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Real estate question

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Posted: #1
I'm looking to buy my first home(condo), and called a few listings and was told that I need to hire a buyers agent to represent me. I found someone and was told by this broker/ buyers agent that my total closing cost would be around 3% of the total price of the property. I said okay then we got into more detailed discussion of my finance and budget. Before I set out to meet this person to sign a contract I was told that the company policy is to charge $3k flat fee for closing if the sale price is under $100k.
 
When I questiuon the high cost I was told that the banks will usually split the cost or might even pay most of it. I have no prior experience in real estate transactions, but it would seem like a bad call to go with this agent because my offers are likely to be passed over since I don't think banks will pick up the cost in a buyers market... plus they added that other stuff like title insurance would not be included in the closing cost and in addition to other fees the total closing cost would be closer to $4k.
 
Needless to say I didn't meet this agent...I'm a little lost and would like some help on this matter. I've called a few agents but none have return my call. Any advice appreciated.
 
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Posted: #2
Realtors and pretty much anyone involved in Real Estate are the scum of the earth. Be prepared and informed.
 
Are you buying as shelter or as an investment?  it sounds like shelter but you posted in the investment forum, which on covers isn't used for investing, just for gambling on stocks and currencies.
 
Do you understand that property values will continue to decline for a couple of years, AND that property taxes and insurance will rise?  The gov't would love to see you pay more for all three, but they can really only control your taxes and your insurance.  You control what you pay for the house . Gov't is doing everything in their power to see that you overpay, but it's not working and house prices will continue their slow decline.
 
Do you have 20% to put down on the house?
 
How safe is your job and is there any chance that you may need to relocate any time soon? if so renting may be your better option.
 
What year was the condo built? if it's less than 10 years old run for the hills as it was likely built with cheap, dangerous materials from China, and will poison and possibly kill you down the road, or crumble to the ground.
 
You said 'banks pick up the cost'.  Did you mean the seller should be offering to pick up some of the costs?  If the bank is the seller, make sure that they don't accept your offer, because if they do, you're paying too much
 
There's so much more, if you have any questions, i'd be glad to help, but it's not my profession, i just happen to know the ins and outs, porbably better than most in the biz. However there are plenty of covers posters in the RE biz, and they will tell you that they have your best interests in hand. One guy swore up and down he was 'one of the good ones'. Maybe you can get them to answer some more questions for you   I don't trust anyone who is looking to profit off of me as having my best interests in hand.  They need to profit and you want to get a good deal, and it's hard to keep 'your best interests' ahead of theirs, just my opinon from my experiences.
 
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Posted: #3
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#44
Posted: 4/22/2009 7:41:38 PM
Hey be easy....might want to take some time to reflect on the value of good Realtors. You seem to be fairly "with it", as proven by your first response to G8r's question.  I sell real estate, and am honest and ethical. My clients would argue with you that I bring quite a bit of value to the table. Not all have the knowledge that you do. I have helped many avoid foreclosure, and am out busting my ass to get young people into affordable foreclosed homes, and to put investors into the market to absorb the existing excessive inventory to help ensure neighborhoods have people living in their homes. I give speeches at the local high school advising on the importance of good credit, volunteer for community suppers, go to Board of Supervisor meetings to make sure private property rights are protected, and on and on. Give us a break man, the market is really tough. It's not as easy as it seems to be in real estate. Cheers
 
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Posted: #4
 
you could page that guy from this thread, linked above.  FriedShrimp says he's in RE, but i'd steer clear of him, he's hard to follow and i'm not sure he would be any help.  There are a bunch of guys that post on covers in the business.  just not sure how many you'd find in the investment forum, as this is just for gambling on stocks, not for buying homes, neither of which are great forms of 'investing' necessarily.
 
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Posted: #5
I'm buying for shelter in vegas, my budget is under $40k and it will be a cash transaction. Most of the listing are REOs, my concern is the banks willingness to cover the closing cost since they have the upper hand in the current market. I don't want to be stuck with a broker/agent for 6 months knowing the chance of closing is slim. 
 
