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Old 07-17-2012, 10:55 AM
 
10 posts, read 24,526 times
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First off, I wanna thank all the thoughtful messages I got yesterday.

I've decided I wanna go ahead and buy a small 2br coop or condo.

and since I'm a complete newbie at this, I'm not sure how the process works.

Do I need to go and qualify for a loan first?
Do I need to go look for houses and then apply for a loan?

people talk about loan brokers; how different is it from applying directly with the bank?

How do I find a reputable real estate agent that's knowledgable about Queens and Brooklyn?


Thank you guys again, you've been of great help!!
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Old 07-17-2012, 11:27 AM
C8N
 
1,119 posts, read 2,982,637 times
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First, get your credit report or at least know your credit score and get a mortgage pre qualification letter. For a pre qualiification letter, you do not need to have a property in place. This will show your agent and sellers that you are a qualified and a serious buyer.

If you have any cash laying around that you would want to use towards your down payment, deposit that into your account right away. You want this fund to be in your account for at least two months. Otherwise, this will be what they call unseasoned money. Any unseasoned money, your lender may require you to source and document them.

A broker shops rates for you based on their existing investors and they will have multiple investors. But remember, brokers are a middle man and will get paid one way or the other. If youre are not going to do your homework in shopping rates, you may want to use a broker and use more than 1 if necessary.

Same thing with real agents. You are not obligated to only one. I highly suggest you use multiple real estate agents. Real estate agents gets paid from the seller and gets a percentage of selling amount. Having said that, they are not your friend and they are not on your side. It is in their best interest to get the deal done fast and at a higher amount so be smart and their influence on your decisions should be minimum.
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Old 07-17-2012, 11:32 AM
 
Location: Upper East, NY
1,145 posts, read 2,884,148 times
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Go read the boards at streeteasy.com on how to bid.

Everything C8N wrote is correct and good advice
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Old 07-17-2012, 11:48 AM
 
1,494 posts, read 2,595,003 times
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Quote:
Originally Posted by C8N View Post

Same thing with real agents. You are not obligated to only one. I highly suggest you use multiple real estate agents. Real estate agents gets paid from the seller and gets a percentage of selling amount. Having said that, they are not your friend and they are not on your side. It is in their best interest to get the deal done fast and at a higher amount so be smart and their influence on your decisions should be minimum.
That's not good advice.

There's a big difference between seller's agents and buyer's agents. and it's important to know what that is.

"Buyer agents" are legally on YOUR side and the are legally bound to represent and negotiate for you - you but that loyalty goes both ways- you cannot go to other brokers and negotiate behind their back. You can terminate the agreement at any time (in writing) and choose a different broker if you change your mind about working with them, but you can't use multiple buyer brokers at the same time in such a fashion. That will get you into a pickle. If you want a good buyer broker on your side, find recommendations for a good "buyer's agent" in your neighborhood from people who have had good experiences during the coop/condo buying process. Word of mouth recommendations are very important.

The seller agents are the ones who advertize and set up open houses on behalf of the apartment owner, and those are the agents who are not loyal to the buyer because legally their obligations are to represent the seller and the seller's best interest. Without a buyer broker representing you, yes you can negotiate with as many seller's brokers as you please. But not everyone knows the ins and outs of real estate, negotiations and the condo/coop buying process. A buyer broker's job is to negotiate with the seller's broker on behalf of the buyer, get you the best price possible and help you through the coop review and closing- they can be invaluable if you have a good one.

All agents will have their own apartment listings, and most are willing and able to represent a buyer or seller depending on the client and the circumstances. Just be mindful of potential conflicts of interest if a broker you've agreed to work with as a buyer's agent wants to show you an apartment where they are also the seller's representative- they are legally required to let you know of potential conflicts of interests like that.

If you don't want a buyer broker and want to represent yourself to a multitude of seller's agents, that's fine to but you'll have a LOT of homework to do. If you feel you're in over your head and need help, get a good buyer's agent but don't sneak around behind their back.
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Old 07-17-2012, 11:55 AM
C8N
 
1,119 posts, read 2,982,637 times
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Quote:
Originally Posted by Alkonost View Post
That's not good advice.

There's a big difference between seller's agents and buyer's agents. and it's important to know what that is.

