Advice about Buying & Selling a House

Questions & Responses:
In search of a "fixer upper" on a budget(8 responses)
Buying 2bdrm home and future additions(2 responses)
preemptive offer on houses?(3 responses)
Archived Responses: 

Questions Related Pages Reviews

Who to ask for advice on how to buy a home?

April 2013

We are looking to sell our home and buy another one, and would like to be able to do this without renting in between. My parents have offered to help, but are not sure how to suggest structuring that help -- a loan? A (smaller) gift? Co-signing? Not sure if we should talk to a real estate attorney, a mortgage broker, or a real estate agent. I'd appreciate any recommendations on who would be a helpful consultant for this question. Anonymous

Dear Anonymous, I'm a Realtor in Berkeley. Been working here for the last 6 years but my father Jack has been a Realtor here for 35 years. It is actually more common than you would expect, to have this dilemma, however it is not a dilemma as much as it is a logistical plan. My initial advise includes 3 different scenarios which land you in another home without any time lapse or rentals. It is not the easiest or most productive process due to the skepticism on the other side of each transaction, however it most definitely can be done and with my help it will.

1. You can sell your home ''contingent on the purchase of another home''. Basically you would disclose that you are intending to purchase another home to move into and cannot sell your home until this happens. Thus ideally within the first few days of you buying your next home and moving to it, you would then complete the sale of your existing home. It is not as ideal for you because you need the cash to make the purchase.

2. Purchase a home contingent on the sale of your current home. Once you get into contract the seller will know you plan to sell yours in order to bring in the balance needed to make the purchase. This ideally would close at the same time and move you in.

3. The last option I can think of right now is to pay rent back to the buyer of your home. Establish this in negotiations and secure your home for a month or two after you sell it. Not very ideal but definitely an option.

I could talk to you a lot more about this so email or call if you have any questions. I'm sure there are more options that will arise as we get a little more into it. Frankly I would love to help you out and represent you in this process as I'm sure we can make it happen for you. Thanks, Jeremy

You will want to start with talking to someone regarding financing. You need to see what you can afford while carrying the two homes simultaneously and if it is even possible before you start. Lenders will calculate the liabilities on both properties plus your consumer debt against your income. The maximum ratio that lenders allow vary from lender to lender. I am a loan originator and Realtor and can have a discussion with you regarding it if you like. W.
I highly recommend attorney Jean Shrem for any real estate advice. She knows how to quickly get to the heart of issues. She can give clear and concise guidance and is a wealth of resources. Her website is: anon
I really think that a realtor is a good choice for these sorts of questions. I can recommend Marni Fischer of Marvin Gardens Real Estate. She is really patient and caring. Her number is: 415-722-0032. anon
Robin Kingsbury of Red Oak Realty, can work with you and help you determine the steps that you need to take in buying a home. He is extremely knowledgeable and patient, especially with first time home buyers. Clients love him. His website is or you can reach him robin [at]
Hi, there are several ways to accomplish what you would like to do. Your specific options will depend on your overall financial picture, how much equity you have in your current home, how much you need to borrow on the next home, the location of the home you are selling, and so on. I would be happy to discuss with you in more detail if you like (I am a local real estate agent). You will also get good advice from a reputable local real estate loan broker, and I can suggest several to choose from. Best of luck! Holly

I want a house but my honey's finances suck!

August 2010

I am in a long term relationship with a very sweet but indebted guy. Before I buy his house from him, or go in together with him, I need some legal/financial advice on how to protect me from his bad credit and what other options I may have to bring about a happy resolution for both our home ownership needs. I know there has to be others out there in this situation. Who have you seen or what have you done??? K.O.

In the bay area it is very common for unmarried couples to own a house together, but your hesitation is smart because there are a lot of issues which could come up. My suggestion would be to get a legal contract which specifically outlines what you both want and what you'll do if your situation changes, much like a partnership agreement or premarital agreement. A lawfirm in San Francisco which specifically deals with this type of thing is Sirkin & Associates (website is On the site there is an article titled ''Unmarried Partners and Real Estate Ownership'' ( which you may find helpful in considering whether you want to buy with your partner and if so, what are some of the issues which you need to consider.

As for financing, a good loan broker would be the best person to ask about how to apply for a loan. My husband is self employed so he is considered a credit risk as well, so I applied for our home loan by myself but also put my husband on title, which was not an issue at the time. Good luck!! ANON

How to figure out if we can afford to buy?

Jan 2010

Hello. I feel really stupid asking this, but I am not really sure where to start. I think my husband and I should buy a house, and are finally in a financial position to do that. Before now, I've been in grad school, but now I'm done, and we have a better idea of neighborhoods, our needs for the next few years (we have a 2 y/o and one on the way), etc. So, I guess my question is - how do I tell what I can afford, and whether it makes sense, tax-wise, expenses-wise, etc. for us to buy versus keep renting? I have heard, for example, that we can borrow against our 401K, but I have no idea how this works. Is that something a mortgage broker would help with? Or are they just salesmen? Do I need a financial planner? Or a bank? Some other service?

