1st Time Home Buyer Making an Offer & SO NERVOUS!

[metro]

DH and I are in our mid 30's. We have stable jobs and a toddler. We really would like to start making strides in life, like buying a home and having another child, so we took the first steps in November and was pre-approved for a starter home. We started house hunting.

We've looked at several houses, but all were lacking in size, condition, location - something. Our realator then showed us a home that was priced 20K over our budget - just for comparison. OH MY GOSH - We found the house of our dream

From the moment we walked in the door, we feel in love! Even our 3-year old loved it! It's a 4-bedroom, perfect for a growing family - plus it has a study, formal dining, living, den, large backyard - it has it all - including a larger price tag

We told our realator that we'd go home and discuss our options. And really, we just went home and chased our tails around. We both want the house but not sure we could afford it. I just don't know what we should do. We love this house. Everything in our price range is too small and/or needs a lot of fixing-up/remodeling. Are we crazy if we go for it? Should we stretch our budget? We're looking at about $400 more a month.

Our realator is drawing up the papers to make an offer for 7K less than the asking price. I'm just so nervous!!

 

[FireGoddess]

Sending good house vibes your way!!! I hope it works out. If you love the house and $400 isn''t an enormous, difficult stretch, I would think about it for sure. But hopefully your offer is accepted, or a decent counter offer from them!

 

[Independent Gal]

I just bought my first place a year ago and ended up in the same situation. Luckily, my realtor was supportive and smart, and didn''t try to pressure me to do something I couldn''t manage.

Here''s what I did:

1) Sit down and figure out what the absolute maximum you could afford would be, taking into account what you''d have to sacrifice... what else would you be spending that $400 / month on and can you live without it?

2) Ask yourself how long it would be a hardship... will your incomes soon go up?

3) Make an offer that''s what you could COMFORTABLY afford. Maybe they''ll accept it! If not, then DO NOT GO BEYOND what you set yourself as the outer limit when you''re bargaining. Make clear that is a FIRM best and final offer. See what happens.

But 20k is not a lot. Surely you could get the place for that much less than the selling price. or at least a little less.

And there will be other houses you love if you don''t get htis one.... I lost hte one I wanted, but found oen in my price range that''s nearly as great.

 

[Independent Gal]

Hold on... why offer only 7k less? Do you trust your realtor? That sounds rather crazy to me, unless either 1) the overall price of the house is quite low to begin with or 2) the realtor thinks the seller is about to get several other offers.

Especially in a buyers market (as I guess it now is in most places in the US) I don''t see why you would make such a high offer.

But what do I know?

Aren''t there realtors on this site? Dee Jay?

 

[starryeyed]

Hi metro. Sounds exciting!

There are quite a few PS''ers here who are realtors who could probably give some good advice. As a regular homeowner who has bought and sold a few homes here are a few things to think about:

1. Ask you realtor what is the average % of asking that homes are going for. MLS can calculate these numbers I believe. For example, in my area, homes are generally going for about 95% of asking. Therefore a good offer price would be 90% of asking, and then you can negotiate up.

2. This isn''t always true though. You should find out how long the house has been on the market. If it''s been on for a while, you may even be able to offer less. However, if it''s new to the market, you should ask how much interest there has been in the property. If there''s been a lot of activity, you may have to offer a little more.

3. There are some basic contingencies you will probably want to include in the offer: a financing contingency, home and pest inspection, if you have a septic tank, septic inspection.

4. Conduct all of the inspections prior to signing the Purchase & Sales agreement so that you can incorporate any fixes into the terms of the P&S. This is really your chance to exert leverage on the agreement.

5. Do you want the appliances and/or window treatments? If so, specify the items you want included in the sale on the Offer to Purchase.

6. You may want to visit the local police department to find out if there have been any problems in the neighborhood. They will have public records for any calls for noise, intruders, etc.

Good luck and keep us posted!

 

[Dandi]

Well I''m not sure what the norm is where you live, but here in Australia it''s the usual to make an offer at about 10% less or thereabouts than the asking price. Some vendors take that into account when putting a price on their houses... some don''t. As someone who''s bought 2 houses and 1 piece of land, I offered 10% below the asking price on all three. One immediately accepted, and 2 didn''t but we negotiated to within a few thousand of that amount. And like Independant Gal said, 20k isn''t a huge amount when you''re talking spending such an amount on a house... who knows, you might get close to that off the overall price of the house if you ''play the game''... it really depends how badly the vendors want to sell! Make an offer for what you''re comfortable with, perhaps with some room to move and negotiate, and you just never know. It''s a gamble and a game, but if this one doesn''t work out another one eventually will! Good luck and let us know of any updates! xo

 

[metro]

Some more info..

