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A pre-qual letter is worthless. It binds no one into anything. You can get one by filling out a basic mortgage form on the internet. All seller agents know this.
Sit down with the mortgage agent from your regular bank for a few minutes, and they can will probably print one out for you. When you are ready to apply for the mortgage, they will look into your current employment and past tax returns.
If you're ready to commit to a buyer agent, ask friends for referrals. The agents referred by Trullia, Zillow, red fin... I don't think they were specially vetted. Probably just pay to add heir names as qualified agents for the site.
Show any listings you like to your buyer agent and they will handle setting an appt to view the property.
Thank you all for the great advice! I had a couple follow up questions:
1. If we get a "pre-qual" for a mortgage, do you know how long it lasts?
I don't think those letters have an expiration date, but it doesn't really matter. The pre-qual is really just a "you will probably get approved based on the little data we have at this time." What will really matter is the actual commitment, which will require you provide much more detailed information. Think background check with top-secret security clearance for handling nuclear codes. Then add a little extra. Banks today get into a very high level of minutia with mortgages. (That's because they re-sell them and they are difficult to re-sell when the paperwork isn't 110%)
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If a spouse changes jobs after the pre-qual, does that matter - do we have to pre-qual all over again?
No, because the pre-qual really doesn't mean anything (as someone else already posted). However, if the job change significantly impacts your financial situation, you may want to re-do the pre-qual for your own benefit. The point is to get the loan approved and you don't want to fall in love with a home where you might not get approved a loan.
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Or does it just depend on savings and credit rating, not anticipated income?
While somewhat of an over-generalization, savings and credit rating mean very little. It is all about income (current, not anticipated).
You can have a boatload of savings and then blow it all the day after you close on the home. The bank is looking at your current and future ability to pay the monthly bill with your income stream.
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2. If we get an agent, how does that work with the agent showing the home? In other words, if we find a buyer's agent, and we look on trulia and see a house we like, the house will have an agent to contact associated with it. Do we contact that trulia agent? Does our buyer's agent contact that trulia agent? Is it a problem that we would then have two agents - the agents have to split commissions (is that right?) and maybe the seller's agent won't be as inclined to facilitate our purchase?
You are over-thinking this. Don't sweat it.
As a buyer, you don't need to worry about the RE commission. The seller is responsible for that.
Typically, there is a 4% commission on the sale. If you go through the listing agent, they get all 4%. If you go through your agent, they split the commission - 2% to your agent, 2% to the listing agent.
There are advantages to you for using a buyer's agent. Being very new to the process, it is probably recommended. If you are using an agent, they would contact the listing agent and arrange a showing. Your agent would also present any offers you make and come back to you with counter-offers.
The RE agent is the "agent" through which all communications run. If you have an agent, they communicate on your behalf. There is no problem with this setup - that's how it works and all agents understand it. They almost always split commissions between buyer and seller agents.
Once you make a deal, your attorney is your "agent" for the transaction. At that point, all communication passes through the attorneys.
Of course you might speak directly to the homeowner when viewing the home. You may speak to your RE agent to set up a time to measure while you are in contract. However, anything related to the deal - offers, counter-offers, what appliances stay, etc. - goes through the agent prior to contract and through the lawyer once an offer has been accepted. Communicating outside the agent or attorney often leads to problems.
Just my 2 cents: When you hire an inspection engineer, don't hire one recommended by the real estate agent. We did that years ago, and it turned out that they were both in cahoots, so to speak, to get the house sold. The engineer gave the house a glowing report. After we moved in it was far from glowing - everything from mice, to dry rot, etc. Go with an independent firm.
Several years later we were interested in another house in Smithtown. For that one, I hired an engineer that I found in "Home" magazine, and the engineering firm was from Rockville Center - miles away from Smithtown with no ties to any listing agents in Smithtown (that I knew of). I believe we used Tauscher. This engineer found everything wrong from inadequate heating, dry rot, inadequate chimney venting, uneven floors, etc. The list went on and on. We ended up not buying the house and all of its problems.
Finding a reputable engineer who knows his stuff is important. You don't want to get stuck with someone else's money pit.
In my experience it's best to go with the sellers agent meaning not having an agent of our own due to the commision being split. I don't have proof but I've felt couple of times our offer was not accepted or maybe not even presented due to having our own agent and the selling agent didn't want to split commision. We were also competing with cash offers so I felt having our own agent was a minus.
In my experience it's best to go with the sellers agent meaning not having an agent of our own due to the commision being split. I don't have proof but I've felt couple of times our offer was not accepted or maybe not even presented due to having our own agent and the selling agent didn't want to split commision. We were also competing with cash offers so I felt having our own agent was a minus.
Not having your own buyer agent is only advantageous AFTER you've found the house you want. Before that, they do a lot of legwork in setting up appointments, unless you like making 15 phone calls before receiving 2 back (because, who are you?). Or dealing with cancellations/reschedules because the weekend lasts only 2 days and people in general are just farking flaky.
I don't know why you make it sound like the seller agent is the one making the decision on your offer. A seller may prefer a buyer without an agent only if the commission to the seller agent (from the seller) is actually reduced because of this. I've heard a reduced commission like that seldom happens anyway. So in most cases, where the commission % remains the same regardless, a buyer agent certainly is free to you.
Not having your own buyer agent is only advantageous AFTER you've found the house you want. Before that, they do a lot of legwork in setting up appointments, unless you like making 15 phone calls before receiving 2 back (because, who are you?). Or dealing with cancellations/reschedules because the weekend lasts only 2 days and people in general are just farking flaky.
I don't know why you make it sound like the seller agent is the one making the decision on your offer. A seller may prefer a buyer without an agent only if the commission to the seller agent (from the seller) is actually reduced because of this. I've heard a reduced commission like that seldom happens anyway. So in most cases, where the commission % remains the same regardless, a buyer agent certainly is free to you.
You're probably right, I was just sharing our experience. We basically went to all the open houses and the few that we had to make appointments with the seller agents responded very quickly and they always seemed more eager if we say we don't have our own agent. The area we were looking at, not many houses were available at a given week that fit our requirements so we basically went to open houses over the weekends.
Not a direct answer to you question but DON'T do what our buyer did. They paid no attention to the on/about closing date and we had put all on notice when we went to contract that we needed 20-21 days of that due to medical appointments and our new home not being ready. Their mortgage commitment expired before we were able to close and due to the 3 week length of time our RE attorney advised us not to rent back. They apparently made a very large purchase and nearly lost the house due to inability to have the mortgage app extended and approved. BUY nothing.
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Banks today get into a very high level of minutia with mortgages. (That's because they re-sell them and they are difficult to re-sell when the paperwork isn't 110%)
