So hopefully we will be buying out first home by the time the summer is over. I have a "buyer's agent" that it all started with..years ago dh, and I were both young and dumb and did some bad things with our credit. Well I've been seriously attacking that for the past 3 yrs, and finally have it good enough to qualify for a small home mortgage. We also just found out we qualify for a 1st time home buyers grant through the city! So it started with getting a flyer in the mail from a realtor that said, "I just sold another home, and I can sell yours too.." well the agent is actually someone I work with, so I emailed her asking. She put me in touch with a lender, and we've been working on it since. (About 2 mos ago). Wed we are going to look at our first house with the agent. How exactly do things work..how does the buyers agent get paid? Should I be expecting a bill? Will she get a portion of sales? I have no idea how things were. I originally emailed her just out of curiousity, actually telling her we wouldn't be seriously looking until next year, but with her prompting we are actively looking now. I just don't want to be surprised with anything. Also she has been really nice to me so far, and I intend on getting her a gift (basket of some sort) when/if everything happens, is that appropriate, and she can accept it right?

Also another mutal friend between us was with the agent this weekend, and she told her that I shouldn't have called XYZ realtor last week asking if a house was still open because it's not proper procedure. I was just trying to save hassle for agent thinking it might already be under contract. Why is that so wrong?

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If you really want something in this life, you have to work for it. Now, quiet! The're about to announce the lottery numbers... - Homer Simpson

I am pretty sure the seller's pay all agent costs, but, could be wrong.

IMO, the only think I see as "wrong" about you calling another agent to see if a house is still available is that it kind of sort of in a roundabout way....sends the signal to that agent that you do not already have an agent. Your agent is working for a commission, let them work for it. Now, if you are not able to get ahold of your agent, then I see no harm in calling the listing house in question, and letting them know you already have an agent, but, just wanted to know if the house was still available.

Now, if you are continually unable to get ahold of your agent, it may be time to get a new one. We did that a few times!!!

I would suggest you pull a free copy of your credit report, and get your FICO score (that will cost a little) to see where you stand credit wise, so the lender doesn't try to pull anything on you.

How exciting. Good Luck to you!!!

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Doing the right thing isn't always the same as doing the easy thing.

You shouldn't be paying any agents costs, the agents usually somehow split the commission, which the seller pays for. Also, agents are pretty much "on call" all the time so you should feel free to call your agent if there is a house you want to see.

If things are moving too fast (I think you said that you weren't originally planning on buying this early, you were going to wait a little longer) don't let your agent push you into buying if you aren't ready. The beauty of a being a buyer instead of a seller is that you don't sign any contracts with the agent saying that you will purchase a house using them. Buying a house is a big decision and I have dealt with a few agents who have been very pushy ("you need to make an offer tonight before someone else puts in an offer on the house then you will lose the house"). I would recommend that if you do find a house that you like, you would wait 24 hours before submitting an offer, just to give yourself time to think about it and not get swept up in the spur of the moment.

Good luck!!!

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I've had a Foreman Grill for about six years. I've done about 85% of my cooking on it, but I've never burnt myself. Probably because I don't use it as a pillow.

I found this info online

Buyer's Agent
A real estate agent who has signed an agreement to work in the best interests of a buyer.The agreement is a contract, and by signing it you are (usually) committing to work exclusively with that agent. Agreements can remain in force for any period of time you both agree to, even as little as one day.

A Buyer Agency Agreement doesn't necessarily mean you must pay a fee to the agent. They are usually paid a portion of the seller's commission fees at closing. However, a contract may state you will pay the agent a fee if you purchase a For Sale By Owner home, so discuss that scenario with your agent before signing.

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I would run a credit check like Allinaugust suggested. We will be buying our first home next year too. It kinda scary for me We qualified for a VA Loan & I still want to have enough money set aside incase sometime goes wrong and we have unexpected cost we didn't caluate in.. I have known 2 people who lost money who jump in it too soon and wasn't prepared for unexpected cost. " Losing their earnest money"

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Angels may not come when you call them, but they'll always be there when you need them.

Be sure to take your time and find something you love. Don't let an agent push you into anything. If you see something you like, but you aren't sure....ask to sched a second walk through. If you saw it in the morning, make sure you ask for an appointment at dusk....might see it in a whole new light (no pun intended).

You are welcome to give your agent a gift, but it isn't expected.

I recently bought a house, and looked at over 50 of them before we found the right one (17 in one day!).

Check out the VA web-site, lots of great info. on there.

