Hello everyone, I've been a lurker on this board to keep updated on what's going on in Tulsa. I finally decided to join because I was looking for words of wisdom anyone could offer.
I graduated from OU two years ago and took a job in Tulsa. I wasn't from here originally but have loved living here the past two years and I am now seriously considering buying my first house.
Anything anyone could offer on the whole process would be great, it's all going to be new to me. Recommendations for lenders, buyers agent, etc? Not exactly sure where I want to buy, either midtown or south Tulsa. I guess it will depend on how much I can get pre-approved for and how much houses cost (I'm really clueless on prices right now, I haven't started looking at how much things cost yet.)
TIA!
1) Unlike previous years you are going to need $$$ down.
2) You can get average mortgage information at a site like http://www.bankrate.com/mortgage.aspx
3) Everybody charges different charges for this and that. A lower % rate is sometimes covered by the fact they charge several thousand extra in closing costs. JUST LOOK AT THE APR . They give you these required standard forms and 1) will charge you $100 for a smile fee and another won't charge you $100 but they will charge you $50 for a paper fee, $50 for a frown fee, and $50 for a splenda upcharge fee. Now they make them sound more official but either way the APR is what you are really paying over the life of the loan with fees included.
4) Don't get a variable interest rate or a balloon payment or any of that junk
5) You can get a realtor but if you don't you might be able to get a break on the price of the house by a few % being that you won't have a realtor taking a cut of the fee.
as far as what houses are selling for, check http://www.zillow.com . you can see houses for sale and if you click on the house itself, you can see what it sold for in the past. that way, if you find a house in a certain neighborhood, you can see what the houses around it have been selling for.
Zillow shows the last sold price. Just remember that the "zillow estimate" is generally a lot higher than the going price for the house. Zillow is an excellent source to find out what a place sold for.
Oh one more tip, depending on the age of the house and how long the owners have lived there the "last years property tax" figure means absolutely nothing. There is a set rate the property tax can increase each year. UNTIL it changes owners and jumps up to current value.
This is all fresh on my mind as I just closed on a house three weeks ago.
Pretty much in line with what the other's said except that the only way you will get a break for not using a realtor is if the house you finally settle on is for sale by owner (FSBO). If it's listed with with a company, they are already signed on for paying a 6 to 7% commission. If you use a buyer's agent, they will split that commission with the selling agent. It doesn't cost you a penny more.
First things first- get approved for your mortgage. Expect to be required to have 3 to 5% down (yes there are still 3 to 5% down loans out there), possibly as much as 10%. If you can come up with 20% down that will help you avoid paying PMI. That's insurance that only protects the lender's interests if you default, and can be about $100 to $200 a month depending on your price range. Shop local banks or credit unions first. Keep in mind, every entity who gets involved in your transaction is going to have their hand out. Mortgage brokers don't make you the loan, they collect fees for shopping your loan around.
You can "buy down your rate" with points. Don't do that. It's strictly a profit center for the lender or originator. If you are so inclined, save that money and pay it toward principal with your first payment. What that does is lower your overall interest paid as the interest is calculated on the outstanding balance. It's an automatic investment in your equity while also cutting your overall interest paid. Without pulling out an amortization chart, off the top of my head, I believe even $1000 addtional toward your principal on the first payment will wind up saving you $5000 to $6000 in interest over the life of the loan. There's a lot of argument as to whether or not you'd be better off investing that money or paying down some extra principal up front. Read up on it and draw your own conclusions.
Being your first time around, I'd highly recommend you work with a buyer's agent. Give your agent your parameters, area, purchase price, etc. They will also be able to handle the paperwork, meet inspectors at the property, a whole multitude of things. I've sold one house and bought one house as FSBO's and resolved to work with realtors from that point on. You can literally make a home purchase a full time job for a few weeks if you are not careful. Realtors earn their money.
Unless you are thinking you might have some significant life changes like marriage or children in the next few years, buy something small and manageable. Home ownership the first time is an eye-opener. If you think you might have an expanding family in the next few years buy something that would be sized for that now. The RE market is a little uncertain right now. If Tulsa's economy takes a serious nose-dive, you might have trouble selling your smaller house to up-size in two or three years.
Don't forget to take advantage of the gov't tax credit for first time homebuyers either. Best of luck, I'm sure others will offer sound advice.
You'll see a lot of houses that you don't want before you find one that you do. Be prepared to see a lot of junk and/or unworkable floorplans. Take your time and you'll find something you really like that's still within your budget.
The house -will- cost you money in repairs, updating, etc. and more than you think. Plan on it.
Hire an inspector to check over a house before you commit to buying it.
I've had very good success with McGraw, Davis & Stewart realtors. Call the Harvard office and ask for Crystal Cates.
My mortgage is through a local bank and I've been happy with them. Every bank you can think of will stuff all kinds of poppycock charges and fees into your loan, it's the way it goes...
Get a totally conventional, no-gimmick loan. Down payment as big as you can manage. Put extra money into the principal every month. Don't fool with "points".
You will feel like you're signing your life away and drowning in a see of unreadable paperwork at the closing.
I'm a broker in Tulsa and have been in the business for 10 years. There are still products available for 100% financing. These do have income limitations and the credit score does need to be above 620. This is on an FHA loan. FHA allows your debt service to go up to 41% but I tell all of my first time home buyers to try to stay below 35%. You will be amazed at what owning a home costs you and you do not want to be house poor.
Also, I would use your own real estate agent. If you do find a home that is listed by an agent and use that same agent, they are still going to be working for the seller to get the highest amount as possible for the sell. Realtor's commission is based on the sell of the home so the higher the sale, the more they make.
