Alex Gonta

I agree with Paul. Lawyers don't give their time away for free. If you come to their office, they charge a consultation fee and if they do any work for you, they charge you a fee, whether they win the case or lose the case, the fact that you agreed to pay a fee is well understood up front. You are using a professional's time and expertise. Just like there are good lawyers and bad lawyers, the same is true of the Real Estate Sales professionals as well...some have excellent people skills, some have less skills, some are very knowledeable in commercial vs residential real estate and some know the marketplace very well in a specific area, and some are well intentioned, but are not as professional as they should be. Basically, like any service oriented profession, you have excellent, good and average persons working in that profession. However, the same is true of plumbers, lawyers, and doctors. They are not all at the same level and at the same experience level and all worth a flat rate. The fact of the matter, is that heart surgeon costs more than a referring MD, because he is a specialist. A trial lawyer specializing in Intellectual Property contracts costs more than a lawyer that handles parking tickets...but in Real Estate, it's not as specialized. However, stealing an agent's time and effort and then writing the contract with somebody else is not the right thing, in a nutshell and so, my advice is simple:

a) Call the agent's broker and ask for a different agent, if you are not comfortable with the one you have. She or He will get referral fee,and no hurt feelings.
b) Decide if you are showing some loyalty to that agent, or none. Was the agent bad and not professional, or was the agent busy but did indeed get back to you? Did the agent end the communication chain with you?

In the end,,unless real estate professionals start charging a flat fee for showing a certain amount of properties, that declares that their time is indeed worth something, and not to be wasted, people will treat us with no real loyalty and no real respect. So in the end, the answer is not a firm clear line to follow.

But a sense of ethics is worth it if it means something to you and if you are asking, it means you are an honorouable person and want to do the right thing. So in the end, write the contract with the agent that showed you the house. There is a whole lot of negotion that takes place from that point forward, between the selling agent and the listing agent, and it's the negotiation skills that matter the most,....and if you show good will, you will be shown good will in return....and that is how it should work. Good luck and enjoy owning your own home. - Fri Nov 14 2008, 12:45

Short Answer: yes, you have to use the agent that showed you the house, whether you signed a buyer's agency agreement document or not. Reason: the agent that is the new agent, that you put an offer via that agent, will be sued by the original agent that showed you the house for what is called "procuring cause".

Detailed answer and example:

The real answer depends on what is known as "procuring cause". Your situation is unfortunately one that is too common. Buyers have very little loyalty to their agent.

Here's an example. I had a buyer I was working with that I showed about 2 or 3 properties each and every weekend. This was an investment oriented buyer that was looking for a multi-family residential property, or a smaller scale commercial property. I got the buyer qualified via my contacts with a well respected mortgage lender. I got the buyer knowledgeable about calculating cash-on-cash math, cap rate analysis, Gross Rent Multiplier, tenant management, leases, and in general how to "size up" a deal whether it will cash flow or not. The bottom line, is that after she backed out of 2 written offers with me, because of cold feet, I asked her if being a landlord was right for her. She said it was, and had reservations about the properties, not with working with me. She thanked me repeatedly for giving a lot of knowledge and time to her. One week later, she had an accepted offer on another property, working directly with the listing agent. Very luckily, it was NOT one of the properties I showed her, because I could have sued based on "procurring cause". I kept a notebook of all the properties I showed her. She took my time, and expertise and knowledge and I didn't get paid one penny. Remember, Realtors are not paid by the hour, but only if the make a successful sale.

I ran comparable analysis for this buyer. I did cash flow calculations for her. I spent time and gas driving around showing her properties. We discussed the various merits of each property, location and a lot of knowledge and information about investing was passed along to this buyer. I helped her get attractive terms and financing via my good relationships with several different loan officers at banks. In the end, I showed her a lot of properties, a lot of knowledge transfer and I wound up not making a single penny.

To answer your question: do you like to come to your job, have your boss give you an assignment, and you dilligently work for that assignment week after week, day-after-day, show up for work, and finally, comes time for a paycheck. Your boss shakes your hand, and says, you did an excellent job, thank you. You taught me a lot. Thank you. But here's your replacement that is earning your paycheck this week. Would you feel good about that?

Realtors are people. They are busy and make a living by working with many clients simultaneously. If you felt you were not getting adequate attention, you should have made a point of it, or you should have made a phone call to that agent's broker and worst case, the broker would have assigned another agent to work with you, from the same office, and paid a referral fee to your initial agent if any sale was made.

The buyer's agency agreement even if not signed is not the issue. If you buy a property that this agent showed you, via another agent, you are stealing this agent's time and paycheck. This agent will exercise procuring cause against the agent in the other office. This is un-ethical and I'm sure you already know that.

