Homebuying tips?

[Randy W]

Nicemac,

yes you should have pushed the issue with the foundation. It helps to weed out those that dont need to be in bussiness.

A home inspector is looking at 5 main areas of the home if they are doing there job right.

1. Roof

2. Foundation and Structure

3. HVAC

4. Plumbing

5. Electrical

Inside these groups there are hundreds of things we look at.

Things to note: This time of year the manufacture of the HVAC recommends we not run the Heating system if the outside temp is above 75 degrees. Inspectors do not perform water quality testing.

BIG NOTE: Some inspectors offer Radon Testing. price anywhere from 100 to 150 $ Home depot and lowes sells the kit for 13.99.

Also any home built before 1978 has the potential of having Asbesto materials and or Lead paint in the home. Effectiv oct 2010 any painter hired to work on these homes is supposed to be EPA lead certified.

[gregintenn]

Buy outside the city limits unless you just like paying more taxes and dealing with other b.s.

[Guest HvyMtl]

Get a credit report. Talk directly to the big 3 credit companies. You are allowed 1 free report a year. AS your credit report WILL have inconsistencies, make sure the ones impacting your credit are taken care of LONG before your pre-approval process.

Do spend time in the neighborhood. Look for traffic, activities which would relate to crime, and look up see if you have heavy duty power lines or multiple lines (access, electric fields, and tree cutting if too close to lines) and check to see if you are on an airport approach. Check the trees in the lawn, make sure they are not too close to the home (impacting foundation, fall in storm) and are healthy.

Check the commute to work. Access to groceries, drug stores, and guns shops

DO talk to the neighbors, as they will spill the beans on the home.

Check to see if there were inside pets. IF so, worse case, add the costs of replacing carpet and subflooring (Urine soaked subflooring will smell forever) and possible bug spraying.

Check the home for Radon (an odorless, colorless gas, which is the 2nd leading cause of lung cancer in the US) Mostly over the decay of Chattanooga Shale, a rock formation throughout Tennessee (thus the name.) Generic test should be under $30. If detected in high volume, move on, or expect to spend $5k+ on mitigation plus additional electric costs.

Check for the termite info. They should have a bug company and it being checked regularly.

Edited June 25, 2011 by HvyMtl

[Spook]

+1 on the radon testing due to its prevalance as a result of the Chattanooga Shale. However, the Lowe's radon test kit was the worst rated one by Consumer's Reports. Try the RTCA (Radon Testing Corp. of America, www.rtca.com). Costs a bit more but worth it. When we bought our house the initial readings were 4.5 times the acceptable rate. That level is equal to about two packs of cigs per day as I recall. After $3500 of work it was remediated to less that 1 part per whatever is measured.

You are getting alot of good advice here. Best of luck.

[Guest friesepferd]

1) if you know the area and you have enough confidense, dont use a real estate agent.

2) figure out how much you are going to spend before hand and make sure its something you can easily deal with. situations change and just because you can afford it now, doesnt mean you can later. anyways, take that number then subtract 10% minimum. you WILL end up buying a house that costs a little more than your "max" was, especially if you are using a realtor.

3) as many have said, dont be spending all your cash on the downpayment. remember there are tons of fees, plus cost of moving, any new furniture, etc

4) have fun!

[Guest nashvegas]

1) if you know the area and you have enough confidense, dont use a real estate agent.

2) figure out how much you are going to spend before hand and make sure its something you can easily deal with. situations change and just because you can afford it now, doesnt mean you can later. anyways, take that number then subtract 10% minimum. you WILL end up buying a house that costs a little more than your "max" was, especially if you are using a realtor.

I would ignore the above advice.

As the buyer, it is a really good idea to have a realtor (buyer's agent) looking out for your interests. They will catch a lot of things that would likely slip through the cracks otherwise, and perhaps save your arse. I know this as I am married to a realtor, and I hear first hand what goes on.

The realtor that lists the home works for the seller and he/she is looking out for the seller, not you.

The realtor that works for you (the buyer's agent) is looking out for you. A buyer's agent costs the buyer (you) nothing. They get a split of the commission which comes from the seller's proceeds at closing.

[Guest nicemac]

The realtor that works for you (the buyer's agent) is looking out for you. A buyer's agent costs the buyer (you) nothing. They get a split of the commission which comes from the seller's proceeds at closing.

Never take advice from someone that stands to profit from your decision.

A buyer's agent that gets a cut of the commission has a vested interest in:

a. the sale taking place.

b. the sales price being as high as possible.

If you pay someone to represent you (disconnected from sales commission), you will likely get someone to really look out for your interests.

[Guest db99wj]

I'm with Nashvegas. I sold real estate as an affiliate broker and a broker for 5 years until I moved into the investment/banking and finally my current job as a commercial appraiser. If the OP had purchased several homes over the past few years and is experienced, then possibly advice to not use a Realtor would be prudent. However, the OP is a first time home buyer, probably has never seen a purchase contract and to go into it ignorant of the nuts and bolts of a real estate contract, expecting to protect themselves, get a fair deal, not overlook items, not to miss items completely against another person who does contract negotiations as a career. This is horrible advice.