One last thing, when comparing rates, please look at the APR as well, this shows how much the fees will be. Also ask your loan representative if there will be any discount points. Discount points do not show up in the APR and can skew that number down.
Go to your bank/credit union and request all the Home Buyer Guide pamphlets.
You'll be amazed at how all the 'little stuff' adds up. It's truly a circus IMO. Some of their fees are just "re-donk-u-lus"... but I guess that's what ya gotta pay to play this game.
We just closed a FSBO contract w/ the seller last night. We're giddy, but have A LOT of stuff to do before closing.
Check out http://www.knoxinspections.com/priceguide.html for an inspection guide.
when we decided to buy a house a few years back, we bought Home Buying for Dummies. we knew absolutely nothing about buying a house. the book was very informative. it helped us a lot. we've even loaned it to friends and relatives when they started looking for houses as well.
Good stuff everyone, thanks for the input!
1) Owning a home is work. When you rent or live in an apartment, little things don't bother you. When you own it, you have to fix it. The good news is you can fix it as you see fit, repaint, renovate, whatever you want. The bad news is, it is all up to you.
Really, don't underestimate the amount of work just owning a home creates, let along the amount of work you can create for yourself by owning a home!
2) I have been treated very well by BOK Mortgage. Their rates are currently as low as 4.8%.
Clearly that rate is with 20+% down and good credit. But I'll assume you know the basics on financing a home. If you don't, don't be afraid to admit you do not and ask questions or seek help.
Since you hold a degree and are asking questions here, you probably don't need a buyers agent. Just don't rush, use reputable people, and take your time. Realtors, buyers agents, etc. can be helpful - but they cost money that would otherwise go towards your home (IMHO).
3) Plan on there being expenses you never dreamed of.
Do you have enough furniture to fill a house? What random appliance, lamps, light bulbs, trash cans or whatever else will you need? When you own a home you'll need random tools, ladders, etc. for minor repairs and gutter cleaning.
All these things take a few dollars. A little here, a little there. Throw in some new carpet in this room. A new window here. Just make sure you plan on there being some additional expenses.
4) Inspections: pick a real bastard for an inspector. Someone who will point out all the little things. You can choose to ignore them, but will at least be aware.
Don't be afraid to negotiate the price down based on what the inspector says. "It will cost me $2,200 to fix XY & Z, we had agreed on $100K, so $98K seems fair considering . . ." Or whatever. At least get them to consider it.
Also - how much work do you want to do? If you want to do major renovation you can save money by buying a house that NEEDS work to be done. If you hate renovating or fixing up things and would have to pay someone to do everything, stay the hell away from older homes unless they were just renovated.
5) SHOP! Shop around and don't be a hurry. It is a good time to buy, but prices in Tulsa are not bargain basement fire sales - so take your time. Check out the houses, watch the prices, zillow nearby recent sales.
If you like it a bit snoop around it a little. Go look in the windows, the backyard, drive around the neighborhood. Did the neighbors see you out and about and look at you suspiciously? Did they say something? Knock on someones door and ask about the neighborhood. Drive by the neighborhood several times at different times of the day. See what it is like: all commuters but busy at night? Old people? Kids? Do neighbors seem to associate with each other (is that good, bad?).
What can you walk or ride your bike to from there? Can you get some milk or a 6 pack on a bike or will you have to drive? Is their a neighborhood pub? Better check it out!
6) In my unbiased opinion, midtown is the place to be. I LOVE being close enough to everything that the drive to get there is not a consideration. My friends in BA or out near 91st always seem to miss out on TU games, Drillers games, the race track, or just going out for a happy hour beer because it's a 20+ minute drive each way.
7) Keep asking questions!
Good luck. The Ranch Acres area is mighty nice. ;)
Realtors dont take a "cut" they earn it as Conan said. Hire a Realtor...they are your guide and advocate. Hire a realtor that knows the market that you are shopping. ( I know this; I am proud and happy to be a Realtor!)
Quote from: Trogdor on April 24, 2009, 09:28:20 AM
Zillow shows the last sold price. Just remember that the "zillow estimate" is generally a lot higher than the going price for the house. Zillow is an excellent source to find out what a place sold for.
Affirmed. Had an appraisal a month ago and it was about 8% lower than Zillow estimate. It's still a useful tool, but I wouldn't rely on Zillow only.
Colemanking offers good advice...don't buy "too much" house. If you start out house poor, you could get overwhelmed by the littlest issue. And all houses have issues.
I have heard many people say that Zestimates are higher than what the market actually supports. Regardless of whether that is true, I still think the best way to go about zeroing in on the "market value" of a given house is to take as many comp sales as you can find on Zillow (as close in time as possible to the current date, as close to the house in question as possible and somewhat as reasonably sized square footage wise as the house in question). Add up all sales prices of all of the comps and divide by the square footage of all the comps then multiply by the square footage of the house in question.
Did the comps you used vary widely w/r/t sales price per square foot? Were they reasonably consistent? You may want to give or take a little from the resulting value from the calculation above depending on the condition of the house in question.
For what it is worth, I have found that after going through this process on a number of homes, it appears to me that Zestimates are pretty accurate.
Zillow=7-9% inaccurate by their own admissions. Market conditions change daily.
Why rely upon a source that is non-local. Use it as a guide yes; but do not place too much credence in it. Hire a red-blooded local to guide you through the woods!
Go Tulsa!
This may be obvious advice to you, but I've seen it ignored time after time ...