"Buyer agents" are legally on YOUR side and the are legally bound to represent and negotiate for you - you but that loyalty goes both ways- you cannot go to other brokers and negotiate behind their back. You can terminate the agreement at any time (in writing) and choose a different broker if you change your mind about working with them, but you can't use multiple buyer brokers at the same time in such a fashion. That will get you into a pickle. If you want a good buyer broker on your side, find recommendations for a good "buyer's agent" in your neighborhood from people who have had good experiences during the coop/condo buying process. Word of mouth recommendations are very important.

The seller agents are the ones who advertize and set up open houses on behalf of the apartment owner, and those are the agents who are not loyal to the buyer because legally their obligations are to represent the seller and the seller's best interest. A buyer broker's job is to negotiate with the seller's broker on behalf of the buyer, get you the best price possible and help you through the coop review and closing- the commission is usually split in half between the two brokers.

All agents will have their own apartment listings, and most are willing and able to represent a buyer or seller depending on the client and the circumstances. Just be mindful of potential conflicts of interest if a broker you've agreed to work with as a buyer's agent wants to show you an apartment where they are also the seller's representative- they are legally required to let you know of potential conflicts of interests like that.

If you don't want a buyer broker and want to represent yourself, that's fine to but you'll have a LOT of homework to do.
I should have mentioned that using multiple real estate agent does not mean for the same property. If agent A showed you property A, and you want to deal on property A, you cannot use agent B to work on property A. But what I meant by using multiple agent was so that you can see a lot more properties. To accomplish this, I still recommend using more than 1 agent.
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Old 07-17-2012, 12:01 PM
 
1,494 posts, read 2,595,003 times
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Quote:
Originally Posted by The_new_guy View Post
First off, I wanna thank all the thoughtful messages I got yesterday.

I've decided I wanna go ahead and buy a small 2br coop or condo.

and since I'm a complete newbie at this, I'm not sure how the process works.

Do I need to go and qualify for a loan first?
Do I need to go look for houses and then apply for a loan?

people talk about loan brokers; how different is it from applying directly with the bank?

How do I find a reputable real estate agent that's knowledgable about Queens and Brooklyn?


Thank you guys again, you've been of great help!!
The first step is to get pre-qualified for a loan before you go out looking for apartments. Very few sellers will take you seriously if you make an offer on an apartment without one. A mortgage broker can usually get you a pre-qual over the phone.

You may also want to perform a credit check on yourself and you wife and ensure there aren't any errors or outstanding credit problems to clear up.

A mortgage broker shops around for the best interest rate for you if you don't want to do the work. Their commission is paid by the bank. The bank where you hold your accounts might actually have a very crappy interest rate for mortgages. Mortgage brokers have info on thousands of bank's mortgage loan rates at their fingertips and find the best one for you.

Use work of mouth recommendations to find a good "buyer's agent" in BK/Queens if you want a broker to help you through the confusing world of NYC real estate. It is not simple to learn or pick up quickly, especially if you're interested in applying for a coop apartment- the processes is invasive, confusing, and odd. Do not follow C8N's advice unless you've got some actual experience in NYC real estate and know how to tango with seller's agents on your own.
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Old 07-17-2012, 12:06 PM
 
1,494 posts, read 2,595,003 times
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Quote:
Originally Posted by C8N View Post
I should have mentioned that using multiple real estate agent does not mean for the same property. If agent A showed you property A, and you want to deal on property A, you cannot use agent B to work on property A. But what I meant by using multiple agent was so that you can see a lot more properties. To accomplish this, I still recommend using more than 1 agent.
This is where it's important to know the difference between buyer and seller agency so you don't accidentally mess things up for yourself.

If you wind up using a buyers agent instead of going it alone, you can still go to all the open houses you want even if your buyer broker can't go with you. Usually all you need to do is let the open house seller's broker know that you're represented and give them your broker's name (there is usually a sign in sheet where you can write the name of your seller broker on). Also be very careful with what information you volunteer to a seller's broker if you go to an open house without your buyer's agent (if you get one). Seller's agents are always on the look out for any info that they can use as a bargaining chip in your favor. Just keep your buyer broker informed on which places you've seen, what you liked and didn't like. If you want to make an offer or find more info on the property the buyer broker will help with that.
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Old 07-17-2012, 12:23 PM
C8N
 
1,119 posts, read 2,982,637 times
Reputation: 778
Quote:
Originally Posted by Alkonost View Post
This is where it's important to know the difference between buyer and seller agency so you don't accidentally mess things up for yourself.

