Question about purchasing our first home..

How does this work? I know, silly question. But honestly, I'm really not sure. Do I just walk into an agency and ask for someone to help us? Do we call the phone numbers on the signs of the houses we like? Do we need an agent to help us? And if so, how do they get paid? Do we pay them out of pocket or does it come out of the mortgage? TIA!!

Re: Question about purchasing our first home..

If you are working with an agent as a BUYER -- meaning you are BUYING the home, then typically the agent gets paid from the sale of the home. The seller who is selling their house you are buying has an agent -- the listing agent on the home -- and that agent gets paid, say, 4% -- then, they split the 4% with your agent who is representing you.

As a buyer, having an agent is a win/win -- there are even some on here that come highly recommended, they are under the business directory. And it won't cost you anything so you might as well utilize them. They come in handy with negotiating and acting as a liaison between the people who own the home you want to buy and their agent who is representing them.

You will go over your wants and desires with whatever agent you work with.

Hope that helps!

Question about purchasing our first home..

First thing we did was get pre-approved for a mortgage. From there we found a broker based on recommendations. Their commission is shared by the seller's agent which is paid by the seller.

Question about purchasing our first home..

Awesome!!! Thanks!!!

Re: Question about purchasing our first home..

We found a realtor through recommendations of people we knew who had used them and had a good experience. We contacted the realtor and set up a day to meet with them, got pre-approved, and started seeing houses that we liked.

As PP mentioned, as a buyer you will not pay the realtor. They make their money from the seller's realtor (the seller's realtor splits their commission with the buyer's agent).

You can also meet a realtor through open houses. When you go to open houses a lot of times the representing realtor there will talk to you. If you like them, give them a call later to discuss your needs and see if they are a good fit.

Re: Question about purchasing our first home..

You don't need a realtor to go to open houses?

Re: Question about purchasing our first home..

Message edited 6/10/2015 3:49:53 PM.

Re: Question about purchasing our first home..

Question about purchasing our first home..

Thanks so much for all the info everyone!!!!!

Question about purchasing our first home..

If you are looking in a particular area, try to find an agent in the area.
You can go look at places on your own, but it's better to have an agent so then the sellers agent contacts your agent rather than you directly. Also you don't need to sign into places, you can just give your agents card at open houses.
If you don't have anyone in mind, go to a few open houses and see if anyone seems like you would want to work with them.

Question about purchasing our first home..

I would get the pre-approval first- many agents won't take you out to look if you don't have one. Once you have the pre-approval, you can find an agent.

Question about purchasing our first home..

We met with someone at Continental Home Loans in Melville and he told us they dont like to do pre-approvals prior to finding a property. He said that it makes the agents show you houses only on the high end of the pre-approval, even if your looking to spend less. Does that sound right?

Re: Question about purchasing our first home..

Re: Question about purchasing our first home..

Re: Question about purchasing our first home..

No that doesn't sound right at all. We got pre-approved for $520,000 but we knew our max budget was $485,000. We told our agent that we only wanted to spend 485 and that's what he showed us.

If you know of a REA that you want to use, I would honestly start there and they usually can direct you to a mortgage broker that will do your pre-approval. We didn't get pre-approved until we met with a realtor.

Message edited 6/11/2015 2:25:35 PM.

Re: Question about purchasing our first home..

Question about purchasing our first home..

He told us that we would have no problem being approved. He did a mockup of what a mortgage would look like at a certain price point. Worst case scenario type numbers. It seemed high for the numbers he used. $200k for the house. 8500 in taxes. I believe 3.75% interest and a 15k sellers concession with approx 10k oop. He told us the payment would be about 2k per month. DH was making alot less money then but we would still like to be around 2k or under. Im thinking something is missing because that payment sounds high for the price of the house. Is it just me being naive?

Re: Question about purchasing our first home..

Re: Question about purchasing our first home..

We found our agent at an open house, we bid on the house and didn't get it, but we let her show us houses going forward since she was familiar with the area and we thought she was very nice/knowledgeable. We previously worked with a guy who we felt was very pushy and just wanted to put our highest bid in for every house we saw. Anyway we didn't pay the realtor, she split the commission with the seller's agent. But she was super nice and gave us a $25 gc to Lowes at our closing...

As far as pre-approval, you can get pre approved for a certain amount but that doesn't mean you have to buy a house for that much.

Question about purchasing our first home..

First, you need to know what your payments can realistically be. Before we bought our first house, my math teacher DH actually made a spreadsheet in Excel of our income and expenses. From that, we deducted major bills: my student loan, his car payments, etc. We asked a local friend for the average costs of her utilities so we could factor that in, too. We also subtracted an amount of money we'd like to have for fun and money we'd like to be able to save on a regular basis. And the leftover # was the payment we thought we could make.

From there, we got pre-approved. Our credit is good and our income is solidly middle class, and were pre-approved for much more than what we wanted to spend. (Important to note that a pre-approval does NOT tell you what you can afford; it tells you how much the bank is willing to lend you). 10 years ago, it was easy to buy a house with a minimal downpayment. Now, now so much. Co-ops on LI typically ask for 20% as a downpayment. Condos and houses don't always have these requirements, but the price tag is typically higher.

How much do you have saved? You need to factor in the DP, closing costs, which will be a % of the sale price and taxes, have money in reserves. (Banks want you to have an "Oh, $hit!" fund, just in case). There are also moving expenses, and you're probably going to want to do things to the home you buy, and that costs money too.

