Real Estate agents/offers/financing ect

[paulsharvey]

So, me and wife have been casually looking to upgrade house/property for probably 5 years, and getting a bit beyond casual now. We have lived in same house for almost 17 year, and a Lot has changed. There was no such thing as a buyers agent back then, and now it seems to be the norm. My understanding (correct me if wrong, I'm happy to learn) the seller typically pays 2.5% to the buyers agent at closing, and the buyers agent doesn't cost the seller? Let's say, I have my eye on a property that fits the major bullet points, and price range (vacant wooded parcel, 6.5 acres), should I contact a buyers agent? I've only bought 1 house in my life, and I was overwhelmed, the stuff I had to come out of pocket for that I didn't expect. I know a buyers agent can help in the search.

My thought right now, is buy the property with a land loan now; get construction loan when ready, and either site built/modular/nice mobile home; preferably with a single closing construction to permanent loan. Down payment is a big issue, also, credit is lower mid to upper low, but nothing specifically bad on it.

One of the big catches, we don't want to sell our current home, until we have a move in ready new home. We have decent equity in this one, but not a good way to use that.

 

[ericm979]

We used a buyers agent to buy a couple houses a few decades ago. It was worth it then and I'd use one now too. The buyer's agent knows the area and the market and can give you a lot of advice. And then they do the negotiating with the seller's realtor for you. The first house we bought the seller's agent was a real jerk. Our agent handled it much better than I would have (I'd have walked out. He was really awful). The seller tried to pull some BS on us as well and our agent knew it was BS and how to deal with it. Totally worth it.

In CA the total realtor fee is 6% max and the buyer's agent typically gets 2.5% but it can vary a bit. I see it listed on many listings now. It may be different in your state.

Buying a second home you'll pay a bit more for the loan. The same is true of the land + construction loan vs a traditional loan for land with a house on it. The more unusual it is, the more it costs.

The market's down some now in most places because loan rates are higher than they have been for a long time. (thanks Fed!). It's a decent time to buy if you can afford to. With rates up there should be less competition for contractors.

 

[2manyrocks]

A good buyer's agent can be of considerable help. I'd be leery however because the recent slow down in real estate transactions means some realtors are hungry and might push towards a purchase that they shouldn't.

If you sign a contract with a buyer's agent that happens to be an exclusive contract, you could owe them their fee even if you find a property on your own and they don't lift a finger. You need to clearly understand the terms of the contract with them.

There has been a huge runup in real estate prices since 2019. Mortgage rates for many are now over 8% and likely headed higher. Sooner or later, something is going to prick a hole in this pricing bubble because wages have not kept pace with the pace of real estate prices. Between these high real estate prices and 8% mortgage loans, property taxes, and insurance, the monthly payment for real estate has gotten pretty high, and that is why the present prices levels are unsustainable, IMPO.

 

[paulsharvey]

Oh I agree 100%, but at the same time, you can't sit still forever. The house we are in was never a forever home, but although the wife complains, it had a been a good place that fit our needs. When we started talking about a new place, we had no idea how much things had shot up, even in a relatively low income rural area. We haven't seen anything that meets our bullet points, in our price range
1) 5 acres min (I really would like more than 5, maybe 10+, but its probably not in the cards)
2) on/near water (pond, lake, creek, stones throw to public ramp, im on board with this, but wife is the driving one on that point)
3) same county, preferably same schools
4) 3/2 min; 4/2.5 would be nice; either site build to new mobile/modular (wife doesn't want to go mobile, but she's not dead set against it, but "I don't want a rectangle doublewide"
5) 24/7/365 roads. I dont mind dirt roads, but paved is nice; but at the same time, I dont want to have to worry about it raining 2" and wife can't make it home cause the road is That bad

So, to get what we want, I think we have to look at land/house as separate items

Current house is 1300 sq ft, 3/2 double wide on 2 acres, and with 2 adults, 3 kids, tractor, buggy, garden, chickens, privacy woods, ect; its shrinking daily

 

[2manyrocks]

Something to consider is whether the property you want to buy really fits your situation. If something comes on the market that really suits you and you know you're going to be able to enjoy it for the rest of your life, it would be less painful to ride through any downward prices that might or might not happen after you buy.