Can I just use my Fidelity guy (we have a good chunk of money in mutual funds there)? Ideally I'd like someone to look at our incomes, our investments, our expenses, our tax situation, and say ''boom, here's the amount of money you can/should spend on a house without taking unreasonable risk.'' Do financial planners do that? Just on an hourly fee? Or maybe, what I need is a realtor? Gosh, I am embarrassed to say that I really have no idea. Thanks in advance for your help. Clueless

Hello. we are actually undergoing a very similar process however are now in escrow on a house. We are usiing two different types of financial planners. One that actually looks at our assets, debts and will help us decide what type of investments, insurance, accounts for the kids would be recommended. We have an upcoming appt with this person and he charges by the hour. The other planner actually does our investing for us. If you have anymore questions, feel free to email.Good luck to you. Lillian
A lot of the professionals that you refer to are mutually exclusive. A financial planner might help you get an idea of what you can afford given your income/expense profile, lifestyle, savings pattern, goals, etc. Your CPA can talk to you about the tax ramifications of interest and property tax deductions, the ins and outs of the FHA first time buyer tax credit, as well as the feasibility of using your 401K or IRA for your down payment. Then a mortgage broker might help you find the best mortgage for your financial profile. There really is no one stop shop. As far as what you can afford, bear in mind, a house is a pretty costly venture that goes beyond a down payment and mortgage payments. You need to factor in semi-annual property taxes, insurance, and maintenance (regular and unplanned large-scale projects like roofs). Property tax, for example, can equal, at today's prices, about 3-4 mortgage payments. Insurance can equal another 3-4 mortgage payments. Yes, you get some relief at tax time, but it becomes a cash flow issue. Two caveats: beware the floating rate mortgage - cheap upfront but beware the resets, and don't fall prey to cash out refis - you still have to pay them back. One other piece of advice that our realtor gave us: after talking with your planner (or not in our case), figure out a dollar figure that is your maximum comfortable price. If a property goes above that, you feel OK about walking away. In a hotter real estate market with multiple offers, it is easy to get sucked into a bidding war. This is a graceful way to keep things sane for your pocketbook. Anonymous
You do NOT want to ask a realtor or a mortgage broker for financial advice. While there are many ethical and competent realtors and mortgage brokers, their focus is to find you a mortgage and have you buy a house, and they don't get paid unless these things are accomplished. Therefore, they are not neutral advisors, and I have concluded (after buying 3 houses over the past 15 years) that a realtor's job is inherently problematic, because your realtor is not just looking after your interest, they are looking out for their own interest as well, and those might be entirely different things. I have learned a lot about financial planning by reading the New York Times' business section on Saturdays and Sundays. There's a few columns that focus on these issues and they offer good practical advice about how to budget for buying a house, how much of your income should go into a mortgage payment, and whether owning a home is a safe investment vs. stocks, retirement funds, etc. Recently one column discussed the issue of home maintenance, and the fact that most home buyers do not factor this cost into their monthly expenses, and that you should factor it in because inevitably your house will need new paint, and various repairs and upkeep (unless you are skilled and handy enough and have the time to do it yourself). You could probably find a lot of this on the NYT website. I have not figured out how to find a truly neutral financial advisor but there has been some discussion of this on this list (someone who does not actually work for a financial services company and who will end up trying to sell you ''financial products''). Good luck! a bit jaded
I'm not an expert, but I'd expect a financial adviser should be able to help you... maybe ask for recommendations in the rec. newsletter? In the meanwhile, if you want to get a sense of how much house you can afford, you can just do an online search for ''how much house can i afford calculator'' and there are many different tools online, for example: The same can be done with ''rent versus buy calculator,'' like: And the same with ''rent versus buy tax saving calculator,'' one possible site: EP
As someone who just bought a house this week, I can tell you that seeing a mortgage broker would answer all your questions. They can tell you about conventional versus FHA loans, they can look at your income and assets and tell you what you can afford. They are knowledgeable about how much cash you'll need from deposit to close of escrow and they can also tell you about the tax benefits of owning a home.

Get some recommendations for a mortgage broker from friends and family (or BPN!) Gather all your financial info (current debts, credit scores, checking, savings and investment accounts, and assets). Talk to your spouse about your comfort level as far as monthly payments before you go. You can also talk to your financial planner about what accounts you may be able to cash in penalty-free as first time home buyers. Good luck! Jennifer

Dear ''Clueless'' (you're really not!) You should first take a good look at your budget. A financial planner who works on a FEE-ONLY basis could help tremendously with this. Forecast what you'd be paying for a home with a mortgage, children, taxes, etc. Pay close attention to this step, because by buying too much home, you're taking a big risk if one or both are not earning income.

Regarding the mortgage broker, banker, real estate agents...your instincts are correct...they are salespeople. They earn their living on making a sale, not giving objective advice. Also, Fidelity can help with how to invest, but that's about it. They're not going to do the job of a good, objective, comprehensive financial planner in looking at all pillars of your financial lives.

