly what our down payment/monthly budget would be, and so our likely house price range. We were really conservative here, compared to what we prequalified for, and kept some of that downpayment savings account in reserve for house repairs immediately after purchase. We were lucky enough to get closing covered by the sellers, or you'll need to account for that too.
- Comparing at least three lenders and getting preapproved BEFORE talking to a real estate agent. It strengthens your offer and you really don't want to be scrambling for obscure documentation while trying to get to closing. And then your lender will talk to you about this, but don't change anything whatsoever about your finances for the duration of this endeavor.
- Making a list of wants/needs/dealbreakers in a place to live, BEFORE talking to any real estate agents. This was ENORMOUSLY helpful in clarifying what it was we actually cared about. Don't let an agent steer your preferences. You have to live in the place, not them. There are lots of sample lists online that you can build from.
- Browsing a lot of listings to get a sense of what neighborhoods fit our needs that we could actually afford, again BEFORE talking to an agent. Doing some reality-testing of the aforementioned list so that we weren't getting our hopes up unreasonably. We looked at basically no houses we couldn't afford for that reason. We looked at a number of houses of questionable habitability, though.
- Comparing (interviewing) at least three agents. You can find lists of possible questions to ask, but an important thing is: do you like this person? Do you trust him or her? We interviewed some people we really didn't like, or who gave us weird gut feelings. Our agent's demeanor was pretty important during the offer, negotiation, and closing process when things were stressful and details mattered. We also didn't have family we could go to with questions, so it was important to us to have someone who didn't treat us like our stupid questions were stupid or that we were wasting his time given our modest price range.
- Be ready to look at a million damn places. They start to seem the same. Think about how you would get to/from work in your target neighborhoods, if that's not where you already live, and test it out to see if it drives you completely insane. See if you feel safe walking around after dark, and if there's anywhere to buy food/wash clothes/do whatever it is you need to do. Come up with some kind of note-taking system and take plenty of photos so when you get your wires crossed, you can remember what it was you were thinking of. Hang on to those, too - the house we ultimately bought went off the market, the offer fell through, and my husband remembered enough about it from the first time to suggest we make an offer when it came back on a few weeks later.
I hated everything about the process and I am glad it's over and I plan to stay put until I die because it made me so anxious. It still makes me anxious, because we are solely responsible for so much now, and it's all incredibly expensive and/or dangerous. Don't be afraid to ask questions of everyone, from your lender to your inspector, constantly. They might think it's old news, but you have a right to be informed. Also, unless you're buying a relatively new build, there WILL be something weird and janky about your home that the inspector doesn't notice. As a rule, previous owners were probably idiots and opening a wall for any reason is a window into that idiocy. Join the homeowner and home improvement subreddits for a taste. Or, if it's a hot enough market (I bought in the DC area), you'll buy a house knowing there are flaws. Being able to spot those flaws before your offer, and during your inspection, is valuable. Make folks get real with you about the danger/expense of various weirdnesses. Be real with yourself about how handy you are actually capable of being, how long you will be in the place, and how much money you can afford to spend keeping it habitable.
Good luck!
posted by bowtiesarecool at 8:42 AM on December 30, 2019 [2 favorites]
- Doing a first-time buyer seminar through our county - this was affiliated with the first time buyer subsidies/assistance programs, which we didn't qualify for, but I appreciated having the chance to ask questions of someone who was never going to get my business.
- Figuring out really really clearly what our down payment/monthly budget would be, and so our likely house price range. We were really conservative here, compared to what we prequalified for, and kept some of that downpayment savings account in reserve for house repairs immediately after purchase. We were lucky enough to get closing covered by the sellers, or you'll need to account for that too.
- Comparing at least three lenders and getting preapproved BEFORE talking to a real estate agent. It strengthens your offer and you really don't want to be scrambling for obscure documentation while trying to get to closing. And then your lender will talk to you about this, but don't change anything whatsoever about your finances for the duration of this endeavor.
- Making a list of wants/needs/dealbreakers in a place to live, BEFORE talking to any real estate agents. This was ENORMOUSLY helpful in clarifying what it was we actually cared about. Don't let an agent steer your preferences. You have to live in the place, not them. There are lots of sample lists online that you can build from.