Don't buy more house than you need. Someone's always going to try to talk you into an extra bedroom (and tens of thousands of dollars more) because "you never know when your parents come over and need a place to stay."
It sounds blunt, but that's what a hotel room is for. There's no sense in spending higher amounts of money for an extra bedroom that will sit empty 360 days a year.
If you're single or don't have kids, stick with houses in the 800 to 1,200 square foot range. They sound small, but you'll appreciate not spending a lot of money on a place to live. Plus, with a smaller living space, you'll pay less on utilities and property taxes.
I am also going to through in my common sense advice (looks like all the good stuff has been covered.
Check the neighborhood out before you sign, sounds simple enough but you have to like where your living and if your going to dislike everything and everyone around your, you will not be happy.
If your a parent/have a family check out the schools in the area, it might be easier then ever to get a transfer to another school, but lets be honest socially and well economically its going to be easier to have your kids in the schools in the area instead of across town. Checking out a school doesn't mean look on local websites for reviews it means scheduling a tour and meeting the staff (and maybe parents.)
No matter what congratulations your on the road to home ownership enjoy.
Quote from: ARGUS on April 26, 2009, 03:11:36 PM
Zillow=7-9% inaccurate by their own admissions. Market conditions change daily.
Why rely upon a source that is non-local. Use it as a guide yes; but do not place too much credence in it. Hire a red-blooded local to guide you through the woods!
Go Tulsa!
Okay, I'll bite. Realtors have become unnecessary and, frankly, a very large waste of money. Sorry.
Best advice I've ever seen listed in the last two pages. I would add two things. I am a former real estate agent with some insight. A good realtor will work for both parties, but remember, he's being paid by the seller. Finding your own agent is a good idea. They take a lot of work off your shoulders.
1. If you don't intend to stay long, don't buy a new home. It takes a while to get the home finished out. Grass, landscaping, window treatments, etc. It takes a while to recover those costs and for the neighborhood to establish itself. Once you get past that stage the returns are usually higher though.
2. Purchase what most of the market is looking for if you want fast resell. IOW, stay with a 3/2/2 if you can. Not a bad idea to purchase outside that criteria if you intend to add a bath, a garage or if you simply can't afford the second bath. Just saying, most realtors can sell a house faster and at higher prices within those parameters. Older neighborhoods with charm and popularity are the exception to this. For instance you can buy a 2br/1.5/1 in Brookside or Florence Park and not suffer because there are so many of them.
3. Don't be afraid to fall in love with your home. All other things aside, you'll enjoy working and spending money on a home you like to come home to.
4. Wait till an election before deciding on a neighborhood. Peruse the kinds of vehicles parked in the driveways and read their bumper stickers. This may sound funny, but it won't be comfortable when you find out none of your neighbors will let their kids play with the new kids. If no one has a sign out for the guy you support, or if there are confederate flags, could be a sign to move on.
Quote from: BierGarten on April 26, 2009, 05:03:46 PM
Okay, I'll bite. Realtors have become unnecessary and, frankly, a very large waste of money. Sorry.
So says the person who leaves a running unlocked vehicle in the parking lot when he goes in to buy bier at Jiffy Mart.
How exactly have realtors become unnecessary? Let's see, running contracts back and forth, coordinating inspections, appraisals, and can be of help with closing. Oh, almost forgot- how about showing your house at 2pm on Tuesday when you've got a meeting you have to be in? Pre-qualifying and dispatching total time-wasters. Yeah- totally irrelevant. I'm not a realtor and don't have one in my family- no vested interest. I'll just say, they've made my life a lot easier in what can be a very complicated process. I'd especially never recommend to a first time buyer to avoid using a realtor.
Unless you stick to looking at FSBO's you are going to end up using a realtor whether you like it or not. You can't tell a seller to ditch their realtor or you won't buy- doesn't work that way. Good luck with finding those FSBO's, multi-list is a great tool and I believe you won't find many, if any, FSBO's listed on MLS. Not every seller chooses to show their house as for sale on Zillow either.
I've seen actual value + or - Zillow. Main difference between Zillow and an appraisal is that an appraisal is an actual eye-view of a house. Zillow does not take into account improvements, lack thereof, nor that hole in the garage roof where a meteorite crashed through a few months back. It's simply a market analysis which is about 1/2 of what an appraisal is all about.
Quote from: Conan71 on April 26, 2009, 08:33:49 PM
So says the person who leaves a running unlocked vehicle in the parking lot when he goes in to buy bier at Jiffy Mart.
How exactly have realtors become unnecessary? Let's see, running contracts back and forth, coordinating inspections, appraisals, and can be of help with closing. Oh, almost forgot- how about showing your house at 2pm on Tuesday when you've got a meeting you have to be in? Pre-qualifying and dispatching total time-wasters. Yeah- totally irrelevant. I'm not a realtor and don't have one in my family- no vested interest. I'll just say, they've made my life a lot easier in what can be a very complicated process. I'd especially never recommend to a first time buyer to avoid using a realtor.
Unless you stick to looking at FSBO's you are going to end up using a realtor whether you like it or not. You can't tell a seller to ditch their realtor or you won't buy- doesn't work that way. Good luck with finding those FSBO's, multi-list is a great tool and I believe you won't find many, if any, FSBO's listed on MLS. Not every seller chooses to show their house as for sale on Zillow either.
I've seen actual value + or - Zillow. Main difference between Zillow and an appraisal is that an appraisal is an actual eye-view of a house. Zillow does not take into account improvements, lack thereof, nor that hole in the garage roof where a meteorite crashed through a few months back. It's simply a market analysis which is about 1/2 of what an appraisal is all about.
