My first thought when reading your post is to do some shopping yourself first online or at open houses. If your area doesn't have many listings or open houses that might be very helpful to you.

I don't know your credit union but possibly first determine what price house and mortgage will work for you. Mortgage cost is one consideration, also the type of house you will be comfortable in. You won't know that until you determine the price of houses in your market, sounds like you've made some progress as you know the letter is too low. My point on waiting to change it is to wait until you know what price you will make an offer.

I wouldn't want to be assigned an agent from your credit union, as a first time buyer you want to know you will work with the agent. Have you looked at local signs, is there an agent name you keep seeing? Have you looked online to see who the experienced agents are in your area?

Meet with one when you think you have one, but don't commit until you are sure. You are smart to make location most important and of course affordable for you.

cmarlin20 has excellent points. I agree, getting a Realtor assigned through your credit union will be hit or miss as to their experience and knowledge. The automatic hit of 25% off their regular split (say 50% to 75% of the commission paid to the office broker of record) would mean that you are more likely to get someone that is new to the real estate business which may not be helpful to you at all. The 25% fee the Realtor has to pay will eliminate many Realtors with experience and knowledge and leave you with either the new agents or agents that don't treat their business as a career.

As to the pre-approval being low, I am concerned that the LO (Loan Officer) just plugged in your number rather than figured out what maximum you can afford. The loan program and your debt and income (and the programs maximum allowable DTI) will determine your maximum mortgage qualification. You shop for something less expensive once you know your max budget. You are the buyer, you choose how much you want to spend ultimately but you want to begin your search using factual information. All my clients have budgets and we stick to the budget set by the buyer.

Also, FYI, each lender can be more restrictive than the loan program guidelines by Fannie or Freddie or FHA/VA or USDA. There are many CU's that don't process their own mortgages - they farm out the origination and processing to a third party. That is not a good thing for you or any other borrower. One of the most critical steps is getting a knowledgeable LO.

A good Realtor has a short list of excellent LO's and LO's/Lenders from which to stay away. I would say your best best is to shop for an excellent Realtor in your area and then find another lender, referred by the Realtor, to compare to the pre-approval and mortgage loan cost estimate you have from your CU.

Hint: If the Realtor has the CRS designation, you are not getting a noob. You're getting someone experienced and knowledgeable. Go to CRS.com and look up agents in your area.

thank you for the replies cmarlin20 and denita. I'll look at crs.com and check it out. any other realtor designation/certification i should look for? i'll have to rely on finding a realtor online, i think looking at crs.com will narrow it down for sure and make my search easier.

this might be a stupid question, but do realtors with extra certifications such as CRS for example, get a higher commission, in other words I'd have to pay a higher percentage of the commission? (not that i mind, i'm willing to pay for better service for realtor to help and guide me through the buying process)

Remember, there are no stupid questions. As a buyer, you don't pay the commission unless you sign an agreement saying you will pay one (don't do this).

The sellers pay the commission to the listing office and the listing office agrees to split the total gross commission with the selling office. The buyer's agent doesn't work for the seller. The buyer's agent works for the buyer. One of the first things the agent will discuss with you is agency relationships - there are several and you choose one.

To answer your question directly: Realtors with extra certifications usually negotiate a higher split with their broker, but it has no change on what the seller pays in commission to the buyer's brokerage. It is the exact same amount if the Realtor is a noob or is experienced.

The Realtors at CRS.com have to not only take many courses and tests, but they have to prove their sales to the organization (and there is a required minimum amount) so you are not getting new agents at all. You are getting experienced agents.

The other thing you might want to do is check with friends and family to see if they used someone they are happy with and at least interview the agent. You will want to feel comfortable enough when you interview them to talk about finances and home preferences.

An emotional connection with your realtor is just as important as certifications. I found my first realtor by calling about listings I liked and then meeting with the listing agent. I'll never forget the agent who actually laughed in my face when I told him my budget. Needless to say, I didn't end up working with him (and I ended up finding a great house). You'll be spending a lot of time with your realtor and he/she needs to "get" you.

Good advice on thread- my take:

1. Find a Realtor who regularly works in your area of focus. Seek a buyer's agent, and don't be afraid to ask Realtor's in your area (who list, the most) to recommend. Get recommendations, from others in the neighborhood. But do make sure that whoever you work with is expert in that area of your market. Contacts matter, Realtor to Realtor-even an agent who has in his/her back pocket sellers who may be ready. A good Realtor has this in his/her arsenal.

2. Really determine the values of what you see as purchases you'd make. Get comps- real ones, from sales in the past 6-12 months, depending on how hot the area is.

