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 Extreme Veteran
Posts: 460
 
| So, I am wondering about first time home buying...I am 24 and starting to save up for my own place (recently got a better paying job, allowing me to start saving). Just curious, how old were you when you bought your first house? And how much did you have to put down? How long did it take you to save up? I'm realizing that it's going to take me longer than I thought to save up enough to have a down payment...but I'm so over paying these ridiculous boarding prices! As I've started to look more in to houses lately, I don't know how people save up that kind of money!? Just feeling like this goal is so far out of reach right now. I feel behind compared to other people that I know my age...some already have houses, spouses and kids! Thanks for reading! | |
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 Not Afraid to Work
Posts: 4717
 
| I started seriously saving around 23/24 and just bought last year at 26/27. I saved up just under 10k because I qualified for zero down but closing costs add up. I was looking for a needle in a hay stack. Land without being terribly far from work. I made 2 offers and was in 2 bid wars... lost both times. It was a blessing in disguise as the house I got was better than I ever expected and well worth the wait.
I went through my budget and made sure I was being smart about my money. I worked a 2nd job and saved all that money. I sold my horse trailer and financed another one. My old one I got $1800 but that went into savings vs the new loan which some might frown upon but for me it gave me somethin to build on.
It takes time but having not only closing costs but fencing money, hay money, etc. Those are what I needed to make sure I could get so I could also stop boarding.
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  That's White "Man" to You
Posts: 5515
| Lots of great programs for FT home buyers. Try to have about 10% of purchase price saved, though you may not need it all. USDA does a 6% program and then you will usually need to pay closing costs. You will likely need 2 years of solid tax returns from your job, though there are some exceptions to this rule. I bought my first house at 26, and built my next house at 29. | |
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Married to a Louie Lover
Posts: 3303
| Great time to sit down with a lending expert and discuss the different programs!
I bought my first house at 25 and I’ve owned 3, not counting the one I live in now since I moved in with my husband and didn’t technically buy it. I’m 30 now. Yes, 3 houses in what ended up being 4 years. Kind of intentional kind of not. I worked a job with great moving benefits. Bought my 1st and got moved a year later. Bought again. Left significant other at the time and needed to downsize property, had bought well and made money on it. Signed papers on the 3rd house the day after my now husband and I went on our first date...so there’s that. Did well enough on that one that I didn’t lose money, which was the goal having only owned it for a year.
One negotiating technique that I learned is to ask the sellers to pay your PMI up front. It will reduce your monthly payment significantly more than a reduction in price of the same amount will. | |
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 Member
Posts: 11
| I bought my first home when I was 25. I had moved home after graduating college and was able to save up while there. One thing I wish I would of done while at home is pay off some of my other loans that I had which I could have. It would have been a lot easier after purchasing a home and having to include a house payment with that. Shop around for a loan that works for your situation. My home was on only 6 acres so I was able to get a FHA loan which requires a low down payment. But know that FHA loans are picky on the home conditions. Whether you go through your bank or a credit union be sure to ask any and all questions you have. As stated above the USDA has some good programs as well which I hadn't looked at until after I had already purchased my house.
When thinking of the house payment you can afford also think about all the additional costs that go into owning a home. Insurance, taxes, water, electric, propane, internet, it all adds up each month.
Don't compare yourself to others. I have friends that are single, married, with kids, or still living at home with their parents. Everyone has a different path and timeline to their lives. Know that everything happens for a reason.
Feel free to pm me if you have questions! Happy to help! | |
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 The Bling Princess
Posts: 3411
Location: North Dakota | How old were you when you bought your first house? My husband and I were 24 when we purchased our first home (almost 20 years ago). He was fresh out of graduate school and we had just moved to Wyoming. We purchased, at the time, on the cheaper end, definately a fixer upper. The bank approved us for much more, but we didn't want to be house poor so we shopped for cheap, but structurally sound, older homes, in respectable neighborhoods. We poured every left over penny we had into that house. In fact, when we sold it to move back to ND, we doubled the value and made bank.
