Tips for buying a home? Questions for Real estate agent?

[phiMD]

Hi everyone, we've officially started our house-hunting journey! Since this will be our first home purchase (as mentioned in a previous thread), we’d appreciate any advice on potential red flags or things to watch out for.

Also, what are some important questions to ask when interviewing real estate agents?

Our budget is up to $1M, and we have $200K available for a down payment. (We're in Beaverton, OR, looking at Raleigh Hills, Cedar Hills)

How much more should we budget/expect to need for closing costs and the buyer’s real estate agent fee?

I’ve learned recently that the buyer is now partially responsible for paying the agent, and I’m curious if anyone who’s bought a home recently can explain how that process works.

Whereas we haven't completely ruled out renting again, it feels like the right time (despite 7% interest rates), kids about to start Kindergarten, hoping this will help us negotiate the home price down and refinance in future.

[OrangeKiwi]

I’ve learned recently that the buyer is now partially responsible for paying the agent, and I’m curious if anyone who’s bought a home recently can explain how that process works.

Previously, buyer’s agents could assume they would be paid by the seller’s agent. Now, buyer’s agents can no longer assume that, so a buyer’s agent would have to ask the buyer to agree to pay them if a seller’s agent does not in order to guarantee they get paid.

Whatever contract you enter into with your agent will likely specify what you owe your agent. Obviously, you can negotiate this and/or forego an agent if you want to save money.

[stan1]

I’ve learned recently that the buyer is now partially responsible for paying the agent, and I’m curious if anyone who’s bought a home recently can explain how that process works.

When you start looking at houses the agent will ask you to sign a contract with them. The contract is negotiable on fee, duration, and location. Maybe it is for a single house or maybe it is any house in the metro area for up to 3 months. Your call on that, and of course what they agree to.

You can choose to pay the commission with cash, or you can choose to finance it into the loan. Your offer would reflect either a price with no buyer agent commission or with buyer agent commission rolled in. If you want to finance it into the mortgage then you have to include it in your offer.

I would use an agent who has a lot of experience buying and selling houses in the specific towns you are interested in. When you interview them see if you like their approach. Some buyers want decorating advice from their realtor, others view buying a house as a business transaction. Do not sign a long term contract with an agent you don't like or who is focused on something that is not important to you. As another example if you are likely going to be looking at older houses that you'd remodel then having an agent who has flipped houses or even has contracting experience could be helpful. An agent who is good at interior design might not be a good one to ask if that wall could come out.

You can still go to open houses and look around without signing a buyers agent agreement. That's still a good way to meet agents and talk to them.

[stan1]

Previously, buyer’s agents could assume they would be paid by the seller’s agent. Now, buyer’s agents can no longer assume that, so a buyer’s agent would have to ask the buyer to agree to pay them if a seller’s agent does not in order to guarantee they get paid.

I would word this differently, under the new rules the buyer pays the buyers agent commission. Period. Can be paid in cash outside the sale, or financed by including the commission in the offer. The seller will pick the best offer.

[adamthesmythe]

If you are looking at houses typically bought by first-time buyers then it is likely that the seller will be willing to roll the buyer's agent commission into the sales price. When ready to offer ask your agent, who will ask the seller's agent. If the seller is unwilling then price your offer accordingly.

Closing costs are local and in addition highly variable. (For example, if the seller has just paid the real estate taxes for the year, you will have to include this in the closing cost). There is a form listing all your estimated costs, and the numbers will become more and more precise as you get close to closing. It is not possible to say X% with X a firm number.

[OrangeKiwi]

Previously, buyer’s agents could assume they would be paid by the seller’s agent. Now, buyer’s agents can no longer assume that, so a buyer’s agent would have to ask the buyer to agree to pay them if a seller’s agent does not in order to guarantee they get paid.

I would word this differently, under the new rules the buyer pays the buyers agent commission. Period. Can be paid in cash outside the sale, or financed by including the commission in the offer. The seller will pick the best offer.

Thanks for the correction.

[J295]

I’ve almost always engaged professionals based upon referrals from trusted sources.

I don’t have an issue with anyone that likes to interview professionals, but I would expect most professionals to be able to interview well, which does not necessarily reflect their professional abilities. Thus, I go with a trusted referral source (and of course, if the referred professional is not a good fit, then I move on).