With a growing family and possibly a home purchase, you're going to want to be sure the following areas have been reviewed, and consolidated into usable advice by a professional:

1. Budget: How it looks now and after major life changes have occurred. Budgets are great for determining how your family would deal with a job loss, increased or unplanned expenses, etc.

2. Retirement plan and College plan: What should you be saving for yourselves vs. what your goals are for the children.

3. Tax situation - can it be improved now, and how does purchasing a home affect your finances?

4. Insurance - analysis of property, casualty, life, disability, medical, etc. You want to be sure you're getting the best coverage for the lowest premium cost.

5. Estate plan - with children, this is a very important issue. Having a will, trust (if needed), health care directives, and powers of attorney set up will ensure your loved ones are cared for in the event of your untimely deaths or severe disability.

6. Investments - are they aligned properly with your goals? Choosing great investments are one part of the problem. When to sell, how to structure your acts for maximum returns, minimal taxes and expenses, and rebalancing are vital parts to your investment strategy.

Pulling this together into a comprehensive plan of action is what a financial planner will do for you. I know of NO mortgage broker, banker, real estate agents or even Fidelity reps who do this.

I don't think you need either at this point. It's fairly straightforward to figure out yourself whether you can afford a house or not. The general guideline is to put 20% of the purchase price as a down payment and then your monthly payment (including mortgage, insurance and taxes) should not be more than a quarter or a third of your monthly income. So, if you make 8K a month for example, your housing costs shouldn't be more than 2-2,500 a month. Anything more than that and you'd be stretching yourself too thin. There are lots of mortgage calculators available on the web. You should also have a good cushion of money in savings because stuff always goes wrong with houses when you least expect it.

Once you're ready to get serious you can work with a realtor and when the time comes they can put you in contact with a mortgage broker or you can get recommendations from friends.

Financial professionals will always tell you that you can afford more than you actually should. It's much safer to be conservative. You'll sleep better at night. Happy house-hunting! anon

It sounds like you want a financial planner. We've been working in fits and starts with Brandi Bernazanni (has excellent reviews on this forum) and our last meeting was for exactly the question you're asking. Banks only care about whether you'll be able to pay the mortgage, even if it means eating ramen noodles all week, never taking a vacation, and not saving a cent. Mortgage brokers can tell you how much you qualify for but not how much you need to save for retirement and your kids' college. Be prepared to spend $1-2k to come up with an overall financial plan, as no one can say how much you can spend on a house without looking at the whole picture. It sounds like it'd be money well worth spending for you, especially before you make such a massive long-term investment. It definitely has been for us. fellow househunters
I asked my husband, who's a Certified Financial Planner, your question. He says it's unlikely that your mortgage broker or Fidelity guy would be able to give you the big picture that you need to help you make this decision. There are some financial planners who work on an hourly basis. (My husband doesn't--you pay him a fee to complete a comprehensive financial plan.) If you don't find a financial planner through friends' recommendations, the Financial Planning Association website should have information to help. Good luck! Karen
Hi, I am a certified financial planner in El Cerrito. You should first figure out how much you can spend on your home by reviewing your current situation/finances such as your assets, liabilities, income, and expenses. The snap shot will give you a better idea on what and where you can afford to purchase. Financial planners can help you with these types of analysis. I think realtors can help you find the appropriate homes based on your criteria, and mortgage brokers can help you find the appropriate loans/lenders you will need to purchase a home.
I'm sorry to tell you this, but the person who should be telling you ''how much you can afford'' is you. When we bought our house a few years ago when the market was way different, they were encouraging us to borrow lots more. Well, I'm thrilled to death we didn't. We bought a house that's great for us, and didn't stretch us to the last penny. Good thing too, as with the economy I wound up not working for 2 years. I can't imagine how stressful that would have been had we stretched and done as the bank told us. As it turned out, we cut back on things, stopped saving, and had zero child care expenses as I was home w/the kids.

Track where you spend every penny - get a real strong understanding of what you spend and what you would need. Be prepared that one of you may, by choice or not, be out of work for a while.

And yes, the tax benefits are great and should be included in your planning. I decided how much I could afford

Hi - I could have written your post myself a few years ago when I was in a similar situation. I was a single woman debating whether I was able to afford a house and how to balance paying off student loans and saving responsibly for retirement. I'm pretty risk averse and didn't want to get in over my head financially. I felt overwhelmed by the entire process and didn't know where to begin. I considered going to a mortgage broker, but realized quickly that those folks are incented to sell you a mortgage. They'll tell you what you are 'qualified' for, but a financial planner will tell assess your entire financial situation and give you advice on what's best for you. There are also some considerable tax savings that make owning a home more affordable.

Some financial planners offer this kind of assistance, and you're probably best off to go with a fee based person. The ones offering 'free' services get paid by selling you products, so I'm not always sure that they have your best interests at heart.