There are probably some extra compensation needed for expertise and selling some of the high dollar houses. As the commission % increases it seems that selling a $250k house and getting 9% might be a little high. If you are a buyer you could probably just pay somebody an hourly wage and it would be cheaper. I guess you are just paying for all the time wasters that don't buy houses and they never get paid.
Quote from: rwarn17588 on April 26, 2009, 03:34:43 PM
This may be obvious advice to you, but I've seen it ignored time after time ...
Don't buy more house than you need. Someone's always going to try to talk you into an extra bedroom (and tens of thousands of dollars more) because "you never know when your parents come over and need a place to stay."
It sounds blunt, but that's what a hotel room is for. There's no sense in spending higher amounts of money for an extra bedroom that will sit empty 360 days a year.
If you're single or don't have kids, stick with houses in the 800 to 1,200 square foot range. They sound small, but you'll appreciate not spending a lot of money on a place to live. Plus, with a smaller living space, you'll pay less on utilities and property taxes.
Translation: I can't afford a nicer home and I am jealous if you can.
My advice, steer clear of Red Fork.
Quote from: Trogdor on April 26, 2009, 08:56:14 PM
There are probably some extra compensation needed for expertise and selling some of the high dollar houses. As the commission % increases it seems that selling a $250k house and getting 9% might be a little high. If you are a buyer you could probably just pay somebody an hourly wage and it would be cheaper. I guess you are just paying for all the time wasters that don't buy houses and they never get paid.
Actually, I believe the commission decreases with a higher listing price. I don't know that applies in all cases. As well, commission seems to be in the 6 to 7.5% range, or at least it was last time I asked. From what I recall of my closing statement on this last transaction, looks like the realtor made 6% dividing out the purchase price/net proceeds and deduction for commission. I've never heard of a 9% rate, and I've never heard of extra compensation for selling a more expensive house.
Quote from: Conan71 on April 26, 2009, 08:33:49 PM
How exactly have realtors become unnecessary? Let's see, running contracts back and forth (yeah, it is really difficult to fill in the blanks in the Oklahoma form real estate purchase agreement, give me a break), coordinating inspections (coordinating? make a call, guys come out, end of story, there is no "coordinating"), appraisals (well, if you are borrowing money to buy the house, the lender is going to make that call and if you are buying with cash, good for you, and I guess then you don't need an appraisal), and can be of help with closing (showing up and sitting down and signing all of those forms is just too difficult without a realtor sitting there beaming because of the 6% they are about to get from you). Oh, almost forgot- how about showing your house at 2pm on Tuesday when you've got a meeting you have to be in? (this adds value only if you operate under the assumption that even after learning the asking price and seeing all of the pictures you have posted of your house on the internet and reading the flier you left on the sign in your front yard, someone became interested in your house, but only if they can look at it at 2:00 pm on a Tuesday. I don't operate under that assumption) Pre-qualifying and dispatching total time-wasters. (assuming you operate under the assumption that paying someone 6% to do this isn't also a waste of time) Yeah- totally irrelevant. I'm not a realtor and don't have one in my family- no vested interest. I'll just say, they've made my life a lot easier in what can be a very complicated process. I'd especially never recommend to a first time buyer to avoid using a realtor.
Unless you stick to looking at FSBO's you are going to end up using a realtor whether you like it or not. You can't tell a seller to ditch their realtor or you won't buy- doesn't work that way. (yes, if you are a buyer and seller has a realtor, you are stuck "using a realtor". But in this case it's a good thing because the seller's realtor is giddy with delight that you are not represented by a realtor and will make that low ball offer sound all that much better to the seller because seller realtor is getting 6% instead of half 6%.) Good luck with finding those FSBO's, multi-list is a great tool and I believe you won't find many, if any, FSBO's listed on MLS. Not every seller chooses to show their house as for sale on Zillow either. (I suppose this makes sense if you have a very large area of town you are looking in. Otherwise, driving around looking seems to work just fine)
Glad that works for you Bier. There are some things it's worth paying for and somethings better done yourself. I tried the FSBO route before and it was a major PITA to me, so I don't mind using a realtor. Next time I sell a home, would I be tempted to skimp and save the 6% realtor commission and sell my own place? Sure. Would I actually do it, no way. I know what my time is worth to me.
If not using a real estate agent works for you then fine. Why diminish others who have spent time and money to become experts in their field because they dare to charge a percentage for having done so? You're not just paying for search and marketing. A successful agent today must specialize on particular areas or price ranges. You buy his accumulated knowledge and contacts within the industry.
I bought my first home without an agent and back then it wasnt' really as complicated as it is now. An opportunity arose through friends and I used my knowledge to make it happen. Mostly out of ignorance of what could have happened. I got a much better price and rate on financing than my contemporaries when I bought my second home because my real estate company was representing an emerging condo. People who walked in the door without an agent to buy, provided their profit.
If you have the skills and persistence to avoid paying that 6% then have at it. Same thing with car buying, insurance and a host of endeavors. Don't expect that everyone wants to learn the business though. If used judiciously they easily earn their keep.
I just bought my first house a week and a half ago, and a real estate agent was definitely the way to go for me. You would miss countless days and hours of work to get this all done if you did it on your own, with the agent I took off about a half day over the month long closing. I highly recommend the neighborhood south of TU by the way.
Some things I have no clue about that the agent did for me:
Schedule two normal inspections and an FHA inspection and a termite inspection.
Help negotiate an offer including repair costs.
Handle pretty much everything with my lender and title/escrow company.
Translate those inspection flaws back into negotiations with the sellers agent for the repair costs.
