(OT) Home Buying

[FolignosJock]

Thinking about buying a house! Want and need all home buying advice!

[...]

Don't compromise. And be exceptionally thorough. I've bought three houses; the first one we got lucky but I missed a lot of detail. The second one we misjudged the neighborhood. This current house is actually pretty good, but the damn town keeps cutting down my trees and there are not as many kids in the immediate area as it looked when we were assessing the neighborhood (a big deal when you have kids of your own).

 

Take EVERYTHING into account: the house, its structure, the plumbing, the electrical, the roof (I say, the roof), the neighborhood, the municipality. DO NOT put on "homebuyers' glasses" and ignore something that would otherwise send up a red flag.

 

Make a list of wants and not-wants, and try and be as objective as possible when assessing the houses you look at. It's so easy to get caught up in the excitement and dismiss things that you'll regret dismissing years later.

 

 

 

Edited February 6, 2014 by sizzlemeister

[Eleven]

1. Use a younger realtor. He/she will be hungrier. That means more patient with you (will not be irritated taking you to see LOTS of homes) and less likely to worry about whether your purchase is too small a fish to bother angling for.

 

2. Keep in mind that the realtor makes more money if you spend more money. Be careful when he/she is trying to talk you up to a higher bid. Don't say no, necessarily, but be careful. There's a good chapter on this in Freakonomics.

 

3. Get a good inspector. I can't stress this enough.

 

4. I'm not sure whether attorneys are required to close a real estate purchase in Virginia or not. (I know they are here, and I know they aren't in DC.) If optional, consider whether the attorney will add real value.

 

5. Try to keep as many of the appliances as you can.

Edited February 6, 2014 by Eleven

[Lanny]

After you find a place you like, visit the neighborhood a couple times without the agent, go for a walk down the street at difference times of day/week. Can give you a better insight to what neighbors are like. First house I bought neighbors were a nightmare, second had train tracks that are out of sight, but can hear the train whistle all hours.

 

Edit: can't stress Eleven's inspector point enough, the inspection should take a couple hours.

Edited February 6, 2014 by Lanny

[...]

 

5. Try to keep as many of the appliances as you can.

 

I dunno about that. We've learned that it's probably better to factor in major appliance expenses. It's an additional $4-5k, maybe, depending on your tastes, but then you know where everything came from.

 

If given the choice of getting the place without appliances and the price lower by a comparable amount, I would opt for new appliances every time.

 

 

[Lanny]

 

 

I dunno about that. We've learned that it's probably better to factor in major appliance expenses. It's an additional $4-5k, maybe, depending on your tastes, but then you know where everything came from.

 

If given the choice of getting the place without appliances and the price lower by a comparable amount, I would opt for new appliances every time.

Don't let the appliances affect your valuation of the house, but doesn't hurt to ask for them. Worst case they say know and it's something you're giving up. Edited February 6, 2014 by Lanny

[...]

Oh, if flood insurance isn't mandatory, have it added to your policy anyway. One day you will thank me.

[Rico7]

Don't just look at the price of the house. You need to seriously consider the taxes too. Where I live, I pay almost as much in taxes as I do for my mortgage which is crazy. Would you rather have a $90,000 house where the taxes are $3,000/ year vs a house that is $80,000 but the taxes are 4,500 a year?

[That Aud Smell]

There's so much advice to give, but I'll stick to this:

 

Buying a home in a successful manner calls for the balancing of the irrational and rational.

 

What I mean: There needs to be that "wow" factor or moment, early on, in order for you to buy any house -- that feeling in your gut during a walk-through of "Shoot - yeah - I really want to buy this house - look at that ________ [whatever]. Sweet."

 

Absent that feeling (irrational), don't talk yourself into (rational) a house that doesn't otherwise grab you that way.

 

But, even when that feeling exists, you must be objective (rational) enough to talk yourself out of that house for any number of rational reasons (infrastructure/mechanicals are a mess, too expensive, school district issues, wrong location, other features you really hate, etc.).