I saw a great financial planner, Megan Rouse ( who has reasonable rates. She helped me calculate a maximum amount that I could spend on a house without getting into trouble. I'm so relieved that I went to her - it was during the crazy go-go years. Of course, my house has lost value, but I'm in great financial shape because I never got in over my head. Megan is really down to earth and gave me great advice that allowed me to make sound, thoughtful decisions.

Good luck. You are not asking crazy questions - you are asking sensible questions! Jennifer

I often have to laugh at some of the responses (although I probably should cry instead).

Neither a financial advisor nor a mortgage broker is going to tell you whether you can afford the payments or not (although the financial advisor will usually be the better bet).

YOU need to know YOUR bottom line. What are the TOTAL costs - principle, interest, taxes, insurance, HOA fees, utilities, maintenance, etc.? Does your cash flow allow you to pay all costs AND eat, AND save for your future, AND maintain an emergency fund AND ...? How secure is your job? What do you anticipate in pay raises (or cuts)?

Also, don't be fooled: BOTH of them are in sales!

The mortgage broker works to make a living. Maximizing the loan maximizes the income. Not all mortgage brokers will push you beyond your capacity, but know that their interests may not be aligned with yours.

Financial advisors don't work as a hobby either. Whether ''fee-only'' or ''fee-based'' (terms too often abused by those in the industry - more about that later), or whatever, expect to pay them in one way or another. They too wish to maximize their income and their opinions may also be biased. Managing your assets, not sinking them into real estate is how they do that.

BOTTOM LINE: 1) Create a budget. 2) Hire an advisor to make sure you're looking at the big picture, to hold you accountable, to guide you. 3) Hire a mortgage broker to provide the loan.

What's the difference between ''fee-based'' and ''fee-only''?. True ''fee-only'' advisors make money ONLY on plan fees and asset management. When you buy a house, that's money they won't be managing. (Be careful with anyone claiming to be fee-only: if a fee-only advisor recommends someone from whom to buy the insurance they recommend, ask if they share in commissions or get paid referral fees.)

''Fee-based'' advisors are identical to fee-only advisors except that they may earn commissions. They may get paid on your investments up front rather than over time; they may be able to sell you the insurance themselves.

Neither is better or worse than the other. Arguments can be made in favor of one over the other - aligned vs conflicts of interests, higher vs lower cost, etc. But every situation is unique and requires its own evaluation.

A good advisor will explain the options and make a recommendation based on YOUR situation. - Anon

Watch outs for older homes in Bay area?

Sept 2006

Hello, We just moved to the Bay area and are looking to buy a home in Piedmont or Montclair. Most of the houses we are interested in are from the 1920s and 1930s, however we are not sure what key ''watch-outs'' we should be aware of. We know that all buildings should be seismically retrofitted. Are there other structural things to beware of? Are there pros and cons to stucco houses? When it rains are mudslides a concern? new to east bay

If you're new to the state, I'd suggest sitting down with a real estate agent to walk through an offer package--including the 8 page standard offer itself as well as all the disclosures (lead, hot water heater strapping (for stability), earthquake (retrofit), and so on.

Generally, each town has its own list of disclosures as well that you should see in advance--view protection ordinances, education parcel taxes (Piedmont), special landlord-tenant laws (for instance if you had any potential to rent in the future), and so on. Both Piedmont and Montclair have some school space issues, so if you join the community after school starts, you may end up in an excellent and (very) nearby school for the first year (with the option to stay thereafter, usually, if you'd prefer).

That would give you a starting point.

In addition, most homes, especially older homes, sold in the area have pest inspections offered by the seller. For termites but more often the dry rot that is endemic in this moist area. Is the inspector reputable? There's one that's very commonly used and the gold standard here in the East Bay.

And even if the seller offers a recent home inspection, I'd definitely suggest that you get your own, tell the inspector that you're new to the area, and they'll be sure to give you as much background (and important perspective--in the scheme of things, is it a dealbreaker that the electrical system is largely 70 years old?). I've worked with a number of inspectors, and while their attention to detail might vary, they seem to tend to be in the business because they love explaining things to other folks.

Hope this helps Maureen Kennedy

I just purchased a stucco home in Oakland that was built in 1925 and was owned by the same family for the entire time. Not much had been upgraded in those years. These are the things I would suggest you be aware of:

Is the electrical system grounded? What kind of wiring does the home have? A lot of older homes have knob and tube wiring which some people consider to not be safe.

Check the piping. Most older homes have old piping and it often needs to be replaced with copper.

Have the foundation thoroughly checked. Our home inspector told us that our home had a lot of cracks in the foundation, which while not uncommon in older homes, can be serious if they're severe enough.

The heating system: A lot of older homes have asbestos insulated ductwork. We had ours replaced, but were told if the ducts are in good condition and there is no asbestos leaking out, this isn't necessary.

I highly recommend that you have a thorough inspection done. Knowing what needed to be done on our older home BEFORE we purchased it was tremendously helpful. Latonya

Piedmont's on bedrock----very safe in an earthquake. Montclair has a lot of cliff-hangers------I wouldn't want to live in one of those even if they do have the best views for the lower prices. Check out how long it takes you to get to a freeway. If you live in Montclair, you might have to add a lot of time for driving down winding, single-lane roads to get to a freeway everytime you want to drive somewhere. And most of Montclair is very shady and dark, and damp. You may want to consider Broadway Terrace. They're close to major transportation, flatter lots, and nice homes. I only go to Montclair for Peet's Coffee

One Realtor or Two?