I'm not sure what to make of your comment regarding the workmanship of homes less than 10 yr old, I can only assume it's  tongue-in-cheek.
 
If anyones currently working as an agent I would like to know the standard closing cost I can expect to pay in this market.
 
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Posted: #6
Closing costs vary by location, so it isnt one set price.

Closing costs consist of real estate comissions if you are selling, title insurance, any loan origination fees, state taxes or fees, local taxes and/or fees, title agency costs (for closing) admin fees like couriers, funding, interest and impounds..

I would say that 3k is a starting point for closing costs, but it can be a LITTLE lower and a TON higher.

Thinking the bank will cover those costs is a bit of a stretch..the way to get that covered is to try and find listings that ARENT REO, and have either gone through the auction and are being flipped, or that are in early stages of foreclosure and the person wants out, you can make an offer contingent on covering closing costs.

40k might get you a place in a tough area, but I doubt it will get  you much if you dont want a mortgage.
 
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Posted: #7
Thanks for the helpful info WSC
 
 yes it would be in a tough area(for those of you familiar with vegas demographics...
 
Denise drove 5 miles South and 12 miles East to get to the market from her house. How many miles is her house from the market?
 
A: 13 ghetto miles
 
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Posted: #8
Quote Originally Posted by gunonenic:

I'm buying for shelter in vegas, my budget is under $40k and it will be a cash transaction. Most of the listing are REOs, my concern is the banks willingness to cover the closing cost since they have the upper hand in the current market. I don't want to be stuck with a broker/agent for 6 months knowing the chance of closing is slim. 
 
I'm not sure what to make of your comment regarding the workmanship of homes less than 10 yr old, I can only assume it's  tongue-in-cheek.
 
If anyones currently working as an agent I would like to know the standard closing cost I can expect to pay in this market.

search thru some of the threads i've started in the past, pertaining to '21st century houses', built with drywall imported from China that is ALREADY proving poisonous to said new build home occupants.

I live in an area where there are houses still in tact and livable that are over 200 years old.  New builds are only built with a 50-60 year expected life span, my roof will last longer than some of these new houses. Add in all the deadly aspects they are finding already from building houses on the cheap, and i would strongly recommend buying something that was built pre this century.  Why else do you think that builders are bulldozing houses and entire developments rather than waiting for the 'economy to turn'?  Partly because they know already all of the problems we will be facing over the coming years dealing with all these cheaply made houses, and partly because they can't afford to sit on the land anymore, and partly because it will be easier to sell an uninhabited tract of land than a big plot with 2 individual homeowners owning in the middle.

Look man, you are in the worst sellers market in America, which SHOULD mean the best buyers market, but thanks to our gov't you will still be hard pressed to get a 'good deal'.  As i said before there are many on covers that work in this field, but i am very up to date with the housing situation in this country, and i have nothing to gain by walking you into a bad situation, rather i'd love to offer help so you don't get screwed and could possibly walk into the best situation you could hope for all things given.

The 40k, is that your down payment? or are you hoping to walk into a cash deal and cover all costs with 40k?  Are you familiar with the rules of living in a condo community? fees? stipulations? regulations? 

I am as big a housing bear as you will find, but seeing as how you want to buy, i think you'd rather listen to someone like me than an agent or one of these perma-everything-bulls that always are looking for a recovery, and believe prices of everything should always only go up

Ask the mod KOAJ, he recently sold and has been looking to buy for awhile and knows how ridiculous the market is.  i know Wallstreetcappers had said about a year ago he was thinking on moving, but i havent heard him talk about it recently

 

 
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Posted: #9
be easy, you obviously have tremendous knowledge and insight. I took your comment at face value and I hope theres no offense taken. I will take that in consideration, but right now my main concern is getting a roof over my head. I've been paying rent for the better part of 10 yrs, and it's time to have my own. I don't see a better opportunity to buy down the road, at least not likely in my lifetime. Yes, I've done the math and it will be cost effective and benefit me in the long run. Am I scared? Yes. It's a big step and I weigh the pros and cons through my mind day and night. That money is everything I have...but I'm afraid if I don't buy now I might be renting forever.
 
