Tips for buying a house in US

[RYCeT]

Hi guys, I want to buy a house. I have a pre-qualification mortgage already. The area that I'm looking for have a lot of rowhouses. I just inspect one house and I like it. I don't know about the average price of that area though. How do I research the price of the house sold in the last 3 weeks in certain area? Is there any tips for you guys in buying a house. For first offer, how much should I offer it? 10% below listing price?

I will highly appreciate any tips since this is my first time and I don't want to make any mistakes.

 

[JMT]

Do you have a realtor? Specifically a buying agent that works independent of the agent listing the home. He/she should have access to all of the information you need to make pricing decisions. They should also advise as to what to offer based on what the market will bear.

When you look in an area, have your agent pull "comps," which are comparable sales in the area for recently sold homes that are generally equal in square footage, beds/baths, features, etc.

Offers a dependent on the market for your area. Depending on the comps, your agent my suggest that you offer $10,000 below the asking, or a few thousand above. It all depends. If you are looking at brand new homes being sold by the builder, than this would not apply. They typically do not take "offers" but rather simply set the price.

You did the right thing in getting pre-qualified. That carries a lot of strength if a seller has mulitple offers, and you are pre-qualed and non-contigent.

Good luck.

 

[Old Pa]

Second to JMT's advice; don't lowball the seller if you want to be taken seriously.

Additional advice: Your written purchase offer, as amended and agreed to, is the most important document. Make sure everything important to you is dealt with to your satisfaction in the written purchase agreement.

Finally, monitor the progress of any purchase agreement contingencies in the time before closing. Deal with all problems in advance so that the closing is extremely boring. I've been to exciting closings and you do now want one of those.

 

[RYCeT]

JMT, I haven't got a buying realtor. I've gone to a realtor but the only houses he showed me are the one that listed under their agency. I've asked about comps but he seems hesitated to give me. My questions are, if I got a buying realtor, Can I still see other homes which listed under different agency? How about the commission? Do I have to pay the buying realtor? Is there any other way to get the data of the prices house sold in certain area? My friend suggest me to go to a title company and get the data from them. Will they (the title company) allowed to give that data?
btw the houses in the area, I'm interested are around 70000-100000 (That's the listing price though, I don't know the actual price sold yet), it's blue collar area and good neighborhood. I'm thinking of offering 10% off the listed price so I know what the seller bottom figure is.

 

[Old Pa]

Seller pays the realtor's commission. Realtor's commission on sales where realtor or realtor's company has listing is greater - called "hoggers" in the trade. Realtor can show you any listed property. Realtor who only wants to show you "hoggers" is not working for you.

 

[austonia]

rycet, the realator should be able to give you comps, no problem. And show you ANY house. Take your time to find what you want. it helps to see alot of houses before you buy so you actually know what you want and what you can afford. I just bought a house 2 months ago after looking for 8 months. It was worth the wait, and I'm glad I passed on a few of them that looked good at first. Consider resale value as well, and how long you are going to live there. Adjustable rate mortgages are the way to go if you don't plan on keeping the house for 30 years. Most people stay in home only 5-7 years.

 

[JMT]

A buyer's agent is highly recommended, especially when you are going through the escrow process. There will be reams and reams of forms that you will have to sign (at least in California there is) and they will help explain exactly what you are signing. A buyer's agent will have access to the MLS, which stands for Mulitple Listing Service. Realtors and Title companies are the only ones that typically have access to this service. These are homes that are listed for sale regardless of who the selling agent is.

A realtor should not be hesitant to share comps with you. That is the gauge that one would use to determine whether or not the home is priced above or below market.

As Old Pa stated, don't lowball a seller. You want to be fair when making an offer, and you do not want to insult the seller. In a word, look at homes that are within your price range.

 

[RYCeT]

Guys, can you suggest me how much lower from the listing price (in percentage) I should make an offer?

 

[Canman]

Rycet, your offer would depends on what has been sold in the past and what you think the property is worth.

For Philadelphia listings, go to:

www.prufoxroach.com/homepilot.

You can search by price for listings from many different agencies in the Philly area.

 

[john_jcb]

Also I would pay to have a qualified inspector look at the house. They can pick out things that you may overlook that could cost you later. Wiring, water damage, roof etc.. If something is wrong seller must fix before you buy or no deal.

 

[Old Pa]

Quote:

Originally posted by rycet Guys, can you suggest me how much lower from the listing price (in percentage) I should make an offer?

Be prepared to sit down and discuss (with much eye contact) how you really like the house but for at least three good reasons specific to that house, why you are offering 3% to 5% less than the listed price. Have a check for 15% to 25% down in your hands while you are talking. Take some time; develop the relationship before you mention numbers.

 

[smokey]

rycet,

For comparable housing prices, enter words like, "buy" "house" "city where you are moving" into Google. This will bring up a number of real estate agents, or attorneys (depending on where you are buying) that will list their inventories. Check these out for current asking prices. If you're lucky, you'll run into the multiple listing service for your area. This web site will let you enter your needs into a search function, and will then return homes on the market that meet your needs.

As far as an offer is concerned. It depends on how hot the market is where you are going. In a neutral to slightly rising market, you might get away with offering less than the asking price. In a market like Southern California however, you'll be competing with multiple buyers for the same homes. Because of this you'll need to bid more than the asking price to be considered. I've heard stories of homes listing for $900K, that go for $1,300K by the time all bidding is done.

Good luck.

 

[fractus2]

Check out the area at different times of day. While it may look like you hear only crickets when you visited, drop by (if you can) during the weekend or on a Friday or Saturday night and check out what's what.

You may have already done this, but start at your neigborhood and drive around the area making larger circles to get a feel for the place.

I visited the local police station and talked to an officer who happened to be on duty that Saturday and come to find out he almost got a place in the same subdivision I eventually bought in. His only thing was the local school. He had intimate knowledge about the areas crime rate and eased my worry in that area.

I tried to get comps too but with little success. The seller's agent showed me some prices on similar homes but that was for his company and checking with different realtors may be the way to go.

Getting a qualified house inspection is really good advice, especially if this house is a resale. He could find something that you are not willing to live with, or fix yourself in the long run. You can also get bargaining points for when you make an offer.

Check and see if flooding is an issue. I found what I needed at the city web site where they had links to flood zones and maps, and FEMA charts etc. If your lot is in a FEMA flood zone then flood insurance will be mandatory.

Take your time and get a good book or two on the subject. This one helped me out allot:
The 106 Common Mistakes Homebuyers Make (and How to Avoid Them), 3rd Edition
This one is good too: Home Buying for Dummies.

 

[RYCeT]

Thank's for all the reply guys. Regarding the closing cost, How much is usually cost?

 

[Canman]

Rycet, if your credit is decent, you should be paying no points up front.

As of last week, 15 yr mortgage rates are at about 4.875% and 30 yr rates are at about 5.75%.

Depending on your credit and income, you may only be able to borrow 85% - 90% of the purchase price of the home (85%-90% Loan to Value)

The following are closing costs that my bank would require:

Application Fee: $100
Commitment Fee: $350
Property Appraisal Fee: $225
Title Insurance Premium: $825
Pest Inspection: $75
Flood Certification / Credit Search: $25
Mortgage Insurance: $37.33

Along with your mortgage payment, you will have to pay property tax escrow to the bank, where they will pay your property taxes. Be sure to include monthly property taxes and any condo association fees when calculating your monthly payment.

If you need any help in calculating your payment please feel free to PM me privately. I work in commercial lending but I am going through this process myself so I am happy to help. If you want, I can also refer you to my bank branch in Philadelphia for a residential mortgage (Sun National Bank).