Get with a reputable Realtor, they are worth their commissions. They will typically get 3%, the commission rate is typically around 6%, this is already there. Listing Agent=3%; buyers agent-3%. Even FSBO properties that Co-Op will pay the buyers agent 3%. So if the master negotiator non-realtor type that buys and sells houses on their own, yes, a hiring an agent is not in your best interest, but in reality, that person will already be a licensed agent anyway, even if they don't represent others.

I had a deal, I represented the seller. This young couple came in to an open house I was doing or called to see it (can't remember), no agent. They wanted the house. I asked who is their agent? They didn't have one. I told them that I was NOT representing them, I have a contract with the seller, and in their best interest, they need to get an agent to represent them. I would do the deal, but I really did suggest that the get someone. They didn't. I got the contract from them, I suggested they contact the local association of realtors to get one of the contracts that they approve of, which I believe was through the Tennessee Association of Realtors, so that there is nothing perceived as fishy going on with my contract, which was very similar to the TAR one. We negotiated it, made the deal. This was around 2000. Fast forward till last year. I was at an event put on by the local association of realtors and this girl comes up to me and asks do you remember me? I said you look familiar, she introduced herself, it was the lady from above. She works for the association of realtors. She said that she should have taken my advice way back then, just because it was the most prudent thing to do, but that I had handled it professionally and ethically and that she was grateful that I handled it that way. She said that I did everything possible to talk them out of doing it that way, but they wouldn't listen. It was an amazing to experience this and that I did the right thing. Not many people know that story, and it is one of those that happens a lot. On the flip side, if you put the screws to someone, word gets out and you end up doing something else because your reputation is shot.

I say all this so that the OP really understand what they are doing. The OP came onto a gun forum to ask advice about how to look at a house to see if it is in good shape, which tells me that they don't know squat about negotiating a sales contract for a house either. The advice on not getting an agent is, in my opinion bad. Nicemac and friesepferd, this is not against you, only your advice to a beginner, you might have years of experience in negotiating complex real estate contracts and that is great, but the OP, obviously doesn't.

[Guest nicemac]

I am in no way advocating them not using an agent.

I just know from experience that the term "buyer's agent" is misleading. As long as the agent is getting a cut of the commission, they effectively work for the seller. Their paycheck depends on the deal going through and the higher the sales price, the more they get paid. That is a conflict of interest.

If you want someone to truly represent you as a buyer, with only your best interest in mind, pay them separately from a commission on the transaction.

[peejman]

I am in no way advocating them not using an agent.

I just know from experience that the term "buyer's agent" is misleading. As long as the agent is getting a cut of the commission, they effectively work for the seller. Their paycheck depends on the deal going through and the higher the sales price, the more they get paid. That is a conflict of interest.

If you want someone to truly represent you as a buyer, with only your best interest in mind, pay them separately from a commission on the transaction.

I don't disagree, but I will say the above is likely why most folks (me included) have recommended a "reputable" realtor. Realtors live and die by their reputation. I doubt a reputable realtor would compromise their ethics by leading a buyer to pay too much for a house. If they push you into spending as much as $20k more ... that's only $600 to their firm, of which they personally only get a cut. That's not much to burn a reputation over.

[Guest db99wj]

I don't disagree, but I will say the above is likely why most folks (me included) have recommended a "reputable" realtor. Realtors live and die by their reputation. I doubt a reputable realtor would compromise their ethics by leading a buyer to pay too much for a house. If they push you into spending as much as $20k more ... that's only $600 to their firm, of which they personally only get a cut. That's not much to burn a reputation over.

Exactly.

[FUJIMO]

My "goto" realtor is a 20 year veteran of the Marine Corp.

[Guest nicemac]

My "goto" realtor is a 20 year veteran of the Marine Corp.

No matter if it is a "reputable" realtor or not–unless the "buyer's agent" is paid out-of-pocket, there is conflict of interest.

[FUJIMO]

No matter if it is a "reputable" realtor or not–unless the "buyer's agent" is paid out-of-pocket, there is conflict of interest.

I understand that money will be the motivator, but find me a realtor willing to get in there and fight their arse off so you can get a great deal, FOR FREE, and I'll show you the realtor who won't be in business long.

[Guest nicemac]

I understand that money will be the motivator, but find me a realtor willing to get in there and fight their arse off so you can get a great deal, FOR FREE, and I'll show you the realtor who won't be in business long.

Who said anything about free?

"… unless the "buyer's agent" is paid out-of-pocket…"

[Guest nashvegas]

No matter if it is a "reputable" realtor or not–unless the "buyer's agent" is paid out-of-pocket, there is conflict of interest.

I guess it boils down to this...are you able you trust somebody? anybody?

[Guest nicemac]

I guess it boils down to this...are you able you trust somebody? anybody?

With hundreds of thousands of dollars?

Very, very few people–and they are all related to me.