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Posted: #10
I have another question...
 
Most of the listing I see are contingent/pending offer, but the sale would never close and the ad run for months. It would seem like they're listing low ball prices to attract buyers but you'd never have a shot to buy them for the listed price. What are some of the tactics used by listing agents that I need to be aware of?
 
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Posted: #11
Gunonenic, I am an agent in vegas and will help you. First off you are right about contingent and pending offers, what os going on here is the listing agents are listing the homes under market value to get traffic and offers there are a few ways to get around this. Also you are right about that agent you talked to hes probably not someone you want to work with just for the simple fact commission is based off the sales price which is 3% not a flat fee of 3000 dollars it might work like that but i have been in RE for 12 yrs. all in vegas and at the same office since then so some offices may have that policy i doubt it. Last you are right about the time to buy is now, how much more can a house at 40 or 50 grand it has already lost 50%, my opinion is in that range you will be in  a good situation. If you need more info send me an email or reply to this post and if you don't good luck in your search.
 
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Posted: #12
sportsfan, I will pm you after you accept my friend request
 
Covers Linesmen
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Posted: #13
guno - call a local coldwell banker or weichert agent...be wary of people on a msg board

also, dont think prices wont still come in. its not like companies are hiring and banks are "free" with their money

in this market, you pay what you want to pay and not a penny more. make sure you are super-educated about where and what you are buying and what the total costs are month to month...utility bills, cable, prop taxes, home insurance

i cant stress the bold enough...ive offered 30% below asking prices for houses in my area only to have everyone tell me i am insulting. my response is "we can wait a year and at that time you will be begging for this same offer"

ive said that for two years...each time a house price is lowered, we lower our first offers. if i could pay next to nothing i could
 
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Posted: #14
Quote Originally Posted by sportsfanatic2:

Gunonenic, I am an agent in vegas and will help you. First off you are right about contingent and pending offers, what os going on here is the listing agents are listing the homes under market value to get traffic and offers there are a few ways to get around this. Also you are right about that agent you talked to hes probably not someone you want to work with just for the simple fact commission is based off the sales price which is 3% not a flat fee of 3000 dollars it might work like that but i have been in RE for 12 yrs. all in vegas and at the same office since then so some offices may have that policy i doubt it. Last you are right about the time to buy is now, how much more can a house at 40 or 50 grand it has already lost 50%, my opinion is in that range you will be in  a good situation. If you need more info send me an email or reply to this post and if you don't good luck in your search.


 I have one word for you "Detroit"
 
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Posted: #15
Koaj,

In his area, even in a great neighborhood the property taxes will be 1/2 to 1/4 what you pay in NJ, there is fierce broker competition, a haughty joint like Weichert doesnt exist..its discount agents galore. You can hire a buyers agent that will rebate back 1-2% towards closing costs, try and get that in NJ.

Vegas and PHX are great markets to enter right now, no doubt about it. Both have great underlying demand which will last long term and great prices for great houses in great areas.

In NJ and PA you cannot say those things, prices are still WAYYYY too high in good areas and the pick of houses in good areas is nowhere near what it is out in areas like Vegas.

I get a huge laugh out of seeing these 80 yr old houses in PA with roofs bowing, rust in the rain gutters and no garage selling for 150 a foot plus.


 
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Posted: #16
KOAJ&WSC
 
weichert don't do business here, still looking around no rush, but my faith in brokers of any kind being straight is dwindling
 
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Posted: #17
I'll take that back, that's was a cop out...there are good and bad people in any profession, apologies to those who are truly dedicated.
 