[stan1]

If you are looking at houses typically bought by first-time buyers then it is likely that the seller will be willing to roll the buyer's agent commission into the sales price. When ready to offer ask your agent, who will ask the seller's agent. If the seller is unwilling then price your offer accordingly.

Market economy will take care of this since most sellers will pick the best offer. If someone offer $500K no buyers agent commission or $550K with $15K buyers agent commission rolled in which would you pick, all other things equal? Now of course everything is seldom equal, maybe a seller would prefer an all cash offer or one that will give them a 90 day rent back. Most sellers will be logical not emotional. To be honest if someone comes across an irrationally emotional seller it may be for the best to move onto the next house.

[phiMD]

Wow, I'm realizing how little I know, this advice is golden, thank you, keep it coming!!

[grok87]

You can still go to open houses and look around without signing a buyers agent agreement. That's still a good way to meet agents and talk to them.

that is good to know.
so if i find a house for sale online and want to see it, what is the process. if i call up the listing agent will they make me sign something before they let me see the property?
thanks
grok

[Dottie57]

You can still go to open houses and look around without signing a buyers agent agreement. That's still a good way to meet agents and talk to them.

that is good to know.
so if i find a house for sale online and want to see it, what is the process. if i call up the listing agent will they make me sign something before they let me see the property?
thanks
grok

If the real estate agent does that I would let the sellers know that you (a genuine buyer) were denied access

[funxional]

I’ve almost always engaged professionals based upon referrals from trusted sources.

I don’t have an issue with anyone that likes to interview professionals, but I would expect most professionals to be able to interview well, which does not necessarily reflect their professional abilities. Thus, I go with a trusted referral source (and of course, if the referred professional is not a good fit, then I move on).

Unfortunately, for infrequent events like a home purchase recommendations are a mixed bag. It is a small sample size but to should focus on the why of the recommendation and how that compares to what you care about.

[stan1]

You can still go to open houses and look around without signing a buyers agent agreement. That's still a good way to meet agents and talk to them.

that is good to know.
so if i find a house for sale online and want to see it, what is the process. if i call up the listing agent will they make me sign something before they let me see the property?
thanks
grok

The listing agent will open up the house but they will not "show" you the house. You can still represent yourself. It's a sublte difference that in practice may be hard to separate. If you start asking questions about school district, taking down a wall, plans for a new highway, who owns that vacant lot, what is the reputation of the HOA, etc. at that point you are asking for representation not just looking at a house. I think its a gray area, and my guess is most realtors will talk to you and not immediately say I won't talk to you unless you sign here at the first visit. Multiple visits they might suggest dual agency (if legal) or start to make clear what the boundaries are. If you go dual agency route see if they will represent both buyer and seller with only the agreed upon seller's agent commission, and if you do that also limit the scope of the buyers agent contract to that specific house.

[nimo956]

Go onto a site like Redfin and filter on houses sold within the last 6 months in your target neighborhood. For each house, note the buyer’s and seller’s agent. After you have gone through all of the houses, note the top 5 or so agents involved in closing the most deals. This is your starting list for people to interview. I followed this approach and it was immediately clear to me who was the best agent for my area. She knew what needed to be done to submit a winning bid. I saw one house, submitted one offer, and won, beating out other all-cash offers even though we were financing.

[mchampse]

Talk to some agents and ultimately trust your gut. And if things aren’t happening, trust your gut to fire your agent and find another one. Best wishes!

[Bogle-007]

If you go dual agency route see if they will represent both buyer and seller with only the agreed upon seller's agent commission, and if you do that also limit the scope of the buyers agent contract to that specific house.

Does the "dual agency" route typically save the buyer money? Sounds like it might since one can try to complete the deal with "only the agreed upon seller's agent commission."

[adamthesmythe]

If you go dual agency route see if they will represent both buyer and seller with only the agreed upon seller's agent commission, and if you do that also limit the scope of the buyers agent contract to that specific house.

Does the "dual agency" route typically save the buyer money? Sounds like it might since one can try to complete the deal with "only the agreed upon seller's agent commission."

Depends on the contract the seller signed with the listing agent. It could provide different commission for dual agency.

[stan1]

If you go dual agency route see if they will represent both buyer and seller with only the agreed upon seller's agent commission, and if you do that also limit the scope of the buyers agent contract to that specific house.

Does the "dual agency" route typically save the buyer money? Sounds like it might since one can try to complete the deal with "only the agreed upon seller's agent commission."

