mrsmaccmoo

Hi

We are both UK citizens about to move to the US with husbands work around late March (he is already there in hotel, whilst our UK house sale proceeds). We are in a real dilema about housing in the US....

We have been advised to rent for a year before buying a house.... sound advice as we don't really know the area very well (CT), but we do have an idea of the places/ towns we like. The reality of rental property (as we are bringing 2 dogs) is awful.... the only places that will take dogs are in a poor state of repair, and we're talking a monthly rent in the region of $3,000 (just for a normal sized house)..... when we add in the fact they want a 2 month security deposit (who knows if we'd see that again), plus a 'finders fee' of 1 months rental, plus a 12 month lease...... so a total of around $45,000 to rent a dirty, run-down house for 1 year.

On the other hand, we are fortunate enough to be in a position to buy a really nice house without a mortgage, so it feels all the more painful to rent somewhere and have that $45k going into someone else's pocket.

Obviously we are scared of making a big mistake, but we have done a fair bit of research, I understand that local schools are a big deal if we ever come to re-sell the property and we have narrowed it down to 3 or 4 areas. I know that if we bought and then came back to the UK in less than say 5 years, we would be out-of-pocket as there is a 5% estate agent fee when selling (is that really correct??!), but avoiding that $45k in dead rental money makes up for that surely?

What would you do - rent a really horrible house you dont like for a year, or go straight to purchase?

One other query, if I may..... we've been told that, as buyers, we must use a real estate agent and that if we dont, and simply find houses ourselves on the internet and approach the sellers agent direct then we would only be able to go to open houses (not be shown round specific properties).... surely this cant be true??! Do buyers normally link up with a realtor, and if so, how do you decide which one to use, and do we as buyers have to pay the realtor for this service?

Thank you in advance.

Pulaski

The 5% you quote for a realtor's fee is not correct. It's 6%! .... The buyer's agent is "free", because buyers agents are paid out of the 6%. ..... The cost all falls on the seller.

You don't have to use a buyers agent. I have bought houses without using one, but honestly I wouldn't recommend buying without one to first time buyers (in the US), especially as there is no out-of-pocket cost to you

jibsymalone

I wouldn't say you HAVE to use a realtor. I can only talk from personal experience (things may differ in different states or even counties), we bought our house without the use of a realtor, because of this and the fact it was a cash sale we managed to beat them down a long way on the price and actually closed in just 10 days (another good bargaining point with the seller).
Realtors work off commision (from what i understand at least) there are plenty of "by owner" house sales dotted around, this is how we came to find ours. As far as houses listed on the MLS sites i believe you will need a realtor to see those as they usually have to make an appointment with the homeowner or will have to access the lockbox on the door to get the key to let you in if the property is vacant. There is nothing stopping you using a realtor to go look at some houses, they do not charge for that, they hope they can find the perfect house for you and get paid from the commission's. we looked at several houses with a realtor also, when we came across this one we just told her we didn't need her services any longer.
As for rent vs buy, to me it makes more sense to buy outright, that way you are not spending "Dead money" on rent. Saying that, it may be an idea to rent for a little while just so you can get a feel for different neighborhoods around the area you are looking at, take your time finding the ideal place. What maybe the ideal house and location for one person may not work for you, so word of mouth cannot always be relied on. Do your research on possible areas, go visit these areas at varying times of the day and night and see if it somewhere you can see yourself living, get a couple of these areas lined up then start house hunting!!
Again this is a lot of my personal feelings and how i would approach a similar situation.

S Folinsky

First, I find myself somewhat amused by having two dogs AND noting that the places allowing pets are in "poor repair." Sad to say, there is a connection.

Would like to point out that the "U.S." is a big place. And not even "Connecticut" is that small.

OP's other half is already on the ground, so to speak, and is in the best position to make what is admittedly a hard decision. Hopefully, there is already a local friend who can be trusted to make the decision as if it was her own.

Pulaski

You should consider yourself lucky to have got away with that, because, round here at least, buyer's agents want a three month exclusivity contract, so they get a piece of the commission no matter what. Otherwise, they run a real risk of doing real work, and running up real expenses (gas bills) only to be stiffed by people like you who think it is OK to not pay someone for services provided.