[deluca67]

Thinking about buying a house! Want and need all home buying advice!

Look at as many houses as possible, above and below your price point to give you a good perspective on the market and what your money can buy.

 

If you have a neighborhood in mind spend time in the neighborhood. Drive around at different times to get a feel for the traffic and life of the neighborhood.

 

Big trees look great, just remember, the bigger the tree the more potential problems they can cause. Not just the leaves, falling limbs during storms and roots clogging your sewer lines and cracking your pavement.

[JJFIVEOH]

Thinking about buying a house! Want and need all home buying advice!

 

Are you looking for a house in the city you live in, or are you looking to move?

Edited February 6, 2014 by JJFIVEOH

[SwampD]

Don't beat yourself up if at some point, you find that you are completely stressed out. Buying a home is a hell of a freakout. that just means you are probably doing it right.

[MILFHUNTER#518]

As a realtor myself, I know for fact how big of an impact he/she can make, good or bad. First of all, MAKE SURE THEY ARE FULL TIME, NOT PART TIME! You would be surprised how many of us are not in fact full time, and do this as a hobby. Try for a smaller hometown broker, they tend to be less arrogant...

[nfreeman]

1. Quality of public schools is a huge factor in resale value -- so I would research this and factor it in even if you don't have any use for the schools.

 

2. Definitely get a good inspector. Ask people for recommendations.

 

3. All realtors and sellers lie. Bring a tape measure and measure the finished living space, height of ceilings, etc.

 

4. A house that the ground slopes down from is preferable to a house that the ground slopes down into.

 

5. Check google maps and figure out how far you are from the nearest train tracks.

 

6. I would try to stay away from major thoroughfares -- not just a house on a major thoroughfare but also a house that backs up to one.

 

7. Mortgage rates are still really low, so I would get a 30-year fixed with as little $$ down as the bank will agree to.

 

8. If you find one you really like -- don't get hung up on "winning the negotiation." The seller will probably try to gouge you for as much as he/she can. That is how it works. You don't need to get the last word in -- you just want to get the house at a number that works for you. OTOH, if the seller won't agree to a number that works for you -- move on. There are other fish in the sea.

 

9. Figure out what you really care about (square footage, lot size, # of bedrooms, # of bathrooms, location, etc.) and then look at as many as possible that fit your criteria. Make the realtor send you the listings before you go out for the day with him/her so you know you aren't wasting your time.

 

Good luck!

[Iron Crotch]

Ugh... I closed on my new build house less than 30 days ago with substantial money in escrow and it was and is a complete nightmare. Will spare the gory details, but to summarize:

1. you buy the builder, not the home;
    
   
2. you buy the area, not the home - land is an appreciating asset and a home is a depreciating asset unless you do something to abate the depreciation;
    
   
3. everyone involved in the process doesn't get paid until you buy - so they will push you to close and will push you toward whatever is most expensive;
    
   
4. the inspector is your only defense against getting screwed - get a good one - ask around - pay top dollar - this is your only friend in the process;
    
   
5. the buyer/seller's job is to minimize cost. Assume they want to screw you over (might not be true, but assume this anyway).
   

If the process ends up where I am... get a good lawyer. ;)

[Eleven]

As a realtor myself, I know for fact how big of an impact he/she can make, good or bad. First of all, MAKE SURE THEY ARE FULL TIME, NOT PART TIME! You would be surprised how many of us are not in fact full time, and do this as a hobby. Try for a smaller hometown broker, they tend to be less arrogant...

 

Gotta say, I had a lot of luck selling a home using a part-timer.

 

Totally agree that the smaller the operation (to a point), the better the service, generally.

[sabills]

There's so much advice to give, but I'll stick to this:

 

Buying a home in a successful manner calls for the balancing of the irrational and rational.

 

What I mean: There needs to be that "wow" factor or moment, early on, in order for you to buy any house -- that feeling in your gut during a walk-through of "Shoot - yeah - I really want to buy this house - look at that ________ [whatever]. Sweet."