Yes, if the seller is paying the agent 2% and the same agent agrees to represent buyer at 0% or even 1% addl the buyer is saving some money, depending of course on what other options are available. There are pros and cons with dual agency: one of the pros is that the agent doesn't have to track down their counterpart (one person between buyer and seller rather than two). Overall less friction which is mostly good until for some reason you want friction.

[stan1]

Does the "dual agency" route typically save the buyer money? Sounds like it might since one can try to complete the deal with "only the agreed upon seller's agent commission."

Depends on the contract the seller signed with the listing agent. It could provide different commission for dual agency.

Buyers agent commission would not be mentioned anywhere in the contract the seller signed with the listing agent, that's the key part of the NAR class action settlement that took effect back in August 2024. The buyer and buyer's agent now sign a contract that identifies the commission. The buyer could approach the listing agent and say "I'm interested in dual agency with you also representing me for a quick and easy sale, what can we work out?". Then see what happens. I'm going to guess that in some places and with some agents the answer will be "my broker won't let me do that". Then you see what you can get. Dual agency should ALWAYS be cheaper than having two agents.

[Bogle-007]

Depends on the contract the seller signed with the listing agent. It could provide different commission for dual agency.

Buyers agent commission would not be mentioned anywhere in the contract the seller signed with the listing agent, that's the key part of the NAR class action settlement that took effect back in August 2024. The buyer and buyer's agent now sign a contract that identifies the commission. The buyer could approach the listing agent and say "I'm interested in dual agency with you also representing me for a quick and easy sale, what can we work out?". Then see what happens. I'm going to guess that in some places and with some agents the answer will be "my broker won't let me do that". Then you see what you can get. Dual agency should ALWAYS be cheaper than having two agents.

Great info - thanks. This also holds true when buying a new home?

[stan1]

Buyers agent commission would not be mentioned anywhere in the contract the seller signed with the listing agent, that's the key part of the NAR class action settlement that took effect back in August 2024. The buyer and buyer's agent now sign a contract that identifies the commission. The buyer could approach the listing agent and say "I'm interested in dual agency with you also representing me for a quick and easy sale, what can we work out?". Then see what happens. I'm going to guess that in some places and with some agents the answer will be "my broker won't let me do that". Then you see what you can get. Dual agency should ALWAYS be cheaper than having two agents.

Great info - thanks. This also holds true when buying a new home?

Ah, you mean a new construction home where the builder's sales office staff is acting as your realtor and also representing the builder? Nope, good point, so not always cheaper :)

[LittleMaggieMae]

As for extra money you may need at the closing - you may need $$ to pad the escrow account for Insurance and Property Taxes. Depending on those costs and how much your lender requires in escrow it might be a substantial amount.

Speaking of property taxes - be prepared to have the amount that was estimated for property taxes jump up maybe substantially the first year of home ownership. Your lender may "estimate" your property taxes based on what the previous owner was paying (via public records) the lender doesn't factor in if the previous owner was getting a "senior discount" or benefiting from a "senior freeze" or if the previous owner was a veteran/current military and getting some benefit/property tax relief. or if the previous was owner lived there a long time. I'm sure there are lots of other things that can effect property taxes for a new owner. I'd suggest keeping this in the back of your mind so IF it happens you won't be taken by surprise when you have to pony up more money into the escrow account and/or your mortgage payment jumps up in the first year of homeownership.

[grok87]

that is good to know.
so if i find a house for sale online and want to see it, what is the process. if i call up the listing agent will they make me sign something before they let me see the property?
thanks
grok

The listing agent will open up the house but they will not "show" you the house. You can still represent yourself. It's a sublte difference that in practice may be hard to separate. If you start asking questions about school district, taking down a wall, plans for a new highway, who owns that vacant lot, what is the reputation of the HOA, etc. at that point you are asking for representation not just looking at a house. I think its a gray area, and my guess is most realtors will talk to you and not immediately say I won't talk to you unless you sign here at the first visit. Multiple visits they might suggest dual agency (if legal) or start to make clear what the boundaries are. If you go dual agency route see if they will represent both buyer and seller with only the agreed upon seller's agent commission, and if you do that also limit the scope of the buyers agent contract to that specific house.

thanks, that's very helpful.

