Looking for experienced homebuyer knowledge??

[FiddlersGreen87]

Hey all, my wife and I are looking to buy a home in the Augusta, GA area. I'm having a heck of a time finding any real substance of information for the builders and neighborhoods we're considering. I'm hoping any of you that have had more experience with buying a home can point me in the right direction for what I should be looking for.

I've tried searching for information that's current on the builder/neighborhood we're considering the most, but all I get back is either information that is 1+ years old or all sales pages for homes available.

Any information on what to look at in a home and what to ask would be great! I'm by no means a handy man, so please help educate me.

 

[airdog_47]

Most times the banks require the house to have an inspection done prior to you signing mortagage. For the couple hundred bucks it's a good idea to hire and inspector also since the bank has it's own set of minimum standards it want's to see. This should take most of the questions away pertaining to the house being sound and structual. As a fairly new home I would check into any warranty associated with the homes. Many times the builder has to carry a warranty on newly built homes for a period of time. I would say with such a new home you shouldn't have to be a handy man quite yet.

The only advise I can give on buying a home are these points. Could you see yourself living in the home and being satisfied with it for 20 years? Not to say you need to stay there for 20 years but if your not pleased with it now you will never be. Can you move into it today and not need to change somthing or remodel somthing? You don't want to start out with house under construction. Remodel or change after you've been there a while. It should be a long and steady program when it comes to house improvements. Lastly, drive by the house / visit the neighborhood on odds times such as during the late evening, early morning or weekends. This will give you a different view of what the neighborhood is like. We used this when looking at a house we wanted but found that a neighbor on the block was into building race cars and would start up and rev motors saturday morning.

 

[SharonaZamboni]

Be sure to investigate any HOA rules, fees, etc. when you find a house you like.

 

[Cheesy_Goodness]

We closed on our house this year. In terms of what to look for, there are too many variables to consider, but I did learn a few things in the process of looking:

1) Find a realtor that several people recommend. Our realtor (really they were a team so there were two of them) was recommended by several of my wife's friends and for good reason. They always made themselves available to answer questions and kept us updated at every step of the way.

2) If a home warranty is available, take it. We closed in May and our AC broke in August. We paid $75 for the service call and the rest was taken care of. Couldn't be happier with it.

3) This is secondary but ask the current owners of a house you're interested in for utility bills. If a family of 4 has an astronomically high electric bill it could possibly be indicative of a bigger problem (drafty windows, etc).

Good luck!

 

[FiddlersGreen87]

Thanks everyone and please keep it coming. Also, is it rude to ask your realtor if they get a kick back from specific buyers? The reason I ask is because there's a specific neighborhood we're considering, and all the homes are built by Crown Communities.

We like the layouts and the looks of the homes, but I'm reading a lot of online reports from multiple sources about craftsmanship and warranty battles.

My concern is we went and looked at this neighborhood last night, and the realtor is very friendly with the representative of the neighborhood, I'm assuming she's a realtor as well. To the point where they've been to each others homes, the rep attended our realtor's son's wedding this past weekend, etc. They may be just friends as people tend to become through multiple interactions, but my concern is that I've almost been set up from the start.

Our realtor has been fairly honest with us at face value, but would if be of poor taste to ask her if she receives kick backs from builders and if so, which ones?

Also, should I make a point of going out with a second realtor?

 

[betarhoalphadelta]

Our realtor has been fairly honest with us at face value, but would if be of poor taste to ask her if she receives kick backs from builders and if so, which ones?

The term "kick back" would be rude IMHO, but the question itself isn't. It's a standard principal-agent problem, and you need to know what your agent's incentives are.

