Real Estate Matters

Home-buying resolutions for the new year

By Ilyce R. Glink and Samuel J. Tamkin
Saturday, December 19, 2009

If you're planning to buy a house in 2010, here's my annual list of New Year's resolutions you should consider making.

-- Get your credit and finances in shape. If you want to take advantage of today's low interest rates, you need to have a credit score above 760. The higher, the better. If your credit score is below 620, you'll have trouble getting even an FHA loan.

-- Know how much you can afford to spend before you shop. Getting pre-approved has never been more important. You'll need documentation (W-2, tax returns, account statements, etc.), so get it together before you contact a lender. And shop around. Each lender sets its own fee schedule. Get the best deal by contacting four or five types of lenders.

-- Know the neighborhood, and be comfortable with it before you buy a home there. Houses are great, but neighborhoods that are littered with foreclosures may be unstable for years. Spend time in the neighborhood before falling in love with a particular house.

-- Interview at least three brokers before hiring one. This is the single biggest purchase of your life. You deserve to have the best representation. Interview at least three agents or brokers before hiring one. Ask questions about how many transaction sides they've closed, what price range they work in, who their typical customer is and what kind of technology they use. Hiring an agent is like being in a marriage. You want it to be good, supportive and productive.

-- Read and understand all documents before signing them. I know loan documents are long and boring. So what? You're committing to the next 15 to 30 years of your life (less if you refinance). Take the time and read your loan and purchase documents. Make sure you understand what they're saying. Make sure the numbers match what you were promised. And if they don't, speak up before you close -- not after.

It seems to us that our mortgage broker violated our privacy. She is a friend of our real estate agent, who was acting as a dual agent in this purchase, and numerous times she provided him with information that he did not need to know and might have been detrimental to us.

She told our real estate agent how much of a loan we were pre-approved for before we told him. She informed him of how much our house appraised for before she even told us. And she told him we had clearance to close without even bothering to inform us at all.

I had at one point explicitly told her to stop sharing information, and that such information should go through me. But she said she was permitted to do so because it was necessary for her to get the loan to go through. This seems false. She could have told me, and I could have told our agent.

Am I right to be angry? Or is this just how it's done?

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