Have that special access to the real estate database and run the queries on surrounding property values.
Have access to those special keys to get in to houses to show anytime they want.
It sounds all easy to schedule all these inspections and act as a go between for the inspections and the sellers to fix things, but I noticed my agent was busy on that stuff daily.
If anyone wants it, I can give them my agents information. She did a ton of work for me. It's not like it costs you anything anyway(well not that I noticed, and I compared prices) and it takes a ton of stress off your back.
Quote from: waterboy on April 27, 2009, 08:27:20 AM
If not using a real estate agent works for you then fine. Why diminish others who have spent time and money to become experts in their field because they dare to charge a percentage for having done so? You're not just paying for search and marketing. A successful agent today must specialize on particular areas or price ranges. You buy his accumulated knowledge and contacts within the industry.
I bought my first home without an agent and back then it wasnt' really as complicated as it is now. An opportunity arose through friends and I used my knowledge to make it happen. Mostly out of ignorance of what could have happened. I got a much better price and rate on financing than my contemporaries when I bought my second home because my real estate company was representing an emerging condo. People who walked in the door without an agent to buy, provided their profit.
If you have the skills and persistence to avoid paying that 6% then have at it. Same thing with car buying, insurance and a host of endeavors. Don't expect that everyone wants to learn the business though. If used judiciously they easily earn their keep.
My only point is that the process gets more complicated to encourage those that don't have a lot of time to learn all the rules to get a realtor. At least that is what I would push for if I was a Realtor. If you are the only one that knows the rules you can make the $$$ :D And I would definitely use a realtor to sell a house. But if you have one to buy and there is a FSBO house he finds you want either you pay more $$$ or the FSBO has to fork up some cash in commission which they might not want to. That is the only reason I even started the conversation with maybe you might not want to get a Realtor to find a house as a buyer.
Neighborhoods have personalities just like the homeowners that populate them.
I would encourage you to drive the neighborhood at about 6pm and look for clues. If families are walking and neighbors are visiting each other in front lawns, you have a good family friendly neighborhood. I also like to see homeowners taking care of their own property (rather than lawn services). Grass is a sign of neighborhood and homeowner pride. Yards filled with weeds and overgrown shrubs is usually an indication of a neighborhood on the decline.
I have and will always use a realtor. The 6% is worth all of the advertising and promotion you get for it. I just sold my house and during the 80 or so days it was on the market, it was on TV about a dozen times, pictured in the newspaper several times, and even mentioned on KRMG. It was also pictured in most of the free home buyer's guides in local restaurants and convenience stores. A week before each of our open houses (2) my realtor sent out color post-cards to hundreds of potential buyers. Each open house got a response of about 20 couples. If I were to purchase all of that media/postage (and I wouldn't) it would cost me more than my realtor's commission.
I've never had anyone work harder for me than my realtor. I was in no way his largest commission, but he called every day with updates, monitored all comps in the area and sent emails daily with listings and closing prices of near by properties. This is the third house I've listed with the same realtor and will never use another, or attempt to go it alone. We looked at a few FSBOs while shopping and were not comfortable with any of the answers we got from the homeowners. There is no reliable ethical standard for the seller of a home, but with a realtor you have recourse, and they are usually far better at presenting an honest representation of the property with all of it's advantages and faults.
Quote from: Gaspar on April 27, 2009, 08:58:44 AM
Neighborhoods have personalities just like the homeowners that populate them.
I would encourage you to drive the neighborhood at about 6pm and look for clues. If families are walking and neighbors are visiting each other in front lawns, you have a good family friendly neighborhood. I also like to see homeowners taking care of their own property (rather than lawn services). Grass is a sign of neighborhood and homeowner pride. Yards filled with weeds and overgrown shrubs is usually an indication of a neighborhood on the decline.
I have and will always use a realtor. The 6% is worth all of the advertising and promotion you get for it. I just sold my house and during the 80 or so days it was on the market, it was on TV about a dozen times, pictured in the newspaper several times, and even mentioned on KRMG. It was also pictured in most of the free home buyer's guides in local restaurants and convenience stores. A week before each of our open houses (2) my realtor sent out color post-cards to hundreds of potential buyers. Each open house got a response of about 20 couples. If I were to purchase all of that media/postage (and I wouldn't) it would cost me more than my realtor's commission.
I've never had anyone work harder for me than my realtor. I was in no way his largest commission, but he called every day with updates, monitored all comps in the area and sent emails daily with listings and closing prices of near by properties. This is the third house I've listed with the same realtor and will never use another, or attempt to go it alone. We looked at a few FSBOs while shopping and were not comfortable with any of the answers we got from the homeowners. There is no reliable ethical standard for the seller of a home, but with a realtor you have recourse, and they are usually far better at presenting an honest representation of the property with all of it's advantages and faults.
Nah, your realtor didn't do anything to earn his commission. Why'd you waste that 6% Gaspar?
You got me.
I just felt sorry for him with the economy and all. Didn't want the bank to come take away his Audi.
Sorry in advance for contributing to the thread hijack, but I looked into this a couple years ago out of curiosity and have to chip in my 2 cents:
IMHO, realtors make sense for people moving to a new area, selling a house after they move away, or if they have a job/life that doesn't allow them to really be involved in a buy or sale. But if you can get away from work a few times there is no reason you can't sell your own home. You're paying someone to deal with the pain in the donkey for you. You are also paying someone to advertise for you. If you are willing to pay for the service, then by all means.