- Browsing a lot of listings to get a sense of what neighborhoods fit our needs that we could actually afford, again BEFORE talking to an agent. Doing some reality-testing of the aforementioned list so that we weren't getting our hopes up unreasonably. We looked at basically no houses we couldn't afford for that reason. We looked at a number of houses of questionable habitability, though.
- Comparing (interviewing) at least three agents. You can find lists of possible questions to ask, but an important thing is: do you like this person? Do you trust him or her? We interviewed some people we really didn't like, or who gave us weird gut feelings. Our agent's demeanor was pretty important during the offer, negotiation, and closing process when things were stressful and details mattered. We also didn't have family we could go to with questions, so it was important to us to have someone who didn't treat us like our stupid questions were stupid or that we were wasting his time given our modest price range.
- Be ready to look at a million damn places. They start to seem the same. Think about how you would get to/from work in your target neighborhoods, if that's not where you already live, and test it out to see if it drives you completely insane. See if you feel safe walking around after dark, and if there's anywhere to buy food/wash clothes/do whatever it is you need to do. Come up with some kind of note-taking system and take plenty of photos so when you get your wires crossed, you can remember what it was you were thinking of. Hang on to those, too - the house we ultimately bought went off the market, the offer fell through, and my husband remembered enough about it from the first time to suggest we make an offer when it came back on a few weeks later.
I hated everything about the process and I am glad it's over and I plan to stay put until I die because it made me so anxious. It still makes me anxious, because we are solely responsible for so much now, and it's all incredibly expensive and/or dangerous. Don't be afraid to ask questions of everyone, from your lender to your inspector, constantly. They might think it's old news, but you have a right to be informed. Also, unless you're buying a relatively new build, there WILL be something weird and janky about your home that the inspector doesn't notice. As a rule, previous owners were probably idiots and opening a wall for any reason is a window into that idiocy. Join the homeowner and home improvement subreddits for a taste. Or, if it's a hot enough market (I bought in the DC area), you'll buy a house knowing there are flaws. Being able to spot those flaws before your offer, and during your inspection, is valuable. Make folks get real with you about the danger/expense of various weirdnesses. Be real with yourself about how handy you are actually capable of being, how long you will be in the place, and how much money you can afford to spend keeping it habitable.
Good luck!
posted by bowtiesarecool at 8:42 AM on December 30, 2019 [2 favorites]
Be aware that they will likely preapprove for a bonkers high number. Do not base your homebuying plans around that number. Instead figure out realistically how much you want to be spending on housing every month and do that math. Set a firm upper cap. Do not let people sway you to spend more money than you feel comfortable spending.
YES YES YES. This cannot be said enough times. Just because you’re approved for an amount does NOT mean that’s the amount you should spend. Figure out your monthly cap. That’s the number. Stick to it.
posted by bookmammal at 8:49 AM on December 30, 2019 [3 favorites]
YES YES YES. This cannot be said enough times. Just because you’re approved for an amount does NOT mean that’s the amount you should spend. Figure out your monthly cap. That’s the number. Stick to it.
posted by bookmammal at 8:49 AM on December 30, 2019 [3 favorites]
jdroth had a great answer recently on How the heck do you afford a down payment for a house? that may be useful. Other good stuff there too of course.
posted by fabius at 9:02 AM on December 30, 2019 [8 favorites]
posted by fabius at 9:02 AM on December 30, 2019 [8 favorites]
When I was looking to do this a few years ago, I thought "What I need is 'Buying a house for dummies'".
As it turns out, that exists.
I bought a Canadian edition but I imagine they are similar. I found it really helpful in stepping through the things I needed to think about in the order I needed to think about them so I didn't feel overwhelmed.
posted by jacquilynne at 9:25 AM on December 30, 2019
As it turns out, that exists.
I bought a Canadian edition but I imagine they are similar. I found it really helpful in stepping through the things I needed to think about in the order I needed to think about them so I didn't feel overwhelmed.
posted by jacquilynne at 9:25 AM on December 30, 2019
- Drive around areas you like, and pop into some open houses on weekend afternoons (12-4 is standard open house time in my area). Great way to meet realtors. If you like a realtor, give them your contact info and go see a couple houses with them. It’s ideal to meet them somewhere and let them drive you between a few houses in their car, as it gives you more time to chat and get a feel for the person.
I found many realtors were pushy and I didn’t feel like they had my best interest at heart, so I disliked most of the ones I met. I felt they were pressuring me and glossing over / outright lying about houses to make a sale (like telling me an unrenovated 100 year old house “might not” have knob and tube wiring, when it 100% unquestionably did).
