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Started By
Message
First time buying a house
Posted on 7/25/22 at 12:32 pm
Posted on 7/25/22 at 12:32 pm
We're buying a house for the first time. Can you please give me a rundown of the process?
-Is their a listing agent and a seller's agent? I assume that the listing agent is the seller's agent? What's their typical commission?
-My agent, the buyer's agent, what's their typical commission?
-Is there a difference between a broker and an agent?
-Who pays for closing costs? How much do they typically run?
-In doing a walk through or viewing, is there anything specific with the house I should really look for (other than the obvious - neighborhood, schools, etc.)
-How much do home inspections typically run?
-Do home inspectors also do termite inspections, or are those separate?
-Are there any warranties I can get or ask for on appliances?
-How do you make repairs or say we want to paint a room a different color, etc. before the closing? I'd prefer not to move in and then have to make repairs.
-I assume everything is negotiable, including commissions, correct?
-Is their a listing agent and a seller's agent? I assume that the listing agent is the seller's agent? What's their typical commission?
-My agent, the buyer's agent, what's their typical commission?
-Is there a difference between a broker and an agent?
-Who pays for closing costs? How much do they typically run?
-In doing a walk through or viewing, is there anything specific with the house I should really look for (other than the obvious - neighborhood, schools, etc.)
-How much do home inspections typically run?
-Do home inspectors also do termite inspections, or are those separate?
-Are there any warranties I can get or ask for on appliances?
-How do you make repairs or say we want to paint a room a different color, etc. before the closing? I'd prefer not to move in and then have to make repairs.
-I assume everything is negotiable, including commissions, correct?
23
Posted on 7/25/22 at 12:40 pm to GentleJackJones
quote:
-How do you make repairs or say we want to paint a room a different color, etc. before the closing? I'd prefer not to move in and then have to make repairs.
Market has cooled off since I bought a place last March, but good luck with this. I especially wouldn't even ask about paint.
Posted on 7/25/22 at 12:40 pm to GentleJackJones
Your (buyers) agent and the listing (sellers) agent will each pocket 3%. This will be paid by the seller, so I wouldn’t even bring up negotiating this lower. In this market agents may refuse to show you a house or work with you if you try and go lower. They’ll go get their 3% somewhere else.
Closing costs can run $5-$10k or more. Whether the buyer or seller pays can be negotiated. For example you may offer $350k for a home and ask that the seller covers $5k closing costs. The seller will view this as an offer of $345k with no closing costs. It does not matter to them, but typically as a buyer you’d prefer to have some closing costs covered.
Inspection will cost about $500. Do not skip this.
Terminate inspections are usually separate.
Appliances are negotiable. You can ask that the seller includes fridge, washer, dryer as part of the deal. You can ask that they buy a one year warranty. All part of the negotiations.
After the inspection is complete, you can go back to the seller and say we want you to fix X, Y, and Z. The seller can then agree, decline, or meet you in the middle. If y’all cannot come to an agreement, you can walk away from the sale. As VegasTiger mentioned, good luck getting them to paint anything. You’ll have better luck with more important issues that need addressing.
It also makes a difference how desperate the seller is to sell. It has been a sellers market for a while but things are fairly neutral now IMO.
Closing costs can run $5-$10k or more. Whether the buyer or seller pays can be negotiated. For example you may offer $350k for a home and ask that the seller covers $5k closing costs. The seller will view this as an offer of $345k with no closing costs. It does not matter to them, but typically as a buyer you’d prefer to have some closing costs covered.
Inspection will cost about $500. Do not skip this.
Terminate inspections are usually separate.
Appliances are negotiable. You can ask that the seller includes fridge, washer, dryer as part of the deal. You can ask that they buy a one year warranty. All part of the negotiations.
After the inspection is complete, you can go back to the seller and say we want you to fix X, Y, and Z. The seller can then agree, decline, or meet you in the middle. If y’all cannot come to an agreement, you can walk away from the sale. As VegasTiger mentioned, good luck getting them to paint anything. You’ll have better luck with more important issues that need addressing.
It also makes a difference how desperate the seller is to sell. It has been a sellers market for a while but things are fairly neutral now IMO.
