Expert: Jessica Bryan - 5/27/2009

Question
First time buyer looking for a cheap starter house. Probably not my ideal house, but something I can at least put my money towards instead of continuing to rent. Something cheap that may require maintenance (~$50k range or lower perhaps). But something I could at least resell or use as an investment property down the road.  I'm looking for a starting point and what’s required, and or helpfull to know... any input you have to offer is appreciated, and however indepth you consider going or feel is relevant at this point is up to you. I will be looking into everything suggested ASAP, so I can hopefully move into a budget home instead of renewing my current lease.

What I already know is very general and sketchy in the details.  I know...
-   i should go through the pre-approval process for a mortgage loan beforehand.
-   i know a lot of people are recommended to use an agent, but I don’t know the specifics..
I don’t know...
-   Should I just go threw pre-approval for a loan right now with any lender and then shop around later? Because I would need to give all my info and go through the approval process for each bank or institution just to find out what kind of rates they would offer me? I’m aware my credit and income affects my rates, but each bank's offers wouldn't have a universal standard and would vary, No? Would it be a good idea just to start the process at a bank I already have active accounts (checking/savings) with?
-   Are agents services free for finding properties for buyers, or is that just case dependent?
-   Because I’m not looking for a great house, mainly concerned with location, and that it doesn’t have a terminal issue such as: located in a contaminated environment or crumbling foundation. And budget is of importance right now to me. Would it perhaps suit my situation to go through the closing process on my own, instead of using an agent/lawyer /and whoever else u normally need? If possible I would like to explore that option. I do not mind taking the time to learn what I need inorder to do that.

PS. I realize this is a very broad topic and would not mind at all if there are previous questions or info you know of that have the info or part of the info I’m looking for, but I also realize my goal is little different then the average buyer, since my standards may be lower. As I’m not currently an investor, but looking for a beneficial situation especially with the current market. Apposed to leasing. So also feel free to simply link me to the appropriate info you feel is relevant. And or info of what Not to do, sometimes I've also found it quit helpfull learning of mistakes others have ran into down the same path, which consequently gives me an even clearer picture on what Should be done.

Thank you very much for your time, and any info you have to offer.  Appreciated

Answer
Dear Joe;
There are many sites that can walk you through the preliminaries of house buying but a good agent can be of more service than anything else you do.  You can call a local real estate brokerage and ask the manager who is a first time homebuyer specialist.  This person will help you to understand the real costs, advantages and disadvantages.  Trying to buy something on your own is full of problems and mistakes.  A buyer's agent in most places doesn't charge the buyer for the service.  The seller pays the commissions.  However, it is important to ask that question since it may be different in your state.  If I were you I would speak to  the loan officer in the bank where you have your accounts right now.  They should review your finances and income to give you a pre-approval letter .  Once you begin working with an agent and if you find a house, you will need to do inspections, search title and find a closing attorney.  These steps can be handled by your agent and attorney.  You will also need homeowner's insurance and an appraisal.  Your agent should do a history work-up for you showing the values and sales history of the neighborhood.  The home should be a good investment for you and not a mistake.  Also, be aware that if you purchase before the end of the year you are entitled to a tax rebate.

Best wishes,
Jessica Bryan