Sept 2006

We are planning to sell our home and buy in another city in the Bay Area. Is it the norm to use the same realtor for the sale of your home, as well as to buy the new home? I have found a realtor I like to help me sell our home, but I don't think she knows the area where we want to buy well enough. I have found someone who does know the area, but is that just not done, hiring two realtors? Any thoughts on the matter would be greatly appreciated anon

Absolutely use two. Especially if your current agent doesn't know the area you are buying in. We will use two in the same area, one to sell, and one to buy, simply because we feel they are more skilled in one area versus the other. Our selling agent doesn't have the more aggressive nature that our buying agent does, but we think she'd make a better representative for selling our home than our buying agent. If your local agent has a problem with this, then s/he is IMHO, greedy, and shouldn't represent you either way. I don't think you have to explain yourself either. Your local agent should be the first to tell you you'd be better off using an agent familiar with the other market. Good luck been there, done that, will do it again
Hi: If I were you, I would work with the agents whom I thought were most capable in the area you're focusing on--two in this case. Your selling agent might be wistful, but I can't imagine that the decision will affect his/her current work for you.

If I have a client moving outside the immediate area (i.e. Berkeley/Oakland/Piedmont), I would personally always suggest that they work with a realtor who's experienced in that other area (and then work hard to get them a great agent with a compatible personality). Real estate is localized enough that local experience is hugely important--prior relationships with the agent selling the house you want to buy, or at least an understanding of his/her approach to negotiation, closing traditions, disclosure requirements, local ordinances (e.g. if you wanted to preserve the option to rent in the future, but together you didn't realize that the target city had rental limitations), school boundaries (Walnut Creek is a total maze on this), and so on. In fact, our brokers often emphasize the legal liabilities of working outside your area of knowledge.

One final item--it's common in the real estate business for one agent to ''refer'' a buying client to an agent working in the target area. In that case, the receiving agent would normally pay a 20-25% ''referral fee'' to your original agent. In this case, it sounds like you've moved past that moment, but again, your current agent's job is to do what's best for you/what you feel most comfortable with, so go for the two agents! Maureen K

Definitely two realtors if you are buying/selling in different cities. You want to get a realtor that is knowledgeable about the area you are purchasing and selling in. There are different rules and regulations for different areas. We found this out the hard way. We used a realtor based out of Montclair (Alameda County) to sell our house in Contra Costa County and found out the day before we were supposed to close that there was a backflow device law that we had not complied with.. a Contra Costa County realtor would have known about that law. I also found out that there is a buddy system between realtors in a certain area and that was how we were able to get our house now (we were competeing against 3 other bids). The sellers realtor did not want to work with an out of the area realtor therefore they took our bid. Lucky us! Hope that helps. Good luck! learned the hard way

Buying a dump and fixing it up

May 2006

Seeking advice and war stories from those who underwent extreme makeovers for their homes---structural and cosmetic. We are thinking about buying a dump, something that needs not just TLC, but major surgery. I would love to hear anything about the process, from pros and cons, to unexpected experiences, to cost (like how much to multiply the original projected figure...). thanks. Anon

To the person considering buying a dump that needs a major overhaul -- proceed with much caution. Also, make sure that your marriage is very solid, and plan for some counseling anyway, especially if you're going to live in the house while remodeling. If you have kids, consider that you will be stirring up a lot of lead dust, mold, and other contaminants, and read up on the risks of lead poisoning (& take the free Alameda County Lead Poisoning Prevention class).

5 years ago, I thought this would be a good idea (actually, it was the only house we could afford). Most days, I am still thrilled that I was able to become a homeowner, but sometimes I still wonder if it was the right choice. As far as cost, start with the price you originally paid for the house, and double it. No kidding.

We're still living out of boxes in a house that would definitely not be considered livable by the public housing authorities, sometimes coping, sometimes not, and trying to work ourselves out of this mess while managing to keep our day jobs and our sense of humor.

I started out optimistic and confident, subscribed to This Old House, hired a design/build general contractor that was recommended on the BPN, took classes at the Building Education Center, and was very willing to build sweat equity on the grunt work portions. We ended up firing that first contractor and feeling quite swindled. We are more cautious now but still learning the hard way. We're learning to navigate the permit process and bidding out specific components of the work. I've heard this is called Owner-Contracting, or being your own general contractor. ALL of the books say NOT to do this, for the inexperienced. But-- it is the only way that getting the job done might be remotely affordable. Progress is being made, slowly.