This post was edited on 7/25/22 at 12:54 pm
Posted on 7/25/22 at 1:02 pm to GentleJackJones
quote:
-Is their a listing agent and a seller's agent? I assume that the listing agent is the seller's agent? What's their typical commission?
2%-3.5% is typical
quote:
-My agent, the buyer's agent, what's their typical commission?
2%-3.5%
So total commission paid between the 2 agents will likely be between 4-7% of the purchase price of the house.
quote:
-Who pays for closing costs? How much do they typically run?
Buyer and seller pay the closing costs. Seller pays the agents traditionally (4-7% above), any concessions they didnt take care of for repairs, some escrow for partial year taxes and whatnot. The buyer pays for inspection, appraisal, loan closing costs, some escrow, etc...
quote:
-In doing a walk through or viewing, is there anything specific with the house I should really look for (other than the obvious - neighborhood, schools, etc.)
The inspector will look at the things that need to be repaired/replaced etc. You just need to find a home you like in a place you like, with a layout you like then let the professionals do their part after. They will point things out like how old the HVAC, hot water heater, roof is to see when it might need to be replaced as those are some more frequent bigger ticket items to be replaced on a home. For example, HVAC systems typically last ~15 years. So if you are moving in a place with 10+ years on it, expect to replace it in the next 5 years. Hot water heaters about every 10 years. Roofs go about 20-ish years.
quote:
-How much do home inspections typically run?
$300-$500ish
quote:
-Do home inspectors also do termite inspections, or are those separate?
I believe ours did but that was because it had a termite killing system in the ground already.
quote:
-Are there any warranties I can get or ask for on appliances?
Usually home warranties are a waste of money. If you can get it roped in a deal the seller pays for, it's worth it because it's free to you, but the market may not be there yet for you to ask for something like them to pay for a 1 year home warranty.
quote:
-How do you make repairs or say we want to paint a room a different color, etc. before the closing? I'd prefer not to move in and then have to make repairs.
Inspector will point out things needing to get repaired, you can ask the seller to repair them before closing or give a stipend in closing to cover the cost of repairs. Market has slowed down enough you might be able to get some things repaired or money for it, a few months ago, forget about it. Homes were selling as-is mostly. Paint is something you do, the seller wouldnt.
quote:
-I assume everything is negotiable, including commissions, correct?
It is, but good luck negotiating commissions with agents, they are usually hard on what they charge, sometimes will make concessions to get a deal done but most of the time, especially now, wont take less than what they usually get. I.E. if they are a 3% agent, they are unlikely to want to accept 2%. Keep in mind the seller is the one paying the agents commissions typically.
Posted on 7/25/22 at 2:30 pm to GentleJackJones
Others have already touched on your answers, but I will add get a plumbing video inspection done as well. This will be a separate cost, but will show cracks, clogs, other issues that you will either need the seller to fix, or you would be willing to walk away from.
All inspections happen after you make an offer, the offer will be contingent to the inspections.
Only way to make cosmetic repairs before moving is to go in after closing and bust your arse before moving in. If need be, get a pod to store your stuff from current residence(s) and move the bare minimum (clothes, bed, tv, simple kitchen things). Bust your arse for a few weeks, then have the pod delivered to unload everything else.
All inspections happen after you make an offer, the offer will be contingent to the inspections.
Only way to make cosmetic repairs before moving is to go in after closing and bust your arse before moving in. If need be, get a pod to store your stuff from current residence(s) and move the bare minimum (clothes, bed, tv, simple kitchen things). Bust your arse for a few weeks, then have the pod delivered to unload everything else.
Posted on 7/25/22 at 3:04 pm to GentleJackJones
quote:
-In doing a walk through or viewing, is there anything specific with the house I should really look for (other than the obvious - neighborhood, schools, etc.)
Go ride by at different parts of the day / week to get a feel for the neighborhood. Also, go ride by when it's pouring rain to see how well the property drains.
Posted on 7/25/22 at 3:24 pm to GentleJackJones
We moved across country and didn’t have much leftover cash for cosmetic crap and closing costs. Seller was a bad human. We would have walked at closing if we had a choice. But we didn’t have anywhere to live. She took the fridge when it was in the contract to leave it, scratched the floors up moving and left the place filthy. Realtors ended up using their commission to buy us a fridge. She wouldn’t budge on the closing costs so we ended up going up on the sell price a few thousand with no closing costs. Hopefully next go around will be smoother
Posted on 7/25/22 at 3:44 pm to GentleJackJones
You've got plenty of good questions.