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Doing the right thing isn't always the same as doing the easy thing.

All excellent advice above.

One thing as a fist time home buyer, please get ALL inspections!! Even if they are expensive, get them anyway!

A nice thing to do for a realtor is to take them to dinner or lunch on a day you are out looking at houses. I have a very close friend who is a realtor and they just don't have much time to make dinner some nights if they are running all over the place.

And like Allinaugust said if you DON'T like your realtor, get a new one! There are a lot of great ones out there and there are some not so great. But once you find one you are working with, let everyone know when you call talk about a house. If you stop at an open house somewhere, before the selling agent makes the pitch, let her know you are already working with someone or sign in using your realtor's name.

Buying is SO much fun, actually the shopping part is so much fun! Please ask questions, lots of them, of your realtor and on here, we are here to help!

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"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

Thanks all! When I got a message back from the real estate agency about the house, I returned the message stating that I was interested, and I would have my agent get in touch to set something up. I made sure to state that so they knew. I also told my agent that, my husband thinks that maybe she was just reacting to the thought that we might not use her in purchasing a house or something?? At any rate now I know. I really do like her, she is really friendly, and has not been pushy at all actually! I was in a rush to look at this one house, because the last house we were to look at it just felt like things were dragging with my agent to set something up to look at it, but reality was it was only like a day (which can seem like forever sometimes!), and then it was already under contract. So on Friday when I emailed my agent to ask her to set something up, she had the day off from the place we both work at, and apparently she emailed me from her real estate company site, so we could set up looking at the property over the weekend, and gave me her home #, but work must have blocked it because I never got it.

Also we actually are not being rushed at all in buying, I just wasn't sure that our credit was well enough to actually get anything, I hadn't looked at it in well over 6 mos before all this started..I've been keeping very good track of our credit, and things are looking good.

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If you really want something in this life, you have to work for it. Now, quiet! The're about to announce the lottery numbers... - Homer Simpson

I so agree with this.

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l/ l/ l/
Dont go through life,
GROW through life

Real eyes...realize...real lies.

My advice - which I have a difficult time following myself - is to not get too attached to any one house. Try to remember that if there's one that's great, there's more....once you go head over heels about a place, your bargaining power is gone...

Oh...and location, location, location! Many things can be fixed, but you can't fix where a house is set.

Good luck with house hunting and enjoy it!

cj/

That is so true! Once you have your heart set on a house, you are so much more likely to go higher in an offer too than maybe you really should. Set a price and don't go over it, if it's meant to be it will be.

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"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

I agree that the most important thing is a home inspection. I'm not sure who pays for this or if you split the cost with the seller. The seller is the one who pays the realtor fees as a % of the sale of the house. Just because you qualify to borrow a certain amount of money doesn't really mean you can really afford the payments. You don't want to get a house and then find that everything you make goes into the house payment. Good luck, and take your time. If your area is anything like ours it is a buyers market right now. Houses are taking a long time to sell and prices are coming down a little.

Make sure you get a regular inspection and a termite inspection (some states don't require a termite inspection and some do). Also, drive by the property at night on a Friday or Saturday night, might look ok during the daytime, but could be a party or drug or gang area at night.

Thanks..We have our VA Certificate just waiting to take the big plunge ...for 3 years now

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Angels may not come when you call them, but they'll always be there when you need them.

This is going to be the most exciting and stressful time of your life!! I was a real estate agent for a few years and I can tell ya a couple of things.

FIRST AND FOREMOST: You must get a private home inspection...even if you have city inspections and/or a VA inspection. The cost will typically range from $200-$500. This inspection would take place after an offer is accepted. You need your agent to write up the purchase agreement contingent on the home inspection. When we bought our first home we declined a private inspection because we had the false sense of security because we had a city inspection and a VA inspection. They found no major faults in the house. In the end it was a money pit that had major hidden defects that we spent tons of money we did not have, ended up in court with the seller, won the judgement, but never got paid. By having the sale contingent on your home inspection you have bargaining power. If the defects are found to be minor you have the option of re-negotiating the purchase price. If the defects are found to be major you have the option of backing out all together without losing your deposit.

2. Deposits-Many realtors will tell you to leave deposits ranging from $5,000 to $10,000. You do not have to leave a large deposit!! I have closed homes with as little as $1,000 deposit. Your agent can present your offer and if the seller likes what they see they will accept it regardless of the deposit amount. What is working in your favor is the slow home market. You can't ever tell if for some reason you can't purchase the house ie: loss of job and losing $1,000 is way better than $5,000.

