Realtors of LetsRun, why shouldn't I sell my home withe Redfin? What's the best way to shop for a mortgage?

Redfin is nice. Lower commissions.

Look for lowest rates also consider closing costs.

Borrow as little as possible.

ARM because rates will probably go back down once things get back to "normal" and inflation and gov spending go down.

I’m not a realtor, but I have sold 5 homes (via a realtor).

You would likely have had much better luck listing it yourself 6 months ago. The market has softened. You’ll have to coordinate the showings, which depending on your family schedule may be tough (or not).

Often the buyers agent will still want there cut of the commission, but you can certainly say no.

I would normally say borrow as much as possible, but rates are relatively high today. I’d imagine being self employed you itemize deductions so that takes the sting out of the interest a little bit.

Yes, get the lowest rate you can, but watch out for points up front.

I’m well educated, but I don’t have the patience for all the administrative work for contract and closing, so I’ve always used a realtor.

It’s worth a shot to list it on your own if you have the spare time.

I feel a certain someone is about to chime in here with more real estate nonsense.

The last person to ask those questions is a Realtor.

1. The main benefit of a Realtor is access to listings before they hit the MLS (that is how I bought my home) and access to lazy buyers who are not looking at the online listings. And Realtors tend to steer their clients away from Redfin and sale by owner homes because that is the racket they run. Realtors also have proprietary sale contract forms that you will get to use and do help with the whole EMK, inspection, escrow and closing routine. Otherwise, it is pretty hit or miss with Realtors. A few really know their market and can tell you everything from schools to crime to noise and so on for every house you look at. They should also know the market and help you with the sale price negotiations and any concessions you may need to make after the inspection. Most anyone can handle all of this on their own, but it is a chore and there are pitfalls in trying to do it without anyone helping you.

2. If you go online and just go with the lowest rate you can find (taking into account the fees and points), you will end up with a scummy mortgage broker who will try to bait and switch you by claiming that your loan can't make it through underwriting. My dad has 800+ credit and a solid investment portfolio. When he financed a condo in FL with an online broker, they told him that they would have to redo the deal with a higher interest rate and fees because of problems in underwriting. He had to get his lawyer friend involved to get the loan closed. They almost didn't get to closing. Get recommendations from friends on local mortgage brokers and shop rates at a few. Having a smooth loan process and closing is worth paying a few extra bucks a month on your mortgage.

Interest rates are too high to make it worth it to take some cash out unless you need it for renovations/repairs to the home. And the prices are still a bit frothy and appraisals are stingy. You will not want to over extend and be upside down if the market hits the fan. Also, you will need to reinvest what you get for selling your current house into your new house to avoid a tax liability if you sell your current house for more than you paid for it.

3. ARMs are for idiots. Even with rates being higher than they have for a while, it is better to go fixed and then refi if rates drop. If you have an ARM and the rates keep going up during the teaser rate period, you are screwed and could be in big trouble if the market drops and you cannot refi.

Just understand what you're paying for with a RE agent. They don't have an incentive to get you the highest price, but rather sell close to market as quickly as possible. For every $10k in sales price, a seller's agent will probably only pocket an extra $150. Do you think it is worth it to them to advise you to hold out for a higher price? It's no wonder why agents who sell their own homes are on the market for longer. I would be up front with an agent to let them know you don't mind holding out for the right price. Or, just accept that you're not likely to get top dollar if you move quickly but are willing to trade that for other factors such as confidence in closing. Seller's agents just don't provide much value in a seller's market. One good experience I had was with a home that needed a lot of work done and the agent was able to connect me with contractors that could do quick work.

Buyer's agents - at least good ones - do provide significant value if they know the neighborhoods, school systems, and builders in the area. I was able to avoid bad water pipe installation in a home around RDU because my buyer's agent knew the area so well.

Do you like your area and house aside from the size? Could you get an add-on built to expand your space?

Most of this is good except the advice on the ARM. That becomes a simple math equation. If the teaser period is less than 10 years, don't do it. If there is more than a 100 basis points difference in the ARM rate and fixed rate, take the ARM and pay like a 20 year. Do the math and you will find out just how far ahead you end up at 10 years. Then you can refi or take the adjustment, but you are so far ahead vs taking the 30 and making minimum payments. Think of it like a forced savings account. This method does require diligence and staying on schedule, which your bank doesn't think you will do.

You don’t have to be a realtor to list on the MLS. Just pay the $300 fee for listing like they do.

Keep in mind that I am a Realtor in TN. Things are different state to state. But of course I'm going to tell you to go with your agent. I don't know exactly what the Redfin commission is but when you go with a discounted service, you will get discounted service. I don't agree with the above poster that said Realtors steer clear of Redfin homes. If it's in the MLS, and it's a home that fits my clients' search criteria, then I send it to them. It is not in my clients' best interest if I'm only sending them homes that is going to pay be top dollar. And I've sold a few "FSBO" homes as well. They still typically will pay a 2-3% commission to the buyer's agent if asked. But if you find a for sale by owner that you like, then you could likely just contact your attorney to type up the paperwork for you. It is typical in TN for the commission to be 6% paid by the sellers and then it's split between the buying and listing agent. So if you don't use a Realtor to sell your house, at least hire them to help you buy as it is of no expense to you. And they will work with your best interest in mind. The listing agent represents the seller and may not give you the best advice.