If you choose to go this route, may the force be with you. It is a character-building and skill-building experience, no doubt. Linden

First-time homebuyer and CalHFA Loans

June 2005

I am looking for more recent recommendations for a Realtor who specializes in first time home buyers working with CalHFA Loans. We are also looking for an AWESOME lender who specializes in these loans. We were working with one lender and he just stopped calling us! This has been really frustrating and I'm starting to think that our dream for homeownership is not going to happen. It seems that all the homes that we can afford are in less than desirable locations. If you go through the city first time home buyer programs you have to give them back so much of the equity, that you don't have much left over. How are people buying these expensive homes and still staying afloat? It's unreal. Frazzeled Future Homebuyer

If you are a first-time homebuyer under certain annual income restrictions (very generous in the Bay Area) you will almost certainly qualify for CalHFA loans. We used them to buy our house. The trick is to find the right people to steer you through the process since most big banks and realtors, in our experience, don't particularly like working with CalHFA. Instead, we found First Home Inc. on Graham Street in San Francisco's The Presidio. Sergei Andruha and his helpful staff guided us throught the entire process, including the step-by-step procedure of obtaining and securing the appropriate CalHFA loans, and we were even able to buy our first small home without a realtor! First Home is a real pleasure to work with and I cannot recommend them highly enough. They also have a number of REaltors lined up that they work with. Contact Sergei at [Sergei [at]] and please do mention my name. We had worked before with of Oakland (another first-time homebuyer's advice non-profit), and although quite helpful, that agency does not have the professionalism and customer service dedication that FHICDA has. Anna S.

What is a fair commission?

Jan 2005

Looking through the advice on realtors reveals that many folks feel they got a good or reasonable or fair commission rate from their realtor when they sold houses in the area. However, no one specifies what good is. Can we share this information in this anonymous format to throw some much needed light on this tricky negotiation process?

Ok, I'll show you mine first. I interviewed two agents who work in the Oakland (Montclair, Piedmont, etc.)-Berkeley area. Both offered to represent the sale for gross of 5% (2.5% for buyer agent; 2.5% for themselves as selling agents). Both presented this as something of a deal, though I believe 5% is becoming the new standard (what was once 6%).

I'm also curious what terms people have negotiated for buying and selling with the same agent. Were agents willing to give any additional considerations for doing both with them? Clueless on commissions

It seems to me like with most things, with real estate agents and their commissions you get what you pay for. How good can an agent be if they will so eagerly drop their comissions? I wouldn't take a paycut on my job and offer the same standard of work. We valued our agent as our home selling experience was a vital one. We paid our agents 6% and got great advice and received the highest selling price on our home in our neighborhood. Also, we used the same agents for our new home and they negotiated us a lot of money back on the sale of our new home. Well worth the commission investment in our eyes as we by far earned and saved more than we would have with a reduced commission agent. We are so glad that we weren't trying to be penny wise and pound foolish. Jim
Re: Clueless on Commissions
As a Realtor in the East Bay, I feel it necessary to respond to the inquiry/comment regarding commissions. Although many agents will give a discount on commissions, it is definitely not the norm nor standard. 6% is still the standard commission base. Unless your agent acts in a Dual Agency capacity, they will only see half that (3%). Then, you agent is till subject to a further commission split with their broker which is sometimes as high as 50/50. There are many aspects of the buying and selling process which are both time and labor intensive. Not to mention the liability issues assumed by both broker and agent in each transaction. Then, you have escrow which in and of itself is like a new customer entering the transaction. Managing a successful escrow between the buyer, seller, both agents and the title company as well as inspection companies, contractors, lenders, etc. is no small task. If you do the math on the hours it takes from beginning to end and the commission realized at the close of escrow, sometimes the rate can be as little as $10/hr. To put it in perspective for you, that is about the same amount that a courtesy clerk at your local grocery store is paid.

So, although it seems as though Real Estate agents are over-paid and should be willing to negotiate their commissions, consider all that they are providing for you to realize the desired result (the sale or purchase of your home). Dedicated Realtor

Buying in another area - two realtors?

Jan 2004

We are looking at houses in Montclair, we currently own in Berkeley. Our Berkeley-based realtor (he helped us buy our current house) says that he can sell our house and help us look in Montclair. Although it's becoming more and more apparent to us that he doesn't know Montclair as well as we would like him to. He's a great realtor and we're sure he'll do a great job in selling our house, but should we go with a Montclair-based realtor instead? It seems like houses in Berkeley are easy to sell, so maybe we get a Montclair realtor to do both? I'd like to work with the realtor we have now for the sale of our house, but will it cost more to have two realtors? If it's best to go with one in Montclair, how do I let our realtor down easy?

Someone wrote in concerned that the realtor they had planned to use to sell their house in Berkeley wasn't somehow familiar enough with the area they had hoped to buy in, and wanted advice.