3. Downpayments-Contrary to popular belief you do not have to have a huge downpayment. There are so many mortgage plans out that they can be tailored to meet your needs. You can also roll a portion of the closing costs into your mortgage. The purchase agreement can go something like this: The home you choose is listed at $150,000. You can offer $145,000 with seller paying all closing costs, essentially this will keep more money in your pocket and the seller will be getting his house sold for roughly $5,000 less than the listed price (which is a good deal). You can also offer more than the seller's drop dead price to cover your closing costs, for instance the seller has to have $150,000 to close the deal but you do not want to tie up your money in closing costs, you can then offer to pay $155,000 with seller paying all closing costs. It is much better to pay on $5,000 over the course of 30 years than it is to spend it up front when you know there will be a hundred different uses for that money when you get into the house. (It breaks down roughly like this-$5,000 over 30 years at 7% is roughly adding only $15.00 to your monthly payment). Doing it this way you are freeing up your available cash to have in case of emergencies.

4. PMI Insurance- This is basically an insurance plan through the mortgage company that guarantees them they will get paid. This is often required if you are not putting down a 20% deposit. This can be avoided by obtaining an 80/20 loan. What happens at this point is you have one mortgage that covers 80% of the purchase price (this would be the first mortgage) then you have a second one that covers the rest. You could save probably $100 or more a month this way because you would not be paying PMI insurance to the first mortgage company.

5. Points-Regardless of your credit you should not have to pay more than 2 points on your mortgage. If they tell you different go to another mortgage company or bank.

If you have any questions you can PM me! I hope you find your perfect home!!!

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#3 Gone To Race In A Better Place...

5. Points-Regardless of your credit you should not have to pay more than 2 points on your mortgage. If they tell you different go to another mortgage company or bank.

Points are the price of the interest rate, whether you want to pay 2 or more or none depends on the rate, how long you are going to be in the house, etc. If you are buying a house you are going to be in forever, it may make sense to pay some points and buy down the rate. Points are also tax deductible. If you are offered a rate with points and don't want to pay any, ask for the no point rate. You can also as for a negative point rate and get a credit which can go against your closing costs.

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Raising my baby RIGHT!!!!!!

All the cool babies are wearing cloth!

The VA doesn't really do an "inspection" as in looking for something wrong with the property. They are looking to see that the house is worth the money you are wanting to borrow, since the VA is guaranteeing your loan.

I also agree, GET AN INSPECTION, and be careful, in some states inspectors do not have to be licensed. Even if the home you are buying is BRAND NEW, get an inspection!!
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Doing the right thing isn't always the same as doing the easy thing.

You do NOT pay PMI on a VA loan, since the VA is guaranteeing the loan. If you have a lender trying to sell you an 80/20 mortgage ....RUN, and RUN fast. We had a mortgage broker trying to rope us into everything BUT a VA loan. She kept going on and on about the 80/20 loan, and "how great" it is, since you avoid paying PMI. Well, that was it, we told her point blank, she must think we're stupid, or she clearly is, since you don't even pay PMI with a VA backed loan. Why go any other way???? We went with a local bank after that, no problems.

It's a lot of information, and the more educated you are, the better for you.

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Doing the right thing isn't always the same as doing the easy thing.

Also, with a VA loan, there is a "funding fee", set by the VA, not the bank. I'm sure you can call the VA and find out what it currently is. Also, each time you use your VA eligibility, the fee is higher than your original fee. For instance, if you sell the house and get another VA loan, your funding fee will be a bit higher than on your first VA loan. Also, I think (could be wrong.....) this is the only fee a seller is not allowed to pay. Of course, I'm sure there is some "creative accounting" to be done to change that, tho.

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Doing the right thing isn't always the same as doing the easy thing.

It sounds like I have a lot to learn..however I do have to act quickly. I have 2-2hr seminars which should be done with in a matter of 2-3 weeks, and then we have 60 days to close on a house.

I have a feeling we are getting ripped with the bank lady I am working on now, but we are very low income, and now that I got my credit cleaned up, I basically have "little to no" credit...so I am not sure what other banks may even be able to do for me. I do know that considering we got the grant, that there has to be another bank out there, but not sure what to do. Ugh.

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If you really want something in this life, you have to work for it. Now, quiet! The're about to announce the lottery numbers... - Homer Simpson

Actually the 80/20 would probably have been a better deal because of the funding fee of between 2-3%with a va loan. It was probably rolled into your mortgage because with a VA you can finance 103% (full purchase price and funding fee). So if your loan was for $100,000 you paid and addl' $2000-$3000 for the funding fee (unless the vet is disabled, then it is waived.) If this money was financed then you paid even more because you paid interest.

