Thread: which is a cheaper way to buy?

In most cases the seller has already agreed to pay both the agent representing the seller and the agent representing the buyer. This percentage typically doesn't change even if you decide just to use the sellers agent, so it typically does not save you anything at all.

But by using an agent of your choice, and not the sellers agent, you can choose someone you trust and whos job is solely to represent you and has no obligations to the seller (possible conflicting interests). In general I think you are better off having your own representation.

That said, while it is typical that the seller has already agreed to pay both sides in their listing contract, in some areas each side must pay their own agent, or the structure of the listing contract could be more complex, allowing for discounts if sold 'in-house' (though that doesn't necessarily translate into a lower purchase price).

-Tim

Tim pretty much answered your question, so in summary:

- Typically it costs a buyer NOTHING to use a buyer's agent.

- It is probably in your best interest to NOT use the seller's agent to represent you as a buyer, just to prevent a conflict of interest from arising; imagine if you and the seller begin bargaining over the price or over repairs, the agent may have a difficult time trying to negotiate the best deal for BOTH sides.

okay, well i was just asking because this is what it says in the contract that i will have to sign:

2(A) It is Broker's policy to accept compensation offered by the listing broker and/or the seller. Broker may be paid a fee that is a percentage of the purchase price. Even though Broker's Fee, or a portion of it, may be payed by a seller or listing broker, Boker will continue to represent the interests of the buyer.

2(B)
1. If the amount recieved in paragraph 2a from a listing broker is less than 3%, then buyer will pay broker the difference or include it as a term in the Agreement of Sale for the seller to pay.

2. If the amound recieved in paragraph 2a from a seller not represented by a broker is less than 3%, then buyer will pay broker the difference or include it as a term in the Agreement of Sale for the seller to pay.


what does all of this mean? would i still have to pay brokers fees if i bought through the seller? or should i just make sure in the "Agreement of Sale" that the seller pays the whole 3%?

I'm assuming this contract comes from the agent also representing the seller, correct?

But yes, just make sure in the Agreement of Sale it specifies the seller will pay the 3%. Otherwise you'll end up footing the difference.

no, that contract came from the independant realtor that i use.

http://www.gregweaver.com/asp/homes/...98_5982857.pdf

another question, haha. in that closing costs estimate file, do i HAVE to prepay the $2988.49 in taxes and insurance for the whole year?

and what are points? why is it charging me $1549 for "total points"? and why is the transfer tax the same exact price as the "total points"?

You probably won't have to pay the full taxes for the whole year as it will be prorated to the day of closing. The seller is actually responsible for the taxes before the day of closing and that will be deducted from their half. Exactly how much that will be depends on the day of closing and what the tax period is for the area. Insurance may have to be paid by the year due to either terms of the loan or insurance company.

A point is 1% of the amount of the loan. It's typically charged to secure a lower interest rate.

Of course remember, this is just an estimate and values may change. You should receive a new revised (and final) estimate the day before closing.

Also remember, while you are getting a fixed loan (which is good), the amount of escrow may change year to year due to changes in taxes and insurance. So this part will change (usually yearly). It jumped significantly on ours for one year because the bank didn't catch on to a increase of taxes and insurance in one year and actually ran a negative balance. So the following year the escro portion went up to cover both the increase in taxes/insurance and to cover the negative balance. A bit of sticker shock, but not bad (plus they couldn't charge interest on the negative balance).

-Tim

Looks like a typical buyers contract. They are ensuring that they get paid in the case the seller isn't offering 3% or you decide to go elsewhere. In some areas they are commonly used, in other areas the aren't. I would however be absolutly certain what the seller is offering on any house you want to purchase so that you know what % you may have to pay, if any. You can likely also write in the purchase contract/offer that the buyer is to pay 3% to cover it as well.

-Tim

do i HAVE to pay for a point? if i do, it doesnt go toward the mortgage like a down payment, right? a 6.75 interest rate seems high, especially with a point.