 

[chocotaco]

My advice:

1) Do not buy if you are not 100% sure you can afford it. Factor in all HOA fees, property taxes, and closing costs. If you're cutting it close, you can't afford it.
2) Do not buy if you are not 100% sure about the home. You're going to live with your decision for a while.
3) Buying a fixer-upper is a great way to save money (as long as you are sure you're able to do some fixer-upping)
4) Get a really thorough inspection. If possible, accompany the inspector during their inspection so you can see everything for yourself, as questions, and point out things that look dubious to you. This should take several hours at a minimum. It will cost a few hundred bucks, but better than a few hundred grand for a house that turns out to have problems.
5) I disagree that home warranty is useful. It is very expensive and they hire the worst, cheapest contractors. Sometimes it ends up being worth it, but it wasn't for me and I regret getting it (they refused to fix certain things, and the contractor they hired to fix other things had no idea what he was doing and didn't fix anything at all for the $55 service call fee).

My wife and I bought an REO (bank-owned property) which saved us a lot of money and we got a great house. It's been around 3 years and we still have a list of fixes we haven't gotten to, but if you have the DIY spirit (and a lot of patience for living in a less-than-perfect home for a while) then it can save tens of thousands to go a similar way. On the other side of the coin, if you can afford it then buying a nicely finished new home can save you a lot of headache and stress.

 

[FiddlersGreen87]

The term "kick back" would be rude IMHO, but the question itself isn't. It's a standard principal-agent problem, and you need to know what your agent's incentives are.

How would you ask it?

 

[chocotaco]

Oh, one more: if your realtor is impatient or pressures you to buy, find a new realtor. We had a wonderful realtor who showed us dozens of homes over a period of 2-3 YEARS before we found the right one.

Look for homes (using the local MLS website) that aren't listed very well. Our home was listed as 0 sq ft lot size, even though the lot size is actually several thousand sq ft. This meant that not many people were looking at it, and we were able to get it for a nice low price without any competition. Sometimes the listing agent will do this on purpose with bank owned properties because if the home doesn't sell in a certain amount of time, their buddy will go buy the home on the auction block for cheap and turn it around (with a proper listing) for a big profit. The shady listing agent's loss can be your gain.

 

[GilaMinumBeer]

How would you ask it?

You ask what the agents incentives are for selling in that area.

 

[jbaysurfer]

How would you ask it?

Do they receive any "compensation" from the builder/developer (or whatever party you're wondering if they receive compensation from.

 

[kombat]

Also, is it rude to ask your realtor if they get a kick back from specific buyers? The reason I ask is because there's a specific neighborhood we're considering, and all the homes are built by Crown Communities.

Also, should I make a point of going out with a second realtor?

It's highly likely that the first time you met with your realtor, he/she had you sign a "Buyer's Representation Agreement" (BRA). This makes them your exclusive representative for a minimum set period (usually 6 months). This prevents you from using them to find you a house, then cutting them loose and buying the house on your own, cutting them out of their commission.

If this is the case, then keep in mind there are other implications. For example, it makes no sense for you to consult another realtor, because one of the first things they'll ask you is if you are currently represented by another realtor, and since you are, you're worthless to them. They can't make any money off of you, and if they even tried, they'd run the risk of running afoul of their organization's code of ethics (a realtor code of ethics, that's a laugh) and potentially lose their license.

Furthermore, there's one other implication here that my wife and I found out the hard way. When we were looking for a house, we enlisted a realtor. She showed us a handful of existing houses for sale, and then one day my wife and I stopped into a builder's showroom to see what some new houses had to offer. It turned out we really liked their designs and the neighbourhod, so we put down a deposit on a new build. They incentivized us with $35,000 in free upgrades.

We went back and told our realtor that we'd found a house and made a deposit, and she reminded us about the BRA. She wanted her cut. Fine with me, I figured, the seller pays the commission so it's no skin off my nose. I had to call the builder back and tell them that we in fact were represented by a realtor. At that point, the builder informed us that that was fine, no problem, but they could no longer offer us the $35,000 in upgrades. We'd have to pay "sticker" for all upgrades we wanted.

So we lost out on $35,000 worth of upgrades, so our realtor could get her 3% ($11,000) on a house we found on our own. I was pissed, but I'd signed the deal, so our hands were tied.

