Those of you who’ve been there: we need to know any and all questions to ask the seller/realtor.
We’ve found a beautiful place, and want to get it before anyone steals it from under us.
Remember that the realtor represents the seller, even if it is a realtor who helped you find a home.
Get a home inspection by a reputable firm who is certified to do inspections. Most of your questions are about the integrity of the home and only your representative who is skilled in such areas can represent you and answer these questions.
When asking questions of the realtor/sellers, always ask for things and make them say “no”. Your bid is really like asking a question. They want 150K, you offer 140K…you’re really asking, “Will you take 140K?”
Ask if they’ll pay the all the points on your mortgage. Let them say “no”, but get them used to the idea so they’ll agree to pay 1 point, or 1.5 points.
Ask for sellers assistance in general, which could include various settlement costs.
Ask for a full list of what is included (legally, some things have to be included, like perm. fixtures) and ask for a list of other things they are including in addition to the required lists: Window treatments? Appliances?
Ask for everything and anything!
I’m not going to repost things here… I’ll just refer you to Clark Howard’s page on the subject.
Also, before we bought our house, I read Home Buying for Dummies. Those books (or your favorite equivalent) really are fantastic. I recommend them.
Good luck!
Actually, we have an agent helping us buy and they have an agent helping them sell.
We’re slightly ahead of the game in that area. Brother-in-law is a house carpenter. He and one of his work-buddies already went over the house top-to-bottom. But we will get a certified inspector in there after seller accepts our bid.
Just found out that price quoted us is $7k less than when it was first listed - don’t know if we have much wiggle-room.
This was a new one on me - no clue what “points” were. Asked realtor (got good explanation) and asked about seller paying them. Realtor said with interest rates as low as they are there’s really no need to try & get the points paid down - would take too long to make it a decent investment.
They’re actually including a fair amount - kitch. appliances, washer & dryer, wood stove…
Thanks for the help, Philster!
and thanks, sdimbert, for the link - good tips there.
Points are always worth it.
But, look into it deeper!
Good Luck, and most of all…enjoy it!!!
Regarding the agent helping you buy. Unless you are paying him a commission, he is still working for the seller, not you. He will be getting a commission (split) from the seller via the listing agent.
If they’ve come off their initial asking price, they’re probably antsy about selling. There’s ALWAYS wiggle room. Dunno about state laws where you are, but here in Alabama you can go to the county courthouse and see what the house sold for the last time it was bought, depending on how long ago it was. That’ll let you know how much they’re making on the sale of the house.
Brief personal history: I bought a house in 1994 for $100,000. When I got transferred in 1997, the realtor working with us recommended we price the house at $134,900. I thought that was too much, and told him so. He wanted to try it, anyway. Two weeks later we lowered it to $129,900. Wound up selling it for $119,000. Somebody who didn’t know what we initially paid for the house would think “Wow, it sold for $16K less than it initially listed. The owners got screwed.” In truth, we made almost $20K on the deal.
If you have the option of paying $2K to reduce your mortgage interest rate, or putting the money in savings, pay down the rate. That’s JMHO; dunno if financial wizards would agree with that. I’ve bought four houses in my fairly short lifespan, and I highly recommend paying down the rate as much as possible.
One other caveat: Even the buyer’s realtor (the person working with you) is gonna play softball with the sellers, because he or she stands to make a commission on the deal. The realtor acting for you may not take a hard-line stand on your (possible) dealbreaking demands because they don’t want to lose that potential commission.
Again, this may be different where I live, but stuff like stoves, refrigerators, etc., usually stays with the house. Offering to “throw in” those items may not be the huge concession it appears. Only appliances I’ve ever moved have been a washer & dryer. Don’t take a verbal agreement on stuff like that – make sure it’s in the contract.
Also, if they offer anything like a “carpet allowance” or “lighting allowance” to replace worn-out items, ask how much it is, then (if your financial situation allows) ask instead that it be deducted from the cost of the house and buy the items yourself. A $1,000 lighting allowance sounds great, but you have to realize that ANYTHING that gets rolled into the mortgage amount will wind up costing more than double its worth over the life of the loan. If any sort of home-improvement allowance is offered, tell them to deduct it from the cost and make the repairs yourself. You’ll save a ton of money in the long run … if you’ve got the cash now.