And how much did you have to put down? Less than 10%. At the time we had some pretty awesome programs available to us.
How long did it take you to save up? A LONG TIME!LOL We were just two poor, right out of college, kids. We tried our best, while he was in graduate school, to stick away whatever pennies we had left over and create a small savings account. We spent every dime we had on our down payment and the bank helped us with the rest.
I don't know how people save up that kind of money!? to be honest we didn't have horses. I waited to purchase a horse until AFTER we had the home purchased and we were in it for awhile...like almost two years. I wanted to make sure we could afford the mortgage and all that comes with home ownership before I tacked on another bill.
I'd suggest going in and talking to a mortgage officer and seeing what's available to you, so you know exactly what you have to do. | |
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 Miss Laundry Misshap
Posts: 5271
| My husband and I bought our first home when we were 23, right before we got married. We did the first time home-buyers program and only had to have $2000 down. It was cheap and our house payment was around $400. Way cheaper than rent and we had equity because it appraised at higher than the purchase price. | |
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The Bling Princess
Posts: 3411
Location: North Dakota | Nateracer - 2017-11-09 12:39 PM My husband and I bought our first home when we were 23, right before we got married. We did the first time home-buyers program and only had to have $2000 down. It was cheap and our house payment was around $400. Way cheaper than rent and we had equity because it appraised at higher than the purchase price.
I bet we are close in age because this sounds just like us! Do you ever wish we could go back to the days of the $400 mortgage payment ......but, with our current salary? Man that'd be awesome!! | |
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 The One
Posts: 7998
Location: South Georgia | 19 years old, 100% financing back then.
As an adult in our marital home...33....we needed $13,000 down. Took us a sale of a house (to get the equity) and a couple months to save this sum.
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 Expert
Posts: 2128
| I was your age and we had to put a certain % down because the bank only financed (I think 90%) of the money needed. We paid all closing costs as well. The day we signed papers we handed over a check for $8,500. Most of this cash was obtained by selling a nice rope horse we had and adding a little of our savings money to it. That was a ton of cash for us at the time. I mean it still is in my opinion but we made it happen and we have been so happy we did. You can do it!! Dont compare yourself to those around you who look like they have it all. Lots of people I know my age (29) live in 300K brick homes and probably do not bring in any more than my husband and I do. Those are the same people who will most likely have to "downsize" one of these years in the future. Just cause you can make the notes doesnt mean you can afford it (in reference to those who live beyond their means). Get a couple of project horses to train and sell. There is your down money and fees :) Best of luck. | |
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 Elite Veteran
Posts: 823
Location: East Texas | To add to what the others have said. Find a 1st time buyer program and get in cheap and refinance after a year or so. I financed 100% on a house I lived in while I fixed it up and sold it 3 years later and made $30K. That plus my equity in that house allowed me to put a decent down payment on my next house and did the same thing. I sold it three years later and made $60K which got me into the house I am in now. | |
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Miss Laundry Misshap
Posts: 5271
| WYOTurn-n-Burn - 2017-11-09 12:43 PM Nateracer - 2017-11-09 12:39 PM My husband and I bought our first home when we were 23, right before we got married. We did the first time home-buyers program and only had to have $2000 down. It was cheap and our house payment was around $400. Way cheaper than rent and we had equity because it appraised at higher than the purchase price. I bet we are close in age because this sounds just like us! Do you ever wish we could go back to the days of the $400 mortgage payment ......but, with our current salary? Man that'd be awesome!!