But I'm too frugal for that. On the sellers side I just see 6% taken out of my gross. On the buyers side I just see 6% added to the price which I know is will be near the top edge of what the market will allow to begin with. On a typical $150,000 Tulsa home that's $9,000. Or about the first 4 years of equity generated by your Mortgage payments.
Unfortunately, every study that I am aware of, other than by the Realtor Association of America, has concluded that the 6% paid to realtors is an economic loss for the seller. While the house typically sells a couple weeks sooner, the sale prices are statistically equal before taking out the 6%. The National Association of Realtor's study found a 16% premium for hiring a realtor (2005) , but admitted 40% of FSBO sales they studied were to friends or family and that may have effected the price. An earlier study by the association found a 26% boost when you hire a realtor (2003).
As an initial matter, I flatly disregard such a numbers from the Association. Why does private research never verify their claims to any significant level, let alone to the amazing high degree that they are claiming? And if their numbers are correct, why, IN THE HELL, would you ever buy from a realtor?
If a typical realtor listed home sells for 26% more, I'm never going to bother even looking at one. 26%? So I could have the $150,000 Realtor listed house in a cookie cutter subdivision OR save $39,000 and buy the identical non-realtor listed one for $111,000 next door. Hmmm, which way to go, which way to go. If that statistic is true, a buyer would have to be an utter fool to consider buying property listed by a realtor.
And finally, if the 85% listing rate of realtors began to wane the self fulfilling prophecy of a realtor being a requirement would collapse. The more FSBO transactions that occur the more comfortable and smooth such transactions would be and the more choices there would be available. The National Association of Realtor's is in the business of making money for realtors - anything they can do to make it look like they are required will help (not faulting them for looking after their industry).
Which goes along with what the government found. That the National Association of Realtors was "fundamentally anti-competitive and harmful to consumers." Mostly for trying to shut down any operation that tried to change the rules, lobbying for effective bans on e-realtor or self-posting websites, and "encouraging" members to maintain fees at certain rates. The big fish in the suit was forbidding people they didn't like from participating in listing services. Under the business friendly Bush DOJ, it was determined that the action of realtors was to benefit Realtors to the detriment of consumers and an illegal restraint of trade. In what the Realtors Association declared a stunning victory in educating the Justice Department, they were ordered by a Federal Judge to allow equal access to all realtors including discount firms, firms with rebates to consumers, and online realtors.
It's a $100,000,000,000.00 industry. They get to make a few of the rules, they have some influence, and they know the game. But they exist primarily because they provide a service. Realtors provide a service.
They know how to navigate the complex buying and selling of real estate, they know the market, they know buyers and they know sellers. If you are moving to a new location and need a guide, if you are not willing or able to put forth the effort to sell your home, or you just don't want to bother with it - hire a realtor. All the realtors I know are honest people who work hard to make a good living. But that doesn't mean everyone needs or will benefit from their services.
- - -
As always, I welcome data and opinions to the contrary. But the studies I found indicate that the seller ends up paying 6% to sell his home a couple weeks sooner. The industry brags that they make buyers pay up to 26% more.
To purchase my first home I spent several evenings looking online for listings, drove around a few neighborhoods, pulled fliers, and made some calls. When I got serious I met a few owners on a Saturday and went through the properties. Pulled transaction histories from the Courthouse (assessment value, previous mortgages). Made an offer, hired an inspector, got a loan and closed. I missed 1/2 day of work for the closing and one long lunch to meet with the mortgage broker. Total time spent: 12 hours. Sold it by posting fliers on campus and an ad in the newspaper (it was near campus). Showed it 4 times and it was sold for $1,500 below asking price.
My first house in Tulsa I drove around with a guy I knew from Tulsa in neighborhoods he said would be good to move to with a digital camera. Took pictures of houses I was interested in, pulled fliers, looked online. Asked people at TU about the various neighborhoods. Went home to Iowa and made a few calls and set up a couple of visits for 2 weeks later when I would be in Tulsa. Looked at the houses with my wife one day when I was in town for orientation, made the seller show me assessed value and what his last mortgage note was for, offered, countered, the bank recommended an inspector, and closed. Again 10 or 12 hours.
Frankly, I don't see how you avoid spending 10 hours even with a realtor. You are going to want to visit the homes, will probably look online at some, you will have to be present for closing etc. For me, it would have represented spending about $600 an hour. I might just be lucky, but our purchases and worked out very well.
/thread hijack?
When you buy a house you don't have to pay the realtor so it is not so bad. I recommend it if you are a newbie or if you are really busy and want the help. You can also view houses more easily because your realtor has the lockbox key and you don't have to wait for the selling realtor to come by. When I was looking at new neighborhoods I came to see one house but would wind up seeing all of them on that street because of my realtor being able to show me. I recommend seeing as many houses as you can before you buy.
As far as selling, I do not always recommend using a realtor because you have to pay the full 6%. If you sell yourself on FSBO sites they can put it on MLS for about $300. You do have to pay the buyer's realtor if they have one. I put in the listing that I only paid realtors 2% commision and they always accepted it but I think it turns some realtors off of promoting it. I did get a lot of people without realtors that were not pre-qualified for a loan so they wasted my time. I got to the point when I told people they had to be pre-qualified before I would show it. You also have to provide your own yard sign and mine was stolen right out of the yard once probably by a realtor. LOL.
The moral of the story is you should have a set amount you want to get out of the house when you sell. Tell your realtor up front and sometimes they will take a lower commision to make you happy. Otherwise they may say they cannot do it and you just sell it yourself. Never sign a 6 month contract with a realtor. I recommend month to month if you can get it.
