Young guy in need of info!

[foxmulder]

I'm fairly young, working stable 5 years at the same place. My credit score is high around 749 on experian. It's overwhelming, Where do i start? Do i look for a home first? Do i need a realtor? I've heard about grants how can i get my hands on that? Any direction is welcomed. I've done google searches and got overwhelmed. I can't afford to get ripped off with a bad realtor and i fear getting a high APR.

[TheNiche]

I'm fairly young, working stable 5 years at the same place. My credit score is high around 749 on experian. It's overwhelming, Where do i start? Do i look for a home first? Do i need a realtor? I've heard about grants how can i get my hands on that? Any direction is welcomed. I've done google searches and got overwhelmed. I can't afford to get ripped off with a bad realtor and i fear getting a high APR.

The easy way is to get yourself a Realtor first and let them show you the market. ...but beware! The higher the sale price, the more money they make. It is your own agent's incentive to get you to pay more.

My own approach is to identify a bunch of properties that I like--don't worry if they aren't listed--everything is for sale at the right price. Ideally, you can find something that is FSBO (For Sale By Owner) or otherwise not listed with an agent. Those are sweet deals because both the buyer and seller can benefit from not having to split up 6% of the cost of the home between Realtors. Then you just take it to a good title company and use a mortgage broker to originate your loan.

Usually, deals don't work out as sweet as that. Somewhere or another, a Realtor gets involved. Depending on the nature of the transaction, things can get dicey. Lots of decisions have to be made by the seat of your pants. If you've got a smart one that's watching your back, you've struck gold. Be picky if you use one. Don't get a stupid one or someone (like me) will take advantage of you if your agent doesn't accidentally screw up the transaction on their own. The corollary to that statement is, however, if the seller you're dealing with has a stupid one, you can use their Realtor, creating all sorts of neat conflicts of interest that can be worked in your favor under the right circumstances. ...just remember that if the seller feels taken advantage of, they know your new home better than you do and probably kept a set of keys. Always change out the locks.

The last bit of advice: patience is a virtue. It never pays to be desperate...unless you're genuinely prepared to walk away from a deal if you can't get the price you want. In that case, threaten the seller to renew your current lease because his or her property is really the only thing that you've found that you really really like, and if you can't get that one, then it isn't worth it to you to buy anything. It's a lie, of course, but it puts the ball in their court with money on the table and strokes their ego at the same time because you'll leave the impression of someone that really cares about the property that they've spent so many years of their lives living in and maintaining with all those personal touches.

[jm1fd]

I'm fairly young, working stable 5 years at the same place. My credit score is high around 749 on experian. It's overwhelming, Where do i start? Do i look for a home first? Do i need a realtor? I've heard about grants how can i get my hands on that? Any direction is welcomed. I've done google searches and got overwhelmed. I can't afford to get ripped off with a bad realtor and i fear getting a high APR.

First of all put together a budget and figure out how much house you can afford....don't forget property taxes, insurance and maintenance. I suggest that you be fairly conservative in your spending....don't buy something so expensive that you can just barely afford it on what you're currently being paid. If you lose your job and can't find something that pays as well and the house gets foreclosed on, your credit is going to be screwed all to hell for many years to come.

Once you know what you can afford, figure out what parts of town you want to live in, and go drive around and look at properties in that price range. Pick some neighborhoods that you like, and start watching what's coming and going on the market. Note how long it stays on the market, asking price, condition etc. Basically, get to know the market conditions of the neighborhood backwards and forwards.

At this point you can go one of two directions....you can either use the knowledge you've gained to find a competent (HAH!) fluffy bunny (you'll find that you know the market better than 99% of the ones you talk to), or you can use this knowledge to strike it out on your own as Niche has suggested.

[HoustonRealtor]

For most buyers, spending more doesn't make an agent that much more money. I would much rather have a happy client than make a few hundred extra bucks. If I have someone looking at properties that are within $25,000 of each other, by the time my broker takes a piece and Uncle Sam gets his fair share, I'm not making that much more if they buy at the high end than if they buy at the low end. (3% of $25,000 = $750 before splitting with my broker and paying taxes.) Obviously, the larger the price spread, the more money there is to be made, but most buyers have a price in mind and don't have a big range because they need their payments to be at a certain level in order to feel comfortable and/or get approved by a lender. In June, I sold a home to first-time buyers and convinced them to make an offer on a $175,000 home after they had decided to increase their budget to $230,000. Did I leave money on the table? Sure I did. Do I care? Not one bit. I was the one that told them that $175k is more manageable than $230k, and they can spend the extra money every month however they see fit. (I already knew they loved the house...we had looked at it a couple of times and it was very high on their list.) There are honest Realtors that really do put their client's interests first...but we have some rotten ones in the bunch too. Just like every other profession. With today's buyers and HAR's award winning website, most buyers pretty much know what they want before they contact a Realtor, but that doesn't mean that a GOOD agent can't add value to the equation.

As for getting ripped off on APR, don't sweat it. If you have a true 749 and a reasonable debt-to-income ratio, you'll have no problem getting a good rate.

Think about what's important to you. Come up with a list of "must have" items, desirable features and things that you absolutely DON'T want in your first home. That will help narrow down your choices. Keep in mind that no home is perfect. With the right attitude, you'll find the perfect place to call home before you know it!