LOL, I'm in the same house and I think I'm up to $450. It changes next month since the escrow changed. | |
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| I was 21, with 5% down when I bought my first house. If I was able to go back, I would have followed Dave Ramseys advice and would not have bought until I had my emergency fund and 20% down. PMI is expensive and a complete waste of money, avoid it if you can. Get a second or third job and save every penny you can and don't compare yourself with your friends, they are likely up to their eyeballs in debt. | |
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 Extreme Veteran
Posts: 433
Location: The Lone Star State | I have been a mortgage Lender for 18 years..USDA is a great program for first time homebuyers in rural area(they dont do loans in city limits) 0 down loan and the seller can pay up to 6% of the sales price to cover virtually all of the closing costs and prepaid taxes and insurance. you have to have a 640 middle credit score and debt to income ratio cant go above 41% (your total monthly minimum debts reported on credit report PLUS the new house payment divided by your monthly gross income)
If you cant get the seller to pay the costs you can get a gift from a family member or you would need to have enough from your checking/savings.
FHA is also a great program but in addition to the closing costs and prepaids you have a 3.5% down payment. Credit can be lower and debt ratio higher.
Good luck! | |
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Extreme Veteran
Posts: 516
| I'm 22 and just got an accepted offer on a home. We're going with a loan that doesn't need any money down. We have emergency funds saved up and some extra for some renovations. We have decent paying jobs but we've been living at my parents house for the last 6 months, so saved a lot in rent and board.
We got fed up with an hour+ drive to work and just plain living at home (I love my parents but its hard sometimes  ) plus we didn't want to throw away money in rent (we have pets which is even more per month) and board. We're going to need to be in the area for grad school anyway so it just made sense for us to buy. It's really not as hard as people think, just make sure you have a backup plan!
Edited by WiscoRacer 2017-11-09 9:08 PM
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Extreme Veteran
Posts: 460
| Thank you for all the replies!! Wow...I didn't even know there were programs that good for first time home buyers!? I completely agree though, it is definitely wise to have an emergency fund and a good savings account...but there are really loans out there where I wouldn't have to put 20-30% down? That gives me some hope <3 I have a decent credit score, but my biggest line of credit is for my truck, and it wasn't a new truck by any means...would I still be able to get accepted for a loan without having a previous larger line of credit? Giving me faith that I may be able to buy a house in the next two years =] | |
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Veteran
Posts: 192
Location: Canada | Be sure to pay your loan weekly as it will be paid off sooner and you will save a lot money in interest/////
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 The best bad guy on the internet
Posts: 3519
Location: Arizona | Katielovestbs - 2017-11-10 8:59 AM
Thank you for all the replies!! Wow...I didn't even know there were programs that good for first time home buyers!? I completely agree though, it is definitely wise to have an emergency fund and a good savings account...but there are really loans out there where I wouldn't have to put 20-30% down? That gives me some hope <3 I have a decent credit score, but my biggest line of credit is for my truck, and it wasn't a new truck by any means...would I still be able to get accepted for a loan without having a previous larger line of credit? Giving me faith that I may be able to buy a house in the next two years =]
As long as you have some credit and a good job history and some money down you should be able to get financed for your house. But, make sure you have more than the down payment saved. You will have to turn on utilities which cost money, furnish it, etc. My daughter and her husband just bought their house about a year ago, it's been a struggle for them. There's lots of expenses when owning a house so be prepared!! I was a single mom and bought my first house at 29. I now own 3 houses. FHA is a good program for fist time buyers, you only have to come up with 3% down and usually the seller pays the closing costs. You will have to pay the PMI(mortgage insurance) for at least 5 years, but you can refinance into a 30yr fixed mortgage and get rid of the PMI!! | |
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 To the Left
Posts: 1865
Location: Florida | I was 22, got my first job out of college and rented a few acres with a barn. Bought a moble home and put it in. Then I saved up for a few years and started buying vacant land. Put together 7 acres and built a barn, fenced, cleared. Within a few years I had saved enough and collected a bunch of building materials that with my families help I build the house I still live in 38 years later. I haved reroofed, added and took out windows and recently went from a wood burning heater of central heat and air. You don't have to mortgage your life away to get a home. Start small and work up. Lot more fun that way. | |
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 Expert