The house was listed in November 15K more than current list price. The seller''s are relocating out of state and need to sell their home.

A CMA of the area shows the house is listed in a med-upper price range per sq. ft, however, there are a lot of updates and let''s not forget that 4th bedroom! All applicances (except I don''t know about the refrigerator) will stay. The window treatments will also stay.

We''re asking for 2K off the listed price plus $4500 towards closing. So I guess the real asking price is $6,500 off list price. If they accept, we''ll then go into the option period where we''d get the house inspected and then take it from there.

Another factor is the location - higher school taxes

than we anticipated. And we won''t get our homestead exeption until after the first of the year.

 

[codex57]

Does your budget include tax savings? That might make a difference.

But yeah, it''s a buyer''s market in most of the US. Your offer is just a negotiating point. I''d give yourself a little more buffer room (altho being in CA, $20K is not much of a swing either way unfortunately).

 

[Independent Gal]

With all the new info you just offered, and everyone else confirming that 10% or so below asking price is normal-ish... maybe call your realtor and tell him to redraft those papers. What he''s offering doesn''t sound like it''s in your best interests!

 

[starryeyed]

Date: 2/7/2007 5:25:40 PM
Author: metro
Some more info..
The house was listed in November 15K more than current list price. The seller's are relocating out of state and need to sell their home.

NEEDS to sell the home?? Then start even lower!

Who cares if the house was prices $15K more in November. The fact that it didn't sell is a good indication that it was mispriced in the first place. Not your problem.

Unless you are up against another bidder right now, start low. You can always come up. The fact that the taxes are higher than you'd like is another reason why the house hasn't sold.

Have there been other offers? I'm guessing - probably not. Don't be bullied into paying too much!

 

[phoenixgirl]

I''m not sure if this will be helpful, but we were in a similar situation.

Our house (that we moved into Monday!

) was on the market for three months with no bites. Then they reduced the price $35k. We offered 30k less than the new price. They counted half-way -- 15k off the new price. We realized that if they reduced that much that fast, they must want to sell, and we countered another 5K off. So in the end we got 20k off the new price, 55k off the original price, plus $1500 in closing costs. The house sold for less than 85% of what they were originally asking. In our case, it was definitely a buyer''s market (unfortunately the same thing applies to our condo . . . sell, dammit!).

 

[metro]

Wow, you guys - thank's for the info

I would LOVE to get the house 10% lower - that would be a perfect price for us! With the addtional taxes due to the location, that would put us right where we wanted to be!

I talked to my realator and he told me that if we offered anything lower, he feels we'd be "insulting" the owners and that they most likely wouldn't consider our offer. He said our offer is already a bit "weak" and that if they bite on our offer, then after inspection, we could do some adjustments. Does this sound like a play?

 

[Dee*Jay]

Metro, first of all, sending good house vibes your way!

Secondly, in my market (and I know that every market is different) an offer 10% below the list price would likely not be responded to, or the counter would be to remind the buyer of the asking price. Generally, anything 5% or more below the list price is not considered a serious offer. Again, every market is different.

Finally, an inspection is not an opportunity to renegotiate price (in my market). If there is something wrong with the house, then yes, it is absolutely reasonable to ask for that item to be fixed or for a fair amount of $ to fix it yourself, but it is not used for futher price negotiation. Inspection items are generally dealt with separately, usually in the form of a credit from the seller to the buyer, at the closing table.

(I always hesitate to weigh in on these real estate threads becuse every market varies vastly and the buying/selling strategy from one property can be 180 degrees from another, even on the same block depending on particular circumstances... )

 

[nejarb]

Metro, who cares about "insulting" the owners? ha! that''s absurd! your relator wants them to accept the offer you make so that he can get his cut and move on to more biz--more so than he wants you to get the lowest price possible for your home. remember the relator works for you. not the other way around.

often the best way to negotiate is to start with an offer so low that you''re SURE they won''t accept it. it''s not insulting, it''s shrewd.

why would 20k above budget equate to 400/mo extra? that doesn''t sound right. have you been pre-approved for the amt you will need to purchase this home?

 

[Independent Gal]

If the owners are desperate to sell and if they''ve had no offers, adn hence lowered the price, then there''s just no way they would simply not respond to an offer, even if it was on the low side. Insulting would be to offer 20 or 30% lower. But to offer 10% lower doesn''t seem insulting... It just seems normal. Then maybe you''ll settle somewhere in between... 5-6% less... but that''s surely more than $6000. They would simply come back wtih a counter offer, it seems to me.