[Cityliving101]

As a buyer, you do not pay the commission. The seller is paying the commission, and that is split between the listing and buyers agents. Using an agent can save you a ton of headaches trying to figure out the system. They can lead you to a mortgage company that can establish what you can afford to buy, how much you would need to put down etc. If you happen to see a FSBO that you like, your agent can probably work a deal there as well. They usually can negotiate a percentage from the seller there as well. An agent can only help in the buying process.

Where are you buying?

[Pumapayam]

You can shop around for homes/realtors using HAR.com and rate shop at bankrate.com

I was in a similar situation in 2002, clueless as well, and I bought my house with those methods.

[TheNiche]

As a buyer, you do not pay the commission. The seller is paying the commission, and that is split between the listing and buyers agents. Using an agent can save you a ton of headaches trying to figure out the system. They can lead you to a mortgage company that can establish what you can afford to buy, how much you would need to put down etc. If you happen to see a FSBO that you like, your agent can probably work a deal there as well.

Agents come at a price, and somebody has to pay for it. A seller paying for the agents' costs and selling the home at market rate is the fiscal equivalent of paying no Realtors and selling the home at 6% below market. If a buyer and seller hook up without a Realtor, then it is entirely possible to negotiate a case where the home sells for 3% below market, which equates to net benefits for both the buyer and seller.

If Cityliving101 is angling at being your agent, just be aware that City's either already misled you once or City is incompetent. My apologies to Cityliving101 if he/she isn't a Realtor and isn't in the industry...

An agent can only help in the buying process.

The above statement is FALSE, and the operative word here is only. They can help you. They can utterly and completely screw you, whether intentionally or by accident. And no matter the outcome, you will pay for them, whether directly or indirectly.

Foxmulder, if you need a recommendation on a mortgage broker or a title company, PM me. But if you've got good credit, you can probably deal with your own bank and a few others, or just use bankrate.com like Puma mentioned.

[HoustonRealtor]

Agents come at a price, and somebody has to pay for it. A seller paying for the agents' costs and selling the home at market rate is the fiscal equivalent of paying no Realtors and selling the home at 6% below market. If a buyer and seller hook up without a Realtor, then it is entirely possible to negotiate a case where the home sells for 3% below market, which equates to net benefits for both the buyer and seller.

I agree with your analysis. Too often, I see FSBO's where the seller wants market value for their home. Often times they do not take in to consideration that they aren't paying a commission whereas the guy down the street is paying one. This is usually the result of either the sellers being greedy or they cannot afford to sell the house with a commission because they need the money to pay off the existing mortgage, buy a new house, etc. I'm of the opinion that if you aren't going to list with an agent, your price should reflect some of the savings that you will realize. Buyers tend to agree. I've had many of them tell me that they looked at FSBO's first because they expected a "better deal". When they realized they weren't getting it, they decided to see what else was on the market (in MLS). Even though the MLS listings had a commission built in to the price, they didn't want to limit their choices because the cost to them was the same. Some times a buyer can get a great deal on a FSBO, other times there is no advantage.

[Cityliving101]

No angling or anything to do with the business. You are right when it comes to the word "only", my mistake. There are obviously unethical agents out there. My experience however, has been good using an agent in the buying process.

As for FSBO's, how many of them are selling it themselves because they are trying to give a buyer a better deal? Not too many I would imagine. The reason they are selling FSBO is to save 6%, or at least 3%.

We sold our last house FSBO. We had realtors beating our door down trying to get the listing. When they couldn't, all asked if we would pay them 3% if they found us a buyer. Fortunately for us, we sold it at market value and saved the full 6%.

[TheNiche]

No angling or anything to do with the business. You are right when it comes to the word "only", my mistake. There are obviously unethical agents out there. My experience however, has been good using an agent in the buying process.

As for FSBO's, how many of them are selling it themselves because they are trying to give a buyer a better deal? Not too many I would imagine. The reason they are selling FSBO is to save 6%, or at least 3%.

We sold our last house FSBO. We had realtors beating our door down trying to get the listing. When they couldn't, all asked if we would pay them 3% if they found us a buyer. Fortunately for us, we sold it at market value and saved the full 6%.

Yeah, if you're lucky, an FSBO can save the seller a full 6%, but that is pretty rare. In any case, it does give you a lot of flexibility in offering concessions to get the house sold and still come out ahead. And if a buyer is approaching you cold, offering to grant the seller the equivalent of 103% of market value if the seller were to use a Realtor, it can be compelling.

[mumbles]

This is good advice, also don't forget how much your electric bill will be. Consider how much house you need cause larger will cost more over the long run, even if the price is lower to begin with. Programs for first time or low income buyers. Flood zone maps, crime stats, tax info is all online. Use the internet, you can't depend on real estate agents to give you all the info you need.

First of all put together a budget and figure out how much house you can afford....don't forget property taxes, insurance and maintenance. I suggest that you be fairly conservative in your spending....don't buy something so expensive that you can just barely afford it on what you're currently being paid. If you lose your job and can't find something that pays as well and the house gets foreclosed on, your credit is going to be screwed all to hell for many years to come.