Expert: Karyn Foley - 3/31/2004

Question
Thank you, Karyn! To answer a couple of your questions, I am writing a following question/memo. I have been searching for condos/townhomes (as you already suggested) in the Sacramento County. And, from a couple of sources, I have been told that I could get a home with zero down payment since my buying power is not all that great. To my surprise, I did manage to find a few places which range from $80K to $110K. Do you think that I should go through the seller's agent at this point if no one else is willing to help me out?  Or, do you personally know or recommend anyone who works in Sacramento County & works with someone like me? Thanks, again.

Followup To
Question -
I am a first time buyer with pre-approved amount of $120K. I have been trying to get an agent to work with me, but I have been very unsuccessful. First, can an agent turn me away for the simple reason of not having a high buying price? Second, who pays the commission for buyer's agent? Thanks.
Answer -
Dear Peter:
 I am sorry you have found it difficult to find an agent willing to work with you.  Not knowing what area in which you are looking, I can only guess that there are no homes at that price, or, for what you are seeking, the price is not reasonable.  You did not mention the amount of down payment.  If you have no down payment or a very small down payment, you will not be a viable candidate in a market with low inventory.  A high down payment assures a greater possibility of success.
 If there are homes in your price range, you should realize that this is not the year that Buyer's are able to negotiate.  There is more demand than there is supply.   
If you are not prepared to go over asking price, you are not a player.   If there are available homes, please give some thought to purchasing a home less than you can pay, and make the highest and best offer:  go over asking price!
 While it would prove helpful to have a reason that you cannot find representation, an agent is not duty bound to discuss with you the reasons you have not been helped.  You should ask directly, and be prepared to handle whatever barriers stand in your way.  If you can handle it by being able to resolve the problem is one thing; not being able to resolve the problem indicates that you cannot compete in this marketplace.
 It is sad that decent people cannot buy a home for themselves and/or their family.  But do not think that this market will last forever.  Structure a sound savings plan for stashing aside as much money on a regular basis as possible.  Then when the market changes, you will have greater buying power.
 Please consider the option of condo/townhouse/coop living.  And many communities have popular mobil home parks.  Also, if your income is adequate, contact your local government agencies to seek if there are programs to help those who need it.
 Run your credit status; maybe your credit needs some
work.  Find out from a lender how you can get a high or higher Fair Issacs Credit Score.  This could influence your ability to buy.
 I hope that you can work this out, and that you can find a home of your choice.   Remember, everyone does start small.  It is not a shame, it is an opportunity.  Good luck to you!]
KARYN FOLEY

Answer
Dear Peter:  What do you mean by the statement that your buying power is not too great?  If it means that your credit is not too great, that may well mean that you will find it difficult (if at all) to obtain a loan, especially a loan with 0% down payment.  By all means, contact the seller's agent after you can establish that you can obtain financing.  The seller's agent may well be able to recommend you to a mortgage broker who can verify your creditworthiness and be able to make the loans you want.  The government is eager to help first time homebuyers, but qualifications play an important part.  Good luck to you.  I would have been happyt to refer you to some one, but this may be considered a conflict of interest.  Also, I work on a referral basis, and the amount of the purchase and the referral fee necessitated may lessen the eagerness and incentive of an agent.  You should try the seller's agent or call three of the top companies that work the neighborhood and ask the managers of the office to refer some one appropriate to the circumstances.  Congratulations on not giving up!  KARYN FOLEY