I mean, put yourself in these peoples'' shoes... wouldn''t you?!? Would you just let an interested party go if you were desperate to sell? Wouldn''t you make a counter offer?

Pretty much everyone seems to agree that your realtor''s suggestion of STARTING the bidding by offering $2000 off the price of a 4 bedroom home sounds ridiculous. And the fact that he wants you to ask for more of the $$$ off the closing costs rather than the house price is sketchy too, because that means it won''t affect his / her commission.

Your realtor sounds dodgy!

Be assertive. Ask to see the comps on similar properties and to see how selling prices have compared to asking prices. It''s your money! This person is working for you. And it sounds like he is trying to take advantage of you.

But also... 20,000 at, say, 7% should be more like $140 a month? Or is the rest the taxes?

 

[gail013]

Metro-

I think too you have to look at the tax benefit owning a home provides you. The payment is higher than you''d like, but surely you would get some of that back by way of tax savings that you might not have previously had. I agree with the others here, that 20k over your top price is not that much more. I would also talk to your mortgage person to find if there is another loan program that would work for you. There are so many of them out there. Just because the home was listed for 15k more last November means nothing. I have several customers and clients who have had to drop their home by 50k-100k due to the market circumstances here.

 

[fire&ice]

Please keep in mind that the realtor ALWAYS works for the seller of the home. That''s how he gets paid. To what degree he will go to bat for you can differ. It sounds like the sellers are motivated. If they are moving out of state, then they want this house gone so that they can free up to buy another.

That said, there is usually an art to negotiating. It''s a fine line between offering too low or too high. What we usually do is take the cue from the realtor and knock a few more $ off. I''m sure he knows that you want the home. Tell him that you don''t have to BUY. And, if you loose this house you will just wait for the next bus to come around. If you are able to pony up the extra 20k, there may be other options out there for you. Keep in mind, it sounds like this is the first house you looked at in the price jump.

Regardless of the negotiation factor, bumping up 20k often pays back in spades. Find something in your budget to cut (cable, starbucks, movies, eating out - all can add up - especially when you factor the after tax benefit - good catch Codex!). Also, typically your income will rise.

Good luck.

 

[phoenixgirl]

We chose not to use a friend who is a realtor because she was always telling us that offering below the asking price was insulting and that all the houses we were looking at were "priced really well." The market will decide that; there is no magic formula.

When we suggested offering an additional 30k below the new price, our realtor told us that he thought it was a "little low" but went ahead and made the offer. What he suggested offering was 5k over what we ended up paying, so I''m glad we went with our gut.

As someone who is trying to sell a home (we are supposedly receiving an offer tonight . . . keep your fingers crossed!), I can tell you that I would not be insulted if I was offered 10 to 20% below my asking price. Disappointed, yes, but it''s been on the market for a month and I don''t want to pay two mortgages. If indeed we get an offer tonight, I can''t imagine my reaction being, "Disgusting! I am so offended by this low starting point that I refuse even to attempt to negotiate a price that is acceptable to both of us!"

Honestly, if I were you, I would stick with what you can pay. If your budget is tight, $400 a month is not easy to come by (although that figure seems high for only $20k difference . . . are you sure that''s right?). Maybe this is a sign that you should stick to your guns, and maybe you''ll get lucky and get your dream house and stay within your budget. If they say no, you can always submit a higher offer and start all over again. Chances are they''ll counter and you''ll meet in the middle, so you definitely want your starting off point to be closer to your comfort zone than just $7k.

 

[psaddict]

I''m also confused about why an extra $20K on the total house price means an additional $400 per month. If it''s a 30 year mortgage and an extra $400 per month, by the end you''ve paid an extra $144,000?? That can''t be right.

 

[portoar]

Boy is there a lot of misinformation going on in this thread.

1. The buyer''s realtor is not working for the seller! In my state, California, BEFORE I even present paperwork to the buyer OR present an offer to the seller, I disclose my relationship to the parties. When I am representing a buyer, I have a FIDUCIARY responsibility to the buyer, and a duty of HONEST and FAIR dealing to the seller. I am working for the buyer, NOT the seller.