Posts: 1520
Location: Illinois | I bought my first house last year and I was 28. I was able to put down 20% luckily, which included a $6,000 grant. I was fortunate enough to have enough leftover from my college savings account my parents had started when I was a baby, so I will say it was a lot easier for me to do than it is for a lot of people. My house was $110K and my monthly payment is $675 right now, that includes taxes & insurance escrow. I was paying $820 in rent for an apartment before hand. However I'm going to tell you to make sure you don't wipe out all you have for a down payment. Since buying the house I've had to put over $10,000 in repairs and a new roof I wasn't prepared to pay for quite yet. Insurance paid for a good chunk of the roof luckily, but I still am recovering from that. My furnace is also from 1989 so I'm biting my nails waiting to have to replace that too, which I'll have to take a loan out for. Many get lucky and have few things go wrong, however my house was totally remodeled by a Do It Yourselfer who I'm pretty sure learned how to do everything on crappy youtube videos, so I have lots of things to fix in the future. From the listing, walk through, and initial inspections it appeared updated and move in ready....nope, it's not. So definitely have a financial plan for things that go wrong and make sure you're taking into account all the things you'll need to buy to fill the house as well. Furniture, decorations, paint, small cosmetic changes, they all add up. Really look into the expenses of the house, what the last 12 months of electricity has cost. You can call the company and ask for a 12 month average. If there's propane make sure you've budgeted for that, my old furnace sucks up the propane like nobody's business and my heat only gets turned up to 64. Remember you're going to have water bills, trash bills, all that fun stuff. Adds up. By the end of the whole thing and being there for a year I realized that the apartment was actually much cheaper, but my money is going towards something I can kind of get back in the end. Make as much of an extra payment on the house as you can each month, even if it's $10 extra. Adds up, interest kills you. By the time I'm done paying my house off I will have paid as much in interest as the actual loan amount and the house won't be near worth that much. So pay, pay, pay. Get roommates if you have to. A roommate for a year could add up to a nice emergency fund even! | |
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Elite Veteran
Posts: 682
Location: Northwest | I’m a realtor and in our area a lot of people get a USDA loan (0% down) or FHA loan (3% down). Most people will ask the seller to pay for all or part of the buyer’s closing cost (this is on top of your down payment). If the seller doesn’t agree to this, then you can expect to pay around 2-3% of the purchase price in closing costs (loan fees, title company fees etc). If you can do at least 20% down then you won’t have to pay mortgage insurance! | |
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 Expert
Posts: 2097
Location: Deep South | My hubby and I bought our first house at 21 with a first time home buyer's loan program offered through the state of AL. Ultimately, at closing we only ended up paying half of the closing costs up front, the rest was financed. We had saved up a good bit from selling a couple of horses, thinking we would need it at closing, but thankfully we had it for projects around the house.
We were approved for a mortgage much larger than I was comfortable with though. I suggest figuring out what monthly payment amount you think you can afford, then set your budget based on that. Not what the bank thinks you can afford. The bank doesn't take into account how much you spend on horse feed/hay/farrier/etc.
We looked at houses for over a year. Made 2 offers that fell through. When we finally looked at the house that we ended up buying, I will say that our expectations/standards were considerably lower than when we originally started. We bought it knowing it would not be our "forever home," but as an investment. It was a great deal. A short sale, about to go into foreclosure. We were hoping to make money on it, or at the very worst we knew we could quickly sell it for what we paid for it if we needed to.
I had a 5 year plan. Stay in it for 5 years, then buy the land we really want and build the house we would be happy living in forever. 2 years later our perfect acreage in our perfect location came available. We jumped on it. Sold the first house for 40% more than we paid for it in less than 60 days on the market. We're now living in a tiny house on that land and saving up to build our next house.
And whoever said don't compare yourself to your peers...  I know several who are absolutely drowning in debt/bills/payments they can't afford just to portray a certain image. | |
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 Poor Cracker Girl
Posts: 12150
Location: Feeding mosquitos, FL | I was 27 (maybe 28.. I'm not even sure how old I am now) when we bought our land and built our house. I think we'd saved for two years or so - not second job or anything, just methodical and slow adding to the savings account. I got bonuses at my job at the time so all of those went in the account, tax return, etc. My husband scrapped some of his stupidly massive steel pile which helped put us over the top. I know several people who've sold good open horses to get a down payment.