Covers Linesmen
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Posted: #18
wall - saw some fitch report yesterday stating that NJ had another 20% to go, NY had 11%, and CA had 36%

who knows...i dont think any of these agencies are right but i know there is no bottom.

the bottom is where a buyer sees value in a house, thats it...lots of inventory out there
 
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Posted: #19
Quick rule of thumb on closing costs in Georgia is typically 1,500 (attorney fees, title search, transfer taxes) + 1.5% of the loan amount but you are paying cash so skip that part.
 
On top of that, you will have "prepaids" for items you pay in advance like tax prorations, HOA, insurance, etc.  For example, if the tax bill is not payed until October, they will prorate it at the closing table.
 
 
 
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Posted: #20
Sportsfanatic2 makes sense in that some of the bank prices are already low and they know that.  Time on market is typically the main thing to look at for negotiating purposes but I would be floored if they did not pick up all the closing costs.  Just write it in the offer/contract.
 
You are paying cash which banks like to see which is good.  Lot of deals are getting squashed because of appraisals and cash buyer eliminates that risk.
 
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Posted: #21
I would recommend a "seasoned" realtor when dealing with "As Is" bank type properties.....
 
What kind of title will they be transferring to you?
 
Are they going to turn on the utilities while you inspect it?
 
Clearly defined boundaries or survey?
 
Any deed restrictions, permitting issues, covenants, termites, all that stuff can bite you in the butt if you don't check into it.
 
I have no clue what's going on in your market and what prices are doing but even if it drops 20% in value, it "may" still be better than paying rent and better quality of life.
 
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Posted: #22
I am a realtor and what you should do is contact the listing agent directly on a property you are interested in. If you do your own homework on pricing (go to realtor.com and check out listings) when you go to the listing agent he will get both sides of the commission and won't want to lose you. YOU SHOULD PAY ABSOLUTELY NOTHING TO THE AGENT. HIS FEE COMES FROM THE SELLER.
 
Get a real estate attorney to guide you and ask him upfront what is fees are. Your closing costs will be low since you are not borrowing money. A title search will need to be done and the real estate attorney is usually linked to a title company so if you google...attorney+real+estate+las+vegas you will be in business in an all in one situation and he has your best interests in mind for a flat fee and he does this stuff daily. The attorney will write the offer up with you and everything is negotiable with the bank. A good real estate attorney who has short sale or bank owned experience will glide you through everything relatively seamlessly.
 
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Posted: #23
Quote Originally Posted by gunonenic:

I'll take that back, that's was a cop out...there are good and bad people in any profession, apologies to those who are truly dedicated.

I probably owe an apology to the few 'good guys' in the business too.  It's alot easier to be mad at all the assholes(and there are PLENTY of them working in RE these days), then it is to seek out and find good honest help.  And after reading MRSARATOGA post, i'd have to say he sounds like one of the good guys, and you should follow his advice

 MRSARATOGA

you will be in business in an all in one situation and he has your best interests in mind for a flat fee

 

when you go to the listing agent he will get both sides of the commission and won't want to lose you

but here's the magic question. How likely is this listing agent to help you brow beat the hell out of the seller for the lowest price?

As a buyer you want to pay the lowest price

As a seller you want to recieve the highest price

As an agent you want to make the most money

SO, who's 'best interests' are the agent going to have in mind

 

 
Covers Linesmen
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Posted: #24
SO, who's 'best interests' are the agent going to have in mind
------------
with an unhappy buyer, both the seller and agent get nothing
 
 
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Posted: #25
Quote Originally Posted by kingpincarbs:



 I have one word for you "Detroit"
Vegas is not Detroit with all those shit cars and trucks they try to sell, this is a vacation city or gambling town whatever you want to call it. There is very little manufacturing here and this town was built on people looking to throw there money away and have a good time and that is what people expect when the come to LOS WAGES. This weekend the town was filled with tourists and Detroit is going down hill today, tomorrow and for a very long time. It's just a much better place then Detroit will ever be.
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