2. It''s ridiculous to assume that you can lowball an offer. I can''t tell you how many buyers I''ve worked with who have lost out on good deals on homes because they insisted on lowballing. Insulting the seller is a very real possibility. You should talk with your Realtor, and your offer should be based on a combination of factors: comparable sales in the neighborhood, condition of the home (including upgrades), length of time on market, and motivation of the seller. Your realtor is a professional and has very likely sold many more homes than you will ever buy or sell in your lifetime. Give him some credit for knowing his business.

3. The "buyer''s" market is over, at least in my area. Sales are picking up and prices have gone up in many neighborhoods. In some neighborhoods they never went down.

4. I feel the single biggest mistake most buyers make is to only apply for a loan through one lender. Even worse when the lender is a family member of friend. Have you throroughly investigated the possibility of first time homebuyer programs you might tap into? If your city, county, or state has special programs to help first time home buyers into a home, you can save MAJOR $$ by tapping into these programs. Without knowing what state you''re in, I don''t know whether any option like this might be available to you. Do a web search under first time homebuyer programs for your state. But do yourself a big favor and apply through at least two lenders. use them to negotiate your rate and points down.

5. If you love the home, there is probably a loan out there that can help you get the slightly more expensive home. For example, there are 40 year loans where you pay interest only for the first five years. I''m not talking about arms, I''m talking about longer term loans where you don''t pay down principal for the first few years. This can help you get into a home you might not otherwise be able to afford.

6. If this is your first home, you shouldn''t expect it to be perfect. You said that there''s something wrong with all the homes you''ve been looking at. Well, if you''re just starting out, don''t expect to get everything in your first home. Make a list of what you "must have" and what you can compromise on, and if you find a home that has most of your "musts," then maybe you can compromise on the other things. A few years down the road when you''ve built up equity and your income prospects are better you can move up.

 

[portoar]

also I''m not sure where the $20K/$400 per month extra is coming from. The rule of thumb I tell my buyers is that every $5000 in purchase price translates into a $30-35 month increase in payment

 

[portoar]

Also, one more thing. In my state, the inspection is not used as a bargaining chip to renegotiate the price. The inspection is used to evaluate the condition of the home. If there is something seriously out of whack, say, for example your inspector finds mold, you then ask for the problem to be repaired or for a monetary credit to correct the problem, but the inspection is not generally an opportunity to change your mind about your offer price. Again, that''s in my state.

 

[portoar]

There are good reasons to ask sellers for credits for closing costs instead of just writing an offer for a lower price. If the home is priced at 400000, and the buyer offers 398000 and for a 8000 credit for closing costs, well the effective offer price to the seller is 390000. Many first time homebuyers don''t have cash reserves for a down payment and closing costs. They have to build the closing costs into the price of the home and ask the seller for the credit. The presumption that the realtor writes it up this way to protect commission is frankly ridiculous.

When I present offeres to my sellers where the buyer is asking for a credit for closing costs, I present it this way -- the buyers are offering you 390000 for the home. They don''t have the money to pay closing costs so they are building them into the price of the home and asking you to credit the closing costs back to them.

Because that is really what is happening.

 

[fire&ice]

Date: 2/8/2007 8:44:37 PM
Author: portoar
Boy is there a lot of misinformation going on in this thread.

1. The buyer''s realtor is not working for the seller! In my state, California, BEFORE I even present paperwork to the buyer OR present an offer to the seller, I disclose my relationship to the parties. When I am representing a buyer, I have a FIDUCIARY responsibility to the buyer, and a duty of HONEST and FAIR dealing to the seller. I am working for the buyer, NOT the seller.

Who is paying your commission? Buyer''s agents are relatively new, especially in our area. It is disclosed up front that the buyer''s agent is NOT working for us. We do not pay him a dime. In fact, the paper we ultimately refused to sign was very one sided - he received a commission on any home we bought even if we found the home ourselves. He is paid his 6% or so commission from of the sale of a home - if and when that may be. Unless the buyer is paying a commission, how can the realtor have a clear responsiblity to the buyer when the seller is paying his fare?

We had a buyer''s agent type arrangement when we were looking for a home in NC. He did good job of finding houses for us - but I was under NO assumption he had ONLY our best interest at heart. He told us NOT to offer anything less than 2% off. This was a second home. We were in no hurry to buy. We were pre-approved with a commitment to close within 2 weeks. No contigencies except home inspection, clear title....the usual. The owner had a contract fall through, was leaving the country & was selling at a great profit. We offered 7% off (was not a high priced home). It was accepted without a counter. And, when the inspection came back with a problem, they settled on more off with VERY little prompting.