How would you like to have your time and your paycheck stolen? Would you like it if your boss did to you what I described above? Do you like to work for free? - Tue Nov 4 2008, 20:02

Most buyers are not fully aware if the agent they are speaking to is the listing agent, who works for the seller, not for them, or the buyer's agent. In the event you are working with the buyer's agent, that showed you the house, and you did not sign a buyer's agency agreement with them, you not legally bound to use that agent. However, I've had this happen to be unknowingly. I've shown a prospect a house that was shown to her by another agent from another brokerage house. She used that agent's time and expertise and he actually showed her 25 other properties, and the one I was showing her was one of that list. After he spent alot of time and effort educating her of local market conditions, and discussing various features or benefits of one property vs another, he felt frustrated that this buyer was a "shopper" and not a real buyer. Their relationship did not end smoothly because she felt his time was free and can be used at will. I uknowingly showed this buyer a house that was shown to her by this other gentlemen and wound up writing the contract. At that point, she finally felt this was the correct one. I asked her up front if she was already working with anybody else, and she said no. Well, in the end, the other agent kept a notebook of all the properties he showed her, the dates, and MLS numbers of each property, and her specific objections to each property. Had this gone to court for "procurring cause", his detailed notes would have helped him win the case. Being a gentleman and after working with this buyer, I felt she did not show any loyalty to an agent which gave alot of his time and expertise for free, and that he deserved the sale more than I did. So I wound up calling him and having him write the contract, and we became friends and give referrals to each other willingly. So be sure you don't blame the agents too quickly. Too many buyers use up an agent's time for free, and we don't get paid by the hour, and show zero loyalty. An agent has to balance several buyers or sellers and may or may not be available instantly to return phone calls, but at the same time, like any other professional, have demands on their time that limit the instant ability to make phone calls. However, good and honest communication is the key to any relationship. However, in real estate sales, or any other sales, people have to have a sense of comfort working together, but loyalty is very important is well, and too little loyalty is shown to agents sometimes by buyers who use up an agent's time, without any commitment to either buy, or use that agent to write the contract. - Thu Aug 16 2007, 09:44

What I suggest, is to factor in your price, your downpayment and your long term goals. Real Estate is a long term investment, and markets do change, but if you plan to hold over the long term, 10 years or longer, values historically do rise, but they rise at different rates at different parts of the city. If your goal is simply become a home owner, and you are looking at $2500 per month as what you can spend, consider buying a luxury condo in West New York, North Bergen, Union City, and the Heights in Jersey City. You will find many attractive listings from 900 to 1,000 square feet in the $285k-$320k price range. You can use the condo as a stepping stone to home ownership and it's easier to sell a condo, or a single family home than a multi-unit home later in time, when you want to step up to a bigger property.

Single family homes and condos are the most liquid type of properties and offer the best appreciation. 3 or 4 unit properties offer positive cash flow, because you are simply collecting more rents that more than pay your mortgage, but are less "liquid" when it comes time to sell. Your buyer for your condo or single family home is a very large audience pool of potential buyers. On the other hand, a 3 or 4 unit building is likely to only attract investors as buyers, not regular home owners, so to liquidate the property at a future date is more difficult. By contrast, however, multi-unit buildings, although they are more difficult to liquidate, took a lower hit in this mortgage crisis market and commercial properties, (6 units and up) took even a smaller hit during this real estate down-turn. That is because, they pay for themselves and with people having a difficult time buying and qualifying for mortgages, there is a swelling of new tenants and rental market is now more active, so landlords are doing better than in the past.

Is your goal home ownership, or to be a landlord? If you are strictly buying for yourself to live in it, and a 3% down, and not 25% down, the only way to get a 3 unit or 4 unit these days is to live in it. If your goal is to be landlord, I go back to my previous answer. Greenville is like any other market, you have your good streets and tougher streets. You are looking at cash on cash return. That is,how much income a property generates as a percentage relative to downpayment. With nearly zero down, your cash-on-cash return is nearly infinite!!
So if you plan to turn this into a rental property at a future date, and keep it long term, i.e:10 years or more, it's a wise choice.

On the other hand, if home ownership is your primary goal, without the need to be an investor at the same time, I say, pick a condo in a nicer area that is more uniformly nice across the board. Real Estate is not like the stock market, it is a very slow rate of appreciation and depreciation in values, and nicer areas are always in greater demand. You can then sell your condo unit, and park the equity into something larger if you get married and start a family.

It's called leverage: a $30,000 downpayment controls a $300,000 asset. The asset, $300,000 grows 4% per year, not $30k grows 4% per year. You also have the tax sheltering benefits of real estate. You also have depreciation of the building itself as tax write off. So real estate is a unique investment; it offers leverage, appreciation and tax sheltering of income.