 

[ndinh]

Great replies everyone. We bought our house 2.5 yrs ago and was looking for awhile to find what we thought was our close-to-perfect house. Trust me, there are no perfect homes unless you're building your own home from the ground up. I agree, drive around the neighborhood and look to see if you can walk your dog or baby stroller around. Tons of cars parked along a narrow street is an obvious no no. Look to see if you have large trees on your property that may cause headaches eventually. Ask the owner about utilities and look at previous property taxes. After we bought our home, we discovered that our water rates are super high (...and I'm dumb enough to brew) compared to other neighboring cities. Prop taxes are also higher than most but we knew that going in. If it's an older home, pay for a good inspector, it's worth it. Also, we were naive and asked our realtor about kick-backs and she was very offended. I've heard others have gotten thousands back to cover closing costs. After her $19K payday she sent us a $500 gift card, at least it's something.

 

[Cheesy_Goodness]

One more secondary thing I'll add is if you're able, try to "stake out" the place during periods of heavy traffic, namely during morning and evening rush hours. If it's gets heavily congested in your immediate area, that might be something important to consider.

 

[cernst151]

Check for first time homebuyer programs. When I bought a few years ago there were Federal, State and City (in Minneapolis) programs through both government and non-profit organizations. I got a 0 interest loan from the government that helped me increase my downpayment and it didn't impact my ability to refinance a few years later.

Speaking of that, DO NOT accept a second mortgage if they suggest it. Sometimes you'll get a mortgage for the bulk of the cost and they'll suggest a second mortgage to cover the downpayment. DO NOT DO THIS! I know several people who ended up getting stuck unable to refinance or make any changes to their primary loan because the second loan had been sold to a separate company.

If you don't know anybody who can recommend a realtor you might want to check Yelp or even better Angieslist.com. That's a good site to find any contractor you may need in the course of being a homeowner but a good place to start would be finding a trustworthy realtor.

Also, seriously consider a 15 year loan if you can afford it. At least run the math. We recently refinanced at a 15 year loan which cut our interest rate in half. In the end our monthly payment only went up by a couple hundred dollars per month and we saved a ton of money over the life of the loan. I agree with the person above though. Don't do this if it puts you "on the edge" of being able to afford it. If you're on the edge, you can't afford it.

 

[Airplanedoc]

Also I like to visit the neighborhood several different times of day. You could see a quiet street at 3pm but from 9-11 pm it's a busy street with traffic. What is the school bus situation when you are trying to go to work etc.

Also talk to neighbors about area. most likely several homes were built by the same builder, they might be able to offer insight into potential problems.

Talking to neighbors might enlighten you to potential ********. If you talk to someone about the house and walk away thinking I can't stand that guy, you probably don't want to live next to him or her no matter how much you like the house.

 

[b-boy]

Get pre-approved for a mortgage. It will speed up the sales process.

Understand the terms of your mortgage. If your getting an ARM, understand what happens if interest rates go up. How much could your payment rise? Are there balloon payments due at any point? Don't take a loan with a low interest rate that could bite you in the ass a few years down the line.

Don't listen to the agent when they tell you how much home you can afford. That number is always too high. Unless you want furniture, vacations, and the ability to buy a car every now and again, ignore that number and figure it out on your own. You don't want to be a slave to your house.

A good Realtor is important, but:

• Keep in mind that in most states they represent the interests of the seller, not you. They are not your buddy.
• They are required to take any offer you make to the seller. A lot of them will try to talk you out of an offer they deem is too low. If they balk, just let them know that you want the offer made. I bought my house for significantly less than the offer my realtor wanted to make on the house. If I had listened to her I'd be out $10K.

A home inspection is important. Pay for your own. I used the inspection report provided by the seller's agent and had to replace my roof, and part of my fence the first year in my house. There was no mention of it in the inspection.

Get yourself a real estate attorney. It will cost a few bucks, but it's better than finding out years later that there are title problems when you try to sell the house.

