Buying a house ...
 

I'm sure there are other threads on this; I just couldn't find them.

So, basically, my husband and I are looking into buying a house since the market is in the toilet. We have no clue what we're doing. Anyone have any good tips they'd like to share? We'd love advice from anyone and everyone who's done this before! Any opinions on whether it's better to spend a bit more on a newer home or less on an older home that we can spend time fixing up?

No matter what type of house you decide on, get a professional home inspection before you buy. It amazes me that people will pay $250,000 for a house and skimp on the $400 home inspection. Even newer houses can have unseen problems with mold, foundation, etc.

Welcome to the world of house buying. My fiance and I just purchased a house and closed in March. It's been a lot of fun and stress all together.

Helpful tips:

We went with a mortgage broker. He was recommended to us by a family member it was better to have him run numbers across a large amount of loans vs. using a bank and just what they can offer.

Get a good realtor. Sellers are still thinking they're in a bubble. Some still don't realize that houses are not the same value as a year or two ago. It was good to have a realtor working for us. We again used a recommendation for this, but it also helps to possibly visit a couple open houses to "interview" realtors on your own.

Take copious notes and photos if you can. We actually only spent one day looking at houses, but months looking online (and we were in a very small market in terms of location and what we wanted). It was good for us to take notes to refer back. **If you go to a second showing take even more notes-open all the doors, cabinets, etc. Walk through the yard, drive by when it's raining/snowing.

As for new vs. old that's more of a person preference and your area. For us we purchased a home that's 20 years old, but we got a single family house. We could have gotten something newer in our price range, but it would have been a duplex. Plus my fiance is super handy, so the little things that we wanted to change have been easy so far.

Hope this helps! I think the best part was I could finally start buying all the decorating magazines and looking for inspiration.

RE: Home inspections. Make sure your inspector has a background in the systems he/she will inspect, or go ahead and pay to have an actual plumber, electrician, etc. inspect it. Some states will give an inspector's license to just about anyone - you want someone with actual experience.

Just purchased our first house last fall, closed December 28th, and moved in New Years' Day. So far, (in these past 3-4 months) we still love it. It is new construction, purchased directly from the home builder.
Tips:
For price range – determine how much you can spend per month for a mortgage payment, up to a max amount, depending on your particular budget. Add in any money available for a down payment. Keep in mind that closing costs, monthly home insurance and taxes will be part of your full mortgage amount and monthly payment.
We had a basic idea going into our house hunt, but our realtor also helped us get into a more expensive house then we originally thought we could afford due to negotiations which brought down our mortgage rate.
The other thing to determine your price range before you even start looking is to look around at various lenders to see the current interests rates as that will affect your per month payment. If you find a preferred lender, look at their max rate and pad it a bit, in case it goes up before you are ready to buy/ close. If you don’t have a preferred lender, take a look around at the rates and get an average one, but again pad it a bit.

Next bit of advice- sit down and make your dream list of what you want in a house- either rank it in order of your preference, or put the things you want in categories, like “must have”, “want to have”, “would like to have”. This is very important! For example on our must have was 3 bedrooms plus an office. Want to have was a separate tub and shower. Would like to have was a 3 car garage.
Also- in that dream list, you should include areas (cities/ neighborhoods) you are looking in. Have a few that would be ideal and a few that would work, but then also know where you absolutely do not want to look. Many things will go into the area you are looking at- even if you don't have kids, you may want to consider school district/ individual schools for future re-sale value.

Next- find a buyers agent. Ask for recommendations from your friends/ co-workers. It’s fine to look on your own at the MLS listings out there, just to get an idea, but the house we ended up with was not actually advertised on the MLS listings. It was an “inside deal” where the company contacted our agent and asked if she had any clients looking for the type of houses they had. So by having an agent, you will have access to more houses and they will be tailored more to your wants and needs.

If you decide to go with a new home- check out the builder to make sure they are a reputable company- BBB, etc. For both an older home and newer home, I third the motion to get an independent home inspector to do the inspection- not one provided by either the seller or even your agent. Find your own and make sure s/he is licensed.

