first time homebuyer in need of some general advice

[spacejamz]

make sure you get pre-qualified, not pre-approved...there is a big difference...

getting pre-approved is just a rough guess based on how much you make versus your expenses. Typically, this pre-approval amount is more than most can comfortably afford.

when you get pre-qualifed, you have turn in paycheck stubs, W-2's, etc and they will give you a realistic number that you can provided to potential sellers. getting pre-qualified will give you a leg up on other buyers as it confirms that you have your financing already lined up.

 

[Gothgar]

Originally posted by: HeroOfPellinor

Originally posted by: Aharami
found some townhomes that we like from the pics but they're all built in the mid 1980's. Not sure if buying a property built 20 yrs ago is such a good idea...

Um, odds are it was built better than anything built today.

qft

 

[mugs]

Originally posted by: Aharami
my fiance and I want to buy a condo or townhouse together this summer but we're generally clueless about the whole buying process. Since there are a lot of homeowners here who've been thru the process once or more, we thought we'd pose some questions here.

1. Where to start off looking for a condo or townhouse? We live in central NJ and we're looking to buy in somerset or middlesex county. We've been looking at sites like foxtons.com or remax.com, but are there other sites out there that are better?

http://new.gsmls.com/public/
http://www.realtor.com/

2. do we have to hire a Realtor? I know sellers usually go thru realtors to sell their property but do buyers also usually hire their own realtors? Wondering if we're gonna get duped if we dont hire one.

3. How much do realtors charge and who pays for them? Do their cut comes out of the sale of the house like it does for the selling realtor? Or do we have to cut a separate check for our realtor?

You don't have to, but you should, and the seller will pay your realtor's commission.

You'll also need a lawyer; you pay for the lawyer.

4. How do we search for homes that are being sold by owners? Those wont be listed on sites we've been looking in.

I haven't looked at FSBO homes myself, but these sites seem obvious:
http://www.forsalebyowner.com/
http://www.fsbo.com/

5. whats the process for acquiring a mortgage? We both have excellent credit (~800 FICO) so we hope we can get a good interest rate. Do we have to wait till we find a property till we start looking for mortgages? Or can we do both simultaneously? We want to find out what kinda interest rate we would get, but would banks even entertain the idea w/o a firm mortgage amt in hand?

Thats all I can think of for now. But if you want to add anything, please do. Thanks

I doubt the way we did it was typical, but because we weren't in any hurry to buy and we knew our house search would likely take a long time, we didn't get pre-approved until we were ready to make an offer. We already knew how much we could afford. Getting pre-approved didn't take long, the mortgage guy sent us the pre-approval letter via e-mail the same day.

 

[mugs]

Originally posted by: loki8481
just a fair warning about somerset county... stay the hell away from anything near a river. lol.

Hah, yeah.

http://en.wikipedia.org/wiki/April_2007_Nor'easter
http://upload.wikimedia.org/wi...d/Boundbrook041607.jpg

My back yard: http://pics.bbzzdd.com/users/mugs/IMG_1115.JPG

 

[Slew Foot]

1. Wait
2. Use a Real Estate attorney instead of an RE agent and have them with you at all document signings and interactions with the other party.

 

[Modelworks]

Don't trust the realtor.
If your set on buying a certain house, go out and hire your own independent home inspector to go over the house.
Realty agents are known for minimizing things that might cost you a bundle later.

 

[AlienCraft]

Originally posted by: Modelworks
Don't trust the realtor.
If your set on buying a certain house, go out and e your own independent home inspector to go over the house.
Realty agents are known for minimizing things that might cost you a bundle later.

Originally posted by: mugs
You'll also need a lawyer; you pay for the lawyer.

Originally posted by: Slew Foot
1. Wait
2. Use a Real Estate attorney instead of an RE agent and have them with you at all document signings and interactions with the other party.

Agents get paid on the sale, so they will do ANYTHING to get that payday.
An ATTORNEY is paid to represent your interests AGAINST all other's, within the scope of the law.
Better to pay an attorney to tell you the agent's have a colluded deal.