Is your goal to be an investor, and a long term player? If yes, this is a good deal: very high leverage, good income relative to price, provided you get steady tenants, and good cash-on-cash return. But you need to be a long term player to see the fruits of your labor. Real estate is all about slow, steady, appreciation, not massive cash flow....it's in equity growth, that's where the money is at. Your liquidity in a 3 or 4 unit, especially in Greenville, over the short term, is poor. But as long as you are a long term player, this shouldn't bother you.

On the other hand, if your goal is home ownership first and foremost, not being a landlord, stick with a condo and cash out the equity growth in 5 years and park that equity into a nice big house down the road. Hope this helps. - Tue Sep 2 2008, 20:48

I work in the Bayonne and also Jersey City areas, and Greenville and West Bergen are very nearby to Bayonne. Whether Greenville is "safe" or not is up to you to determine your own comfort level. Different neighborhoods change on an almost block by block basis. With the Ligh Rail coming in this area and many other newer houses, the area has improved considerably compared to 10 years ago. Jersey City as a whole is a wonderful place to live and I have lived in Hudson County for over 30 years, in both Downtown Jersey City, Journal Square Section, West Bergen and other areas. It is home to over 250,000 people. Every area improves over time and if you plan to hold a property for the long term, it is very likely that over a period of 10 years, property values will double.

At one time, about 15 to 18 years ago, Downtown Jersey City was not the wonderful business district that it is today. The economic center was in fact, Journal Square and not Downtown Jersey City. There were many factories that were abondonded, amongst them Colgate.

In your particular situation, you have three factors that make Greenville an attractive choice. First of all,your downpayment is only 3% down, and it's 3% of a modestly priced home. Therefore, your downpayment cash is a limiting factor to buying in a more expensive section of Jersey City, and with the mortgage market meltdown, it's hard to get 100% financing anymore. Secondly, you are looking to buy not purely based on price, but based on price RELATIVE to rental income. This yet another reason people choose the Greenville section of Jersey City as a wonderful area for investment, because in most cases, the prices sellers ask relative to the rents generated, will not even cover your mortgage in many other sections of Jersey City, North Bergen or Bayonne, but this is not the case in Greenville, where price RELATIVE to income gives you positive cash flow. Thirdly, you are buying brand new construction, so if you were to buy the exact same home in a different section of Jersey City, you wouldn't be able to afford a condo for the price of this entire house.

So as long as you feel safe by visiting at different parts of the day, and night and you feel ok about the location, you are making a smart move. The property allows you to be both a landlord and a first time buyer all at the same time. Later on, as the value climbs back to the glory days of the seller's market we had previously, you can either cash out your equity, or keep the property as an income property and pull out some equity and buy somewhere else. This would not be as easily possible in other parts of Jersey City.

Only you can decide if you feel comfortable in a particular neighborhood or not. But, in a business sense, this is a smart move: maximum leverage, i.e: 97% Loan to Value Ratio, Positive Cash flow, new construction, so very little money into repairs or maintenence, and still within a short commute to NYC, a major souce of employment.

Alexander D. Gonta, Realtor Sales Associate
Phone: Cell: 201-988-3282
AlexGonta@gmail.com
Exit On The Hudson Realty
808 Broadway
Bayonne, NJ 07002
Office: 201-437-0411
Fax: 201-437-9978 - Sun Aug 24 2008, 14:06

Hi Missy, I can help you evaluate options in North Bergen, West New York and Union City, all within 30 minutes by bus to Midtown Manhattan, or in Jersey City, which is also very close to Manhattan. Hoboken is very pricey by comparison. Please contact me directly and I'll send you some potential listings you may like. - Sun Aug 24 2008, 14:37