 

[Bobby_M]

My advice is to not hire a realtor to look for you. This is the internet age and with sites like Zillow, Trulia, and all the major realtor sites that syndicate MLS listings, there is very little reason to hire a buyer's agent. Of all the people I know that bought a house in the last few years, including many people that have looked at my house that I'm selling, 99% of them found the listing on their own and told their realtor about it. They get a 2.5% commission for submitting your offer?

The best situation for a buyer is to make the offer through a property's listing agent. Why? They stand to make the full commission. While they are supposed to be looking out for the seller's best interest, you cannot expect them to be able to resist that bias. Do they want to make 2.5% or 5%? You tell me. Even if they do so subconsciously, they will push your offer to their client just a wee bit harder.

The worrisome folks will say that you need an agent to look out for your interests but that's why you hire a lawyer and an inspection service.

 

[chocotaco]

It's highly likely that the first time you met with your realtor, he/she had you sign a "Buyer's Representation Agreement" (BRA). This makes them your exclusive representative for a minimum set period (usually 6 months). This prevents you from using them to find you a house, then cutting them loose and buying the house on your own, cutting them out of their commission.

If this is the case, then keep in mind there are other implications. For example, it makes no sense for you to consult another realtor, because one of the first things they'll ask you is if you are currently represented by another realtor, and since you are, you're worthless to them. They can't make any money off of you, and if they even tried, they'd run the risk of running afoul of their organization's code of ethics (a realtor code of ethics, that's a laugh) and potentially lose their license.

Furthermore, there's one other implication here that my wife and I found out the hard way. When we were looking for a house, we enlisted a realtor. She showed us a handful of existing houses for sale, and then one day my wife and I stopped into a builder's showroom to see what some new houses had to offer. It turned out we really liked their designs and the neighbourhod, so we put down a deposit on a new build. They incentivized us with $35,000 in free upgrades.

We went back and told our realtor that we'd found a house and made a deposit, and she reminded us about the BRA. She wanted her cut. Fine with me, I figured, the seller pays the commission so it's no skin off my nose. I had to call the builder back and tell them that we in fact were represented by a realtor. At that point, the builder informed us that that was fine, no problem, but they could no longer offer us the $35,000 in upgrades. We'd have to pay "sticker" for all upgrades we wanted.

So we lost out on $35,000 worth of upgrades, so our realtor could get her 3% ($11,000) on a house we found on our own. I was pissed, but I'd signed the deal, so our hands were tied.

Wow, that really sucks. I was working with a realtor for over 2 years and never signed anything until we made our first offer (which didn't pan out). But nevertheless, that sounds like a pretty shady realtor to lock you into using him or her for any length of time.

Good lesson for the OP, though. Don't sign anything until you've found the home you want. And then, read it very carefully and make sure there's no unexpected obligation for you.

 

[chocotaco]

My advice is to not hire a realtor to look for you. This is the internet age and with sites like Zillow, Trulia, and all the major realtor sites that syndicate MLS listings, there is very little reason to hire a buyer's agent. Of all the people I know that bought a house in the last few years, including many people that have looked at my house that I'm selling, 99% of them found the listing on their own and told their realtor about it. They get a 2.5% commission for submitting your offer?

The best situation for a buyer is to make the offer through a property's listing agent. Why? They stand to make the full commission. While they are supposed to be looking out for the seller's best interest, you cannot expect them to be able to resist that bias. Do they want to make 2.5% or 5%? You tell me. Even if they do so subconsciously, they will push your offer to their client just a wee bit harder.

The worrisome folks will say that you need an agent to look out for your interests but that's why you hire a lawyer and an inspection service.

Sorry, I really disagree with this. NEVER, EVER use the property's listing agent as your own agent.

The listing agent is obligated to get the highest possible price for the property, which will also bring him or her the biggest commission. You will not get a break from them out of "thanks" for not bringing your own agent. This is like retaining the prosecutor to defend you in a criminal trial. You can only lose.