So if you got a $200,000 loan and paid a 2.2% funding fee that was included in the loan, it would be an additional $4400. If your loan was at 6% for 30 years, you actually end up paying over $9000.

In a different scenerio, it can be a better deal to take a loan and pay PMI instead of the funding fee. Say you don't have 20% to put down so you are going to pay PMI. You mortgage states that once you have 20% equity in the home, you can drop the PMI. If in two years your home has appreciated and appraises at an amount that gives you 20% equity, you may have paid less in those two years in PMI than you would have paid for a funding fee. If your PMI is $50/month, in 2 years that is only $1200, that may be much less than the funding fee you would have paid with a VA loan. This would also hold true if you are going to be in the home for a shorter period of time and would save money paying PMI for a few years instead of the funding fee.

I'm not saying that VA loans good to do, you just need to look at all your options and do the math. And compare costs and rates between a VA, conventional and FHA.

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Raising my baby RIGHT!!!!!!

All the cool babies are wearing cloth!

Just a few things, with the VA loan you do not have to pay PMI...but it often breaks down to a better deal financially if you do an 80/20. It just depends on your situation and you need to ask your mortgage person to break down all the scenarios for you so that you can make an informed decision. The best mortgage person will already do this with out being asked and will not push you to make a decision.

With points if you have any credit problems many mortgage people will lead you to believe that you must pay points...they kind of give you no option. They know you have had credit issues, they know you are scared that you may not qualify for a home and they have you over a barrel. I have heard so many negotiations where that mortgage guy is flat out telling the people the only way to get this loan closed is if they pay two to three point because of their credit. They want you to pay points because they get a cut of the percentage in their own paycheck...or at least in Michigan they do. For every honest mortgage broker there are two creepy ones that will take advanatge of you...I worked with a bunch of the creepy ones until I found my honest one that I felt I could send my customers and family to.

I know this is all overwhelming and confusing but you will be fine! Just remember that you do not have to go with the first mortgage company who will work with you, it is best to shop around and be honest about your financial situation. They can give you a rough estimate without pulling a credit report...the best scenario is that you bring your credit report with you so they do not have to pull it for you and your report won't show a lot of hits and they won't charge a credit report fee.

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#3 Gone To Race In A Better Place...

I would definitely do as the above poster says, and look at all your options. I googled the 80/20 loan, and found this:

80-20 loans help buyers who have no down payment
By HOLDEN LEWIS
Bankrate.com
As home prices climb, borrowers increasingly turn to 100 percent financing and especially loans that sidestep the need for mortgage insurance. One is known as the 80-20 mortgage.
How does it work? The home buyer takes out two loans -- the first for 80 percent and the second for 20 percent of the price. The borrower is expected to come up with the closing costs.
"It allows people to buy without a down payment and also works for those who don't want to touch their savings," says Anthony Hsieh, president of HomeLoanCenter.com.
The main drawback to split loans is that if the house loses value, the owner will owe more than the house is worth.
Many mortgage programs allow you to buy with little or no money down, but they usually require private mortgage insurance, or PMI. Mortgage insurance, which protects the lender from the costs of foreclosing on a house, is generally required when the loan is for more than 80 percent of the home's price.
The way to avoid paying mortgage insurance is by getting a "piggyback loan" -- a second mortgage to back up the first one. The first and main mortgage is for 80 percent, and the piggyback loan is for 20 percent of the home's price, minus any down payment. There are many combinations, such as an 80-15-5 loan. It means the borrower got a main mortgage of 80 percent, a piggyback for 15 percent and a 5 percent down payment.
The interest rate on a piggyback loan is usually higher than the rate on a first mortgage. But the combined payment is usually less than a loan of greater than 80 percent of the home's value plus mortgage insurance. This is especially true if the homeowner itemizes deductions on federal income tax. Mortgage interest is deductible but mortgage insurance is not.
Lenders structure 80-20 loans in many ways. At Hsieh's HomeLoanCenter, the first mortgage generally is a 5/1 ARM, with a fixed rate for the first five years, which adjusts annually after that.
The piggyback loan is a home equity line of credit that changes with the prime rate.
With Countrywide Home Loans, a 20 percent piggyback is always an equity line of credit pegged to the prime rate. The 80 percent first mortgage can be a fixed rate, adjustable rate or interest-only loan.



