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Can I get a commercial loan without 25% down?
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Mentor
Hire a realtor who has closed a few transactions recently. Dont just hire the friend / relative / former classmate who’s a realtor and will give you a good deal.
A good realtor is worth their fee many times over!
Mentor
In a flat or down market (depending on your location) like today, I’d argue that a good realtor can easily get you 3% to 5% off of any list price of a home in concessions, repairs, or other benefits. Finding a realtor who has closed a few transactions recently will help as they will know what sellers are accepting from an offer perspective and/or how competitive your specific market is. They will also have a Rolodex of contacts that will help you with the transaction - inspectors, handymen, painters, movers, etc… again, in a flat or down market, this helps you get far more for your money than you would in a competitive market!
They will also help guide you through the process so you don’t feel stressed or pressured. Your first home purchase is likely the largest purchase you have made in your lifetime by a factor of anywhere from 5x to 20x, if not more. It’s also a commitment to hundreds of thousands of dollars of debt, which can be highly problematic if you sign the paperwork without understanding all of the nuances and details.
An “average” or below average realtor will simply open doors and tell you where to sign your name on the paperwork. Those realtors deserve to fail out of the industry IMO.
Bank will approve you for a loan amount much larger than you should take on. Don't get on a payment that is larger than 25-30% your monthly income.
I wish I knew I could take money (I think up to 10k) out of my 401k to put down. I did not need that extra money, but it would have been good to know.
Buy something you can easily rent (and that the rent will cover your mortgage) because you will prob end up moving to a bigger place in a few years.
Agree, especially with all these layoffs. The economy is diff now. Also, if it’s a tenant friendly state.
I’m going the other way in realtors. I certainly don’t think they are worth the hundreds of dollars an hour they make if you are buying in an expensive market. I used upnest to get a realtor that refund me 25% of their commission. But that was before the recent lawsuit settled. Remember that sellers don’t have to pay your agent’s commission anymore. Do the math and negotiate what you think your should pay. I think the value of a Realtor also depends on the size of the city. When I bought a house in Boulder Colorado I reviewed every listing when they came out and went out and saw 1-3 houses a week. I knew what I wanted, there weren’t that many and it was completely manageable. If you don’t even know where you want to look in a large city, a Realtor might be more help. I think I could pretty much buy a house without a realtor but need someone to unlock door and let me see houses and manage the logistics of the negotiations. Is that worth $20k? Not to me.
Same - we don’t use realtors and have saved a ton of money. When we sold our last house I insisted we meet with a local realtor who is #1 in the area and they said 3% if they sold it and 5% if they also brought the buyer. They wanted to list at $1.1 and we had done extensive research and said $1.3; he laughed and said no way and even $1.1 was a stretch. We ended up using Congress Realty (I think we paid $500 for them to list on MLS and then we did everything - they have different levels of support) and selling for $1.25. Def sent that relator a text when we closed. 😅
Also, SHOP RATES. We are under contract for another house now and locked 5.25 30 year fixed with no points through a local credit union. Check rates on bank rate and shop local credit unions - often they have portfolio loans which can be a better deal. The amount of people who just use their bank or who their realtor suggests is nuts to me - you can save so much money by shopping around!
Location, location, location.
Also, do your research yourself - don’t rely on a realtor. Their incentive is to sell at the highest price point - even as a buyer’s agent.
Lots of tools out there to find good neighborhoods, ask several realtors for comps in an area you like, they will do this for free to win your business. Don’t sign with anyone until you talk to a few (interview them) and, depending on which state you’re in, find a good real estate lawyer.
I say that last part because, if you’ve done your research and know what you want to pay, you can cut out the realtor and just use the lawyer to close. Much less costly than a realtor. Lawyer can potentially save you some costs on Title insurance and stuff - I was able to do this long time ago so not sure if still valid, but worth an ask.
Good luck!!
Subject Expert
That everything you need to fix costs thousands (if not tens of thousands) of dollars… so make sure you’re well capitalized…
Pay close attention to the neighborhood if you’re moving to an area you’re not familiar with… https://www.city-data.com/ can tell you a lot
These are my thoughts
Don’t impulse buy. If you are patient, there will be an amazing house. Also a house is not an investment, it is for memories. Especially with the housing market, don’t over extend and make sure you are buying super within your budget.
Get the best school district you can. You may want to move for a better house but you will definitely consider moving for a better school district. Unless you are comfortable paying for private school.
Consider if renting is worth it. Where the housing market is, a lot of people are choosing to rent long term instead of
Until they redistrict right after you buy. Happened to us.
If you are using a real estate agent (you should if it’s first time buying) - make sure they actually have a lot of experience with not just buying and selling, but understand the legal and inspection processes. A good realtor knows exactly what inspections cover, and will be present during inspection to help look out for your interests.
A good realtor with years of experience usually can refer you to plenty of contacts for repairs, remodeling, etc.
If your realtor doesn’t seem to have answers for any of the above, then they don’t have good experience and you’re paying thousands of dollars to have someone drive you around a few times.
My advice is not to buy a cheap house with an incurable issue. Don’t buy a house in a busy street or under power lines or in the flight path of an airport. Also don’t buy so far out that your commute is over an hour. Buy a house that you can live in for 10 years. Buying and selling homes is expensive, don’t buy thinking that you can sell in 4 years and upscale. That only works in an up real estate market and this market is flat. In a flat market, you will burn $50k if you decide to buy again in a short period. I agree with Tax SM - buy a good school district. Paying $2k/month for school (per kid) is a lot more expensive than putting that money into the house. And make sure you know where city borders are and the amenities that each city offers as well as differences in the property tax rates.
When I bought my condo I was so focused on what single me wanted. It’s hard but try to project into the future the kind of lifestyle you’ll want 5 years down the line. Priorities can change, make sure you’re thinking longterm I.e. rental potential, appreciation upside, amenities etc.
I’ll weigh in one more vote for an experienced realtor who makes it their full time profession. As a first time homebuyer, you will question every aspect of the process, likely with a tinge of anxiety and self-doubt. It’s a big decision and you don’t know what you don’t know. Get someone who does know. If you live in a state that has had recent major changes in real estate contractual requirements (and omissions), like California, please do not rely on ChatGpt or think that you can “research” your way through the process with accuracy while still managing the emotional side of buying your first home.
‘100 questions every first time homebuyer should ask “on Amazon.