None on financing?
None on financing?
Posted on 7/25/22 at 4:02 pm to ItzMe1972
Buyer and seller commissions don’t have to be 3%. Don’t fall into a trap seeing those as an industry requirement.
Posted on 7/25/22 at 4:33 pm to GentleJackJones
quote:
-In doing a walk through or viewing, is there anything specific with the house I should really look for (other than the obvious - neighborhood, schools, etc.)
Go to the house when it is hot outside and see what the temp is in the house. Fixing this will be an expensive issue if it is not cooling it now.
If the inspector list any thing that will need to be replaced soon, you find out what the replacement cost is. My current residence needed new windows, I got a $2000 concession for them from the seller. I paid $20,000 for new windows. I had no clue and no one told me I was getting screwed. I needed a new privacy fence also and did not think it would be much so I did not ask for anything. $7000 later I have a new fence.
Your agent is not necessarily working for you. They get paid when you buy a house, not if you are happy a year later (although they would like a referral). You need to do your own research on things and do not just assume they have your best interest in mind. I have bought two houses, thrilled with my first agent and not so much with my second.
This post was edited on 7/26/22 at 7:40 am
Posted on 7/25/22 at 4:44 pm to GentleJackJones
quote:
How do you make repairs or say we want to paint a room a different color, etc. before the closing? I'd prefer not to move in and then have to make repairs.
This ain’t happening. If something truly needs repaired, they will either fix it or take that cost out of the price.
Posted on 7/25/22 at 4:54 pm to GentleJackJones
You pay the commissions, even if indirectly. People suggesting otherwise are talking about the seller cutting the check to the agents, but that check came from your purchase price, so it’s your cost at the end of the day.
The seller has a bottom dollar amount they’ll accept for the house, and no less. They’re worried about what they net, not necessarily what the sale price is. All seller costs are essentially rolled into the price you’re going to pay, or they should be from an economic standpoint.
The seller has a bottom dollar amount they’ll accept for the house, and no less. They’re worried about what they net, not necessarily what the sale price is. All seller costs are essentially rolled into the price you’re going to pay, or they should be from an economic standpoint.
Posted on 7/25/22 at 6:20 pm to GentleJackJones
quote:
The seller has a bottom dollar amount they’ll accept for the house, and no less. They’re worried about what they net, not necessarily what the sale price is. All seller costs are essentially rolled into the price you’re going to pay, or they should be from an economic standpoint.
This!
Also, some basic negotiation tips:
Ideally, you want to negotiate from position of strength (in a cooled down market with fewer buyers / offers). If it is hot as it has been, ignore the following cause all bets are off. Has been cooling down and that may be in your favor as a buyer.
Let the seller know (via RE Agents) it is 1 of 3 homes on your final list (whether it is or is not...). You have options.
Be prepared to demonstrate your strength as a buyer (how much cash you are putting down, find out seller's desired closing date wish).
The inspection is very important! It opens your contract exit if cannot agree on what gets fixed / who fixes. In my experience, sellers want easiest sale so if you pick up some of the repairs (via price reduction), that can be a welcome thing from seller's perspective, and you control the quality of the repair, that is in your best interest.
Get a reputable inspector. Have seen wide range of quality. This is critical.
Get seller to buy 1 year Home Owner's Warranty.
If you get within $1,000 of asking / bidding impasse, lean on the RE Agents. They hate this! And I love that they hate it. Have them pitch in for the $1,000 by lowering their commissions (fixed rate commissions in our internet world of Realestate.com, etc. is BS!). They will tell you they don't do that (and in a hot market they are not lying), but cool markets impacts all players. Use to your advantage.
Good luck!
Posted on 7/25/22 at 6:28 pm to GentleJackJones
A little trick if you don't have down payment money AND closing cost money or you just want to finance as much as possible you can offer 105% of the asking price and ask the sellers to pay closing costs of say 5%. They can't pay the down payment, but they certainly can pay the closing costs. That is if you are trying to put in a competitive full price offer, times are changing, again, so maybe discounts are coming.