I answered once before but I'll add additional comments. Others have given you excellent advice on fixing your credit and improving it prior to purchasing. Also FHA loan programs are great and I'm not going to repeat what others have mentioned. Instead, I'd like to add a couple of alternatives on the one hand, and offer some additional advice as well. First of all, consider the fact that your credit became poor for a reason: either late payment, or job loss and inability to pay, or whatever the reason was. Are you disciplined enough a this time to not do the same things again that decreased your credit score in the past? Try to see if you can budget toward a mortgage payment that will be higher than your rent payment, buy putting the difference between aside into a savings account pretending it's the amount you would be paying toward a mortgage. If you can comfortably do that for a few months and build up some savings, you know you have the discipline in the future. If not, perhaps it's better to continue renting instead of getting in over your head and then being foreclosed upon later? I hate to sound negative, but it's best to get into disciplined spending and budgeting habits because being a homeowner has pride of ownership but carries with a great deal of financial responsibility as well. The other solutions you can consider are as follows: Perhaps look to buy a 2 or 3 family home, where rental income can help you with the mortgage payments, but get into property whose price tag is not too far ahead of what you can buy a single family unit for. Another alternative, is to buy a condo vs a house. Keep it for a few years, create some equity and sell it in 5 to 7 years and use it as a stepping stone toward home ownership. That way, you have the tax benefits of home ownership, the equity growth of a leveraged asset and pride of ownership, at a cost not too far above what you now pay in rent. For instance, if your current rent is $1500 per month, a $200,000 condo might make sense and be in the same ballpark rather than $330,000-$350,000 house. Yet another possibility is the rent-to-own option, where a portion of your monthly rent goes toward the downpayment, along with an option payment, and this puts you into a high equty position in a few years, that will make a lender lend to you no matter what the credit score. After all, a lender is more inclined to lend an a 70/30 Loan to Value Ratio house to a borrower with average credit than to lend at a 95/5 LTV ratio to a borrower with fantastic credit. (70/30 means, your equity=30% of the value and the bank lending only 70%). So in sum: 1) Decide if you really can handle the payment of being a homeowner with a forced savings program. Better than, than a foreclosure later. 2) Decide to perhaps use a condo as a stepping stone toward a house. 3) Perhaps a 2 unit or 3 unit would work for you . 4) A rent-to-own property, with the documents prepared by an attorney might also work. Finally, improving your credit while building up savings is a good thing to do at all times. Good luck and best wishes. - Sat Jul 5 2008, 19:57

The first thing to know, is your buying power. A good rule of thumb I use, not being a mortgage broker, is to tell my buyers that every $750 per month buys you $100,000 in mortgage money. So that $200k would cost $1,500 per month. You also need to add in the cost of home owner's insurance, property taxes, and PMI (Private mortgage Insurance) since you are putting less than 20% down. When you add up all these numbers, you need to be comfortable that you can afford the overall mortgage payment.

What I advise you to do, is to play a game of "pretend". Let's say your current rental payment is $1,500 per month, but your mortgage payment would be $1,850 per month instead. I advise you to put the difference of $350 per month into a savings account and pretend that you HAVE to pay this number. If you can still balance your check book, and you're ok with that $350 per month not in your check book, you are disciplined enough to make that payment. If however, you can't manage your bills when you do this game of pretend, than you are not ready to own that house if you can't own that mortgage payment. What this "game of pretend" does, is force you to save money, and if you can manage to play this game of pretend for 6 months, that means, you can do it in real life with a mortgage payment. But if you can't, then don't and simply continue renting. During that 6 month period of playing to "pretend" to pay a mortgage, you can improve your credit score in the meantime. Home ownership is nice, but it's also alot of responsibility, and a low credit score means that some bills weren't paid on time, or were paid late. So if you can manage to pay all your other creditors on time, and put away money in this game of pretend, you are ready to own, but if you can't, then wait until you can. That is pretty honest advise. - Tue Nov 6 2007, 14:13

Bad credit is not necessarily a stumbling block to buying a home. Be sure to not deal with predatory lenders that will tell you anything you want to hear to give you a mortgage. The best source of funding is actually not banks, but sellers. An elderly home owner may have paid the property off in full, and if you can give them a large downpayment, of 15% to 20% of the asking price, they might seller finance the difference in the form of mortgage payments to the seller. You could offer them 7.5% interest, which is a lot better than even the best high yielding money market accounts can offer them. That way, you win and they win: you get less than the exhorbitant rates a bank could charge, and they earn a higher rate of interest and have income coming in from they property they formerly owned. Anotehr possibility is a land-contract, where you don't get the deed until you've paid them in full. The other possibility is seller financing in the second position, not the first position. Meaning, you get a loan from a lender for 70% LTV ratio, and home equity loan from the seller for 20%, and your own money for 10% down. That way, the bank giving the loan at 70% LTV ratio feels very secure in lending you money, since they have so much LTV in their favor. The seller lends you only 20% of the money in form of payments to the seller, and he gets the lion share of his money from the bank you've brought to the table. His money is secured by a lien on the property. Essentially, he is both the seller and the lender all together. Another possiblity is to find a seller with AN ASSUMABLE mortgage, such a VA loan or FHA loan. YOu basically take over the payments of the loan, which gets switched to your name, and give the seller money for his equity. The VA loan or FHA loan that you are assuming is usually at very attractive interest rate, and much lower than you would get if you got it with your credit. These are just a few ideas. - Fri Jul 13 2007, 19:28

The market is now truly a buyer's market, no longer a seller's market. What that means, is that interest rates are historically low. Prices are very negotiable. In some cases, prices are down 10% and in other cases by as much as 30%. There is alot of inventory to choose from. No matter what all the media hype says about the real estate market, you need a place to live, a place to rent and a place to call your own. It offers a tax advantages, a built in cash nest egg. It offers leverage. It offers long term growth. It's simply the best investment one could choose to make. If you feel it's the right time, don't hesitate: BUY NOW! - Fri Mar 7 2008, 16:59