Home Buying in Oak Hills>Question Details

sanjuan_dcw, Other/Just Looking in Oak Hills, CA

how to buy house or land? get prequalified first from bank or Sign a Buyer Broker Agreement

Asked by sanjuan_dcw, Oak Hills, CA Fri Mar 1, 2013

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Don't want to get too technical here...a "prequal" letter simply tells an agent you have talked with a lender and based on your credit report and what you said your income level is, they'll write a letter prequalifying you for a certain amount. That letter is not a guarantee of a loan- period. However, you need to have this letter in order to present an offer on a home. Plus, you need to either place with your agent's office what is called "Earnest Money Deposit" or EMD. This shows the agent representing the seller (listing agent) and the agent representing you (selling agent) you are serious about making this offer come true. The EMD counts against your closing costs (see below).
Signing a Buyer/Broker Agreement ties you to that specific Broker- regardless. In essence, you are committing to that agent's broker (the "selling" agency) that they'll get paid regardless of who shows you the home, no matter who, how, or when. If you've signed one, you either need to cancel or commit to letting that agent/broker do their job and find your new home.
When it comes to mortgages, remember this- You have a lifestyle (clothes, date nights, movies, clubbing, whatever). You should consider how much your lifestyle is paid from your income and then budget for your home, and maintain your lifestyle (or way of living). A really good REALTOR will always consider your lifestyle into the equation...we want you living a good life and being a homeowner- not working your bottom off to be a homeowner...Find a good, honest REALTOR who will work hard to protect you from the pitfalls of home buying- it can be daunting. Also, learn as much as possible about mortgages, invest the time in it because the most perplexing part about buying a home is in the details- and mortgages are all about the details. Sometimes you'll think; "Why do they need to know that?". The answer is because it is in the rules of lending, always has been, hasn't really changed all that much- lenders were allowed to get a little less diligent before 2007.
PS- You're going to need 3.5% (roughly) of the purchase price to pay for expenses. On a home that goes for $100,000 that's $3500, plus the appraisal and home inspection (the last 2 are not in the percentage quoted) but your EMD does. Many agents say to get the seller to contribute $$ helping you cut costs, but don't count on the seller agreeing. Right now, its considered to be a "seller's market" (low inventory drives up sales prices- part of supply and demand). A "buyer's market" is when there are many homes for sale and not enough buyers (high inventory can drive prices down- again, supply and demand).
Remember, its real estate- anything can happen (and it usually does!)
We're here to help!
1 vote Thank Flag Link Wed Jul 2, 2014
Good Afternoon,

I would recommend getting pre-qualified first. Reason being that you want to know what you qualify for and that you are comfortable with the terms (payment, interest rate, etc.). Once you have your pre-qualification you can do your research as to what agent you want to work with. Make sure you ask questions of the loan officer as to financing types offered and what is the process for switching loan types. For example, switching between an FHA 203b and 203k or conventional product. The more products a loan officer has to offer, the better chance you have to finding the home you want at the best terms.

I hope that helps. Good luck, and let me know if I can be of further assistance.
1 vote Thank Flag Link Fri Mar 1, 2013
Great question. Get your loan pre-approval first. It's hard to go shopping when you don't know what your budget is.

Secondly, I would be cautious about signing a buyer-broker agreement unless you are absolutely sure of the agent. Although many fine agents use these agreements, there are still plenty who do not use them...

My feeling is that it's hard to sign up for 'going steady' unless you've had a few good dates first!!

Good luck.
1 vote Thank Flag Link Fri Mar 1, 2013
When you want to buy a home the best place to start is to hire an EXCLUSIVE Buyer Agent, not just a Buyer's Agent. EBAs only work with homebuyers and there is never a conflict of interest that will jeopardize your negotiating position. Contact http://www.naeba.org for a referral in your area.

I've written a best selling book called Buying a Home: Don't Let Them Make a Monkey Out of You. It'll teach you how to buy a home and get a mortgage without getting ripped off. Follow the link below.

Best of luck!

Alysse Musgrave
214-734-3863
Alysse@HelpUBuyAmerica.com
http://www.HelpUBuyAmerica.com
0 votes Thank Flag Link Wed Jul 2, 2014
You will need a pre-approval letter to be able to meet an agent to view and submit offers on homes of your choice. You may qualify for the USDA Rural Zero Down program from a minimum 580 fico score and FHA 3.5% down or as low as .5% half percent down payment program for other areas.

If you figure out what cities/zip codes your considering, minimum number of bedrooms and the maximum payment/price your looking to achieve you can be set up to receive automatic daily emails to fit your search criteria. It only takes a few dozen questions to qualify, go over your options and email you listings to study and compare.

Here are some blogs to study such as Zero Down Payment programs, Which loan is right for me, Down payment and closing costs hurdles and Pre-approval in minutes.

http://www.trulia.com/blog/under640ficoscoreloans/2014/06/ze…

http://www.trulia.com/blog/under640ficoscoreloans/2013/01/wh…

http://www.trulia.com/blog/under640ficoscoreloans/2012/12/ar…

http://www.trulia.com/blog/under640ficoscoreloans/2013/12/pr…

Sheryl Arndt, Real Estate Broker - Sr. Loan Officer CA only
REO & Short Sale Specialist
Credit Repair At No Cost
ALL Loan Programs Available
20+ Years Experience
BRE# 01140252
NMLS# 297251
760-486-4225
9am till 7pm Monday thru Saturday, Sundays by appt.
Under640FicoScoreLoans@gmail.com or HomeLoans4U@live.com
http://youtu.be/MrygA2_8fAY
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0 votes Thank Flag Link Wed Jul 2, 2014
I used to say "get pre-qualified first", but now I say it's better to find the right broker first. Only a broker can give you a complete picture of the market so that you can focus on getting pre-qualified for the right type of property loan in the right price range. Most brokers will take you through what's available in the market and then wait patiently while you get pre-qualified.
I also highly recommend that you have a discussion with your tax guy regarding what impact a home purchase will have on your tax situation. Neither a broker nor a mortgage lender are qualified to advise you on tax and personal financial planning.
0 votes Thank Flag Link Fri Mar 1, 2013
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