Depends if you are familiar with the area. If you know the area and what you want, the realtor does basically nothing for you. If you don't know the area and don't know where to look for your demo/price range/school needs, realtor might be able to help you.
Problem is when you are a buyer your realtor gets paid more the more money you spend. Of course they aren't going to recommend you double-counter and/or have demands. Seems like a conflict of interest to me but who am I to criticize or question the necessity of the real estate agent industry, after all, I'm just some dude with access to the internet.
Realtors want fast and easy; buyers and sellers often want to min-max. If you are buying or selling, I think the best thing you can do is be up-front, direct, and certain about what you want and why.
We bought a $300k house and put 5% down. We didn't have the downpayment to put 20% down but we had enough to pay $7k up front to buy out the PMI. Since its typically about 10 years to reach 80% LTV ration, we would have paid around $17k in PMI over that 10 years, so we saved ourselves about $10k.
Sounds like a scam. If you had put that extra $7k as a down payment your PMI would have dropped to about $13.5k until 80% LTV was hit and you would have saved yourself ~$5k in interest assuming a 4% interest rate.
It isn't really his fault. People don't realize mortgage brokers aren't bankers or financial experts. They are salesman, plain and simple. Most of them have no background in finance from what I've seen.
Nothing astounding about it. Most people stink at math and they are going to be overwhelmed by dishonest rehearsed people who have a couple of calculations and some sales pitches ready to go.
It's his fault, game, job, whatever. When he puts you in a worse position to improve his own, you can call him whatever you want.
I was saying it's not really Arative's fault as the consumer. The mortgage broker who sold him that line is a scumbag.
That is exactly the strategy that my wife and I are going with. 30 year loan, and we make enough extra payments that it could be paid off in ~18 or so years from what we figure. But last fall my wife quit her job and was out of work for 4 months. Was nice to be able to scale that back to the minimum payments for those 4 months so that we didn't have to dip into savings to pay the mortgage(if it were a 15-year). I think it's a solid strategy as long as you stick to the plan. Some people aren't disciplined enough to keep paying extra unless they are forced to(15 yr loan higher payment), to make that work.
It's an entirely reasonable plan and makes a lot of sense. The only problem is people tend to look at a 15yr mortgage on a house and say "I can't afford that house" and look at the 30yr and say "I can afford that house" on the same exact house. The 30 yr mortgage ends up costing way more money so that line of thinking is completely irrational.
Opiate explained what I was saying. And your examples are a bit silly because people with that kind of money are probably investing the remaining liquidity and feel they can get a better return and are obviously in a different league when it comes to finances. Let's not compare the top 1% of Americans to the rest of us when it comes to sound home purchasing practices.