Hope that helps!

If the home inspector does find things that need to be repaired (mainly minor things) consider asking for money off the asking price or an allowance from the current owner so that you can fix it after you are in the house. Most sellers just want to sell the house and will go with the cheapest/quickest fix to a problem whereas you the new home owner might go with a more expensive but longer lasting fix. (For example water heaters, if you need a new one the old owner might buy a cheap model whereas you might decide to pay a little more for a larger or better water heater).

and READ the fine print. Don't sign anything until you have read everything and feel free to ask for copies so that you can get a second opinion on things.

Quote:

Originally Posted by Blondie93 (Post 1639311) No matter what type of house you decide on, get a professional home inspection before you buy. It amazes me that people will pay $250,000 for a house and skimp on the $400 home inspection. Even newer houses can have unseen problems with mold, foundation, etc.

DITTO DITTO DITTO. I spent $350 for a home inspection on one house and it saved me $70,000 worth of repairs that the house needed.

Think about what you "must have", what is easy to remodel on your own and what is not. For instance, paint and carpet color? no big deal to re-do. Ceramic tile in a shower? Whole big project that is a pain in the neck. Try to get a house with the "permanent" stuff pretty neutral.

A few items:

Go to two brokers, not just one. Each broker has different products available to them and get referrals for them- Sometimes your realtor will know reputable brokers. Be careful about just going to lendingtree or something a lot of those companies bait and switch guaranteeing you a rate of X and when you get to the closing table it has changed but you think it is too late.

Interview realtors. Typically the selling realtor gets a 3% commission and the buyer's realtor gets a 3% commission. That means if you see a house you like and it says the Relator that has it for sale is Susie B Bell, you may want to think twice about calling her and not using your own realtor- why? Because it can be a conflict of her interest. She gets 6% if she is the buyer and sellers realtor. And she may not tell you that you could ask for another 2% off or something.

When I bought my house we had a home inspector and then followed up with a structual engineer. I spent $1000 in inspections but it was worth it. We were able to get the house we wanted and not have to worry that it was going to crash down.... (even with our recent earthquake!!).


Other thoughts- ignore the paint and the ugly dirt, you can fix taht. So many people think that the houses aregoing to be move in condition. I looked at some foreclosures even. Putting some sweat equity can save you some money sometimes!

Get pre-approved for a loan-many sellers won't even consider your offer unless you are pre-approved.

Get your credit in order, and the financial documents you'll need ahead of time. Go ahead and start organizing bank statements, w-2's, and the last few years tax returns. That way you won't be scurrying (like we were) at the bitter end.

I can't agree more with the home inspection. We have gotten to the inspection part of the buying process and backed out of two houses because of bad (really, really bad) inspection reports. The inspector on the last one found things I never would have dreamed of looking for. For example their "new roof" found that they had put up tar paper and shingles with whole sections having no wood behind it, electrical shock risks in the pool, etc.

Also check commute times, and community resources in the area. Calculate that into the price as well. So if it's going to take you twice the amount of gas weekly to get to and from work, remember that it's a consideration.

Also (others have said it) remember to take into account taxes and insurance and if you are going to put it into escrow, calculate it montly.

You may want to consider a lender that allows penalty free pre payment. Our lender has a pay 52 program, where we can make 1/4 payments weekly instead of one montly payment. You end up making a total of 13 montly payments a year with the additonal payment going to principal only. It ends up cutting 7 years of the loan. Not that you will stay there that long, but it adds equity.

Buying into an HOA?
 

If you end up looking into condos, townhomes or any community with a Homeowner's Association make sure you review the CC&Rs (Covenants, Conditions and Restrictions) very carefully. Get clarifications if you have any questions and make sure you can live with the rules.

Add monthly HOA dues to your budget and leave room for the dues to go up. (Sometimes there will also be "special assessments" for big projects within the HOA.) Take a close look at the community after reviewing the CC&Rs. You want to make sure that the Board is actually doing their job. (i.e. suppose satellite dishes are forbidden yet you see them on several homes/units. That could be an indication that you've got a weak Board.)