However, if you buy something that doesn't tick all of your boxes and you find yourself wanting to sell it to get something more desirable, you could be tied up in what you bought for a while if your equity position goes negative when the market turns down.

Generally, listings are down and that is what is holding prices up for now, but you might have more affordable choices coming.

 

[newbury]

If you are relatively clueless about the intricacies of real estate a buyers agent might be worth the money.
For our last (hopefully) purchase we tried to use a buyers agent. My wife is a retired Lawyer from US Army Corps of Engineers so she knew the intricacies.
We tried several agents over the course of about 3 years trying to buy a "fixer upper" house & land within a reasonable distance of her mom in Northeast Mississippi. They were all abject failures.
They constantly pushed us to the top of our price range ($350K) on relatively new housing. The one house we settled on that agent was lax and did not get paperwork forwarded in time before a deadline and it was going to cost us a couple of thousand to "restart" the paperwork. Her comment was "sorry".
We ended up finding a property ourselves, for half of our upper limit with an additional 70 acres available for well under market value.

Remember - most of them still make $$ based on a % of the sale, so there is little if any value in finding property for less then the maximum $$ they can suck out of you.

 

[NorTracNY]

If you're just looking for land, I'd just use a real-estate attorney. Agents have zero ethics (that's for a good one). We started with an agent, and as a buyer's agent, they have ZERO of your interest in mind. They make money based upon percentage of what you will spend. Land is very cheap relative to a house, so they really won't do anything for you as they will see you as a client that will only get them less than a quarter what another would.

In case there are agents here, I make my comments based upon a relative who use to be an agent and got out do to no ethics, and my own experience.

 

[Omega Woods]

As stated above, if you find a piece of land that you want to buy, I would talk to a real-estate lawyer instead of an agent. Generally speaking, with notable exceptions, real estate agents know how to sell new and pre-existing homes. If the land you find is listed with a real estate company and the price is fair, just use the listing company to complete the purchase. If you don't trust them for whatever reason, get a lawyer to look over the contracts.

May I ask what your current situation is compared to what you're looking for ultimately? How much land do you have now? Any chance of upgrading your current home into something closer to perfect? If you want to stay in the same county and school district, looking at how to improve what you have may be a better strategy than taking an 8% mortgage.

 

[paulsharvey]

We currently have a 1994 double wide 3/2 (1300 sf) on 2 acres, bought in 2008. Got some decent equity, but nothing crazy. We bought this place when we where single income, and 1 kid, so typical starter house.

I had considered A: have a new home built or a modular set up; But we would be throwing a lot of value away, and still have a very small property in a rapidly growing neighborhood...

B: adding on, but see same probelms as above. Also, it's not so much it doesn't have enough rooms, more a matter of all of them are small, closets are tiny, no in home storage, ect. Also, it's a real pain to do while you live in the home.

C: more wife's comment than a plan, renting out this house, there is good cash flow between mortage vs rent rates; but honestly, we both work full time, and I don't really want to be a land lord

D: asking if my mom would sell us a chunk of hers, but 1)that's an award conversation, 2)don't want to live next to family; 3)youngest daughter would change schools

As background, I moved a Lot as a kid, and Hated it, never 100% settled, and although kids are tough, I don't want to do that to them. Also, oldest is (currently) planning to move out in next year to go to college, but don't want to assume that won't change, but either way, within a couple years, it will only be 2 daughters still at home

 

[Omega Woods]

I see. Sorry, I didn't read post #4 carefully enough. If you have 2 acres and want 5+ then there's not much to do except find a bigger place.

Since your original question was regarding buyer's agents, I'll give my opinion on that. Ninety percent of what 90% of buyer's agents do these days can be replaced with an internet search. You have a pretty clear picture of what you want and you can pretty easily determine whether your parameters are met by searching the same data streams the buyer's agents are going to search. Depending on what you're looking for, it may take a long time to find it in a price range you're willing to stay within. That's the nature of the game. If you find one that meets all your needs, then contact the listing agent quickly and get a showing. Good ones don't last long in many places.

Having said that, I have found two or three properties through agents I trust, generally from small agencies with solid insight into the local markets. It doesn't hurt to ask around for agents that people like and trust. If you find a good one, then you can give them your wish list and parameters and let them do some work. If they bring you a good property, then they've earned their money. If they're hungry, they'll poke around without a written buyer's agency contract.

Best of luck to you!