Condo selling agents are often condo BUYING agents, and as such, will have questionable associations within these "communities".
Have the lawyer go over the condo association CCR's for anything stupid. Check their financials for appropriate cash reserves, yet a balanced fee schedule.
Some Condo association memebers are paid, some volunteer, find out which yours is. Professional managment is often a more expensive, yet less volatile situation.
Condo associations are notorious hotbeds of petty bureaucracies (sp?), feather-bedding, and kickback generators.

And that was in hippy dippy Bay Area, God help you in NJ.

 

[Capt Caveman]

Originally posted by: spacejamz
make sure you get pre-qualified, not pre-approved...there is a big difference...

getting pre-approved is just a rough guess based on how much you make versus your expenses. Typically, this pre-approval amount is more than most can comfortably afford.

when you get pre-qualifed, you have turn in paycheck stubs, W-2's, etc and they will give you a realistic number that you can provided to potential sellers. getting pre-qualified will give you a leg up on other buyers as it confirms that you have your financing already lined up.

You have them reversed. Pre-qualified does not verify your sources while Pre-Approved is the more thorough process.

 

[Capt Caveman]

Originally posted by: smack Down

Originally posted by: boomerang

Originally posted by: smack Down
Do you really think now is a good time to buy consider it is just after one of the largest housing bubbles.

Not to speak for the OP, but I'm curious as to your reasoning in regards to that statement.

Are you saying it's better to buy high? I can't imagine a better time to be getting into the housing market than now.

Right now might not be the peak, but you sure as hell are buying high if you buy now.

You really don't have a clue.

 

[Aharami]

update 1 03.31.08
we got together with a realtor that our friend used and recommended and we've been looking at places the last 3 weekends. I think we've seen close to 15 places so far. Well we saw a place that we really liked this past weekend and we want to put an offer down on it.

The place is listed at $320K. We want to use the current market to our fullest advantage and we're thinking of putting our first offer at ~10% below asking - or $285K. Does that seem like a really low ball offer, or is 10% below asking a normal initial offer?

/update 1

 

[Capt Caveman]

Originally posted by: Aharami
update 1 03.31.08
we got together with a realtor that our friend used and recommended and we've been looking at places the last 3 weekends. I think we've seen close to 15 places so far. Well we saw a place that we really liked this past weekend and we want to put an offer down on it.

The place is listed at $320K. We want to use the current market to our fullest advantage and we're thinking of putting our first offer at ~10% below asking - or $285K. Does that seem like a really low ball offer, or is 10% below asking a normal initial offer?

/update 1

Your real estate agent should be able to give you recent comparables that have sold in your area. Your offer could still be high or too low. How does it compare price-wise with other stuff you've checked out? How long has it been on the market?

 

[Aharami]

the property's been on the market since 12/28/2007. Original asking price was 330K.

Some of the other units that sold in this area in the past year
list date.........sell date.......ask price........sell price
11/19/06.......05/26/07......$330K............$322.5K
01/01/07.......04/17/07......$330K............$312K
06/06/07.......07/27/07......$337.5K.........$323.5K
03/15/07.......08/30/07......$340K............$315K
02/06/07.......06/04/07......$350K............$335K <---- model unit, larger than other units
03/25/07.......07/11/07......$380K............$354K

the unit we're looking at is vacant so seller might be desperate to sell
also all other units sold prior were in 06/07, back when the market was much better than now.

Thoughts?

 

[JulesMaximus]

Originally posted by: Aharami
the property's been on the market since 12/28/2007. Original asking price was 330K.

Some of the other units that sold in this area in the past year
list date.........sell date.......ask price........sell price
11/19/06.......05/26/07......$330K............$322.5K
01/01/07.......04/17/07......$330K............$312K
06/06/07.......07/27/07......$337.5K.........$323.5K
03/15/07.......08/30/07......$340K............$315K
02/06/07.......06/04/07......$350K............$335K <---- model unit, larger than other units
03/25/07.......07/11/07......$380K............$354K

the unit we're looking at is vacant so seller might be desperate to sell
also all other units sold prior were in 06/07, back when the market was much better than now.

Thoughts?

A good realtor is the way to go. They know the market and can advise you and help you find what you want in a home. I can have my wife refer you to someone if you like. PM me if you're interested.

 

[QED]

Originally posted by: Aharami
the property's been on the market since 12/28/2007. Original asking price was 330K.