I'm not sure if it varies from state to state but, if you can, ask to see documentation regarding structural integrity. Find out if the Board is up to date with payments...insurance, maintenance, any applicable utilities.

Not to scare you but problems within HOAs occur mostly out of laziness and, at worst, fraud. As long as you go into it with your eyes wide open you should be okay. If you'd like an attorney to review the CC&Rs, by all means, do it.

Best wishes in finding a great new home. :)

My fiance and a bought a new construction, after looking at over 60 different houses. The biggest piece of advice I can offer is to figure out how much you can afford to pay, not how much the bank is willing to give you.

We got pre approved for a very high amount. Thinking that was what we should spent, we went out looking at some very nice homes - until we did the math, and realized how house poor we would be. The one we bought is just over $100K less than what the bank was willing to give us.

Also, ask for recommendations from local friends and family for buyers agents and mortgage brokers. We got such rave reviews about our BA, and he became a very good friend of ours - we trust him completely.

As for spending more on a new home versus fixing up an older one, be realistic about how much time you can devote. We thought we'd do a fixer up, until doing research about hanging drywall, knocking down walls, re-tiling kitchens, etc. We knew that it would take years to get the house the way we wanted, so to us, we chose to spend more, and have exactly what we wanted, the day we moved in.

Lastly, I've had several friends get GREAT deals on foreclosures in their areas, and as long as you get the inspection, you can sometimes really luck out. But avoid a Short Sale like the plague - its a pergatory where the owners don't really own the house, and neither does the bank, and you'll wait weeks to months to get a response on your offer. We made the mistake of making offers on 3 different short sales, and it was the BIGGEST waste of our time and energy. Wait til it goes into full foreclosure!

PS - when people say that the three most stressful things are kids, getting married and buying a house - they're not kidding. I am staying here for the next 30 years because I dread going through the process again!

One thing I've heard is that you should never buy the most expensive house in a neighborhood - it means it will not gain as much value because it is limited by the other houses around it.

That's all I got.

Location, Location, Location!!!

Someone upthread mentioned this briefly, but it cannot be stressed enough.

You may be able to afford some insta-mansion (picture stars in your eyes over all the cool amenities in a brand new home) in a new "master planned community", but it may very well lose its value due to location. It may be better to buy a smaller home in an established neighborhood because there will always be a demand for the property, even if the house is a teardown.

I really wish we knew more local people. It's so weird; back "home" (it's no longer my home! :eek: ), I knew all the neighborhoods, and half my family was in construction/development so I knew all the right people to go to for these things. Here it's just ... a mystery. I really feel like a fish out of water.

Try your Sister network!

If I ever move out of the Atl area, that's what I am going to do!

BTW, I was introduced to my current Realtor that is selling my house by a chapter sister that was an advisor with me. The current Realtor in the new area used to be neighbors of a pledge sister...who also sold her house for her!

I work for a mortgage wholesaler and feel free to PM me with questions. We buy loans from over 2000 brokers in every state, so I can possibly give you some names.

First, pre-approvals are not worth the paper they are drawn on. Don't worry about it. If you want to spend $X for a house and your LO tells you that you can afford 25% more house....Run....fast.

I agree with those who tell you to check out a broker. They have multitudes of options available that some (many) banks can't offer. Be very careful when handing over information or fees upfront. Many brokers are scammers and you don't want to be subjected to ID theft. Ask friends and family members who they have used in the past, and what they liked/didn't like about them. Also, don't feel obligated to go with someone locally. If your brother/parent/friend in another state loved their Broker or LO, they can do a deal in you market.

Don't let your Real Estate agent steer you to a particular broker. They are getting a kick-back and not acting in your best interest

Don't always jump at the broker that can get you the lowest rate. There may be fees and points attached that they are not disclosing.

Since you are a first time homebuyer, check out any classes that local banks or brokers offer. They are well worth the time. You learn your options upfront so you can make an educated decision and not rely on what your LO tells you.