After getting pre-approved, we were referred to a buyer's agent that used to work with FIL (a former REA that had moved out of state). She took us around to houses, negotiated for us, referred us to a home inspector, and really walked us through the process. It helped, especially considering that we were first-timers.

I'm not sure where you are, but we used Bethpage Federal Credit Union twice and are very happy with them. Ask for Tara Sacco-Roman.

Question about purchasing our first home..

We're well aware of what we want/can spend monthly. I think my biggest concern is that we are being given incorrect information by the mortgage banker right now. I've been emailing back and forth with an agent this morning from Remax because I inquired about a property. She seems very willing to help. I really appreciate all the help everyone!

Question about purchasing our first home..

That's very odd that continental told you that. They pre-approved us before we found our house. When we decided to put an offer in, our agent texted our loan officer and he had a letter in about 10 minutes. He put the amount of the offer on the letter. We were approved for significantly more, but no way were we advertising that.

For our agent, we used Beth Lowe (a vendor on here). She was great and had no problem telling us "you're not buying this" when we saw anything that raised any red flags. Christine Braun is another vendor on LIF and she seems extremely helpful and knowledgeable.

Good luck!!!

Re: Question about purchasing our first home..

Re: Question about purchasing our first home..

Re: Question about purchasing our first home..

As a buyer, especially a first-time buyer, it's really to your benefit to have an agent who is dedicated to working with you, knows your wants/needs, and can help you navigate an increasingly competitive market. If you have a buyer's agent representing you, you have someone to help you figure out the pros/cons of any house you see, the value of the home you decide you want to make an offer on (and an offer strategy), and then you have an advocate on your side to guide you through the rest of the process (the home inspection, contracts, mortgage process, etc.). When I work as a buyer's agent, I consider myself the "project manager" for the entire transaction for my buyer. Going to each listing agent for every house can be a logistical nightmare for a buyer AND that listing agent is representing the seller's best interest, not yours. Her only job is to get the best deal for her seller. NY state is very "buyer beware" in terms of real estate laws (required disclosures and that type of thing). So you really want representation.

[I used a buyer's agent when I bought my home, before I was in real estate, and I was a savvy buyer and an attorney, but I still felt I needed a buyer's agent.]

I think a good first step for you would be to set up a consultation with an agent. I typically like to sit down with a potential client for about 45 minutes to an hour to discuss (i) what the buyer's goals, needs, and situation is in terms of what they want in a house, where they want to look, when they want to buy, (ii) tell the buyer a bit about me and how I work, and (iii) go over the entire process from soup to nuts, which would address many of the questions you are raising, including financing/preapprovals, how agents get paid, whether you can go to an open house, etc.

If you would be interested in setting up a consultation with me, we could do that -- no pressure or obligation, just a chance for you to get information. I have worked with many buyers on this site and if you search my name on here, you will find reviews. In the business directory, under "Real Estate" you will find my bio. You can also go to my Facebook Page - "Christine Braun Real Estate" for more information and client testimonials. I'm a full-time agentI am based in N. Bellmore, but I work all over Nassau and Suffolk. My direct contact info is [email protected] or (516) 587-7618.

As far as questions raised - Yes, a buyer's agent is normally paid out of the seller's sales proceeds (not out of pocket for the buyer).

Re: the preapproval - That is a MUST before you seriously start looking at homes. You need to know what you can afford, and also what type of loan you are going to get, how much you will put down, whether you will finance your closing costs or pay cash for them... and you need to understand all of the pros/cons associated with your options. A good loan officer will guide you through this. (When you make an offer, it's not just about the number, but ALL terms -- down payment, loan type, etc.)

I don't understand where the loan officer is coming from at Continental, saying wait until you find a property. First of all, a good real estate agent will respect your budget. So if you are approved for $500K but only want to spend low $400Ks, they will help you achieve that. I encounter this all the time. Or, if you are really concerned, you can tell the loan officer that even though you are approved for x amount, please generate the letter for a lower amount that reflects your budget. No biggie. Furthermore, if you wait to find "the house" you want to make an offer on and then start the preapproval process, you will likely lose out. Many houses are now drawing multiple offers and getting offers day one on the market. So if you see a house on a Saturday, and can't get a hold of your loan officer until Monday, the house may be gone by then. Getting the financing piece squared away is the most important thing to do, for your own knowledge, and for being offer-ready!

Re: open houses. Yes, anyone can go in, and it's certainly a good way to get a feel for homes in your desired price point and location when you are in the casual looking stage. BUT - if you have a buyer's agent, and go to an open house without them, you should tell the agent at the open house that you are working with someone (I give my clients a stack of my business cards that they can give out.) Sometimes, if I know my buyer client is attending an open house without me, I call the other agent as a courtesy to let them know. The thing is - a buyer has the right to have anyone they want make an offer on their behalf. They are not legally stuck using the listing agent just because they went to the open house. BUT if you don't disclose you have an agent, the listing agent will assume you don't and will go through them. And yes, they often will "get mad" that they showed the house to a buyer who never mentioned they had an agent, and now is bringing one in after the fact. While you can still then use your agent to make an offer, as a practical matter, it really doesn't help the buyer in negotiations to have pissed off the listing agent, lol. So better to be upfront!

Hope this helps! Feel free to contact me anytime with other questions, or maybe schedule a face-to-face meeting!