If you wind up using a buyers agent instead of going it alone, you can still go to all the open houses you want even if your buyer broker can't go with you. Usually all you need to do is let the open house seller's broker know that you're represented and give them your broker's name (there is usually a sign in sheet where you can write the name of your seller broker on). Also be very careful with what information you volunteer to a seller's broker if you go to an open house without your buyer's agent (if you get one). Seller's agents are always on the look out for any info that they can use as a bargaining chip in your favor. Just keep your buyer broker informed on which places you've seen, what you liked and didn't like. If you want to make an offer or find more info on the property the buyer broker will help with that.
With all due respect, I had simply recommended to use multiple agents so that the OP can view as much properties as possible. Never have I mentioned to use a buyer's agent.

Secondly, is it not true that whether it is the buyer or seller's agent, their commission comes from the seller? And is it not true that commission is a percentage of the selling price? Hence, is it not true that it is in the best interest of the both agents that the deal is closed fast and at a higher value?

I am sure there are real estate agents that holds themselves to higher morals and would perform in the best interest of their client, but as I always say, it is better to be safe than sorry. In addition, trust is earned and not given.

Would I be correct in assuming that you are in real estate yourself? If this is an invasion on your privacy, you do not need to answer but I was just curious because your advice and mine were almost identical up to the point of real estate agents. However, you commented not to follow my advice which is kind of perplexing to me.
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Old 07-17-2012, 01:12 PM
 
Location: NY,NY
2,896 posts, read 9,428,797 times
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Quote:
Originally Posted by C8N View Post
A broker shops rates for you based on their existing investors and they will have multiple investors. But remember, brokers are a middle man and will get paid one way or the other. If youre are not going to do your homework in shopping rates, you may want to use a broker and use more than 1 if necessary.
Investors?

What do you mean?

Actually, a mortgage broker has access to MANY lenders across the country offering differing mortgages with varying terms and rates.

You can either go yourself to a few dozen lenders here within walking or driving distance or you can have a broker do it for you electronically. A mortgage broker will access to more info than you could ever have on your own.

There are two kinds of mortgage brokers, the difference is in how they get paid, and can make a difference in how well they serve you.

Brokers either get paid by the Lender in the form of a percentage of the mortgage, or a fee. The key here is that the Lender pays. A Lender will incentive a broker by offering aryong fees or percentages. You should ALWAYS know how and how much a broker is being compensated for a particular mortgage.

If you are offered a particular mortgage or a few to choose from ALWAYS inquire how the broker is being compensated for each mortgage.

These mortgage brokers can be very helpful, but you MUST be an educated consumer.

The second type of mortgage broker is the type that is paid by YOU, his client. The broker has a set fee AND may or may not also be compensated by the Lender. Again, ALWAYS inquire and know what you are buying.

A fee paid broker is less likely to present you mortgages which are most costly to you and offering him high compensation as well.

Either way, you need to be pre educated prior to walking into a mortgage broker's office. Having a good idea of what terms and rates you need and/or want.

Mortgages can differ GREATLY in their costs. It is not just about obtaining a low rate. A low rate with all sorts of underlying costs and fees is NOT a bargain.

Simply put, two people can separate $100K mortgages with 6% rates, but differ considerably in their upfront fees and closing costs, as well as monthly payment.

It is all about FEES and Closing Costs. Mortgages differ GREATLY!! It is all in the details. High fees and closing costs SHOULD result in low rates and payments, BUTTS that is NOT how it always works.

There are LOTS of 'come ons'. Low rates to entice you into high fee mortgages. FREE 'Closing Costs' offers to entice you into high rate mortgages or high fees.

The key is in finding a low cost (low fees low closing) and low rate mortgage. For that you'll need to educate yourself, and I would suggest utilize more than a single mortgage broker and let them know it. It will help to keep them honest.

There are indeed unscrupulous brokers, so INTERVIEW a few.

Lastly, NOTE, when you walk into a bank, the loan office does precisely the same as an outside mortgage broker. Searches electronically for mortgages to offer you, but he gets paid just the same, percentages and fees. The difference is that the loan office will be focused on mortgage products offered by his bank AND will have access to products that may not be available to an outside mortgage broker.

Also, a high volume mortgage broker or one with good relations with particular lenders will have access to mortgage products that other low volume brokers or brokers with no special relationship with lenders will not have. Another reason to shop with at least two mortgage brokers.
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Old 07-17-2012, 02:11 PM
 
10 posts, read 24,526 times
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Thanks guys, this is quite helpful.
but now, I'm a little more confused than before. lol!
Do I need a loan broker or not? I mean for a small purchase like this, would it make it worth it?
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