Another benefit of your Realtor, is they likely have several local lenders that they know, like, and trust. Reach out to them. The local lenders will give you a competitive quote and you get to talk to the same person for the entire process instead of someone else every time you call at a place like QuickenLoans. And that local lender will give you the best advice about what kind of loan to get. From what I've been told (I am not a lender), An ARM is best for someone that doesn't have great credit, but has a good amount of money for a down payment. And also doesn't plan on staying in the home long term. Like less than 5 - 7 years depending on what kind of ARM you get. It's likely best for you to get a fixed rate. The type of loan you get will give you a clue as to how much to borrow. If you borrow a lot, then your mortgage payment will likely be a lot higher. If you only borrow a little bit, then your mortgage payment will be much less. So it's all a matter of what is best for YOUR situation. Everyone is different.

In my town, the local “stud” realtor that gets the most listings and sales steers clients away from inspections (that should DEF have inspections) and often shows houses buyers cannot afford (until they bring in a co-signer). We call her Qanon because every time I chat with her she tells me some conspiracy theory about trump and that he’s going to be in office soon.

realtors are entirely worthless if you know anything about the housing market.

Hey Rojo,

I'm a loan originator down in West Palm, but I grew up in HOCO and think I can give you some solid advice...

1) I'm a huge proponent of using a SOLID realtor to sell your home. You'll need advice on pricing in this market, you'll probably want someone in your house for open houses(so you don't have to do it yourself), you'll want someone with a big database of agents and buyers to pre-list your home, etc etc etc

If the Redfin agent is professional then by all means go with them...but I'd think a little bit about why an AWESOME agent would settle for lower commission. Think about attorneys; you probably wouldn't be comfortable with the competence of the lawyer who's "selling proposition" is that they're far cheaper than anybody else.

2) Now here I'm really biased. I'm a mortgage broker(I actually own the company) and us brokers can shop your scenario to different lenders. Normally small brokers like me are cheaper than the lenders(a bunch of reasons why...less overhead, competition etc).

Unless you have millions to invest...then the JPMorgans of the world will give you a jumbo loan(over $647200) basically for free. Us brokers can't touch that with a 10 foot pole.

3 and 4) There's no way to answer this question without knowing what's under the hood...but rates have somewhat stabilized(although they did shoot up a bit a couple days ago).

Example, if you put between 20 and 25% down and have credit of 740+ you're looking at a 30 year fixed just under 5. ARMs are actually less competitive and are in the mid 5's.

Hope this helps!

Jason

You should absolutely sell your house with Redfin. I sold my house with Redfin in October in the greater Seattle area and had a great experience and saved a bunch of money. The original buyers had a financial issue and fell through and my awesome Redfin realtor was on the phone with everyone who'd looked at the house and found new buyers the SAME DAY. He was on it and had a nice support system from Redfin. Note we did not need handholding.

I mainly do PM and development. Hence the cynical perspective on residential brokerage:

Sellers don't need an agent, just market exposure. Flat fee or FSBO is fine.

Buyers (not all but most) do need an agent. The buyers mortgage broker and the title company do all the real work, but there is important hand-holding too. I recommend offering a buyer agent fee at your local market % even if you FSBO.

I've only done mortgages through local brokers. My broker has done nice stuff like advise on days to lock rates and eat the cost of an extension, but I don't know if that is better than online brokerages.

Saw someone mention that having a buyers agent costs you nothing. That is a common mistake. The buyer pays the sellers agent and the buyers agent. Think about it. The purchase price reflects the cost of both agents commissions. Without realtors, housing costs wouldn't be as inflated.

Rojo....get a handle on your typing and spelling. I'm not a stickler, but this is at least the fourth prominent typo in less than a week. A typo in the body of a message board post is one thing, but you've published multiple articles and thread titles with obvious and glaring typos. Not a great look for someone trying to pass as a professional.

I did say in the state of TN, it is common for seller to pay commission. The buyer doesn't pay anything. Every state is different. And I have seen deals where the buyer REALLY wanted the house and offered to pay the commission. It's all a negotiation. There is nothing that is set in stone. Just what is common.

You don't get it. The buyer is the only one paying anything, therefore they are paying both the sellers and buyers agents commissions. It's built into the price.

Realtors are paid like this as far as I ever saw..

Price 100K. So the buyer brings 100K to the closing.

3K go to each broker

Misc fees go to the lawyer, title guys, other misc. stuff

So.....100K-6K-Misc = ~92K lets call it, goes to the seller.

Who pays that ~8k? Only depends on your perspective but certainly no buyer is bringing 108K to the closing. But becasue they are the one bringing money, they're paying in that sense. The seller might "feel like" he is paying but presumably he has factored commissions into the listing price.

Probably a better explanation than I was giving, but essentially the same thought. There are no "free to the buyer" agents. The entire process is actually completely disadvantaged to the buyer. Realtors get in the way, are pushy, and don't care about you after sale is done. Your largest purchase of your life should not be rushed and should be done face to face with the person who lived in the house. End of story.