first time buyers

**emg_pgh** · 12-14-2009, 12:31 PM

Hello, everyone! Thank you in advance for any help that you can give. My girlfriend and I are very interested in buying a home. We have seen it three times and have looked at other houses in the area, but nothing compares to this one house. We are rather clueless about this process, and our agent seems to be pretty sincere and helpful, but we want to check in about a few things. Here is some background information:

1. The house is listed at $179,000, which has been reduced from $209,000. It has been on the market since May, and the sellers were not motivated to sell before because they were building another house. Now that the house is built, they have come down in price.

2. The sellers paid $145,000 for the house in 1999 and have made some improvements to the home. Is it normal for sellers to ask for so much more than they paid? Can that be a reason for us to make a significantly lower bid?

3. In the area, the average sale is between $230,000 and $240,000. This particular house is up a hill from the downtown area, which accounts for the cheaper price tag.

4. All kitchen appliances are included and in good condition. The kitchen itself is gorgeous and better than we ever thought we could afford.

5. We are getting an FHA loan, even though we still don't quite understand what that means. We have a little bit of money to put down (about $5,000, if we have to), but we're confused about the estimate of closing costs that we received today. That estimate is about $7,000, but it did not include a down payment. Who pays for that? Us or the sellers?

6. Our agent has explained that we would be asking for sellers' assistance, whatever that is, so we shouldn't bid too low. However, he is also the agent for the sellers (which he explained makes him a "dual agent"), so should we not trust him with that because the more we pay, the more commission he gets?

Thank you so much. We're excited and terrified, which are probably common emotions for people in our position! Have a great day!

**caseyzeman** · 12-14-2009, 03:44 PM

HI there good for you that you are getting your first house. Is it your first house. Because if so you can get the tax benefit. First off, you say that the purchase price is like 179k now and 10 years ago they paid 135k right? Since then they have done some home improvements. It is actually normal for the value of a property to go up. Especially when it has been 10 years since it has been on the market. It is called appreciation. The value of the property has appreciated. Now it has not actually appreciated that much considering it has been 10 year. I usually see increases of like 100k in 10 years.

Also FHA is a government loan that allows you to put less money down. Only putting 5k down tells me that you are putting the least down needed and also that your income qualifies you for that amount. Do what your agent says because he is getting the sellers to cover your closing cost which could be in access of 10k by the time it is all done. FHA requires mortgage insurance so if the seller is paying that as well that is a good deal. Sounds like your agent is getting double commission. The only tricky part to that is making sure you are covered. You know if there is some foundation problems or other issues with the house the agent will be more weary of divulging that information however he has a fiduciary obligation being required by law to do so. Just make sure that he has your best interest in mind and you will be fine. If you have anymore questions always feel free to ask.

**Greg** · 12-15-2009, 05:52 AM

Make sure the contract has a home inspection contingency and a FHA loan contingency.

If you pay $179,000 and the seller pays some of your closing costs and the other expenses related to selling (5-8%) they won't be walking away with very much profit.

It looks like they are very motivated so try a lower offer and see how they respond.

**First Time Home Buyers** · 12-16-2009, 08:25 AM

Sorry to sound harsh, but from the long list of questions you have, here's my advice:

GET A NEW AGENT

You need someone who is going to take the time and answer these questions for you. If you ask a question, and they answer it, but you're still confused, ask them to explain it further.

Buying a home a HUGE financial decision, and you need to know the impact of your choices.

Also, you need to get an agent who is not a representative of the seller. You see, they work for the seller to try and get the highest price for the seller--that's their job and that's the law. So you need to get an agent who is representing your best interests as well. He can be a "Dual Agent" but by doing so he cannot really help advise either one of you.

And I hope you are approved with a mortgage company. Sounds like you still have a lot of loan questions too, which means you need to find a trusted real estate team of professionals you can count on.

Let me know if you need help finding anyone in your area.

Good questions, and best of luck!

**caseyzeman** · 12-17-2009, 08:18 AM

I would say get a different agent as well however it seems like the price is pretty good and if you are able to get reparations from the seller then I don't see what the problem is. Sometimes if it is one guy representing both parties he can voice the needs and work through them easier. However he can also hide certain things as well if he feels like they would hinder the sale. And that is the danger of it. it could go either way in my opinion. this deal seems alright though. If the seller is really worried about the loan let me know and i can go over the details. Loans are my specialty.

**BoiseRealEstateSoup** · 12-17-2009, 09:00 AM

I'm always turned off a bit to see peoples first response as: ditch your agent.

Honestly, unless you have all the details of the circumstances, it's not good advice to just ditch someone. And in this circumstance, it could very well be that the buyer feels weird or stupid about asking what may seem like simple questions. I honestly doubt the agent is making the buyer feel that way. I can't tell you the times I've had buyers start a question with: "I know this is going to sound stupid....."!

How many times would you have lost a client if they wound up at a forum like this because they were just confused or wanted some anonymity to ask a certain question.

I doubt that you've had 110% customer satisfaction 100% of the time! Having the ability to sit down with your client or your agent and discuss seriously what might be going wrong with the relationship ie: communication, follow-up, guidance, etc. etc. is only going to make your relationship stronger and improve the chances of really getting more than your moneys worth!

Real estate agents can't read minds and unless you tell them that you're not understanding them completely, then he/she might assume you do.

If, after you have attempted to get on the same page together and you just cant, then you might find a new agent.

In the mean time agents, lets just remember that it's a rare opportunity to be able to get a second chance with a client even when you thought things were going well. We've all made mistakes and deserve and opportunity to right the ship and get back on course!

**CharlesHeyward** · 12-18-2009, 03:17 AM

Hi, here are a few tips on types of closing costs (you wrote you were surprised by amount of closing costs you have to pay)..hope you find them helpful

On the Buyer