I can just tell of my experience. Did he offer what he thought was best for us? Maybe. My thoughts - he was really pushing us to make an offer on a more expensive house. He mentioned early on that he had a buyer looking for a bungalow in the price range of the house we wanted to make an offer on. Things that make you go huummm.

 

[metro]

Thanks for all the info. you guys are great!

1st - the $400 is off. I misunderstood what my mortgage broker was trying to explain to me (taxes and exeptions) - which is not surprising cuz I''m still trying to understand the process and all the lingo - not the mention the women talks very fast! The taxes for the area are about 2K more a year than the area we were initially looking. The house price is 20K more.

And I never thought about the whole commission issue - thanks for pointing that out, Independent Girl! My realtor is a former landlord, whom I rented from for about 5 years. When we started looking for a house, I contacted him because I know him thought he''d do a good job for us since he know my husband and I personally. I know he''s gotta make a buck to, and I can understand that. But does it seem like he''s yanking my chain?

My realtor sent me the CMA for the area and the house is in the mid to upper price range per sq. ft. My realtor said that if we''re asking $4500 back from the seller''s than that will put us right at the mid. point.

He also talked to the seller''s realtor and it seems the couple has to be out by March 31.

We want to make an offer this weekend. My husband and I just need to work with our realtor to try to agree on what that price and terms are to be offered. He wants to draw-up the papers this evening so we need to come to terms soon!

 

[Independent Gal]

Two things to keep in mind:

1) Why START at the midpoint with a highly motivated seller? Why why why? After all, you guys aren''t in the super-hurry... THEY are.

2) You said you have to come to an agreement with your realtor... but make sure you remember that your realtor doesn''t have to ''agree'' to your offer. It''s not his money! It''s your money! He''s just your agent, and although it''s good to consider his advice, you should also remember that it''s bound to be a little biased... the more you pay, the more HE gets paid, and the quicker you come to an agreement (i.e., by offering something HIGH) the less paperwork he has to fill out. But ultimately, he should take your instructions. If he''s pushy or doesn''t listen to you, fire him and get a new agent. Whatever he suggests you offer, knock a little chunk more off of it. As several people have said (and this was my experience too) you may well get your place for a few $K less than what he''s suggesting you offer. I did! And a few K is a few K... think of it in terms of diamond upgrade money!

Good luck! And let us know what happens! We''re rooting for you. It would be so great if you got the place for a price that was COMFORTABLE for you, and I bet you can.

 

[Independent Gal]

Incidentally, I don''t want to make it sound like I''m down on realtors. Mine was GREAT! He was up front about the fact that he made his money from a commission on the selling price. He didn''t try to push me out of my price point, and only showed me ''the next tier'' when I actually asked. He listened to me and respected my concerns. He was patient when I was indecisive. He gave me as much information as he could and let me come to my own decisions and he followed my instructions, even when he thought I was wrong. I felt respected, I appreciated his time and personal attention (given the relatively small commission he''d make from my ''starter home'') and felt I got helpful advice.

As a result, I recommended him to several friends and he ended up doing well ''off of'' me in the longer run.

As with all areas of business, the best way to make money is by being honest and straightforward and gaining your clients'' trust. And I''m sure there are plenty of agents like mine! But there are plenty of sleazy or pushy ones too. It''s the biggest purchase you''ll ever make and you need to feel comfortable, supported, and well informed.

 

[portoar]

Date: 2/9/2007 9:10:57 AM
Author: fire&ice

Date: 2/8/2007 8:44:37 PM
Author: portoar
Boy is there a lot of misinformation going on in this thread.

1. The buyer''s realtor is not working for the seller! In my state, California, BEFORE I even present paperwork to the buyer OR present an offer to the seller, I disclose my relationship to the parties. When I am representing a buyer, I have a FIDUCIARY responsibility to the buyer, and a duty of HONEST and FAIR dealing to the seller. I am working for the buyer, NOT the seller.

Who is paying your commission? Buyer''s agents are relatively new, especially in our area. It is disclosed up front that the buyer''s agent is NOT working for us. We do not pay him a dime. In fact, the paper we ultimately refused to sign was very one sided - he received a commission on any home we bought even if we found the home ourselves. He is paid his 6% or so commission from of the sale of a home - if and when that may be. Unless the buyer is paying a commission, how can the realtor have a clear responsiblity to the buyer when the seller is paying his fare?