 

Absent that feeling (irrational), don't talk yourself into (rational) a house that doesn't otherwise grab you that way.

 

But, even when that feeling exists, you must be objective (rational) enough to talk yourself out of that house for any number of rational reasons (infrastructure/mechanicals are a mess, too expensive, school district issues, wrong location, other features you really hate, etc.).

 

Alot of good stuff in here so far, this is my favorite advice so far. Couple more things from a new homeowner:

 

Use a realtor that knows the area you want to buy in well. We bought a house in the city, and the woman we used had lived in that area for years and years, and therefore knew what to look for in the type of house we were looking at, especially pitfalls and problems (even more important for us since we bought an older home).

 

Once you have an offer accepted, THAT'S when the work begins. Getting all the paperwork in can be a nightmare depending on the mortgage person who's putting it all through for you. Every time we thought we were done they asked for more. Be prepared to push them both on your own and through the realtor in order to get the thing closed on time. Its not a gauruntee, but if you don't close by the closing date the seller can pull out or you might have to start almost all over again with the process.

 

BUT, its all very worth it. The day you close bring a couple beers and some camp chairs with you, take them to the new place, and sit down and enjoy your house for a little while. Its a great feeling.

[SabresFanInRochester]

Have your finances in order at least two months (bank statement cycles) prior to beginning the mortgage process. The money that you plan on putting down should already be in your account for those two statement cycles. If you go to a mortgage banker today and tell them you want a $200,000 mortgage, they are going to ask you for tons of documents, among them bank statements showing $40,000 (20%) in your account. If you have to come up with all or some of that money, you will be hounded and scrutinized the entire process. By contrast, if you need to borrow money from mom and dad, or you need to move money from an account you don't want to disclose to your banker for whatever reason, do it now. The money will reflect on two statements, and they will not question the origins of the money. If you have demonstrated that you have the means for a down payment AND can satisfy the debt load with your current income, this should limit the amount of financial records and documents you will need to turn over.

 

One other tip -- provide the necessary paperwork to your mortgage banker and leave the country. If you are available, they will call you relentlessly asking for documents that you already provided. And they will call you for stuff that you really don't need to provide.

[Iron Crotch]

 

One other tip -- provide the necessary paperwork to your mortgage banker and leave the country. If you are available, they will call you relentlessly asking for documents that you already provided. And they will call you for stuff that you really don't need to provide.

 

Ha! This sounds familiar. I bought well under my means and didn't even represent part of my income and any of my wife's income. Yet, still I was getting emails every two seconds from the lender, was relentlessly asked for statements, faxes, what's this expense? why did you deposit a check?, etc. It really borders on harassment.

[biodork]

Don't just look at the price of the house. You need to seriously consider the taxes too. Where I live, I pay almost as much in taxes as I do for my mortgage which is crazy. Would you rather have a $90,000 house where the taxes are $3,000/ year vs a house that is $80,000 but the taxes are 4,500 a year?

 

Tons of good advice here already, and I'll echo the one above -- do your homework and look at property taxes (and local tax rates, if your area has them -- PA is odd that way) because that will be part of your monthly mortgage payment and makes a huge difference in actual affordability vs the home price alone. Get pre-approved for a mortgage through more than one lender and look at different scenarios (downpayment vs term vs interest rate, etc). If you don't have a lot of cash to put down, check into FHA loans. Only 3% down required, but rates are a bit higher than traditional mortgages and you'll be stuck paying PMI (although you will even with a traditional loan if you put down less than 20%, which is tough to do). Bankrate.com has lots of very helpful articles and calculators to look at mortgages.

 

Appliances are a mixed bag; if you're not in a position to buy your own, getting them included in the sale is nice. But if you can afford them (and especially if the existing ones are on the older side), you can negotiate a bit on price if you don't want them (or sell them yourself after it's yours).