Since we bought land, I think we needed 20% down but 20% on land is not nearly the amount 20% on a house and acreage was. We got a screaming deal on the property (bank-owned for the win!) in a location with rising land prices, so when it was time to build the house a year later, we had enough equity in the spec'd house and land to not need another down payment. The property was covered in giant pine trees so we sold the trees which helped finance the closing costs and the fencing/barn/stuff that goes with that.
Look for any opportunity to hoard money here and there and it'll add up. Plus, talk to a couple of different mortgage lenders. There's lots of ways to skin a cat and sometimes you just need to keep on making phone calls until somebody tells you yes. | |
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Expert
Posts: 1446
Location: California | I've done my fair share of buying and selling homes, and making a lot of money along the way.
For first time buyers, the absolute best thing you can do is meet with a lender to at least see where you're at. Just because I qualified for X amount doesn't mean you will. They will tell you which bills are best to pay off first, how to improve credit score, exact $$ you should be ready to spend out of pocket.
Secondly, make sure buying your first house you pick an outstanding realtor-soak up all the knowledge you can about the process.
Lastly, when/if you go to sell, I highly recommend you sell BY OWNER. Most realtors do things buyers could easily to yourself! An excellent lender and great title company are way more important and really all you really need! The realtor just takes THOUSANDS (talking 10-30k) for their "percentage" when they barely do anything. Remember, it's your hard earned money put into the place, you deserve as much profit as possible! | |
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 Can You Hear Me Now?
Location: When you hit the middle of nowhere .. Keep driving | JLazyT_perf_horses - 2017-11-13 5:00 PM
I bought my first house last year and I was 28. I was able to put down 20% luckily, which included a $6,000 grant. I was fortunate enough to have enough leftover from my college savings account my parents had started when I was a baby, so I will say it was a lot easier for me to do than it is for a lot of people. My house was $110K and my monthly payment is $675 right now, that includes taxes & insurance escrow. I was paying $820 in rent for an apartment before hand. However I'm going to tell you to make sure you don't wipe out all you have for a down payment. Since buying the house I've had to put over $10,000 in repairs and a new roof I wasn't prepared to pay for quite yet. Insurance paid for a good chunk of the roof luckily, but I still am recovering from that. My furnace is also from 1989 so I'm biting my nails waiting to have to replace that too, which I'll have to take a loan out for. Many get lucky and have few things go wrong, however my house was totally remodeled by a Do It Yourselfer who I'm pretty sure learned how to do everything on crappy youtube videos, so I have lots of things to fix in the future. From the listing, walk through, and initial inspections it appeared updated and move in ready....nope, it's not. So definitely have a financial plan for things that go wrong and make sure you're taking into account all the things you'll need to buy to fill the house as well. Furniture, decorations, paint, small cosmetic changes, they all add up. Really look into the expenses of the house, what the last 12 months of electricity has cost. You can call the company and ask for a 12 month average. If there's propane make sure you've budgeted for that, my old furnace sucks up the propane like nobody's business and my heat only gets turned up to 64. Remember you're going to have water bills, trash bills, all that fun stuff. Adds up. By the end of the whole thing and being there for a year I realized that the apartment was actually much cheaper, but my money is going towards something I can kind of get back in the end. Make as much of an extra payment on the house as you can each month, even if it's $10 extra. Adds up, interest kills you. By the time I'm done paying my house off I will have paid as much in interest as the actual loan amount and the house won't be near worth that much. So pay, pay, pay. Get roommates if you have to. A roommate for a year could add up to a nice emergency fund even!