In order for the thing about not having an agent to save money to work, you would have to buy a house that was specifically FSBO right? Because if the house you wanted was for sale by agent, then your agent would just take part of their commission. That is the way I understood it.
I got like 4-5 pre approvals before I started looking like the OP is suggesting. You will have to pick one and stick with it early on because the lender has to work with insurance and escrow/title people. That was one thing my agent got angry at me about. I was trying to keep all of them on board in case a deal with one fell through. I think it also works best if your agent seems to be buddy buddy with your lender. I think mine fast tracked me through BOK's system because of that.
Cannon- your data that houses listed by realtors sell for 26% more than FSBO's would justify using a realtor as a seller and paying a 6% commission, yes? If I can net a 20% gain on my sales price just by paying someone else 6% that's a great investment. I'm highly suspect of those numbers, but that's what's given in your data.
Not such a great deal if you are a buyer, no.
I've honestly not run into situations where FSBO list prices are significantly less than those of homes listed with realtors in the same neighborhood. Some FSBO sellers have it priced up so that they can pay a broker commission (I believe it's usually 3% if the broker brings a buyer). Everyone is trying to get the max they can for their house, I don't really find much to support that houses sold by realtors are consistently 6% higher (much less 26%) than FSBO's.
It's not an area most people feel competent in. Let me put it another way, would you advocate someone with no knowledge of the law taking on a tort action pro se to avoid paying a 30% "commission" to an attorney?
Quote from: Conan71 on April 27, 2009, 10:09:40 AM
Let me put it another way, would you advocate someone with no knowledge of the law taking on a tort action pro se to avoid paying a 30% "commission" to an attorney?
You just compared the expertise required to buy or sell a home with the expertise required to run a successful tort case. ?
R= hardest working letter in the alphabet. Capitalize it when using in refernce to Realtor.
Feel free to remind me to not do biz w/ atty's. Bleh...
Why would I capitalize realtor? I understand that Firefox and Word want me to, but it isn't a proper noun. It's a job title. If refering to THE President, the Pope or another title serving as a proper noun, capitalize it. Otherwise, it's just a title. I was not using it to reference members of the NAR.
My father is an accountant, my mom an administrative assistant, my sister is a hydrologist, I am an attorney, I go before a judge, the laws I argue are passed by legislators, my secretary makes appointments, my plumber works on my pipes, I used to work for a crane company and our operating engineers ran our equipment.
The explanation I've been given is that people who want to join the NAR have to take a test and often study for over a month. I studied for 5 years to take the CPA (requires 150 hours), but am still just an accountant. I studied an additional 3.5 years to take the bar, but remain a lowly attorney. A journeyman plumber studies for 3 years, an operating engineer has to be an apprentice for 3, a judge often has 7+ years of college, took a test, a lifetime of experience, and is an official but the word judge isn't a capitalized title.
Yes, I understand the NAR holds a trademark on the term REALTOR. So does Xerox, Kleenex, Frisbee, Velcro, and Coke. Hell, most words associated with the internet (Internet) have been trademarked by someone. If you want to be technical, you should know that the NAR insists you follow the word Realtor with the registered trademark symbol. But it is real annoying to do so whenever you reference Realtors® so no one but the National Association of Realtors® does it. They are deathly afraid of losing their trademark.
Furthermore, I wasn't referring to only members of the NAR. I was using it as a generic, NON-REGISTERED term to refer to people who charge fees to facilitate transactions in real estate. The term the NAR demands I use is "real estate practitioners." Luckily, since I am not using the term for profit or in a commercial application I won't be sued for my infringement. Ask 80% of the people and they will give you a generic definition for the term realtor as a reference to someone who acts as a real estate practitioner.
Can you imagine the CPA's trademarking the word "accountant?" Or attorneys trademarking "lawyer."
I'll capitalize Realtor on a general basis when you call me Dr. Cannon_Fodder, as I hold a terminal degree in my field and have been granted a Doctorate. I understand their desire to differentiate members of their club, but to demand I capitalize their title is pretentious.
Conan:
Yes, if you use the 26% figure you come out way ahead. That figure was given in a publication byt the National Association of Realtors®, not supported and replaced by their next release. I gave the number out of courtesy to present the other side of the argument. Their more recent figure (16%?) still has serious flaws in it's underlying data, as they readily admit. And if the figure is true, the argument from the buyers perspective is irrefutable. Just like you wouldn't want to defend a lawsuit from an attorney who brags about inflating rewards 26%, I wouldn't want to buy from a Realtor® who makes the same claim.
And yes. If you have a simple tort case, a no contest & no child divorce, traffic ticket, small claims, eviction, or other simple legal matter you can handle it yourself. I readily tell clients that. In some instances clients will do no better than a break even by contacting an attorney and it only serves to pass on the pain in the donkey and as a piece of mind. I don't pretend my involvement is needed for every legal transaction and I don't believe things should be so complex that my help should be required.
You have a wrongful death claim, medical malpractice, a divorce involving dispute child custody, a felony criminal charge or other areas that require an expert to navigate . . . then I would highly suggest hiring an attorney (or is that Attorney®?). Simple legal transactions don't require an attorney. Simple real estate transactions don't require a Realtor®. I'm not sure why that is threatening.
Sorry, but I don't see data to support the notion that hiring a Realtor® improves my position as a seller and I haven't heard a coherent argument that it is beneficial to the buyer (particularly given the aforementioned and oft mentioned arguments of increases costs to the buyer as a reason for the seller to use a Realtor®). Though I realize that's what seems like is happening, I'm not setting out to bash Realtors®. Just giving my opinion.