A house is a big purchase and the realtor’s advice is very important, so shop around for someone you actually trust. If you meet a realtor and don’t like their vibe after going on a drive with them, don’t feel bad saying something like “actually I’m gonna take a break from looking” if the person isn’t a match after one “date”.
- You could also try asking on Facebook if anyone liked their realtor. (You can say “asking for a friend” if you prefer to be more private). I found my AMAZING realtor through a recco from an acquaintance. A neighbourhood FB group might yield good suggestions.
posted by nouvelle-personne at 9:40 AM on December 30, 2019 [1 favorite]
I found many realtors were pushy and I didn’t feel like they had my best interest at heart, so I disliked most of the ones I met. I felt they were pressuring me and glossing over / outright lying about houses to make a sale (like telling me an unrenovated 100 year old house “might not” have knob and tube wiring, when it 100% unquestionably did).
A house is a big purchase and the realtor’s advice is very important, so shop around for someone you actually trust. If you meet a realtor and don’t like their vibe after going on a drive with them, don’t feel bad saying something like “actually I’m gonna take a break from looking” if the person isn’t a match after one “date”.
- You could also try asking on Facebook if anyone liked their realtor. (You can say “asking for a friend” if you prefer to be more private). I found my AMAZING realtor through a recco from an acquaintance. A neighbourhood FB group might yield good suggestions.
posted by nouvelle-personne at 9:40 AM on December 30, 2019 [1 favorite]
There are some great realtors out there and there are some really terrible ones - like hilariously terrible. So finding a good one is important and will make your life so much easier. Without having anybody to ask for personal recommendations, I would go to a bunch of open houses in the area and speak to the realtors there. Ask them questions about the house and pay attention to how much they know about it, or are willing to find out. Ask them about their experience. Ask them about the neighborhood and the market. While the point of an open house is ostensibly to sell the house, realtors also use it as a marketing tool to get new clients, so they should be happy to chat with you about this stuff. But pay attention to if they are also doing their job of trying to sell the house. They should be, but many don't, or don't know specifics about the house, etc. Get all their cards/contact info, although I wouldn't recommend giving them your email or phone number (they often have a sign in list asking for it) because they will try to contact you to get your business. You may not mind that but I don't like it, so you can just sign your name and leave the email/phone number part blank if you want.
Once you've talked to a bunch of realtors in the area (and bonus, seen some houses and what the market looks like), call up or email a few of the ones you liked. Ask them if they have worked with many first-time buyers, how long they've worked in the area, etc. Have a few questions about the process ready, and pay attention to how they answered - did they give you thoughtful answers with good details? Did they brush you off?
And then you can just pick one from there! To be clear I am NOT recommending using a realtor to buy a house if they are also the seller's agent (for example if you wanted to buy one of the open houses you went to). A realtor should be working for you and only you, not the seller as well. I'm just recommending this method to find your realtor.
Most agents DO work as both buyer's and seller's agents, and that can actually be a good question to ask - if you were interested in a house that they were the listing agent on, how would they handle that? Would they recommend you to a colleague? Want to act as both agents (they get the whole commission in that case)?
Some realtors will ask you to sign a contract that you will only work with them. They are trying to protect their time, so that if they show you a bunch of houses, you won't then go use another realtor to buy it. In my experience, the good ones don't ask you to sign anything until you are ready to put in an offer, although this may vary by region. That being said, if you do sign a contract, you can't use another realtor to buy a house they showed you, but you can break the contract to go work with another realtor, you just have to go through the process of doing so and letting them know - specifics may vary by region (local or state laws) and the contract, so make sure to read it!!
I have to disagree with sallybrown above, in my experience the seller pays the commission which the buyer's and seller's agents then split, so you won't be responsible for that. But you will most likely need to pay at least some closing costs. You can negotiate to have the seller pay some of them, but I would be prepared to pay them plus the down payment.
Good luck!
posted by sillysally at 9:41 AM on December 30, 2019 [1 favorite]
Once you've talked to a bunch of realtors in the area (and bonus, seen some houses and what the market looks like), call up or email a few of the ones you liked. Ask them if they have worked with many first-time buyers, how long they've worked in the area, etc. Have a few questions about the process ready, and pay attention to how they answered - did they give you thoughtful answers with good details? Did they brush you off?