[privateer79]

you can find out a lot between redfin(searching) and Homes.com (will show details of current owner/mortgage... maybe there an intel/Nike recent retiree hot to get out of beaverton).

consider if you really need a buyers agent... in Oregon the sales negotiation is essentially a form that you fill out and pass back and forth (i.e. you aren't negotiating a bespoke contract...you're just filling out fields in a state mandated form and passing it back and forth. ) there are complexities to the process (inspection, appraisal, mortgage, title closing, property details (schools, HOA, etc), so don't feel shy about getting an agent if you're lost and dont want to read up on the process, but in my historical experience, buyer's agents are as much harm as help... and alot of those other areas (inspection,appraisal, mortgage, title closing) are actually executed by people who aren't the realtor.

[stan1]

you can find out a lot between redfin(searching) and Homes.com (will show details of current owner/mortgage... maybe there an intel/Nike recent retiree hot to get out of beaverton).

consider if you really need a buyers agent... in Oregon the sales negotiation is essentially a form that you fill out and pass back and forth (i.e. you aren't negotiating a bespoke contract...you're just filling out fields in a state mandated form and passing it back and forth. ) there are complexities to the process (inspection, appraisal, mortgage, title closing, property details (schools, HOA, etc), so don't feel shy about getting an agent if you're lost and dont want to read up on the process, but in my historical experience, buyer's agents are as much harm as help... and alot of those other areas (inspection,appraisal, mortgage, title closing) are actually executed by people who aren't the realtor.

OP is a first time buyer, I'm not quite there to recommend that all first time buyers try it without an in the flesh agent. Yes this is Bogleheads so we have a lot of confident DIYers. There are good agents out there who are helpful. I'm at three out of four being generally good, only one was bad and that was the first one I used at age 21. I selected her because she was a family acquaintance not because she was good at anything. Came to find out she was partially retired and more interested in interior design than the mechanics of home sales. Learned my lesson. Many Bogleheads hire staff in our jobs or businesses, or we review documents with a critical eye. Hire a realtor the same way, not based off who has the most social media followers or who is the most popular in a church social circle.

[Weathering]

Ask potential buyer’s agents what services they provide to the buyer. Also, make sure this is stated in the contract you sign with them. Examples of things you may expect buyers agents to provide which they may not are: home owners association documents for prospective properties, typical problems with homes in a particular neighborhood (e.g., cracked slabs due to sandy soil), why specific homes have fallen out of escrow previously, improvements made to homes based on permits issued by the city, age of the roof of each home, what type of water pipes are in each home, what type of electrical wiring is in each home, electrical service to the home (100amp, 150amp, 200amp, or greater), whether the local schools offer school buses to the neighborhood and possibly the nearest school bus stop.

Do not accept wish-washy answers. You will be paying this person tens of thousands of dollars, do not let their sole responsibility be the offer contract with associated communication to the seller’s agent.

[dogagility]

Buy one of the cheaper homes in the better/best neighborhood.

[Not Law]

The first rule of thumb is that ALL real estate agents are trying to make money. The good ones treat that as a by product of helping you find a home. Since you are new to this, you are going to be overwhelmed with trying to understand everything that occurs throughout the process. I highly recommend that you consult with an attorney that focuses on real estate issues/transactions.

The purchase agreement, which some refer to as putting in a bid, is the contract that binds you to the transaction. All of your expectations about the transaction need to be covered in this initial document. Including things that might cause you to back out - contingency clauses to cover inspections, surveys, encroachments, special assessments, easements, water/septic testing, etc. If the survey shows the garage is partially on the neighbor's property, do you really want to buy into that problem? By the way a "mortgage" survey does nothing to protect you - it is to assure the lender that the legal description of the property matches what you are borrowing against.

If you have thoughts about altering the structure, you should also have a contractor lined up to determine feasibility.

[Watty]

I am not a real estate agent but here are some suggestions;

1) When you have found a potential house the go back without your real estate agent at different times of day and park your car and walk around the neighborhood to get a better feel for what it is like. Talk to people who are working in their yards or walking a dog to see what they they think about the neighborhood.

2) Look at google maps to see a satellite view of the neighborhood to see what is nearby. I once found a nearby rail line which I did not know about.

3) I don't have a link handy but find the website to look up registered sex offenders which might be living nearby. Don't freak out when you see one which lives a mile aways because that it almost unavoidable but it would be good to know if a house is next door to where a registered sex offender lives.