Flabound oneday

facing that sort of loss, I would buy.

you say 6% commission is bad (and you need to add another 1.5% approx. to cover title etc if seller pays) BUT if you factor in home inflation ,unless the market crashes you should more than cover that

if you pay say $400k for a house and lost the 6%-7.5% on it that's still 'only' a 24-30k loss and you would have the benefit of having your own home to do as you please.

Flabound oneday

sorry but that's actually a pretty sh1tty thing to do, I would be embarrassed to admit it.

Nutmegger

Which part of CT will you be in? There are areas where $3,000 won't buy you much, others where you should get a very nice place. When my friends sold their house a year in advance of moving to CO, they rented a nice apartment -- along with their two big dogs -- for much less than that. Does your husband's company offer the services of a relocation expert when it brings in employees from overseas? I really would recommend working with a relo realtor who knows the area and is familiar with apartment complexes and rental properties -- and when you are ready to buy, using a realtor does make life much simpler. Perhaps your husband's new colleagues can recommend someone they've worked with if the company doesn't have a relationship with anyone. By the way, you mention the two month deposit -- usually described as "first and last month" -- but places that accept pets often want a third deposit against damages, which is returned when you move out and leave the place unscathed.

notonuksoil

We have just purchased our first home in the US (NY) having rented for a number of years first. Mortgage rates were excellent and property prices had reached a point where we thought "now is the right time!"

We didn't use a realtor (estate agent). Around here most new listings have a realtors open house on a Tuesday morning at 11am-12. I knew the area VERY well and every Tuesday would drive around and see the boards outside, I'd walk into the houses and just pretend to be a realtor

When we found the right house, we called the listing agent and arranged another viewing with him (didn't say I'd already seen the house) then we made him an offer - would he prefer to keep all 5% of the buyers /sellers realtors fee or split it 2.5% with another agent! We got the house we wanted he got all 5%.

jibsymalone

Why is that a sh1tty thing to do? If we had liked any of the houses she showed us we would have bought through her! So are we not supposed to look for ourselves in the meantime?? we did our own work, found our own house, she had NO input at all on the house we ended up buying. In fact if she had listened to us from the get go and showed us what we had initially asked for from the beginning instead of what she "thought" we would like then her chances would have been greatly improved!!
so no I am not embarrassed in the slightest by saying that!!!

Pulaski

As I said earlier, I am surprised that you didn't have to sign a buyer's contract. We did in both NY and NC. Given that the seller pays, it was no skin off our noses anyway.

Yorkieabroad

I recognize the difficulties of renting with pets (I'm a landlord and don't allow dogs/cats, although I have a dog myself), but if it was me, I would really push hard on finding a rental.

To me it's not just a matter of possibly buying in the "wrong" place, but also the risk that a potential 5 year posting may turn out to be significantly shorter. And when postings get "shortened", it often happens at extremely short notice. We were in Singapore when we were "shortened", lost our work permits and had a month to get out. We were extremely glad to be able to give a months notice under the diplomatic clause in the lease, and basically walk away.

Here in the US, we currently have three friends/acquaintances who came here on long term postings with large multinationals, with promises of green cards and all sorts. They bought, and within 2-3 years found themselves to be unexpected long distance landlords from Bahrain, China and North Dakota. Far from ideal to my mind, but each to their own - just throwing out an alternative potential future to throw into the pot!

Pulaski

So your situation is just about the polar opposite to the OP's situation. .... And given that there was no cost saving to you, I still don't see anything to brag about not using a realtor.

Yorkieabroad

Curious...why did you end to pretend to be a realtor..? Round here anyone can go to the open houses- that's kind of the point of them

Also curious on the 2.5% vs 5%.....of course the realtor would agree to it... but what was the advantage to you? Do you think you got a better price, or moved up the pecking order?

Nutmegger

Here there are often realtor open houses during the week, where the people "in the trade" get introduced to new listings by the listing agents, then at the weekends -- usually Sundays -- there are public open houses that anyone can attend.