Some of the other units that sold in this area in the past year
list date.........sell date.......ask price........sell price
11/19/06.......05/26/07......$330K............$322.5K
01/01/07.......04/17/07......$330K............$312K
06/06/07.......07/27/07......$337.5K.........$323.5K
03/15/07.......08/30/07......$340K............$315K
02/06/07.......06/04/07......$350K............$335K <---- model unit, larger than other units
03/25/07.......07/11/07......$380K............$354K

the unit we're looking at is vacant so seller might be desperate to sell
also all other units sold prior were in 06/07, back when the market was much better than now.

Thoughts?

Your realtor should give you a good idea on where to start. A 10% reduction right off the bat seems a tad steep, but with today's market if I were a seller I certainly wouldn't turn you away unless you really insulted me, and a 285k offer on a 320k shouldn't be insulting.

 

[SampSon]

There are sites that give you plenty of info on how to buy a house. You should be reading thoes sites.

Your first step is to go to banks and get pre-qualified, if you haven't been pre-qualified you shouldn't be looking at houses.
Use a realtor. While plenty of realtors may seem overpaid, it's their expertice, use it. (ps, I work in the RE business and I hate realtors, but they do serve a purpose).
You hire a realtor do all of the foot work you don't have time for. Lawyers will not do anywhere close to what realtors do.
Make an offer you are comfortable with and be prepared to WALK AWAY.

Your offer wasn't a lowball, it was reasonable. If the seller doesn't like it, then the hell with them.

Go and search google on how to buy a house. I could ramble on for days, but I've had too many beers.

 

[Aharami]

Originally posted by: JulesMaximus

A good realtor is the way to go. They know the market and can advise you and help you find what you want in a home. I can have my wife refer you to someone if you like. PM me if you're interested.

Thanks, but we already have a realtor we're working with. we like her so far

 

[Capt Caveman]

Originally posted by: QED

Originally posted by: Aharami
the property's been on the market since 12/28/2007. Original asking price was 330K.

Some of the other units that sold in this area in the past year
list date.........sell date.......ask price........sell price
11/19/06.......05/26/07......$330K............$322.5K
01/01/07.......04/17/07......$330K............$312K
06/06/07.......07/27/07......$337.5K.........$323.5K
03/15/07.......08/30/07......$340K............$315K
02/06/07.......06/04/07......$350K............$335K <---- model unit, larger than other units
03/25/07.......07/11/07......$380K............$354K

the unit we're looking at is vacant so seller might be desperate to sell
also all other units sold prior were in 06/07, back when the market was much better than now.

Thoughts?

Your realtor should give you a good idea on where to start. A 10% reduction right off the bat seems a tad steep, but with today's market if I were a seller I certainly wouldn't turn you away unless you really insulted me, and a 285k offer on a 320k shouldn't be insulting.

Based on the fact that it's vacant and been on the market for 90 days, I think it's a good initial offer. Expect a counter-offer and counter back if you see fit.

Good luck!

 

[Aharami]

Originally posted by: QED
Your realtor should give you a good idea on where to start. A 10% reduction right off the bat seems a tad steep, but with today's market if I were a seller I certainly wouldn't turn you away unless you really insulted me, and a 285k offer on a 320k shouldn't be insulting.

I dont understand that statement. Your initial offer should be lower than what you're actually comfortable with, no? It's not like you put in an initial offer of 5% and then later reduce that to 10%. We're comfortable with 300K and thus our initial offer is lower than that.

 

[Aharami]

Originally posted by: SampSon
There are sites that give you plenty of info on how to buy a house. You should be reading thoes sites.

Your first step is to go to banks and get pre-qualified, if you haven't been pre-qualified you shouldn't be looking at houses.
Use a realtor. While plenty of realtors may seem overpaid, it's their expertice, use it. (ps, I work in the RE business and I hate realtors, but they do serve a purpose).
You hire a realtor do all of the foot work you don't have time for. Lawyers will not do anywhere close to what realtors do.
Make an offer you are comfortable with and be prepared to WALK AWAY.

Your offer wasn't a lowball, it was reasonable. If the seller doesn't like it, then the hell with them.