If you don't have 20% down, can you and your new home qualify for VA and FHA? Check it out because MI companies have all tightened their guidelines and they are tanking all kinds of deals that they previously did. If you qualify for VA, no question...do it!

Since you are in Georgia check out the state's Real Estate Fraud Prevention group: http://www.grefpac.org/ . I have attended a few of their meetings and they are probably the best organized group in the country.

I am just curious as to why pre-approval status does not make a difference? When I sold my house my realtor only considered offers from those that were pre-approved.

Yes, why does pre-approval not matter?? My husband and I are moving to WV from TX and we're going to buy a house. I am house hunting with a realtor next week, and was super stressed out that we haven't bothered to get pre-approved yet (my husband is commuting every week and is gone Mon-Fri). Do we NEED to? Or can we look seriously without it?

Also, what all documents do I need to get pre-approved? We're going to get one rate from our bank, but because there is no branch of our bank in WV, we have to do it over the phone with the national number!! Stress, stress.

Also! I was thinking that we should get a pre-approval/interest rate quote from our bank, and then another from a mortgage broker( for comparison sake). But, I assume they'll run our credit each time-and won't that hurt my score? It's really good right now, and I don't want to mess it up.

Wow, just from typing this now, my blood pressure has already gone up.:eek:

Wow. I am so glad someone asked for advice. As I commented in another thread, I am HATING house hunting right now with my fiance. We know we have made some mistakes. But I feel like we are getting back on track, and hopefully find the right house for us.

Being pre-approved will save you from wasting your time looking at homes that are out of your price range.

The one year home warranty plans offered by sellers (an insurance policy) are nearly impossible to make a claim on. If there's something not working right at the inspection, have the seller fix it or reduce the asking price before you close.

Has anyone bought a house without a realtor? My boyfriend is looking and I'm getting a lot of input since I'll be living there too but we cannot stand the realtors. Their contracts seem absurd to us AND a bunch of them try to force you into using their title company and their attorneys - we're attorneys! We don't need to pay for one! I'm just wondering if anybody has been successful doing it on their own.

It's a Realtor-thing. Many of them think they are wasting their time (remember Commission only) if their buyer is not pre-approved. Pre Approvals are NOT required to put in an offer.

I've known of many buyers to be pre-approved for hundreds of thousands more than they can really afford because the LO told them they could afford $XXX, when much less was more realistic. Often, these are the people who end up losing their houses when the market turns. Our Loss Mitigation Department hears so often, "well the lender pre-approved me for that much".

Yes. Get your own Real Estate attorney (unless you specialize in it) to facilitate the process.

I have purchased 7 houses (I've always been single) and never was pre-approved. I didn't always go through the lending institution that I worked for. I only went to a familiar face when I needed to do some creative financing

Depends on if they are doing a full pre-approval or a pre-qual. Sometimes lenders vary. At minimum, you will need 2 years W2s, 3 months bank statements, last paychecks. If you own a business, you will need 2 years Tax Returns with all schedules. If someone is contributing to your down payment or closing costs, bring a Gift Letter. If you are selling a house, bring a copy of the listing. If you recently sold a house, bring the HUD-1 from the sale. If you are having your closing costs paid by an employer, have the HR department list what they will cover.



Interest Rate quote? Not sure what you mean. Until you have a sales contract in your hand, lenders can't lock in your interest rate. Running a credit report WILL, I repeat WILL hurt your credit score. Every time a lender does an inquiry, your score will drop. How much depends on what your original score is.

As the Fed drops rates, it seems to do little for housing rates and my banker says stay put.

80% at 6.25 and 20% at 10.025.

I own a whole duplex, both sides, 2 bed room that I live in and the other side is 3 bedroom. Both have a 1 car garage, 1-1/2 baths and family room with a fire place.

It was split and I have no clue why but it does become a pain in the rear!

Right now may be a price game for property, but the interst rates are not doing anyone a favor.:o

I was able to lock into an interest rate before I bought my house. This was in 2003 so maybe things have changed? Real estate was moving really fast here in Austin at the time so if you were not pre approved it was less likely that your offer would be taken seriously or even at all. When I put my house on the market I sold it within 24 hours-I would not have even considered a buyer that was not pre-approved. Things have definitely slowed down though.