Ditto to this... save more then you need always, you never know when your furnace goes... or your roof has a leak... or your hot water tank breaks... or your stove, laundry machine, dishwasher, leak in the basement.... and then if you want to do any renovations it all costs a lot of $$$$. There is a lot of stuff you have to handle when you own a house that you never had to worry about when you leased.
I can't help you with the payment options or give you advice since it works differently up here, have all your taxes up to date, paperwork in order, and always read the fine print. It was my most stressful but rewarding experience.
Edited by ndiehl 2017-11-16 9:39 AM
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Elite Veteran
Posts: 682
Location: Northwest | *almost there* - 2017-11-14 4:52 PM
I've done my fair share of buying and selling homes, and making a lot of money along the way.
For first time buyers, the absolute best thing you can do is meet with a lender to at least see where you're at. Just because I qualified for X amount doesn't mean you will. They will tell you which bills are best to pay off first, how to improve credit score, exact $$ you should be ready to spend out of pocket.
Secondly, make sure buying your first house you pick an outstanding realtor-soak up all the knowledge you can about the process.
Lastly, when/if you go to sell, I highly recommend you sell BY OWNER. Most realtors do things buyers could easily to yourself! An excellent lender and great title company are way more important and really all you really need! The realtor just takes THOUSANDS (talking 10-30k) for their "percentage" when they barely do anything. Remember, it's your hard earned money put into the place, you deserve as much profit as possible!
I agree that selling by owner is the best course of action if possible. Not everyone has the time or desire to market their property themselves though. Whenever I meet with a potential client I always ask them if they've considered doing FSBO and explain to them what that would entail plus the money they would save. I feel like this is part of offering great customer service. I also wanted to note, that the amount a seller pays a "realtor" and what a realtor actually makes are two very drastically different numbers. Everyone thinks realtors are rich and make tons of money but this couldn't be further from the truth in my opinion. | |
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Extreme Veteran
Posts: 460
| All great advice! So these loans through FHA and USDA, are these just around right now because of how high the housing market is? Should I be worried about those sort of loans for first time buyers going away? I still want to have a decent lump sum of money saved, and I know I won't be comfortable enough until next year. Do you think those loans will still be around in another year or so? I just don't want to miss out on my chance, if they are only going to be around for a short while, I might have to figure something out to take advantage of that now... | |
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 Elite Veteran
Posts: 889
| Katielovestbs - 2017-11-16 10:10 AM
All great advice! So these loans through FHA and USDA, are these just around right now because of how high the housing market is? Should I be worried about those sort of loans for first time buyers going away? I still want to have a decent lump sum of money saved, and I know I won't be comfortable enough until next year. Do you think those loans will still be around in another year or so? I just don't want to miss out on my chance, if they are only going to be around for a short while, I might have to figure something out to take advantage of that now...
No, those loans don't "expire". They are offered year round. Now, they might come out with some special financing from time to time and those may have expiration dates, but any USDA, FHA, VA, rural development is always available. | |
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Rad Dork
Posts: 5218
Location: Oklahoma | Katielovestbs - 2017-11-16 10:10 AM
All great advice! So these loans through FHA and USDA, are these just around right now because of how high the housing market is? Should I be worried about those sort of loans for first time buyers going away? I still want to have a decent lump sum of money saved, and I know I won't be comfortable enough until next year. Do you think those loans will still be around in another year or so? I just don't want to miss out on my chance, if they are only going to be around for a short while, I might have to figure something out to take advantage of that now...
First time home buyer programs are not going away. :)
You can do USDA for 0% down (just know there are property restrictions... you can’t go buy a home on 30 acres with that) conventional 3% down, FHA for 3.5%. Just plan on refinancing in a few years if you take on a loan with private mortgage insurance. The important thing to is to talk to a knowledgeable lender and know what’s possible for you. Know exactly what title company quotes are and what will be collected for reserves if you’re escrowing. Some states even have down payment assistance/grants that will cover a percentage of your down payment. Roll in closing costs/seller pairs (if you’re okay with that) and you’re set! I only started working in the mortgage industry a year ago and can’t believe all the opportunities that are there.