Go and search google on how to buy a house. I could ramble on for days, but I've had too many beers.

ah yea, we already got pre-approved by a bank

 

[Capt Caveman]

Originally posted by: Aharami

Originally posted by: QED
Your realtor should give you a good idea on where to start. A 10% reduction right off the bat seems a tad steep, but with today's market if I were a seller I certainly wouldn't turn you away unless you really insulted me, and a 285k offer on a 320k shouldn't be insulting.

I dont understand that statement. Your initial offer should be lower than what you're actually comfortable with, no? It's not like you put in an initial offer of 5% and then later reduce that to 10%. We're comfortable with 300K and thus our initial offer is lower than that.

Depends on the market. In a hot market where there might be multiple offers, your first offer maybe your only offer. In this current market, you're thinking right.

 

[SampSon]

Originally posted by: Aharami

Originally posted by: SampSon
There are sites that give you plenty of info on how to buy a house. You should be reading thoes sites.

Your first step is to go to banks and get pre-qualified, if you haven't been pre-qualified you shouldn't be looking at houses.
Use a realtor. While plenty of realtors may seem overpaid, it's their expertice, use it. (ps, I work in the RE business and I hate realtors, but they do serve a purpose).
You hire a realtor do all of the foot work you don't have time for. Lawyers will not do anywhere close to what realtors do.
Make an offer you are comfortable with and be prepared to WALK AWAY.

Your offer wasn't a lowball, it was reasonable. If the seller doesn't like it, then the hell with them.

Go and search google on how to buy a house. I could ramble on for days, but I've had too many beers.

ah yea, we already got pre-approved by a bank

Then you're halfway there.

Get a realtor, lawyer and a home inspector (if you really feel the need).

 

[QED]

Originally posted by: Aharami

Originally posted by: QED
Your realtor should give you a good idea on where to start. A 10% reduction right off the bat seems a tad steep, but with today's market if I were a seller I certainly wouldn't turn you away unless you really insulted me, and a 285k offer on a 320k shouldn't be insulting.

I dont understand that statement. Your initial offer should be lower than what you're actually comfortable with, no? It's not like you put in an initial offer of 5% and then later reduce that to 10%. We're comfortable with 300K and thus our initial offer is lower than that.

I never said to offer more than what you're comfortable with. I was merely commenting that a 10% offer might seem steep, but with today's market it should be par for the course in most markets. All I know is, when I did have my real estate license (a few years ago), a 10% reduction off of the asking price was considered quite steep.

Offer what you are comfortable with, and if the seller balks just know there are hundreds of other properties out there for you. One of the things I used to tell all of my clients is that one of the biggest mistakes a buyer can make is to convince themselves that a particular home is the only possible home for them.

 

[Aharami]

wow. was digging thru NJ tax records and found out that this is the original owner and they paid 149K back in 1999. Crazy profit even in a crappy market

 

[Elbryn]

honestly, i'd say this is the time to be cheap. you as a buyer have the advantage and it's time to get the best deal you can. whats the worst thing that can happen? you take your money, hang onto it a little longer and find another house? dont get locked into a particular house, trust me, there are plenty more out there to find that will fit your requirements. lowballem. i'd say throw out a 275k offer and see what happens.
heh in the fabulous art of relinking here
takem for all you can, you've got the negotiating leverage here.

 

[spacejamz]

Originally posted by: Aharami

Originally posted by: SampSon
There are sites that give you plenty of info on how to buy a house. You should be reading thoes sites.

Your first step is to go to banks and get pre-qualified, if you haven't been pre-qualified you shouldn't be looking at houses.
Use a realtor. While plenty of realtors may seem overpaid, it's their expertice, use it. (ps, I work in the RE business and I hate realtors, but they do serve a purpose).
You hire a realtor do all of the foot work you don't have time for. Lawyers will not do anywhere close to what realtors do.
Make an offer you are comfortable with and be prepared to WALK AWAY.

Your offer wasn't a lowball, it was reasonable. If the seller doesn't like it, then the hell with them.

Go and search google on how to buy a house. I could ramble on for days, but I've had too many beers.

ah yea, we already got pre-approved by a bank

did you get pre-approved or pre-qualified? did you turn in W-2's, paycheck stubs, did the lender pull your credit report, etc? If they didn't do any of this, you need to do that ASAP to see how much the lender will actually loan you...