Please be realistic. If your income doesn't add up for the home, don't try it and save. I am saying this because I will be packing after moving into a condo owned by my roommate. Her loan wasn't on a fixed rate, gambled on things going well, and her business caved in, so the condo goes, too. Her chaos isn't something she bothered to mention before I moved in. The place went on the market this week. If you can't afford it without involving others as far as bringing in roommates, wait.

Yes, everything has changed. We use to have a "lock and shop" program, which allowed you to lock in your rate without a property. However, the broker (wholesalers don't deal directly with the borrowers) would be penalized if they didn't produce a loan within 90 days. Typically, these rates were not great since the hedge on a 90-day lock is much riskier than a 30-day lock.

We discontinued the program before the market went south because pull-through was so low and we were losing money on the hedge. Often, borrowers just can't find a house (or make up their minds) in a particular timeframe.

Update- I flew to West Virginia last week, and the husband and I house hunted for a day. We were not pre-approved at that time, but did it the next day. We found a house we loved! We started the bidding on it last week, and just found out this morning that we got it!!

Congratulations and hope the % rate was reasonable!:)

It is nice to prop you feet up in your own little nest so to speak!:)

Congratulations! Good luck with your home inspection and closing! :D

*Bumping*

Any new advice for those of us who are buyers in todays market? Hubby and I are meeting with our realtor this Thursday to go look at houses. I'm so excited!

The biggest piece of advice I can offer is to figure out how much you can afford to pay, not how much the bank is willing to give you.

This...^^^

Don't look at houses that are priced out of your budget.

If you're able to, put 20% down. This helped me avoid getting into a bidding war, and of course, saved me the expense of PMI. Also, once you close escrow, be sure to file for tax credits that may apply to you as soon as possible.

Depending on where you are looking to buy, you may have to put in a bid as soon as you are finished seeing a place that you like in order to have a chance. Thus, it pays to have done all your homework in advance about an area so you will be able to jump on it.

Stay away from short sales unless your agent is super skilled in such matters. I've heard some horror stories!

Keep a positive attitude, and good luck! The process is stressful, but sooooo worth it! :)

+ a zillion to hiring a qualified inspector. If you have parents, friends, or family that you trust bring them along as well. The fact that my dad was wowed the construction of our latest home (from 1961) over his 1987 home spoke volumes.

Think about how long you are going to stay there, and what is negotiable in terms of location, layout, lot size, amount of light, updates required, etc. After being in our house for a year and a half now I've realized that having a bathroom off the bedroom is no longer negotiable. We have always had that, both in our condo (still own as a rental) and previous apartment... I didn't know how necessary it was until now. The other item I've realized is that I don't like the bedrooms split between floors- we have 2 up and 2 down, and now that we are getting closer to having kids I am suddenly worried about where kids' bedrooms would be. We're thinking of various remodeling options to give me what I want while staying in the same house, because I'm not willing to budge on location and we love our lot size & position. When we were looking, I had been focused on entertaining space (living/kitchen/dining) because that was lacking in our condo, but our bedroom situation there was fine so I didn't even think to consider it. Whoops!

Oh, and that huge yard that is so nice? Remember that someone has to mow the lawn, weed, etc. Some people love that and some don't.

ETA- if you are looking in an area that has many of the same floorplans over and over again (most neighborhoods, really)- if you find one you like, check out others with the same floorplan. Chances are they will have slight differences that may help you figure out how you can best utilize the space. In ours, we saw extra bedrooms, custom storage, mother-in-law suites, the works. None are in the one we chose- but it was nice to see the possibilities & creativity out there.