No need to worry about not having a large line of credit to qualify, just don’t max out your current lines. No one would ever buy a house if they never owned anything more expensive than their vehicle. | |
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Expert
Posts: 1446
Location: California | 07milch - 2017-11-16 7:43 AM
*almost there* - 2017-11-14 4:52 PM
I've done my fair share of buying and selling homes, and making a lot of money along the way.
For first time buyers, the absolute best thing you can do is meet with a lender to at least see where you're at. Just because I qualified for X amount doesn't mean you will. They will tell you which bills are best to pay off first, how to improve credit score, exact $$ you should be ready to spend out of pocket.
Secondly, make sure buying your first house you pick an outstanding realtor-soak up all the knowledge you can about the process.
Lastly, when/if you go to sell, I highly recommend you sell BY OWNER. Most realtors do things buyers could easily to yourself! An excellent lender and great title company are way more important and really all you really need! The realtor just takes THOUSANDS (talking 10-30k) for their "percentage" when they barely do anything. Remember, it's your hard earned money put into the place, you deserve as much profit as possible!
I agree that selling by owner is the best course of action if possible. Not everyone has the time or desire to market their property themselves though. Whenever I meet with a potential client I always ask them if they've considered doing FSBO and explain to them what that would entail plus the money they would save. I feel like this is part of offering great customer service. I also wanted to note, that the amount a seller pays a "realtor" and what a realtor actually makes are two very drastically different numbers. Everyone thinks realtors are rich and make tons of money but this couldn't be further from the truth in my opinion.
It's on my legal documents on all the houses I've sold what both realtors walked away with--hefty amounts. Yes, they have to pay taxes, 401k, but we all do. | |
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Elite Veteran
Posts: 682
Location: Northwest | *almost there* - 2017-11-16 11:05 PM
07milch - 2017-11-16 7:43 AM
*almost there* - 2017-11-14 4:52 PM
I've done my fair share of buying and selling homes, and making a lot of money along the way.
For first time buyers, the absolute best thing you can do is meet with a lender to at least see where you're at. Just because I qualified for X amount doesn't mean you will. They will tell you which bills are best to pay off first, how to improve credit score, exact $$ you should be ready to spend out of pocket.
Secondly, make sure buying your first house you pick an outstanding realtor-soak up all the knowledge you can about the process.
Lastly, when/if you go to sell, I highly recommend you sell BY OWNER. Most realtors do things buyers could easily to yourself! An excellent lender and great title company are way more important and really all you really need! The realtor just takes THOUSANDS (talking 10-30k) for their "percentage" when they barely do anything. Remember, it's your hard earned money put into the place, you deserve as much profit as possible!
I agree that selling by owner is the best course of action if possible. Not everyone has the time or desire to market their property themselves though. Whenever I meet with a potential client I always ask them if they've considered doing FSBO and explain to them what that would entail plus the money they would save. I feel like this is part of offering great customer service. I also wanted to note, that the amount a seller pays a "realtor" and what a realtor actually makes are two very drastically different numbers. Everyone thinks realtors are rich and make tons of money but this couldn't be further from the truth in my opinion.
It's on my legal documents on all the houses I've sold what both realtors walked away with--hefty amounts. Yes, they have to pay taxes, 401k, but we all do.
That’s what I meant about the amount a seller “pays” and what a realtor “gets”. For example, my firm gets 40% right off the top and then I start deducting all expenses, taxes, insurance out of that. But Yes, sellers pay a lot...hence why I encourage people to sell FSBO when possible. Also, say you pay 5% in commissions, that means selling agent would get 2.5% and the listing agent would get 2.5%. Then you would take 60% of the 2.5%. Then you take your 30++% in taxes out then you start ducting your expenses. The number you take home gets small real fast. Not trying to argue that fact that sellers do pay a lot, just trying to stop the misconception that realtors just make bank for doing “no work”.
Edited by 07milch 2017-11-17 4:31 AM
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OT - First time home buyer