Unless you put put a 20% downpayment on a house you usually endup having to pay PMI (something Mortgage Insurance). This is not insurance for you, it is insurance for the motgage company and you get to pay it.
In Illinois this used to be mandatory on anything less than 20% down. Illinois has recently waived that requirement but mortgage companies can still ask for or require it.
Our mortgage agent came up with a good way around this. We put 5% of our own money down, took a loan out for 80% and a second loan for 15%. The second loan plus our 5% equaled the 20% the primary lender wanted so no PMI. The second lender doesn’t require PMI on that small a loan. Our monthly payments are $75 less than if we went with one lender and took PMI on top.
When we crunched the numbers we have to either payoff loan #2 or sell our house before 10 years has passed. After that, if loan #2 is still outstanding, we’ll endup paying more than if we did PMI (the interest payments catch up eventually).
I’m not saying this is the right way to go for you but you may want to look into it and crunch the numbers to see what makes the most sense to you. Of course, if you can toss a 20% downpayment at your new house this is a moot point.
As to the rest others have given good advice. One thing I noticed no one mentioned is to definitely retain an attorney for this. The added expense sucks but it’s not TOO expensive and worth it to protect you from getting screwed. An attorney is definitely the one person you can count on to represent YOUR interests above anyone elses.
Also, soak your hand in ice water before going to the closing. It is absolutely stunning the number of documents you’ll have to sign. Your hand feels like it wants to fall off when it’s all done (took my wife and myself literally 3 hours to sign and initial everything).
Good Luck!
It’s Personal Mortgage Insurance, and Jeff is absolutely right. It’s almost worth getting a loan from in-laws just to be sure to put at least 20% down.
This is also good advice, but it is regional. My wife and I almost bought a hose (were under contract before escaping) in New Jersey, where even the lawyers have lawyers. It cost me over $600 in legal fees to not buy that house. Then we moved to the Midwest. The entire house-buying transaction here takes place on fill-in-the-blank contracts that the 2 realtors handled. We just kept signing revisions that got faxed back and forth. No lawyers, no hassle.
**
Also different in the Midwest!
I did have to sign the contracts in several places, but it was nowhere neat the grueling ordeal my east-coast friends had warned me about. Also, in Kansas, I wrote only one check, to the Title Company, and they paid all other parties. Much simpler than I expected.
So, moral is, things are different all over. You don’t definitely need a lawyer - ask around. If the sellers don’t have one, you probably won’t need one.
Again, good luck and have fun!
Home Buying for Dummies is particularly good. We found it way more helpful than other books of that genre. It gives you lots of great ideas of things to ask and look out for.
Good luck. We bought our first house 1.5 years ago, and being a homeowner is great.
Don’t know bout NC, but in IL it used to be “buyer beware.” The seller did not have to disclose anything unless asked. Now, in IL the seller has to list any known “material defects.” Check which is the practice in your area. Also, if a defect has been repaired, it generally need not be listed. So instead of just asking, for ex., if there are any foundation leaks, ask if they have ever repaired any or know if the previous owners did.
Ask lots of questions in the presence of your realtor, especially if there is anything in particular you are wary of. Then record the responses in writing, and send a copy off to your realtor. Even if they have no duty to disclose, they cannot make material misstatements if asked.
Ask about the neighbors/neighborhood. Find out if there are any cranks/etc. in the area. And make sure you check out the area several timesa at different times on different days to check traffic, noise, etc.
Finally, realize that no matter how wonderful the house is, something will go wrong and will have to be repaired/changed when you move in. That is just the way houses are. And whatever a pain in the ass buying and moving is, focus on the end result when you will be happy in your new home?
Also, be aware of any contingencies to maximize your wiggle room and minimize the sellers’. Also, be specific as to time of possession if it is important. I have two friends who recently moved. In both cases the date of possession was left vague. And in both cases, my friends felt dicked over when the sellers dragged their feet about getting out.
Enjoy!
Oh yeah, if you get it, post us a photo.