4) You mentioned that you have kid who will be in kindergarten soon so schools will be very important. When picking a school nothing beats actually visiting the school, but call to make an appointment. Each school has a different feel which you will quickly pick up on. One time we went to a high school which looked very good on paper but when we got there we saw that they had dozens of temporary classrooms, basically mobile homes, in a field because the school was so overcrowded. The school ranking web sites are better for avoiding problem schools than finding great schools. Here is a post which I made about my experience with picking out a high school for my son to go to.

viewtopic.php?p=7993056l#p7993056

5) Pay a lot of attention to the commute and get up early and do an actual test drive of the commute. Also keep in mind that the commute may get worse in the future as more houses and businesses are built. I bought a house which had a pretty consistent 30 minute commute but by the time I retired 13 years later it was 45 minutes on a good day and there were frequently worse days.

6) Be cautious about buying next to undeveloped land unless it is protected. It will be developed some day. I heard of a situation where someone bought next to land which was zoned for single family homes only to have the zoning change and tall townhomes were built overlooking their back yard.

6) When you find a house that you like except but for some reason it is not right for you then make a note of that subdivision or neighborhood. One option is to pick a couple of specific areas which you would like to buy in then sit back and wait for a great house to come on the market and snap it up quickly. You can also pick out a grade school or high school which will define a general area and watch for new houses as they are listed for sale.

I was once doing a corporate relocation where I flew into town to shop for a house which I needed to buy quickly. I was lucky that the housing market was slightly a buyers market so there were hundreds of houses which I could select from and the average days to sell was around 50-60 days. That sounds great but what we found was that even in a slight buyers market that we would pick out houses we wanted to look at then fly in a few days later only to find that the best ones were already under contract. I still had a lot of decent choices but they had all been shown to a number of other buyers before we got to see it.

Even in a weaker housing market the best houses will sell quickly if they are priced right so we did not get to even look at some of the best properties.

[privateer79]

The purchase agreement, which some refer to as putting in a bid, is the contract that binds you to the transaction. All of your expectations about the transaction need to be covered in this initial document. Including things that might cause you to back out - contingency clauses to cover inspections, surveys, encroachments, special assessments, easements, water/septic testing, etc. If the survey shows the garage is partially on the neighbor's property, do you really want to buy into that problem? By the way a "mortgage" survey does nothing to protect you - it is to assure the lender that the legal description of the property matches what you are borrowing against.

in the OP's jurisdiction there is a set of standard forms/contracts... OP should read and understand those forms in detail, (and the consequences of checking / not checking the boxes, etc) but IMO its unlikely and irregular for a sale to close on a lawyer-tailored contract.

[mary1969]

If you are buying a home for a $1 mln, then you will be paying the realtor $25k to help you find your home. That seems like a lot of money to me.

Anyway, I am 59 and we are planning to downsize our home in the next year or so. Our plan is to use a realtor to sell our home and DIY for the purchase of our new home.

[PottedPlant]

what are some important questions to ask when interviewing real estate agents?

How many sides have you done in the past 12 months?
As buyer’s agent?
Can you provide a proof source?

20+ is a good number

[invest4]

Based upon my own experience:

* Do not spend more than 3x your annual income on a house and always put 20% down

* You do not need an agent

* You do want a real-estate attorney.

* You do want a home inspector

Unless you run into something weird, buying and selling a home is not complicated. Of course, you may not realize something is weird, which is why you hire the attorney and home inspector.

When we sold our own house, we did it ourselves with the support of a flat fee listing service. It is straightforward including the negotiations which further convinced me the process only survived in its previous form due to habit and the machinations of the National Association of Realtors, etc. which was finally punished for its practices.

Of course, change is often slow and uncomfortable. Give it a thought and make the choice that works for you.

[loopdloop]

Read “First-Time Home Buyer: The Complete Playbook to Avoiding Rookie“ — it’s available as an audiobook on Spotify too. It made me feel a lot more comfortable entering into the process for the first time.

[grok87]

Read “First-Time Home Buyer: The Complete Playbook to Avoiding Rookie“ — it’s available as an audiobook on Spotify too. It made me feel a lot more comfortable entering into the process for the first time.

thanks. has that been updated for the new post-NAR-settlement world we live in now?

[HooCares]

Buy one of the cheaper homes in the better/best neighborhood.

Buy the house that fits your needs in the best neighborhood you can afford.

Cheapest house in the nicest neighborhood is a 1 way street to expensive renovations or a quick move. Both are very expensive and disruptive propositions.