buying a house in nj, agent and tax in pay question (real estate, mortgage)
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Hi,
We're getting to close to buying a house, looking at 2 properties to choose from, just wanted to know do we need an real estate agent? We don't have one now, looked for homes on our own, just wanted to know if they help once we've picked the house and are ready to buy, otherwise aside from talking to the bank and getting an inspection, is there anything else to do? or is the real estate agent the one who do advise us whats next?
Also I was wondering, after buying the house, would I get a break in taxes in my paycheck? I live in nj, but work in ny, so aside from the commuting cost I end up paying more in taxes now then i did when i was working in nj, just wondering after we buy do they get reduced? First time we're buying, currently we rent.
Well, I'm not sure where to begin with this one... lots of thoughts in that post...
While I personally think the entire real estate industry, especially the lawyers, is a comple sham, on the buyer side it's generally a good idea to work with a realtor simply because you don't pay them. They get paid by the seller of the home so you mine as well find someone who has a lot of expertise in an area you're interested in. A good realtor can help steer you to better schools and neighborhoods, can describ traffic conditions and even where you can find the best deals on gas, fencing and landscaping products, etc. Now this is all stuff you could learn yourself and research yourself, why bother if you can get the advice for free? They'll be very helpful in writing up the offer letter you're going to send to the buyers though I'm sure you could do it yourself if you really wanted to.
As for the process, there's a lot more to it then simply making an offer and doing a home inspection. There is going to be some negotiations pre and post inspection, there is going to be a lien search, and a while list of other mumbo jumbo that's generally done by an attorney and/or your realtor to make sure the property is legally ready to be sold and you aren't getting any surprises. Again, I don't think buying a home should require a lawyer, but in this sue crazy world, it's best to have one, especially because the seller likely does.
As for a tax break, that depends... your taxable income to the Feds will go down but that won't show in your pay check unless you increase your dependents. Your employer couldn't care less and won't adjust your paycheck simply because you buy a home, it's something you have to manually manipulate by increasing your dependents. Both your mortgage interest and your property taxes are deductions for your federal taxes and in NJ that can be a significant amount. Additionally, the year you buy a home there are other deductions that are applicable I believe (buying down interest possibly?? I know there are some!). You can either increase your dependents and bring home more pay each month or simply wait until you file taxes and get a nice big fat tax return. An economist will tell you to do the former, most of us probably do the latter.
How did you look for homes on your own? Open houses?
If so, whenever you decide to make an offer, you will call whatever agent you made contact with at the open house and they will be your buyer's agent. They will most likely then be acting in what is called a dual agent capacity, as both the listing agent and your buyer's agent will work for the same broker. Not a big deal, happens all the time, just so you know.
What will an agent do, once you write the offer and get it accepted? Depends on the agent. I've found they don't do all that much at that point. Really, the important person becomes your lawyer, who will help you iron out the details of the contract during the attorney review process. Then it's up to you, the buyer, to get the home inspected (which they should help you arrange) and get your financing.
Once you hire an attorney, direct your questions to them. If there is anything important you need to know, make sure you get it in writing, do not believe anything anyone SAYS, especially an agent.
While I personally think the entire real estate industry, especially the lawyers, is a comple sham, on the buyer side it's generally a good idea to work with a realtor simply because you don't pay them. They get paid by the seller of the home so you mine as well find someone who has a lot of expertise in an area you're interested in.
The attorney is so important. The agent doesn't do that much after both parties accept the offer. All of the legal stuff, including the lien search, etc is done by the lawyer, who also acts as the closing agent. Any post-inspection negotiations also go through the attorneys.
Realtors rarely do the stuff you mention (point out downsides of the house) and I'm not sure they are allowed to steer people to certain neighborhoods. I've found you really have to do all the research yourself on towns and neighborhoods and schools. Realtors will encourage you to buy anything.
I take it you had some bad experiences with real estate agents luckyshoes?
Sure! Of course I've had some bad experiences, some good ones, and some average ones. I've bought and sold three homes already. I did have one great listing agent, but she doesn't do the buyers side.
The buyers agents I've had have been nice people, and great tour guides, but I didn't find that they offered any value-add to the transaction, other than driving us around and searching MLS for us.
I understand. I once had an agent try to sell me a house right next to Route 17 and said don't worry about the noise, you won't hear the traffic with the windows closed lol.
A good buyer's agent should help with knowing the neighborhoods, guiding you through the buying process, coming up with an offer price, and negoiating. The internet has allowed the buyer do a lot of research on their own now but its still good to have a buyer's agent in the transaction. I wouldn't recommend using the seller's agent to act as a dual agent. Doesn't cost the buyer anything to have their own agent. Like any industry, there are ones who do their job the right way and others who don't.
Its funny as you are all writing as the agent acts for "free". yes seller pays their commission but who's money it is ? of course yours, the buyer's. You are the only one paying in the whole transaction. If you know what you are doing and found the home, you can use the fact that you do not have an agent in your advantage to lower the price - your seller won't have to pay your agent commission !
Its funny as you are all writing as the agent acts for "free". yes seller pays their commission but who's money it is ? of course yours, the buyer's. You are the only one paying in the whole transaction. If you know what you are doing and found the home, you can use the fact that you do not have an agent in your advantage to lower the price - your seller won't have to pay your agent commission !
This isn't really true. Let's say you sell your house at a loss. In that case the buyer isn't the only paying in the whole transaction.
Loss? compare to the purchase price they paid maybe few years ago? what does it have to do with my transaction? My transaction is only about money changing hands(banks) at the closing. I am paying, seller is receiving, all other hard working folks getting their commission, taxes, fees etc
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