FIRST THINGS FIRST

FIRST: Prove, with documentation, that you are financially sound

The FIRST THING YOU NEED TO DO, before you go out looking at houses is talk to a lender to verify what you financially qualify for. It is always assumed, when you are out looking at homes, that when you find one you like and want to buy you can actually afford it and are able to get financing. When you make your offer, the seller will expect it to be accompanied with documentation showing that your offer is financially worth considering. A seller won't even give you the time of day without it, and neither will any REALTOR® who is worth working with. Further, for the past couple of years many sellers won't even let you see their house unless you are pre-approved for a loan large enough to pay for it.

Does this sound a little over the top? After all, it is a buyer's market and thus you are supposedly in the driver's seat, right? Yes, it's true to a certain extent.... but it's true only AFTER you prove to the world that you are good for the money. Nobody knows you until you prove who you are financially.

Now, if you are reading this before you have found a home you want to see, even better, because you are ahead of the game.

Getting a mortgage pre-approval is VERY easy...

All you need to do is pick up the phone and call someone in the mortgage business. However - since you are going to use your pre-approval document to substantiate your financial position to a seller, the best pre-approval would be one that came from a lender who has a good reputation in today's economy. Choose a well known bank and use them for your pre-approval. You may even want to contact two or three of them, because they each have different product offerings that may pre-approve you for a larger loan than one of the others.

Here are a few recommendations:

Hudson Valley Federal Credit Union. This is a local organization with a very good track record with mortgages. Call Nancy Lilly-Hamilton at 845-463-3014

Walden Savings Bank. This is another long-time well known Hudson Valley bank. They have been providing mortgages locally for many years. Contact Jack at

Wells Fargo Mortgage. This is a national company that may sound familiar to you, with a great record in providing home loans. Contact Scott Gunst at 845-222-4683

Bank of America. A national bank with probably the most familiar name in the industry. Contact

Remember that you are not making any commitment to obtain your mortgage from the bank you call - for that, they will need to prove to you that they are worth your business.

OK, now that you have documentation that supports your financial viability....

NEXT: It is time to choose a REALTOR® to work with

How much does a REALTOR® COST??

When you are buying a house that is listed in the MLS, the seller has determined the commission he will pay to the listing broker to market his house. He signs a listing contract stipulating the commission rate HE is paying. Therefore, the buyer does not pay the REALTOR® a commission, the seller does.

Some may argue that since the buyer is financing all of the purchase price, including the commission, that the buyer is actually "paying" the commission. NOT SO, and here's why: The bank is financing the purchase, and before they do this will have an appraisal done to substantiate the value of the property. The bank has an independent appraiser do a valuation for the property to validate that the sale price supports the value of the house, and NO less. The bank is not a charity, and they are not going to "throw-in" the REALTORS® fee just to be a nice guy. NO, the REALTORS® fee is on the seller.

The bank finances the sale price, and hands it over to the buyer, who then pushes it across the table to the seller. The seller pays the brokers the commission, and keeps whatever is left - after the commission is taken out, and THATS WHY the buyer gets the services of a REALTOR® for FREE...isn't that exciting? yes it is.

Actually the REALTOR® you choose is not always "free"

When you make a non-reasoned choice in who the REALTOR® is, the cost can be high. If you were to choose the first REALTOR® who comes along - the one who happened to be sitting in the office with nothing else to do that day, you just might be getting a newbie who is not experienced enough to advise you on something as important as say, the purchase price of the home...

One example: Shelly advised one of our buyers that the sellers agent on a house he wanted was the 'goofball' who didn't have a clue as to the value of her sellers property, and thinks it is worth $25,000 more than what it will appraise for - best case! Her advise? Don't negotiate, and walk away, because the sellers and their "advisor" are not being realistic on the value of the property.

Hopefully these sellers will think again as they see their first buyer go silent, but if not, oh well! At least our buyer won't be regretting throwing $25K down the drain on an over-priced house.

Moral of the story...choose a REALTOR® who has been around the block a few times.

Gray hair might be a good characteristic to look for.

Consider Interviewing Your Realtor

Even though the seller is paying the commission, giving you a "free ride," getting the full value our of your REALTOR® is certainly worth doing. Think of yourself as an employer who is hiring a representative to assist you in your purchase. Act like a human resources manager and interview one or more REALTORS®, and ask them;

• how they will be representing you,
• to describe some of their past experiences with buyers,
• to explain what their follow-up with you will be like,
• to commit to how much priority they will be giving you.

Ask questions, get comfortable, and make sure you choose a REALTOR® who knows how to value property, negotiate, work the suppliers, and take care of YOU.

That's where the money is.