Look, I hear what you are saying. And to some extent I agree–have someone on your side. But if you want true impartiality, you will have to hire them and they cannot be financially tied to the transaction. If they stand to gain from the transaction (via commission), they will not be truly impartial. Large sums of money cloud people's judgment, even otherwise honest and reputable real estate agents.

[maroonandwhite]

Thanks for all the great advice guys. We have pretty much decided to get a buyers agent and already have one picked out. None of the houses we are looking at are listed with her firm so I figure she may be ok. haha. As for not know squat about what I am doing; I know enough to not get taken to town and back but I agree a professional is a must.

[Guest nicemac]

Thanks for all the great advice guys. We have pretty much decided to get a buyers agent and already have one picked out. None of the houses we are looking at are listed with her firm so I figure she may be ok. haha. As for not know squat about what I am doing; I know enough to not get taken to town and back but I agree a professional is a must.

Good luck!

[Seaslug]

I've really enjoyed reading this thread. I learned a lot that I didn't know!

Best of luck to the OP! It's a great time to be a buyer!

[Guest nashvegas]

With hundreds of thousands of dollars?

Very, very few people–and they are all related to me.

You are not trusting them with hundreds of thousands of dollars. They don't touch your money. You are trusting them (well, "you" are not trusting them, it appears you have problems in the trust area) to guide, educate, protect you, and negotiate on your behalf in a complicated legal transaction.

But if you want true impartiality, you will have to hire them and they cannot be financially tied to the transaction.

How are they not financially tied to the transaction if you are paying them?

If they stand to gain from the transaction (via commission), they will not be truly impartial. Large sums of money cloud people's judgment, even otherwise honest and reputable real estate agents.

Not sure what you have against Realtors... perhaps you had a bad experience.

I'm sure you can find less than reputable agents out there if you try, but I would hazard to guess that most in TN have good morals and are on the up & up. I personally know quite a few, my wife included.

She has advised clients against purchasing homes that they thought were right for them.

She has advised clients that they are not yet ready to even purchase a home.

She spent 2 years working with one client a few years ago to find the correct home for them. They have since become good friends.

Glad to hear the OP found a Realtor (pronounced Real-tor not Ree-la-tor)... wise move.

BTW, my wife has also been hired by buyers (on their dime) to negotiate and handle the contract details on a couple of occasions. This can however be a sticky point with the Brokerage.

Personally, as long you have someone you can trust (not you, per se) I don't see what the difference is if the buyer pays the agent, or the agent gets a cut of the selling agent's commission, other than the fact that the buyer is then out more $.

[Guest BenderBendingRodriguez]

How are they not financially tied to the transaction if you are paying them?

The way nicemac would do it would be to pay the agent a fixed fee. The fee would be decided on the front end. That way the purchase price would have precisely zero impact on the payment to be received. This is unlike splitting a percentage-based commission in that under a percentage system a higher sales price equals higher payment for the agent. This could potentially lead to a lowered willingness to press for the best possible price for the buyer.

[Seaslug]

The way nicemac would do it would be to pay the agent a fixed fee. The fee would be decided on the front end. That way the purchase price would have precisely zero impact on the payment to be received. This is unlike splitting a percentage-based commission in that under a percentage system a higher sales price equals higher payment for the agent. This could potentially lead to a lowered willingness to press for the best possible price for the buyer.

The end result would be significantly greater out-of-pocket and total expense for the buyer, as this flat fee would not be included in the sales price, and therefore could not be rolled into the loan. The commission negotiated with the listing agent remains the same whether he or she has to share with a buyer's agent or not, so the net sales price that the seller would be willing to accept would not change. Therefore, any fee paid to the buyer's agent simply adds to the buyer's expense. I do the bulk of my work with buyers--especially first-timers--so I certainly wouldn't want to do business that way.

[Guest db99wj]

The end result would be significantly greater out-of-pocket and total expense for the buyer, as this flat fee would not be included in the sales price, and therefore could not be rolled into the loan. The commission negotiated with the listing agent remains the same whether he or she has to share with a buyer's agent or not, so the net sales price that the seller would be willing to accept would not change. Therefore, any fee paid to the buyer's agent simply adds to the buyer's expense. I do the bulk of my work with buyers--especially first-timers--so I certainly wouldn't want to do business that way.

No, wait.....Exactly! Glad to see this, when I sold, I was an ABR (Accredited Buyers Rep) designate, not even sure if that is still around, and paying a fee to a "buyers agent" was not done much if at all. I was in at the beginning of the development of the "buyers agent".

Also, I never told or negotiated the price, I advised my client so that they could make an informed decision, they are ultimately the ones that have to live with it.

[Seaslug]

Also, I never told or negotiated the price, I advised my client so that they could make an informed decision, they are ultimately the ones that have to live with it.

Hahaha! I actually typed this myself at the end of my last post, but I ended up going back and deleting it because I didn't want it to come across the wrong way. You're right, though. Only the buyer and seller can ultimately determine the parameters of a deal. It's their money, after all.