IMO, it's riskier to go with the "new" type of loans. My understanding of an 80/20 is that the "20" part is at a higher interest rate. I know several people with "creative" loans, and they are constantly looking to refinance them as rates go up.

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Doing the right thing isn't always the same as doing the easy thing.

My husband and I used the Nehemiah program 4 years ago when we bought our house. (google it if you are unfamiliar.) It worked wonderfully for us, and allowed us to purchase our home with ZERO at closing.

check out a lot of options before you decide which is best for you. i now work in the mort loan business but am by no means an expert, and rules/regs vary by state. i have been in the business only a year or so -still my best advice to you is to check out many many different banks/loan companies/finance companies/credit union/etc before you commit.

do not assume you have to have a crappy loan because of credit or whatever. find out all your options before you decide on one.
have seen people lose their homes over an ARM that went up $400-500 a month, suddenly and they couldn't afford it. the 80/20 or heloc (home equity) helps some people, but others are paying credit card-style high! interest rates on the 20 part of the loan. just met someone paying about 13 percent, ok that is a horrible rate for a house loan!

i have clients who thought they had a great loan, went to closing then suddenly all the paperwork/prices had changed. one client went to closing and the only person who showed up was a title company stranger whose paperwork for everything was way different than the client had agreed to. my neighbor had this happen to her, she & dh walked out of closing and refused to sign anything, it was the old bait and switch basically. but some people feel like they have to go thru with it. don't!!! that is illegal.

people still get ripped off and lose their houses though. makes me sick. where i live it is horrible at mort regulation and is the #1 area in the state for foreclosures. i can't always help people because i am trying to help someone with a good/honest/fixed rate loan to save them some money. but, maybe they came to me when they were too far gone and i can't get them approved for anything at that point they are late, worse credit, owe more than principal etc because of the crappy loan they took in the first place
i try though. it is sad so many people are ripped off.

The suggestions about seeing a house you think you really like a second time are very good. When you go the second time, take pictures. Your mind can play tricks on you after you have seen house number 5 or 20. Go by yourself at rush hour, late evening, early rush hour and midday during the week if you can. Just park on the street and watch what is happening for a while. If you get the chance, talk to some of the neighbors that you might see out in their yards or walking the dogs. My brother fell in love with a house on a country road and we had looked at it on a Sunday afternoon. Went back during the week to find out the road was a main thoroughfare for dump trucks going to a quarry and a by-pass on the interstate for trucks that wanted to avoid weigh stations. The constant noise was incredible.

I would also suggest that you sit down and make of list with three columns of things you must have, would like to have, would like to avoid. Make copies of your list and give one to your realtor and take a new copy with you each time you go to a different house and mark off the things that fit or do not fit on your list. There are so many things to think of and then when you fall in love with the bathroom in one house you forget that it only has a carport or some other feature you really don't want. You also have to be able to tell the difference between a feature that you hate that can be changed easily and a feature you hate that can not be changed. Don't sweat the lousy flooring or the horrible paint color. But do sweat the busy road, the lousy schools, or the backyard that is as big as a postage stamp.

This is a fun time. Try to be organized. Get a notebook and if you have any interest in a house take notes as you go through it. Make notes of things that may not have made your original list, like, no tub in master bath, two closets in second bedroom, etc. Listen carefully to everything you are told. And don't let anyone push you into a house that is not what you think you can live with. Your house is out there. Sometimes it appears on the first try, more often it takes a little longer.

Just the fact that you have a buyers agent and don't know what or how she is paid is a bad sign. Ask questions. Lots of questions. If you don't understand ask them again and say you don't understand. If you don't like the answers, tell them you don't like that answer. What are the alternatives?

Good luck and happy hunting!

Thanks everyone for your advice. Since I work with the buyers agent, I think she probably didn't realize I didn't understand her process on things. We've only been formally doing this for about a month, and just this week are actually being serious.

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If you really want something in this life, you have to work for it. Now, quiet! The're about to announce the lottery numbers... - Homer Simpson

It's a buyers'market in most of the country right now, no matter what your agent says, take your time to find the right place for y'all.
Patience, in the real estate market, no mattert what is going on, is rewarded.
This is coming from someone who has done a lot of flipping in the past 30+ years, both intentionally and otherwise, to get to the place where we can build *exactly* what we want.
Look at the big picture. Think of where you would like to be 10+ years from now before making any real estate decisions.
And breathe, really. don't let *anyone* (fam, friends, realtors, etc.) make you feel rushed into decisions.


MZ



MZ