Oh yea, and don't worry about paint. Just get a Sherwin Williams account and some super paint and paint away.
Get a separate Termite inspection and get it treated and under contract.
Oh yea, and don't worry about paint. Just get a Sherwin Williams account and some super paint and paint away.
Get a separate Termite inspection and get it treated and under contract.
Posted on 7/25/22 at 6:33 pm to Turf Taint
one more thing...
Appraisals
In rising markets, there is a lag (6-months or so) in appraisal values. Outside of very hot markets where buyers are going nuts and paying above asking / appraisals, the appraisal matters. So, if sellers are asking well above appraisal, this is a contract exit point or leverage for you to get price down.
Remember, buyers set the price by what they are willing to pay. Not the sellers. This includes hot (buyers go nuts) and cold markets. You have more control than you may think you do.
Appraisals
In rising markets, there is a lag (6-months or so) in appraisal values. Outside of very hot markets where buyers are going nuts and paying above asking / appraisals, the appraisal matters. So, if sellers are asking well above appraisal, this is a contract exit point or leverage for you to get price down.
Remember, buyers set the price by what they are willing to pay. Not the sellers. This includes hot (buyers go nuts) and cold markets. You have more control than you may think you do.
Posted on 7/25/22 at 7:51 pm to GentleJackJones
quote:
-Is their a listing agent and a seller's agent? I assume that the listing agent is the seller's agent? What's their typical commission?
Yes, see other answers for commish.
quote:
-Is there a difference between a broker and an agent?
Brokers have further education/courses and can sign their own docs.
quote:
Who pays for closing costs? How much do they typically run?
Both sides have closing costs. For yourself, factor about 2% of the purchase price. Usually the buyer will foot the bill for their closing costs and pre-paids.
quote:
-How much do home inspections typically run?
$300-$600
quote:
-Do home inspectors also do termite inspections, or are those separate?
quote:
Are there any warranties I can get or ask for on appliances?
Yes but they have lots of loopholes. 2-10 and AHS tend to be popular.
quote:
-How do you make repairs or say we want to paint a room a different color, etc. before the closing? I'd prefer not to move in and then have to make repairs.
Welcome to home ownership. Room paint isn't a repair. You have inspection and it's a phase of the contract.
quote:
-I assume everything is negotiable, including commissions, correct?
Hire a professional, based on your questions, you need a good one.
Good luck! There's nothing like your first home. Be decisive and you'll have a smoother experience.
Posted on 7/25/22 at 8:06 pm to GentleJackJones
Get ready to bend over and take a hard pounding
Posted on 7/25/22 at 8:16 pm to GentleJackJones
You are free to ask for almost anything. Sell can accept or reject. It negotiable
Just paid a home inspector $425. Cheaper is not always better. The inspector the buyer on my house was only there 45 min didn’t even climb on roof. My inspector on house I am buying was there almost 3 hours.
Closing cost can run about 3% of sale price. More for some federal backed loans.
I paid 5% commission on my sell. 2.5% to my agent (sellers agent) 2.5% to the buyers agent.
You can purchase a home warranty or have seller pay for one. Not always worth it but each to their own.
Just paid a home inspector $425. Cheaper is not always better. The inspector the buyer on my house was only there 45 min didn’t even climb on roof. My inspector on house I am buying was there almost 3 hours.
Closing cost can run about 3% of sale price. More for some federal backed loans.
I paid 5% commission on my sell. 2.5% to my agent (sellers agent) 2.5% to the buyers agent.
You can purchase a home warranty or have seller pay for one. Not always worth it but each to their own.
Posted on 7/25/22 at 8:38 pm to Catchfalaya
quote:
Get ready to bend over and take a hard pounding
Don’t listen to this guy.
I’m following 3 local builders in central Texas, and in the last 90 days they have gone from a total of 5 available homes to more than 40. As of this weekend one is offering to cover 100% of closing costs, and paying the buyers rate down 0.5% points.
The swing is here, and it’s glorious to see, especially if you’re sitting on enough cash to offset a moderate interest rate.
Posted on 7/26/22 at 8:21 am to armsdealer
It still has to appraise at 105%
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