Orange County Real Estate: Buying Tips

Brokers Work for the Seller, Not the Buyer
The first thing you need to know about real estate brokers is that they typically work for the people selling the home -- not you. The standard practice is for the seller to hire a broker, who then takes over marketing the home and seeking out potential buyers. For this, brokers usually are paid around 6% of the sale price, which gives them a built-in incentive to find the seller the highest price they can.

That sounds simple enough. But as you begin to drive around town with seasoned agents, you'll quickly find that they act like they are, in fact, working for you. So don't get too cozy. You will probably be tempted to tell an agent the highest price you are willing to pay for a house or the size of down payment you can afford. Don't. The agent is obligated to pass those details on to the seller, which could hurt you in any negotiation. Also, don't feel obliged to buy a home through one particularly helpful broker. Use several to have the widest selection of possible homes.

Getting Pre-Approved Puts You in a Stronger
Negotiating Position
What is pre-approval? It's basically a quick-and-dirty look from a lending institution at your creditworthiness. With a pre-approval or pre-qualification letter in your hand, you're immediately in a stronger negotiating position with any seller.

There are two types of "pre" letters:

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Pre-qualification is an informal agreement between you and your lender. The bank gives their opinion on how much they think they will be able to lend to you based on information that you have provided to them. Your bank doesn't do any background check s at this point. It relies solely on you portraying an accurate picture of your circumstances. Because this is more like a friendly handshake, the lender can decide not to give you the loan if they find out later that you have been less than candid with them. There is no charge to do this and you are under no obligation to get a mortgage with this lender if you find a better deal later.

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Pre-approval is more serious. The bank will actually check your credit history, employment information, assets, and liabilities. The only thing they won't check is the property that you plan to buy, because, of course, you haven't found it yet! If you're concerned that you might not qualify for a mortgage, we highly recommend that you go for pre-approval. It will put your mind at ease while you search for your new home and make the entire experience much less worrisome. Some lenders charge for a pre-a pproval. If you decide to go with one who charges for this service, make sure you're really going to buy a house soon or you'll just be throwing money away.

Real Estate United Inc. 1197 Dolsontown Rd. Middletown, NY 10940 | NYS Licensed Real Estate Broker