Please, if I am missing something (other than improperly capitalizing a noun), state your case. I'm not pretending to be a definitive source here. Just stating my opinion. Clearly Realtors® on this board have a different opinion and while I respect their work, I personally fail to see value in it for me in local transactions (just lack my firms expertise in divorce lacked value for you).
/goodbye Karma. ;)
Really, I know I sound like a [penis]. Just stating my opinion.[/sub]
[edit] Sorry for a massive thread hijack. I got distracted! [/edit]
Penis. ;)
My point was nothing more or less that it's worth paying someone else to do your footwork for you if you are unfamiliar with how something works, or if you have limited time resources to accomplish a task. I've bought and sold property enough times now, both in-state and out of state that I've found using a realtor is worth my time. It might not be for others. Not every transaction goes as smoothly as the last. Selling my farm in Nebraska without the use of a realtor would have been incredibly time-consuming and foolish on my part, considering I was living in Tulsa at the time.
When someone finds a house they really like, market time will be crucial on their existing property. If a realtor can make it happen on average 2 weeks quicker, it might be worth paying that premium to someone.
It's just like renovating my house- there are things I'm proficient at, things I'm not so proficient at. I also have time constraints to get moved in, so there are some things I'm willing to pay to have done just so that I can continue to earn a living during the daytime instead of taking multiple days off to re-finish drywall or install flooring.
IOW- don't poo-poo a whole industry that serves a good purpose for millions of people just because it doesn't necessarily serve your personal needs. If it wasn't a good value, the real estate brokerage industry would not exist.
Haven't seen this mentioned yet, but it is very important. Check out the surrounding zoning of the the house. Make sure you understand what it means. Know what the lot size restrictions are--your next door neighbor may decide to split their lot & replace that one house with two. You may not mind, but it is something you should know. If something near you is zoned as a PUD, call INCOG and make sure you know what that means. Is it zoned HP? (I love my HP neighborhood, but it is definitely something you should know ahead of time). If you use a realtor, don't rely on them to explain the zoning--many don't understand it.
Also, if you use a realtor, remember that you still decide who you want to do the inspections and the closing. I've had realtors try to push closing companies, as though they get to decide. If you have a good realtor, and trust them, that's fine. But call around before you decide whom to use.
If you are going to be short of cash after the closing, buy a warranty. They aren't that expensive, and chances are something will break right after closing.
Quote from: cannon_fodder on April 29, 2009, 03:35:39 PM
Sorry, but I don't see data to support the notion that hiring a Realtor® improves my position as a seller and I haven't heard a coherent argument that it is beneficial to the buyer (particularly given the aforementioned and oft mentioned arguments of increases costs to the buyer as a reason for the seller to use a Realtor®). Though I realize that's what seems like is happening, I'm not setting out to bash Realtors®. Just giving my opinion.
Most people are incredibly poor negotiators. A Realtor® is usually better, since it's their job to be better at it.
Attorneys are usually better at resolving traffic tickets in a way that keeps them off your record, too.
Whether those skills are worth the price charged is up to a given individual to decide.
I wouldn't attempt to negotiate a home purchase myself. There's too much money at stake and I'm not a great negotiator, and it's worth it to me to have someone else deal with scheduling inspections and all that. I do deal with my traffic tickets myself. What I'd be paying hundreds of dollars for in that case would be not having to attend the arraignment in person and maybe a hundred dollars in savings on the fine.
And who pays "list" on a house? That's like paying MSRP on a car.
Quote from: nathanm on April 30, 2009, 11:08:01 AM
And who pays "list" on a house? That's like paying MSRP on a car.
Not entirely. There is only one house just like mine so if several people like it, they might get into a bidding war and end up paying even higher than list price. When buying a car there is usually an entire lot of virtually the same car to choose from and I only need one. The auto market is over-supplied virtually all the time.
To the OP - I have a real nice 3 bedroom in midtown that I am just about to put on the market. Pretty much everything has been redone - new roof, new floors, new counters, new thermal windows. Send me a PM if you are interested before someone else gets it.
Quote from: nathanm on April 30, 2009, 11:08:01 AM
And who pays "list" on a house? That's like paying MSRP on a car.
Not true. Sold my last house for "list." Was able to do so because I was realistic with my asking price. Sellers are all different. Some have an unjustified inflated opinion of their home's value and don't get their "list" because of that. Some sellers price their home higher than what they would take for it because they think it is beneficial to have wiggle room. Other sellers list their house for its actual marketplace value. All that to say, paying "list" for a house is often justified if the seller has listed it for the appropriate market value.
Or people offer list price with specific items they want done, like new windows, a fence, or a roof so they can get improvements financed.
There have been points in really hot real estate markets that people will offer well over list because there's such a high demand. I don't know that you'd see an over-list offer in the Tulsa market right now. No, houses aren't as generic as a new car, but houses for sale in mid-town with a new roof, windows, countertops, etc. isn't exactly unusual. Unless it's a really rare one-off for a neighborhood or something iconic like a Bruce Goff design, chances are people won't be lining up to pay over list.
I am glad the CF capitalised the P in Penis.
Quote from: BierGarten on May 01, 2009, 10:23:26 AM
Not true. Sold my last house for "list." Was able to do so because I was realistic with my asking price. Sellers are all different. Some have an unjustified inflated opinion of their home's value and don't get their "list" because of that. Some sellers price their home higher than what they would take for it because they think it is beneficial to have wiggle room. Other sellers list their house for its actual marketplace value. All that to say, paying "list" for a house is often justified if the seller has listed it for the appropriate market value.
Few sellers will list the house for what it's really worth, not even taking into account needed repairs.