Question: Hello, I’m seeking to buy a home within the next year. I’ve gotten great > > advice, and I was wondering if anyone could add any additional tips. I’m > > trying to understand the best things to do and the worst things to do. > > Furthermore, it seems that everyone says I should first understand > > exactly what I want. I’m a 24 year old first time buyer looking for a > > house to own for three to five years and then either sell or rent out to > > others. My questions include:
> > – What percentage should I put down?
> Ideal is 20% because then you avoid paying PMI (Private Mortgage Insurance) > which is required by most lenders on loans with less than 20% down. PMI is > a hefty monthly charge and a pain in the rear. So ideal is 20%. That said, > few first time buyers put 20% down (of those I know personally). We put > about 2% down on our first house (we qualified for an FHA loan). We put 10% > down on our second house (and we’re paying PMI). Lenders have all kinds of > programs for first time buyers and you can do it with very little cash up > front.
> > – Should I use a realtor?
> Yup. It’s the easiest way to see listings and get in to view homes. In > most areas of the country (that I’m aware of) the realtor that helps you > recieves his/her commission from the seller (that is, the listing agent > splits their commission with the agent that brought in the buyer). So… > legally, both realtors are actually working for the seller and representing > the seller’s interests, not yours. In some areas, there are buyers agency > agreements where you can sign a contract with a buyer’s agent and that > person represents you. In my 2 experiences, this person was still paid by > the seller. In some areas of the country, I’ve heard that the buyer pays > the buyer’s agent directly. Local customs and laws vary.
> > – What’s the difference between a buyers realtor and an owners realtor?
> See above. The listing agent is the person the seller has contracted with > who is marketing the home and listing it on the MLS among other things. A > buyer’s agent is someone you contract with to show you available homes in > your price range. Unless otherwise stated in the contract you sign, the > agent that drives you around showing you houses is still representing the > seller. Buyer beware.
> > – What are some good realtors in Houston? > > – Where are the best places to live in Houston in regards to saftey, > > appreciation, and quietness?
> No idea
> > – Should I look at new homes or previously > > owned homes?
> Generally, you get more for your money with previously-owned homes. Unless > you are handy or have money to spend on fix-ups, look for previously-owned > homes that have been updated (especially systems, appliances, etc) and are > in good condition — pay for a home inspection and include this as a > contingency on any offers you make.
> – When should I get pre-qualified for a loan?
> You can pre-qualify yourself at a zillion sites on the internet, or call any > lender in the phone book and they’ll do it over the phone. > Pre-qualification just gives you a rough idea of what you will qualify for. > You should get *pre-approved* within three months of purchasing a home. A > pre-approval means a lender has actually checked your credit and approved > you for a home loan. It makes your offers stronger.
> > – How many bedrooms should I get (I’ll be the only one living there but I > > hear that a one or two bedroom house is hard to sell)?
> Generally speaking, a 3 bedroom, 2 bath home (or more) is the easiest to > sell in most markets. Since you want to sell it in a few years, buy in a > popular neighborhood that is convenient to stores and for commuting. Don’t > buy a home on a main road, as these tend to be more difficult to sell.
> > – What kinds of inspection should I have done on the house before buying > it?
> Get a home inspection. I believe a termite inspection is required in most > states.
> > Thanks for all of you help.
Answer: Great Response!!!! Just wanted to clarify a few points. Generally, the only one who pays at closing is the buyer so the buyer through their purchase pays both the selling and listing agent or buyer’s and owner’s agent. Second, be careful pre qualifying over the internet or with too many mortgage brokers – aside from insecure sites, there is the problem that every time someone makes an inquiry it impacts your credit score which makes your application less attractive better to get a copy of your credit report and shop it to the mortgage companies or use the one suggested by your real estate salesperson. 20% down is great, if you have it. But first time home buyer programs are even better. You get a lower interest rate in most cases AND depending on who does your mortgages, you can later pay enough of the mortgage to get the PMI taken off (get this in writing) also, you can take the money and invest it, depending on your financial situation (consult tax attorney or CPA). Need a good realtor!! I can help. Give me information about what you want and the city and I will interview real estate agents on your behalf (the agent receiving the referral pays me a referral fee, but only if YOU agree to use their services AND they close on a property for you).
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