[MILFHUNTER#518]

This is all true, as far as the bank and financing crap. I tell my clients when they start out looking for a house to ask the mortgage person for EVERY SINGLE DOCUMENT THEY WILL NEED throughout the entire process, and start before they go out and look at the first house. That way, when it is time to go into contract most of the docs are with the loan officer already and the closing process is much smoother.

 

Also, DO NOT go to a stand alone bank, go to a broker. Better rates, easier to close

 

The only good FHA product is the 203K loan, which in short is a remodeling loan. That is the only one out there like it, and is a good product. Otherwise, FHA sucks now because the cost of the PMI has doubled, it never goes away for the life of the loan unless you refinance conventional and the FHA inspections nit pick everything, so you may be out there scraping paint or fixing a window before closing... Conventional is the way to go because the PMI is cheaper and goes away when you pay the loan down to a 79% LTV.

[Iron Crotch]

This is all true, as far as the bank and financing crap. I tell my clients when they start out looking for a house to ask the mortgage person for EVERY SINGLE DOCUMENT THEY WILL NEED throughout the entire process, and start before they go out and look at the first house. That way, when it is time to go into contract most of the docs are with the loan officer already and the closing process is much smoother.

 

Also, DO NOT go to a stand alone bank, go to a broker. Better rates, easier to close

 

The only good FHA product is the 203K loan, which in short is a remodeling loan. That is the only one out there like it, and is a good product. Otherwise, FHA sucks now because the cost of the PMI has doubled, it never goes away for the life of the loan unless you refinance conventional and the FHA inspections nit pick everything, so you may be out there scraping paint or fixing a window before closing... Conventional is the way to go because the PMI is cheaper and goes away when you pay the loan down to a 79% LTV.

 

Great advice.

 

PMI sucks. I did an 80-10-10 conventional loan with no PMI. Put 10% down and the other 10% is a revolving line of credit. No PMI is great. But, the extra 10% is variable interest. If you have the means to pay the 10% back quickly then it makes the most sense... plus you can keep the revolving line of credit open should you need it in the future. (all of this depends on your credit profile though)

[Weave]

I'll add some financial advice.

 

Put a good, solid budget down on paper. Then fit a mortgage + taxes into that budget. Leave yourself room for unexpected expenses. That is not your number. Your number should be smaller than that. Houses require regular maintenance. Maintenance costs money. The number you come up with will almost certainly be a lower number than the bank will approve you for. It is real damned tempting to say to yourself, the bank says I can afford X so I will look for a house with a value of X. Don't give in to that temptation. Stick to the number your budget provides.

Edited February 6, 2014 by weave

[X. Benedict]

Thinking about buying a house! Want and need all home buying advice!

 

1.First time buyer? Buy the cheapest house in the best neighborhood you can afford.

 

2. Get the best inspector you can find. And then get another one.

 

3. Check the sex offender registry. Living next to a sex offender pretty much makes your house unsaleable if you ever need to move. I know two guys this happened to.

[biodork]

This is all true, as far as the bank and financing crap. I tell my clients when they start out looking for a house to ask the mortgage person for EVERY SINGLE DOCUMENT THEY WILL NEED throughout the entire process, and start before they go out and look at the first house. That way, when it is time to go into contract most of the docs are with the loan officer already and the closing process is much smoother.

 

Also, DO NOT go to a stand alone bank, go to a broker. Better rates, easier to close

 

The only good FHA product is the 203K loan, which in short is a remodeling loan. That is the only one out there like it, and is a good product. Otherwise, FHA sucks now because the cost of the PMI has doubled, it never goes away for the life of the loan unless you refinance conventional and the FHA inspections nit pick everything, so you may be out there scraping paint or fixing a window before closing... Conventional is the way to go because the PMI is cheaper and goes away when you pay the loan down to a 79% LTV.

 

I wonder if they changed the rules for FHA loans? Mine was originated in 2006 (and refinanced in 2012), and I know I've received statements that PMI can be cancelled once the LTV hits 80% and will automatically cancel at 78% LTV. Only catch was you had to be at least 5 years into the loan.

Edited February 7, 2014 by biodork