We had a buyer''s agent type arrangement when we were looking for a home in NC. He did good job of finding houses for us - but I was under NO assumption he had ONLY our best interest at heart. He told us NOT to offer anything less than 2% off. This was a second home. We were in no hurry to buy. We were pre-approved with a commitment to close within 2 weeks. No contigencies except home inspection, clear title....the usual. The owner had a contract fall through, was leaving the country & was selling at a great profit. We offered 7% off (was not a high priced home). It was accepted without a counter. And, when the inspection came back with a problem, they settled on more off with VERY little prompting.

I can just tell of my experience. Did he offer what he thought was best for us? Maybe. My thoughts - he was really pushing us to make an offer on a more expensive house. He mentioned early on that he had a buyer looking for a bungalow in the price range of the house we wanted to make an offer on. Things that make you go huummm.

Fire & Ice -- then you probably signed a buyer broker agreement. Some agents use them. The reason is that we spend our time and money driving clients around and then they walk into a home without us and write an offer with the listing agent. . . . or use us to drive them around and then use Cousin Betty to write the offer. Buyer broker agreements say, in effect, I am spending my time and efforts to help you find a home, in return you agree to use my services when you buy a home. Sure, the agreements in my state say the buyer pays the agent a commission, but that''s only if the agent doesn''t get paid by the seller''s broker . . .e.g. in a for sale by owner situation, or, if you have agreed to work through your broker and then you go use someone else.

In my state the disclosure is very clear that I am working for the buyer. The commission structure is that the seller pays his broker a commission. Because of the reciprocal multiple listing service participation agreement between brokers, if I bring a buyer to another broker''s listing, he pays me a portion of his commission. But the pay structure is that seller pays his broker, and his broker gives part of his commission to me if I find the buyer. I have never considered myself to be working for a seller when I am working with a buyer, and all of my efforts are directed to finding a home they like, and getting them a good deal on the home.

The part where I think a lot of buyers are off is they expect to lowball all their offers. and many sellers expect too much for their homes. Both sides frequently need a reality check.

 

[phoenixgirl]

The condo across from ours sold this summer for the highest price ever (until ours today!). The guy who was moving out did not need the money and was set on his price. The eventual buyer made an offer below asking initially, and the owner said no. So the buyer made a second full price offer. I really think that *insulting the seller* is something realtors say to keep prices higher. I really do. The invisible hand of economics sets prices. Yes, if there is another buyer waiting in the wings to pay more, you''ll lose out. Maybe you are willing to take that risk. But if you have a house that is sitting on the market, motivated sellers, and no bites, then you have room to negotiate, and worrying about "insulting" a person who obviously overpriced their home is silly. That''s what realtors are for -- to convince the seller, kindly but gently, that maybe they should consider/counter the offer rather than have a temper tantrum and refuse to do business with the person no matter how much more they come up in price.

I''ll be honest . . . I am glad that I received a full price offer on the condo. But as my sister said, "Why didn''t they try to negotiate?" I think it''s because my realtor did a good job of making it sound like we didn''t have to sell and had a lot of other interest, and it came down to the fact that the buyer really wanted to live in our building. But if she had offered below asking, I would have simply countered somewhere in the middle. We priced it 9% above what we really needed to get (in order to pay back the margin loan we took out on our investments) just to have wiggle room, and since the market has slowed down and it''s the winter I wasn''t going to get greedy.

 

[Moosejaw]

Hi Metro,

COngrats on looking. My wife and I bought our second home since we were married two years ago...so it was a bit of a move up.

In the past 5 years I have purchased 2 homes, 2 condos...and sold 3 of them...so I know my way around real estate a little bit, and learned the hard way at times.

Here are some suggestions:

1. Don''t trust anyone. Hehe. A bit of an overstatement, but the realtor and the mortgage broker make big commissions. REALLY understand your financing.
2. Since it is a starter home be realistic how long you are going to live there. If you think you will be living there 5 years or less, take the lower interest rate on an adjustable rate mortgage. The first few mortgages I took 30 years for the security, but we moved up quickly as the equity in our home grew.
3. If you plan to stay less than 5 years don''t pay them points...and this MAY depend on the price of your home...as to pay a point on the house we just purchased was 9k a point.
4. If you are getting a 1st and second mortgage, understand what your APR is as opposed to the initial rate.

I think most mortgage brokers are thieves...including my friends who are in the profession. I don''t trust any of them, and the more I understand through each transaction the more disgusting it is.

Best of luck...it will be awesome. Also...do a thorough inspection, don''t be afraid to ask for money at closing to fix certain things, and if the house is older pay a couple hundread bucks to have the sewer line inspected. TRust me.

-G