Before I learned this, I did look at several properties without a realtor of my own. The listing agent of course was always overjoyed to hear that I would be potentially using them as my buyer's agent. What followed was a lot of disingenuous pricing and high pressure sales. It's simply a bad idea. If it worked out well for you, then you're lucky you got an honest one. Very, very lucky.

 

[FiddlersGreen87]

Well one of my benefits is that my realtor is free of charge not counting the sale commission. Other than that I appreciate all the feedback. We do know not to wander into anything without talking to our Realtor first. Please if you have anymore to add, don't hesitate, I appreciate letting me learn from your good and bad lessons.

 

[Calichusetts]

Those are some crazy BRA stories. Don't know if this is a state to state thing but BRAs where I live are very flexible. They basically just say that you are working with said agent. The wife and I went through several agents with our first house and several more with the search for another.

I'd just say that if you really want to buy, buy now. Rates are going up over the next year and if you can get something in the low 3%, go for it.

Also, make sure your not becoming a slave to your home. My wife found her "dream" home, literally looked like the money pit house but it would have been such a big mortgage that we would not be able to do anything else. I put my foot down, make sure you can enjoy life and not just stare at a fancy house.

 

[kombat]

Well one of my benefits is that my realtor is free of charge not counting the sale commission.

Do not fall into the mistaken belief that your realtor is "free" for you. It's true that the seller pays the commission, but in reality, they simply factor that into the sale price. As the buyer, YOU are paying the commission. Think about it. Of all the people involved in the deal - you, the seller, your agent, their agent - YOU are the only one shelling out money, and everyone else is getting paid.

Don't get complacent. You are paying for your realtor (and the seller's!). Make them work for your money.

 

[FiddlersGreen87]

Do not fall into the mistaken belief that your realtor is "free" for you. It's true that the seller pays the commission, but in reality, they simply factor that into the sale price. As the buyer, YOU are paying the commission. Think about it. Of all the people involved in the deal - you, the seller, your agent, their agent - YOU are the only one shelling out money, and everyone else is getting paid.

Don't get complacent. You are paying for your realtor (and the seller's!). Make them work for your money.

Thanks, and I realize they're going to be paid for their services. As a USAA member, their services are free of charge with the exception of the commission. I could terminate her services at any time and receive a new realtor the same day. It's in the contract I signed.

 

[broadbill]

Thanks, and I realize they're going to be paid for their services. As a USAA member, their services are free of charge with the exception of the commission. I could terminate her services at any time and receive a new realtor the same day. It's in the contract I signed.

Also remember the buyer realtor only receives the commission if you buy a house. So keep in mind that your realtor really isn't working solely in your best interest, but rather in theirs to get you to the closing table. For alot of the process, your goals and their goals are aligned, but sometimes they aren't.

Example: The Freakonomics guys found that when realtors buy their own houses, they frequently pay less for them than what their clients pay for an equivalent house. The reason is there really isn't an increased financial incentive for them to get you the absolute lowest price...instead, they try for the price that will get the deal done and everyone (buyer AND seller) at the table. Although their "cut" is based on final sale price...often times its not worth the extra work for them to get the lowest price possible.

Always keep in mind how somebody gets paid.

 

[FiddlersGreen87]

Always keep in mind how somebody gets paid.

Absolutely valid point. Our one advantage is we have a lot of time to find a house. The only fight is going to be our own impatience. We are in no rush, so I'm completely ok with going to the negotiating table with the lowest offer and walking away if it gets too high.

 

[broadbill]

Absolutely valid point. Our one advantage is we have a lot of time to find a house. The only fight is going to be our own impatience. We are in no rush, so I'm completely ok with going to the negotiating table with the lowest offer and walking away if it gets too high.

Yeah, everyone says this, but they see a place, they envision their lives there in the house, in the neighborhood, how they are going to decorate/renovate to make it their own, and suddenly low-balling isn't so easy.

