Tips on buying a house

[Betty]

Originally Posted by scaeagles

It is a buyers market, more so in CA than elsewhere, I would presume. There are so few buyers out there that if you demonstrate even a small amount of patience you should get them to meet your offer rather than going back and forth with counter offers.

Wait wait wait. I would rather not have to - but I think you're right. Even more so considering there should be a wave of forclosures coming up here pretty quickly... they had a moratorium that will be over?

It feels wrong to take glee in others misfortune - but at the same time - I didn't go out and spend $350,000 on a house worth $100,000.

[Strangler Lewis]

I would imagine that the State of California or some state or local board of realtors has some helpful online publication about everything you need to think about and do in the process. The big agencies probably do as well.

How annoying, there's a bee in the garage. That wasn't in the disclosures.

[Morrigoon]

Originally Posted by Moonliner

Realtors work for the seller not for you.

That's a misconception. Yes, we're paid out of the commission that the seller agreed to pay when they listed the house with a listing agent, but make no mistake, your realtor is there to represent YOU.

However, this makes one very good point - don't use the listing agent to double-side the deal thinking that somehow you'll get a better deal out of it. Use your own agent that you chose for yourself, because you want someone who can fight your battle for you. An agent double-siding a deal is less of a negotiator and more of a mediator/facilitator, because they have to treat both sides equally.

There are some very good prices out that way, so you shouldn't have too hard a time finding something you like.

The inspection is written into the standard CAR forms, it's one of the standard contingencies of the deal (eg: your offer is contingent upon satisfactory results from the inspection). When you do the inspection, the inspector will come back to you with a report on the things he found wrong. This becomes a 2nd point for negotiation, where you negotiate on things the seller will or will not fix, or amount they might be willing to negotiate on price in lieu of fixing. Sellers will not fix everything, pick your battles. Decide what's important.

Do not be afraid to walk away from a deal.

Here's something that is an option on the standard CAR form, but not many agents use: be sure your agent checks off the box that says, "The loan contingency will remain in effect until loan is funded". That is a huge out for you, should anything go wrong with your lender.

Definitely ask seller to pay for a home warranty, with the air conditioning upgrade. It's a small concession for them to make, and gives both you and the seller some peace of mind. We even renewed our home warranty up until this year, and only dropped it because they've already had to come and fix all the major stuff that we were worried about fixing (got a new heater and garbage disposal, stuff you'd rather not pay for out of pocket!)

You'll get more concessions out of a regular seller than you will out of a bank. That's not to say don't buy bank-owned properties, because let's face it, those are some of the better deals out there right now, just set your expectations of negotiation accordingly. For example, banks probably won't fix much, if anything, following the inspection. So if you don't like the results of the inspection, be mentally prepared that you might have to walk from the deal.

[Betty]

Printing up Morigoons post for my info folder. Great tips!

[Betty]

Originally Posted by Morrigoon

Here's something that is an option on the standard CAR form, but not many agents use: be sure your agent checks off the box that says, "The loan contingency will remain in effect until loan is funded". That is a huge out for you, should anything go wrong with your lender.

What does this mean?

[Morrigoon]

It's a checkbox on the standard CAR purchase contract. Just make sure your realtor marks off that box.

Basically, it means that if you don't get your loan, you don't have to buy the house anyway. See, if you had a normal loan contingency, then after you've shown that you're approved for a loan that meets the terms you set forth on your offer contract, you would have to remove the loan contingency. Let's say you do that, and all looks good, then suddenly in the last week or so of your escrow, something happens where the bank now doesn't want to give you the loan, or changes the loan terms drastically (don't think it doesn't happen, it does!)... you end up in a bit of a pinch because now you're obligated to go through with the purchase, and you have to either make something work out with your current lender, or find another lender.

Oh, that's good advice too... get approved by another lender... that way, if anything does change last minute, you have a lot more options, as you're further along in the loan process than you would be if you had to scramble at the last minute to get a new lender. Also keeps lenders on their toes in giving you the best deal they can. Make sure lender #2 knows you already have one pre-approval and that they're having to find a loan that makes them competitive with that. I can give you a few names, if you want.

[Moonliner]

Originally Posted by Morrigoon

That's a misconception. Yes, we're paid out of the commission that the seller agreed to pay when they listed the house with a listing agent, but make no mistake, your realtor is there to represent YOU.

So if the buyer was to make a comment like, 'Gee I like this house, I'm going to offer 5k less than asking but I'd pay asking price if I need to"

Would you or would you not be legally obligated to pass that info onto the seller?

[Ghoulish Delight]

The agent would not.

[Morrigoon]

Moonie: if the agent you're talking about is the buyer's agent, absolutely not.

If the agent is double-siding the deal, then they might not tell the seller "hey, they said they'd be willing to pay more", but they might advise their seller to counter-offer. That's why it's a good idea to bring your own agent to the deal.

Oh jeez, this reminds me of another bit of advice:

DO NOT TALK TO THE LISTING AGENT! I mean, make nicey-nice if you run into them, as you might at an open house if the agent is sitting their own open house (sometimes agents looking to pick up clients will sit open houses for other agents, that's different), or if you and your agent visit a property where the listing agent has to let you in. But don't tell them anything about your moving circumstances, finances, etc. Remember to keep your cards close. Every bit of information will be considered during negotiations.

For example, if you were relocating to an area, and you had a job starting in 3 weeks, and you made the mistake of revealing to the listing agent that you were in a real hurry to close for that reason... don't think for a moment that that wouldn't come into play during the offer/counteroffer stage. They know you need to find a place, and soon, and that they can negotiate harder because you don't have much time to look at other properties. All that agent needs to know is that you'd like a 2-week escrow please, and the why of it is your business.

If you've picked a buyer's agent that you're going to work with, and you still visit open houses, as your agent for a stack of their cards. When you go into open houses, the agent sitting there most likely wants to pick you up as a buyer client. Maybe they're the listing agent, maybe not, and certainly while you're in the market for an agent, it's worth talking to them, you might like them. But it gets annoying after a while when agents are trying to poach you from whoever you've chosen, so once you have someone, you can just say, you have an agent, here's their card if they want to follow up.

One other thing: As a courtesy, if you work closely with one agent for a while, and they've been taking you out to look at houses, etc., then you decide you'd like to check out new construction... please please tell your agent and let them take you there the first time you visit. If your agent is not with you the first time you visit new construction, then the builder cuts them out of the deal if you end up buying that, and you basically rob your agent of the time they've spent with you. They only get a pittance from the builder even if they bring you to them, but at least it compensates them for their time and gas if you've been working closely with them. It really really sucks when you put weeks of work in for someone and they go to new homes behind your back and you get cut out of the deal.

[3894]

Originally Posted by Betty

So - open houses I can just show up for... but most listings I need to have the realtor make an appt. and stuff?

Exactly.