Home Buying in Bessemer>Question Details

Tbodley, Home Buyer in Bessemer, AL

What if I can't afford a Real estate agent?

Asked by Tbodley, Bessemer, AL Tue Aug 30, 2011

What if I don't have the money to spend on a real estate agent or an appraiser to help me figure the ARV on a home I may want to purchase? I need another option in case I am unable to afford agents and Realtors. The last I heard it is quite expensive for this type of service. My income is much too low to afford an agent or appraiser to do figure the ARV.

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12
I hate this kind of question.

The simple answer is this: if you can't afford a real estate agent, then you really can't afford home ownership.

Let's put aside for a moment that brokerage fees are paid by the seller; and that in order to get financing, the lender will require that you pay for an appraiser.

I think that homeowners need to have six month's of living expenses readily available in savings or other liquid accounts. Some people think three. Whatever.

At the very least, you need to have enough money in savings to handle a big car repair, like an engine or transmission. So if money is this tight, then maybe you need to continue renting.

All the best,
5 votes Thank Flag Link Tue Aug 30, 2011
A buyer's agent (Realtor) will help you figure out the market value of a home and assist you with the purchase without you having to spend any money out-of-pocket. Period.

As far as the appraiser... when you get a loan, your lender IS going to require an application fee which will cover your appraiser. Perhaps the best first step, for you, since money appears to be so tight, is to contact a lender, and see if you can even afford to purchase a home at this point.

They will run your numbers and give you a pre-qualification, showing what you can and cannot afford, and that service is usually a no-charge.

Good luck.
1 vote Thank Flag Link Wed Aug 31, 2011
Alan May, Real Estate Pro in 60201
MVP'08
Contact
If you are buying a home you can utilize the services of a buyers agent and the commission for that agent gets paid by the seller. This solves your problem. If you are financing you can negotiate in closing costs to include the appraisal but many banks like for you to pay in advance the appriasal fee.

Sincerely,

Gusty Gulas
RealtySouth- 52 Homes sold in 2010 (#2 Gold Club)
205.218.7560
gusty1305@gmail.com
http://www.gtherealtor.com -(Search all Birmingham area homes)
http://www.zillow.com/profile/Gusty-Gulas/Reviews/2011
Birmingham Business Journal Top 40 Under 40
1 vote Thank Flag Link Tue Aug 30, 2011
Just talk to the agent upfront about it, they should be able to show you what your expenses will be. You will also want to speak with a bank to make sure you have a good idea of what you will need to spend on the home.
0 votes Thank Flag Link Wed Aug 31, 2011
You should not be in the Real Estate market right now:
You have got too much on your plate and you will not be able to handle any more.
If a couple hundred dollars makes that much difference to you,
You should wait until you can do it comfortably.

Good luck and may God bless
0 votes Thank Flag Link Wed Aug 31, 2011
Many people in this market think that they don't need or cant afford to use an agent. With the advances in technology the information on homes gives Buyers and Sellers the facts, figures and photos at their fingertips that once only real estate agents could have access to. Your home is one of the top decisions that you will make in your lifetime. Anybody can paint a house, you go buy paint and paint brushes and go! However, since we do not "specialize" in painting and all the nuances that go with what a painting specialist has learned over the years its a good bet that your efforts wont match the professionals! The money that you may spend on an agent will be more than compensated by the professional advise, direction, negotiation skills and knowledge of the area that you are in. And besides if it is a buyers specialist in most cases the Sellers pays the fee! In the long run by NOT using a agent who specializes in your area it very well could end up costing you money! Best of Luck!
0 votes Thank Flag Link Wed Aug 31, 2011
Mack - Bulls eye!

TB - although costs are a consideration in every investment of equal importance is results.
A real estate professional can provide comprehensive information on your investment consideration. Nearly all agents work on a contingency basis. As an investor, (from your other questions that appears to be your interest) you should consider partnering with a real estate pro until you get the results you want on a few deal, THEN YOU CAN SOLO!

Be advised, there is no way you can receive actionable, comprehensive guidance on a forum such as this. There are too many variables and way to much to consider regarding your local market AND your situation. It will cost you nothing but time and TRUST to pick up the phone and call a local agent. That sounds affordable.
0 votes Thank Flag Link Wed Aug 31, 2011
As Gusty indicated, the buyer's agent is paid for by the seller.

For the appraisal fee, that is going to be around $445 for an FHA or USDA loan. That is a fee that must be paid upfront for before the lender can order the appraisal. If you cannot afford the appraisal fee, then you are really not in a position right now to purchase a home. You will also need earnest money of $500-1,500 to place a property under contract. A home inspection fee would probably arund at least $250- 350 or so.

An FHA mortgage will require a 3.5% down payment , whie USDA is 100% financing in rural areas.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Wed Aug 31, 2011
How much of a down payment have you saved? Generally the commission is paid by the seller, so I don't think commission is a real concern, and it sounds like you NEED a real estate agent to help you understand and navigate the process. I am concerned, however, that you say you can't afford an appraiser. There are always costs associated with purchasing a home these days, gone are the days of zero money down and closing costs included in the loan so you have no out of pocket expenses. It rarely exists these days and those few remaining programs have very stringent requirements.

I would suggest you talk to a real estate agent right away. Have a frank disucssion about down payment and closing costs and then decide if you are really ready to purchase a home today. You may need to wait just a little while longer to give yourself enough time to get all your ducks in a row so that the process goes smoothly if and when you ARE prepared.


Good Luck!
0 votes Thank Flag Link Wed Aug 31, 2011
Tbodley,

If you are a buyer or a seller, either way you cannot afford to not use a realtor. However, being a buyer allows you to benefit greatly when working with a realtor who ultimately is paid at the closing table from the seller's funds. If you go thru the real estate process which covers more than 180 steps alone, you may miss out on something small that in the end grows to be a monster. I recommend you find a great agent to work with when buying property here or overseas. If you need help in your international endeavors, I am the one to work with. If you need help with your local real estate needs, I am one to work with. Let me know.
0 votes Thank Flag Link Wed Aug 31, 2011
you can't afford NOT to have a good Realtor by your side. In almost every case our commission is paid by the seller, not the buyer. Your agent can do a market analysis on the homes you like to justify the price. If you are getting a mortgage, your lender will require an appraisal. Wouldn't matter if you are using an agent or not. I would suggest you talk with a lender who has experience with programs that assist 1st time buyers (assuming you haven't owned a home in 3 or more years). There are also some Realtors that have knowledge in those areas. If you need a referral, you might call your local board of Realtors for more information. Good luck.
0 votes Thank Flag Link Wed Aug 31, 2011
Tbodley,
Gusty is correct. A buyer's agent’s commission is paid by the seller and part of the price. Seller's will not reduce their price if you are buying without an agent, so you will be paying for the services if you use them or not.
If you did have to pay, chances are you couldn't afford not to use a quality agent. Notice, I did not say any agent, but a quality agent. Spend some time, so some homework and find a good, experienced, knowledgeable and patient agent who likes to work with first time buyers.
First time buyers need an agent more than most buyers. There is so much to learn, know, prepare for and look out for. One mistake will cost you far more than anything you might have to pay, if you had to pay.
Go find a great agent!
0 votes Thank Flag Link Tue Aug 30, 2011
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