Like it or not, house-buying has an emotional element to it (for both parties). A low-ball offer may offend the seller and they refuse to do business with you.

 

[DrunkleJon]

Also I like to visit the neighborhood several different times of day. You could see a quiet street at 3pm but from 9-11 pm it's a busy street with traffic. What is the school bus situation when you are trying to go to work etc.

Also talk to neighbors about area. most likely several homes were built by the same builder, they might be able to offer insight into potential problems.

Talking to neighbors might enlighten you to potential ********. If you talk to someone about the house and walk away thinking I can't stand that guy, you probably don't want to live next to him or her no matter how much you like the house.

I second the motion of contacting your potential new neighbors. Not only to confirm that they arent complete jerkwads, but also to find out if they have had any construction quality related issues. I know that in many cases builders will settle (a coworker is going through this now) and one of the stipulations they try to pass on is for you to not talk about issues with potential new home build customers.

Do get a home inspection. Make sure the attic is nicely insulated, look for discoloration due to possible leaks. Look closely at the walls for signs of leaks that have been painted over. visit during/after a good soaking rain and look for standing water, especially near the house. Check for leins, etc on the property.

Asking about historic utility costs is a great idea.
HOA - people love or hate HOAs I personally dont like them. Ask the neighbors about how restrictive they are. read the HOA rules, etc closely. That can really screw you over.

 

[Bobby_M]

Sorry, I really disagree with this. NEVER, EVER use the property's listing agent as your own agent.

The listing agent is obligated to get the highest possible price for the property, which will also bring him or her the biggest commission. You will not get a break from them out of "thanks" for not bringing your own agent. This is like retaining the prosecutor to defend you in a criminal trial. You can only lose.

Before I learned this, I did look at several properties without a realtor of my own. The listing agent of course was always overjoyed to hear that I would be potentially using them as my buyer's agent. What followed was a lot of disingenuous pricing and high pressure sales. It's simply a bad idea. If it worked out well for you, then you're lucky you got an honest one. Very, very lucky.

I think this is flawed logic. If you bring your own agent, they also have motivation to push your offer price higher. For one thing, they are commissioned the same way the seller's agent is. They also want to see you buy a property as soon as possible and don't want another offer trumping yours. They would LOVE for you to overpay for a house immediately so in that regard neither agent wants to see anyone get a great price.

On the other hand, if you're capable of researching what the house is worth and discipline yourself as to what you should pay, you essentially make the offer on your own. Sure, you sign the dual agent disclosure form but make no mistake, that agent now wants you to buy the house above any other potential buyer that walked in with their own agent. Do the math...

Do they want the seller to take your 300k offer and they get 5% = $15k? Or do they want someone else to offer 310k and take the half commish at $7750? While it's not an easy job to talk a seller into taking less money, they will certainly talk up any other power you bring to the table, like fewer contingencies or higher down payment for example.

I understand why it's counter intuitive when you think of agents as really doing hard negotiating on your behalf, but that doesn't really happen.

 

[Calichusetts]

I think this is flawed logic. If you bring your own agent, they also have motivation to push your offer price higher. For one thing, they are commissioned the same way the seller's agent is. They also want to see you buy a property as soon as possible and don't want another offer trumping yours. They would LOVE for you to overpay for a house immediately so in that regard neither agent wants to see anyone get a great price.

Man, you must have some really cut-throat real estate agents down your way. I would never work with an agent that pushes anything on me, time or money wise. Your real estate agent is working FOR YOU. You are there boss and if you feel like the control has shifted to their side, drop them.

I guess this makes me realize how awesome my real estate agent is. We looked at over 80 homes, over 6 months before we made an offer. And several times we did some crazy low-ball offers. We said offer x, he did it. He didn't push us higher.When we thought we would move recently, we went through 3 agents before we worked with him again. He bought our kid toys, met with us and contractors (thought we were building our own home.) He's also one of the most successful agents in our area.