3. Pepper your buyer's agent- are we in a buyer's or seller's market? How much leeway do we have, within asking price and what they're really getting? How, best, to "win".

4. With that info, go back to your lender. What you're looking for here is the most realistic picture of what you can actually get. Is your buying power realistic for your targeted area?

5. Stay away from "too cozy" relationships, like the one you've described. In a real estate contract, you (as a buyer) benefit from a Realtor who represents only YOUR interests- not those of the financial institution he/she works for. Lots of fees in what you describe- might not save you a thing.

6. I think that a pre-approval letter from a reputable financial institution is essential, within negotiations. In a decent market with a sharp listing agent, it's unlikely a seller would entertain any offer without assurances that you will sail through financing.

Good luck, and keep us posted.

Sounds like good advice from above. One thing I want to mention is that when you do find a property that you check it out fully in addition to inspections that you also check and consider the location and any future developments that may happen in the area especially if there is open land nearby. Also check the sex offender registry to be aware of who might be living nearby - doesn't mean one won't move in later though.

The last one is especially fresh in my mind as we just terminated a contract yesterday based on this and the information we found out about the person. We deemed him to be too high of a risk based on the court records we ordered. It was worth the 69 dollars we spent. We have a young daughter so wanted more info on him as it was an offense with a young girl. We did a criminal back ground check for $3 dollars and then requested copies of all court records related to that crime. Not pretty reading, but the cost was worth it. This is all public record.

Ideally I would have checked the free record before we even visited the property and submitted our offer, but didn't think of it until we already had so we quickly ordered the court records as we had already fallen in love with the property and wanted to see if there was a potential of a mistake or false accusation etc. I have now familiarized myself with all the locations of offenders and will stay away from those areas as we now continue our hunt in our target area.

Oh for the pre-approval letter. Just ask them what the max you would be approved for. You really only want the letter to present with an offer and you don't want the letter to show higher than what you're offering so often they put what you tell them on the letter. You may ask for a new letter if/when you make the offer to keep the number for what you're offering.

lyfla just said what I was going to say. :) Let's say you can technically afford $300k, but you're putting an offer in on something for $250k. You don't want the home owners to know you are pre-approved for up to $300k - so the letter would be written to show you as pre-approved for $250k. There is no value to you in letting home owners know your max budget.

'I plan to buy a home in the next 3 months, but I'm willing to be patient until I find one at the right price and in the neighborhood I want.'

Lost, when I read this part of your post, an alarm bell sounded over my shoulder.

In my opinion it would be a mistake to think this way.

But to answer your question, I personally would NOT choose any company's 'preferred' anything.

I would get out there and go 'shopping' for a real estate agent. Suss them all out and then listen to your gut feelings.

^^Absolutely right - find your own agent. Get referrals from family and friends and interview them to see if they are the right fit for you.

If you make an offer you can make it stronger as well as instead of being just pre-approved you can be pre-qualified. We did that recently as the bank we use that is all they do. It means that they have looked at all the documents you need to provide for an application and not just some simple input. This means that you are much closer to actually being fully approved and a small hiccup is very unlikely to occur unless you suddenly go and spend a lot of money unexpectedly.

Our offer was stronger than any other due to this without going over list price.

Pre-approved is stronger than pre-qualified but those terms seem to be interchanged regularly by consumers. Pre-qualified usually means they have just checked your credit and not your income or asset documents. Pre-approved is when they have checked all of your documentation. There is a step beyond where you have been through underwriting subject to finding a home to buy. That sounds like what you did lyfia and that is a good thing. It is as strong as you can be without having an actual contract in place. When you actually get a contract then underwriting can be completed based on that home.

Having an approval for more than your offer does not mean you offer to pay more than list at all. It means you have the capacity to buy a more expensive property but choose not to do so. Your offer is independent of your approval amount. The pre-qualification or pre-approval is meant to show you have the capacity to close. If you are buying at the top of your approval range, its possible that you won't be able to close if there is any change in the figures used to generate your pre-approval. Just because you are approved for a $300k purchase doesn't mean you have to spend that amount. In fact, it is better to spend less than your max for many sound financial reasons.

Yes. Pre-approval also signals to a buyer that, should your offer be accepted, you're ready to go with a lender. Quicker closings, of course with time for inspections and title du diligence etc. As somebody has already pointed out, this can help elevate your offer over others not as solid, even if its a bit lower than others. A good Realtor can see the difference between a ready buyer and one who's just casting and hoping. Be the ready one!

Oops looks like I got the terms mixed around, but it's what they told me. So they must have mixed them around too.

Just want to point out one thing, it's hard to go against a cash buyer in seller's market. Bidding war is impossible to void these days........