As the wife of a real estate broker in Contra Costa, I can tell you that financially, you will likely be better off using the same realtor, whichever one you choose, to both sell your existing house and help you buy a new one. At least in this area, many realtors will list your house for a very favorable percentage if they know they will also be able to help you buy a house (a more favorable price than if you were relocating outside of the area, let's say). If you truly like and trust your current agent/broker, my advice would be to be as specific as possible with him/her about what you are looking for in your new neighborhood. One thing my husband does for people who are actively looking for property is that he sends them a weekly report of everything new that has come onto the market with the buyer's preferred criteria, along with a summary of market activity for the past month (with the same criteria). This report is generated from the MLS, which is the most reliable and up-to-date source for listing information. You might think of asking your realtor for a report like this, unless it is already being provided. Good luck! Lisa

Leaving the Bay Area - rent or sell our old house?

Feb 2004

My husband and I are close to deciding that we'll be moving back east (where we are from.) This decision to move came about due to several factors: -most of our family lives back there. -none of us like to fly on a regular basis and the parents are getting older, less healthy -we just had twins -we need a bigger house, which would cost less (not a lot, but still...) where we're moving -neither of us are tied to our jobs

Now we're thinking about the logistics involved. Has anyone out there done a home exchange or rented their house to ''test out'' their move, so that you have a place to come back to if it turned disasterous? Or is it a bad idea to have that escape clause so to speak? And is the benefit of having that backup plan outweighed by needing to come back, and fix up the house to sell?

A little history: we are somewhat leery about moving because in the past, when we were childfree we moved to Portland and to Washington DC only to suffer culture shock and move back. The difference this time is: we have kids, our parents are older, we have a house (and hence equity). Also, we won't be moving to Portland or DC! Any input on moving, especially east coast v. west coast, home exchange, being near family as they age etc is appreciated.
Possibly moving

The best advice I ever got was to rent out our Albany house when we moved away. My husband was lucky enough to even get a leave of absence at work. We realized that if we did decide to come back, we might never get another home here (or one that we liked as much), and if we decided not to return, we could sell the house then.

Select your tenents very carefully. And, depending where you live, you will need to be VERY careful how you write up the rental agreement so you will not have to evict an unwilling-to- leave tenant. Be very clear from the start that it is for one year (or whatever time frame you decide). You will also want to consider how you will manage it from a distance. You might want to get someone local to manage it.

I suppose, in a way, not cutting totally loose made it ''too easy'' to return. We could have stayed in our new home (in central New York state, closer to family), and it was not an easy decision to return to the bay area. However, in the long run, we're really glad we kept our options open. R.K.

I decided to move out of the State as well. My motivations surrounded the fact that the public schools in my area are horrible, and I cannot afford private. Also, I wanted my son to have a yard to play in, and housing prices here are just not reasonable for a middle of the road income. I also toyed with home exchange (not a very receptive idea for families in the Dallas area where I am headed and I have Condo), also thought about renting my condo out, not as a safety net, but to let the equity grow for tax purposes. In the end, I decided to sell. I talked to my accoun! tant and my realtor. Both agreed I should sell, take the equity and invest short term while I find another home.

Im excited about my move, and it sounds like you are too, and you have all the right reasons. When you have a child, your priorities change. If you embrace that, and look forward to the new life you will be creating for yourselves and your child, much less the support you will be able to give to your parents, I don't think the transition will be difficult at all. Good Luck and God Speed

Home purchase on limited funds

March 2004

I would like to know if there are single mothers out there, who would like to purchase a home on limited funds. Any advice?

hi there, i did not buy a home when i was single but i had done lots of preparation for it (it just turns out that 6 months later, my boyfriend proposed and we got married, etc. etc.). you should check out this organization, w/h helps people purchase and refinance homes. you don' have to be single, just ''lower income'' based on the home prices where you are looking. i'm not explaining this very well, but check out the website:

How to buy a house

August 1999
Based on our fairly recent house-buying experience, here's what we found: (1) You have to trust your agent to do the right thing, and you have to do your homework as to what people have been paying for the various types/qualities/sizes of houses in the various neighborhoods you're looking at. We found that our agent was concerned if she thought we were overbidding, which inspired us to trust her and her judgment on many issues. (2) We found that a number of sellers would have been happy to let us do pre-offer inspections, because we could then write a cleaner offer. We only pre-inspected at one house, though, which we didn't get and so lost $400. The market has been so competitive that a number of potential buyers do a pre-inspection, which sort of cancels out a lot of the advantage it might otherwise confer on you I don't think not pre-inspecting on later houses (we looked for a long time and wrote a number of offers) was a big deal, except in one instance with a very nervous seller. I'm afraid that we found it generally boils down to money, money, money. If you offer more $$, the seller will probably take your offer over a lower one with a pre-inspection, unless the difference is pretty darn small. (3) If your agent feels the seller-provided inspection reports were done by a reputable company, and the reports are fairly recent, sure, you can trust 'em. But you need to be aware that those reports are written with GIANT loopholes. (4) Foundations are a pretty big deal. This is earthquake country. We got under contract for one house, had it inspected and found the foundation was returning to sand. There was some negotiation back and forth after that, but ultimately that house fell through. With the house we did buy, dry rot from leaky garage roof and pipes has been the big problem. If you buy on a hill, landslides can be an issue. You should check with the city to see what sort of permits have been issued for your property in the last 5 years or so, and you should also have your sewer lateral inspected if it's an older house you're thinking of buying. Replacing a sewer lateral is about $10K, so it's better to know now. Again, your agent should be able to advise you as to what might be a good idea for the individual property you're considering. Wendy 8/99 ---------------- Go to Nolo Press in West Berkeley and buy their book on buying a house. They are a coop of lawyers who write books for the average person. This book will get you up to date with current CA law, as well as give you lots of tips. It was great for us!! In general, CA protects the buyer very well. -Lisa 8/99 ---------------- My husband and I recently bought a house in Vallejo and relied heavily on the book, Home Buying for Dummies. The book tells you about all the factors involved in buying a house and what to look out for, and it does it all in non-realtor English, so normal people can understand it. Our house-buying experience turned out to be relatively painless. We also had an excellent realtor who did a lot for us without pressuring us into anything. Karyn 8/99 -------------- There are a couple good books on the market to help you with answers to your questions. One is Home Buying for Dummies, which is part of the for dummies series; another is How to Buy a House in California, which is published by the local, legal self-help publisher, Nolo Press. Your agent will guide you through much of this, and it pays to take some time selecting a competent agent. However, as an inactive (but licensed), realtor-associate who is in the housing market daily, I'll take a shot at some of your questions: 1) The incentive agents have to get you the best price is repeat business from you and referrals. Agents count on referrals and repeat business and the best agents hardly need to market their services to outsiders once they have a good pipeline going of satisfied customers. Unfortunately, in this crazy time of overbidding on houses, the market is driven much more by what buyers are doing to each other than by what good agents will advise. 2) You can always make your bid contingent upon this or that type of inspection and your approval of the results or willingness to pay for repairs up to a certain amount. This is common. Again, however, because of the current trend of houses being over-bid on, some buyers may be willing to purchase as-is with no inspection contingencies just to get the house. 3) Look at the date of the inspection report and the party that provided it. Ask your agent whether he or she has hear of the inspection company before. There are many pest control companies and roofers that agents should be familiar with and an experienced agent will have run across these firms before. If it's an unknown company, look at the report carefully and decide whether it seems realistic based on the apparent condition of the house. If you can't make a judgment call, then you should talk with your agent about ordering your own inspection. Just remember that once you have two conflicting reports, the chance for an argument with the seller that can blow the deal dramatically increases. 4) Other types of work--it depends upon what the problem is and how much the seller is willing to correct. You can also get an overall contractor's inspection and have someone give you his or her opinion of whether the house is generally solid despite this or that. 5) Although this is no guarantee the seller will be completely honest, there is a LAW that the seller must disclose all known defects of the property in written form & this becomes part of your purchase contract. his should include material facts that could affect the property's value, such as noisy neighbors or lots of theft in the neighborhood. Good luck! Becky 8/99 ---------------- House-buying: We bought four years ago and used a helpful book called Buying and Selling a Home in California (or something like that). It's by the person who writes the home news column for the SF Chronicle, off the top of my head her name is Dian (?) Hyman. I've lent it to so many people, I don't even know if I still own it! Nicole 8/99 -------------- We did this about 3 years ago, and landed in San Leandro. We liked the area because it was family friendly, had pretty good schools, and was more affordable than Berkeley (the same house in Berkeley would have cost 1/3 to 1/2 again as much). Your realtor might not have much incentive to get you the lowest price, other than losing your business altogether (which he doesn't want to do). There are some agreements you can make with your realtor that don't have them on commission, but I'm not sure how to do it. Make sure they are working for *you*, and not for the seller (it's bad to have the same office representing both you and the seller, for instance). We did inspections either right before making a bid, or right after, with a contingency that the offer was null and void if the inspection turned up bad stuff. This really saved us on one house, which turned up more than $60K worth of work needing to be done.... Should you run screaming at major foundation work? Probably. Depends on whether or not you can afford to do the repairs, or get the seller to do it before lending. The problem is that many lenders will not lend on a house needing major structural repairs such as this. (This was the problem in the house we backed out of, BTW, in addition to other goodies like a toxic furnace.) What can go wrong? You've mentioned the biggies. Other stuff to watch out for: *Really old (knob and tube) wiring that's frayed and unsafe *sinkholes in the yard (bad drainage; potential of slides) *old and bad plumbing (can be REALLY expensive to repair) *really uneven floors (can indicate foundation problems, and can cause damage to the walls and entire structure) Good luck! Dawn 8/99 -------------------- You should check with the city to see what sort of permits have been issued for your property in the last 5 years or so. I HIGHLY RECOMMEND looking at all the permits issued over the history of the house. It is not difficult (they are usually all in one file) and can be WELL worth it. The ones for our house told us a lot about the quality of various jobs, and revealed the presence of a landslide that took place 10 years previous. We discovered that the work to repair the slide was substandard. You want to know this kind of thing before you buy a house. There are some excellent books on house buying, and as this is likely to me your major investment and asset, it is well worth looking at them. I believe that you should not let the market rush you into doing anything haphazardly. Lynn 8/99