And then you can just pick one from there! To be clear I am NOT recommending using a realtor to buy a house if they are also the seller's agent (for example if you wanted to buy one of the open houses you went to). A realtor should be working for you and only you, not the seller as well. I'm just recommending this method to find your realtor.
Most agents DO work as both buyer's and seller's agents, and that can actually be a good question to ask - if you were interested in a house that they were the listing agent on, how would they handle that? Would they recommend you to a colleague? Want to act as both agents (they get the whole commission in that case)?
Some realtors will ask you to sign a contract that you will only work with them. They are trying to protect their time, so that if they show you a bunch of houses, you won't then go use another realtor to buy it. In my experience, the good ones don't ask you to sign anything until you are ready to put in an offer, although this may vary by region. That being said, if you do sign a contract, you can't use another realtor to buy a house they showed you, but you can break the contract to go work with another realtor, you just have to go through the process of doing so and letting them know - specifics may vary by region (local or state laws) and the contract, so make sure to read it!!
I have to disagree with sallybrown above, in my experience the seller pays the commission which the buyer's and seller's agents then split, so you won't be responsible for that. But you will most likely need to pay at least some closing costs. You can negotiate to have the seller pay some of them, but I would be prepared to pay them plus the down payment.
Good luck!
posted by sillysally at 9:41 AM on December 30, 2019 [1 favorite]
I can only nthing the disregard the amount you get preapproved for. Your lender will give you a breakdown of the closing costs. Often with a closing date early in the month so your first mortgage payment will be X. They will then do the closing at the end of the month so your actual payment will be much smaller than X and then add the rest of the payment somewhere else so your final figure will be the same as the first estimate. Sneaky!
posted by Ferrari328 at 10:49 AM on December 30, 2019
posted by Ferrari328 at 10:49 AM on December 30, 2019
When I bought my first home, this free online guide was a sanity-saver. It starts out very basic and doesn't assume a lot of pre-knowledge like other online resources, and then gets more detailed section by section. I consulted it often through the whole process.
posted by muddgirl at 11:47 AM on December 30, 2019 [2 favorites]
posted by muddgirl at 11:47 AM on December 30, 2019 [2 favorites]
As for the specific question of finding a realtor, I found mine through a coworker who had worked with her before and highly recommended her. But you are a little early yet to think about realtors, IMO. They're going to want to know your budget and you have some research to do to figure that out.
posted by muddgirl at 11:49 AM on December 30, 2019
posted by muddgirl at 11:49 AM on December 30, 2019
Just bought a house in the Philly suburbs. We had a recommendation for a realtor from a local friend, but we didn’t really like the realtor, so once we realized we had to do all the work anyway to find a house we liked, we dropped him. I ended up looking at all the listings on Redfin for the area we wanted to buy in for a couple months. When I saw a very promising house come up we set up a series of tours with a Redfin realtor. We were coming from 2 hours away, so we set up 4 showings in one day. The house I had the best vibe from online ended up being the one we offered on and live in now. Redfin gave us a cash back buyers discount of about 1.5k on our 350k purchase. The realtor we worked with through them was totally fine and helped us with all the paperwork aspects of the process.
My biggest tip is to look at listings (many listings) to see what you can get at your budget. Then go to open houses, not necessarily of houses you think you want to buy. The open house is so you can see how the houses portrayal in the listing corresponds to reality. The pictures online are almost always way way nicer than in person. Open houses are also a great place to meet a realtor- they use it as an opportunity to drum up clients, not actually to sell the house.
posted by permiechickie at 12:34 PM on December 30, 2019
My biggest tip is to look at listings (many listings) to see what you can get at your budget. Then go to open houses, not necessarily of houses you think you want to buy. The open house is so you can see how the houses portrayal in the listing corresponds to reality. The pictures online are almost always way way nicer than in person. Open houses are also a great place to meet a realtor- they use it as an opportunity to drum up clients, not actually to sell the house.
posted by permiechickie at 12:34 PM on December 30, 2019
Also, when you are deciding your “budget” for a house, make 3 numbers: your “goal” budget, which is what you actually want to spend, your “max” budget, which is the maximum you actually feel comfortable spending, and your “realtor max” budget in between the previous 2 values, which is the number you tell your realtor is your max. In my experience realtors always try to shop you at or above what you say your maximum budget is.