Everything I can think of
 

• Spend less than "the most" that the bank allows you to. House insurance, taxes, repairs, services (gas, electricity) add up. There will always be unexpected issues.
• The usual rule of what you can afford used to be that your rent/mortgage not exceed 1/4th of your gross earnings, but that might have changed. Draw an absolute line above which you will not go. Sometimes you can fall in love with a house and cloud your judgment. Although many owners might be willing to go down, ask your realtor to not show you anything above, say, 10% of the highest you'll pay.
• Check property tax on every property you consider. Check to see when the town last increased, and when the next increase will be.
• Look at towns that have a decent number of businesses - people living in towns that have few businesses have higher property taxes. So do people in towns with a higher percentage of renters.
• Consider an escrow account for taxes - some people vow that they'll save but it doesn't always work out that way.
• NO adjustable rates. They are good only in very specific circumstances.
• Put down as much as possible. Less than 20% and you will pay "points" - higher percentage on your mortgage.
• Go to Zillow.com for history on any property (sales, estimates, taxes, schools).
• Obtain property assessment records for ones you are considering. Know the property lines, zoning ordinances, flood plane, etc.
• If allowed, take pics of the houses you visit - inside and out. Note anything unique or things you really like, dislike or might change. That way, when trying to compare or remember where you've been, you have something to look at.
• Ask about yard/house maintenance. Do they have a lot of plantings that need to be tended to? Pics of the seasons? Do they normally use an exterminator for preventive maintenance? What are their normal electric/heating bills?

When you make an offer and once it's accepted:

• Make it inspection-contingent. Get an inspection, no matter where you live!! Get a pro to do the big stuff, then do your own investigating. Inside and out, foundation, attic, basement, bathrooms, vents, alarms, garage door, locks, windows, doors, stairs, fixtures, faucets (inside and out), stains, test all appliances, heat/ac, light switches, outlets, etc. Make a list of EVERY item with an issue.
• If the house has pet stained carpets, smoke smell, mold, structural or system issues, or radon (GET A TEST), ask for the owner to either fix it or give you a concession on the work you have to do.
• If possible, visit the house or neighborhood during the following times: weekday, weekend, daytime and evenings. Get a feel of what the people are like (keep to themselves or out in the neighborhood), traffic patterns (parking, commuting, busy streets).
• Get a neighborhood crime report from the police department - preferably for the past year. Some crimes are more seasonal.
• Get quotes for house insurance. If there is any chance of natural flooding, get the insurance.
• Ask for warranties/owner manuals for the furnace, hot water heater, a/c, appliances, fixtures, and the places they have used for repairs or services. The businesses would have the installation or service records.
• Ask owners if there are any "tricky" issues like a bathroom door that sticks when it's cold out, a loose burner on the stove, springtime ants, icicles over the back door in the winter, etc. Not to get money from them, but problems to watch out for.
• Ask about any special treatment that plantings might need.

Before moving in:

• For your own records, write down room dimensions, where every outlet, light switch, light and air vent is. This will help room planning.
• If the house is older, you might need the electric system updated and add more outlets.
• If you plan to paint, do it BEFORE you move in, if you can.
• Throw/give away things you don't want/need before moving. For example, if the house has ceiling lights, you might not need a ton of lamps.
• Update fire and carbon monoxide alarms, and porch/flood lights outside.
• Clean all carpets, floors, surfaces and appliances before you move in.
• Get names and numbers for all service providers - phone, tv, internet, heating oil/gas, etc. Ask previous owners for local food delivery places (moving day picnic on the floor!) and recent menus or phone book.
• Get all records (and deadlines) together for your license, car registration and new insurance, etc.
• Find out your closest fire house, the town police department (emergency and non emergency numbers), local hospital, local and 24-hour vet.
• Learn several routes to your new home, from different directions. Street closings, construction, weather - these can disrupt your usual route.
• Check out all of the shrubs and trees on the property. Do any trees look like they might fall? Any shrubberies that might conceal someone hiding?

I think that's it for now. If I think of more, I will write.

My husband was unemployed for over a year after we moved to Columbus when I started my current job. We since then have learned to live on my income alone, even though he recently, thankfully, picked up a part time job (he's still in school) we are purposely looking for homes that will be about the same, maybe slightly more per month, than what we are paying in rent now, since we know we can sustain it on my income alone. :)