posted by permiechickie at 12:40 PM on December 30, 2019
posted by permiechickie at 12:40 PM on December 30, 2019
Go to open houses. When you choose a realtor, you are giving them a big chunk of business, do not be shy about making sure you get what you want. I would not sign with a realtor for a while. Shop for a mortgage, costs vary. A credit union may be a good option. Read this thread, especially jdroth's answer.
posted by theora55 at 1:05 PM on December 30, 2019 [1 favorite]
posted by theora55 at 1:05 PM on December 30, 2019 [1 favorite]
All great advice above (and probably below). Additional tip: When you narrow it down to a couple of candidates or neighborhoods, try to find out what it's actually like living there, beyond the open-house walkthrough. Try the commute both to and from work, at normal commute times. Notice if there are intersections where you have to wait forever to turn, traffic choke points, uphill roads nearby where trucks will make loud noises, straight sections where headlights will light up your bedroom at night. Hang out in your car near the house at 11pm, see how loud the neighborhood is. Notice if you feel safe doing so.
posted by Diddly at 2:40 PM on December 30, 2019 [1 favorite]
posted by Diddly at 2:40 PM on December 30, 2019 [1 favorite]
I found first time homebuyer courses great - I think I did two of them just to wrap my head around the process. I kept asking people for realtor recommendations and So Many people didn't like their realtors; it surprised me. Once I found someone who loved their realtor I jumped to work with her and it was the best part of the process. I ended up leaning on her recommendations for professionals, mortgage, bids - almost everything, and I Definitely wouldn't have felt comfortable doing that with the vast majority of other realtors I met through the process. Nine years later when I wanted a bit more space I went back to her, and was again grateful for her professional expertise and general trustworthiness.
Lastly, have a sense for what really matters to you. I thought location didn't matter so much to me the second time I bought, and it's been my biggest regret. But also know that there are Always tradeoffs, so "good enough" is as good as it gets most of the time (and that buyers remorse is super common with real estate, but that if you stick with your fundamentals, you'll probably be ok).
posted by ldthomps at 6:10 PM on December 30, 2019
Lastly, have a sense for what really matters to you. I thought location didn't matter so much to me the second time I bought, and it's been my biggest regret. But also know that there are Always tradeoffs, so "good enough" is as good as it gets most of the time (and that buyers remorse is super common with real estate, but that if you stick with your fundamentals, you'll probably be ok).
posted by ldthomps at 6:10 PM on December 30, 2019
Ask your loan broker to explain her or his rate sheet to you; how your credit score affects your rate; and how many points they will get from your loan.
Learn to use the local police databases so as to be able to view crime stats in the different neighborhoods, talk to insurance people about how your car insurance rates might change, check on what future homeowner's insurance might be, consider your drive to work from where you live, learn to use the assessor's office database to see what the home sold for last; and how much you are paying for it, ... basically research, research, and more research.
Take pictures of all sorts of stuff - crawlspaces, attics, all the places you can't see. Look at the other home in the neighborhood too - I've looked at homes with outside walls so rotted and wafer thin weak a child could push through them. Later; the home gets a layer of stucco; or vinyl siding; and looks 100% - but it remains the same crumbling structure; just with a coat of paint for example.
The more work you do; the less your realtor will have to do; and the better price, closing, and commission bargaining options you have.
posted by Afghan Stan at 8:14 AM on January 1, 2020 [1 favorite]
Learn to use the local police databases so as to be able to view crime stats in the different neighborhoods, talk to insurance people about how your car insurance rates might change, check on what future homeowner's insurance might be, consider your drive to work from where you live, learn to use the assessor's office database to see what the home sold for last; and how much you are paying for it, ... basically research, research, and more research.
Take pictures of all sorts of stuff - crawlspaces, attics, all the places you can't see. Look at the other home in the neighborhood too - I've looked at homes with outside walls so rotted and wafer thin weak a child could push through them. Later; the home gets a layer of stucco; or vinyl siding; and looks 100% - but it remains the same crumbling structure; just with a coat of paint for example.
The more work you do; the less your realtor will have to do; and the better price, closing, and commission bargaining options you have.
posted by Afghan Stan at 8:14 AM on January 1, 2020 [1 favorite]
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posted by ThePinkSuperhero at 7:23 AM on December 30, 2019