House Buying Tips?

[12dn94dst]

Hi All!

I'm getting ready to take another step in being a real live, authentic grown-up. I'm going to buy a house. Anyone have any helpful hints or advice to share?

[mccoyred]

PreQualify!!! Know what you can afford.

Know what you MUST have and what you would LIKE to have BEFORE you go looking.

Also, check out the neighborhood, esp if you see something you really like. You could wind up w/ the neighbors from H*ll!!

[miss priss]

My husband and I are trying to buy another home. This is what we did hope it helps.

1. Get your credit in order! A decent credit score is anything above 600 with 900 being the best. You want to make sure that your score is as high as possible to get the best rate. If you have any current outstanding debt (esp. 7 years of age or younger) clear it up and write a letter to the credit bureaus stating that they have been paid. Make sure to get copies of all three credit reports. Sometimes creditors report only to one of the three agencies.

2.Make sure you have enough money in the bank to cover the down payment. Say you purchase a $100,000 home and the down payment, which is usu. 3% or more,is $5000 ;if you have $4300 in the bank or less and try to borrow the rest and place it in the bank account. The lenders will only look at what you had prior to the deposit. Start saving at least 6mos-2yrs before purchase.

3. Get your mortgage approved before looking for the house. That way you know what you can spend. This is the longest and most arduous process.

4.Go through a bank first if you can. If your credit is a-one a bank or credit union is the best choice. Most times they offer the best rates and can offer a lower interest rate. Mortgage companies tend to sell their loans to other mortgage companies. Ask a reputable realtor with yrs. of experience about the mortgage companies. Try to find a company that has been in business the longest with a reputable history. If they tell you to pay for the credit report first 9 times out of 10 they are sheisty.(trust me it happened to us....long story).

[kiml122]

Make sure that your credit is in order.......and it is very, very good to prequalify. Like mccoyred stated that is always plus when you know what price range you are looking for.

If you have everything together before you start out, it really won't be very bad at all. Both of my experiences have been really good, and my realtor was fantastic. I have now referred him to several friends that have found great houses.

Good Luck.

[CrucialCrimson]

Take a realistic assessment of your overall life and lifestyle - where do you see yourself in 5-10 years - yours house should assist your planning for the future, not hinder it so keep future plans (job, family, etc.) in mind - don't just let the $$ dictate your decision - also getting pre-qualified is very helpful, but do not let a realtor tell you that you must get pre-qualified before they start showing you homes - if they do, you have a housing discrimination suit on your hands. If you want to get your taste buds wet and see what is out there, go ahead and do it while you are going through the pre-qualification process. Also, don't sleep on mortgage companies, not some store-front fly by night operation, but the well established ones are giving banks a run for their money on rates and other terms - some of the bank and state first-time home owners programs have very restrictive clauses in them that a mortgage company may not have. If you have the money, get your own attorney, not just the one the bank asks you to select or selects for you. If you are a teacher or police office, you qualify for HUDs Officer/Teacher Next Door program which I believe discounts the selling price of a HUD home 50%. Finally, if you have any creativity or handiwork skills, get them going to, become a HGTV nut!!

[AKA2D '91]

Make sure before you make your final decision, you have a carpenter/builder/or worker to look INSIDE the home. Have him/her to check the roof, the attic (A/C, hot water heater, electrical stuff) you know the REAL stuff. We would not want you to invest in a MONEY PIT.

Enroll in a first time home buyer's class

Talk with the next door neighbors to see if there is a high turnover.

You know the agents are not going to tell you EVERYTHING.

[PenguinTrax]

Ditto what everyone else has said, plus..

Be sure to check the tax appraiser's web site for the area.

Ask to see the house appraisal before you make an offer.

Be sure to get the home inspected once the offer is accepted.

Be abso-damned-lutely sure you hire your own real estate attorney to look over, prepare and authorize the contracts. In most instances the realtor (even yours) is working on behalf of the buyer. An experienced real estate attorney will work on your behalf, and only your own behalf.

Take into account the comparable values of the homes in the area. Make sure the house you are interested in isn't overpriced for the area and that the area will have a good additive value over the years. You probably won't live there forever, so make sure that any improvements that may be needed for the house are worth it in the long run.

Make sure you take property taxes, home insurance and homeowner's association fees into account when budgeting for a new home.

Check out my BIL's web site for information about mortgages and real estate law.

http://www.lyonsandsmith.com.

FWIW - we are househunting now and it's tedious, but you do learn a lot. Go to every open house you can on the weekends, even to houses you can't afford, just to get the education you need. Spend time online researching properties.

[snuggles12]

Check out FHA loans for first time home buyers. I believe you only have to put down 3% and the seller may pay for your closing costs.

Before going through the process of putting in a bid for a home, check out the neighborhood at night on the weekends and after it rains if you are unfamiliar with the neighborhood.

Get prequalify/preapproved so you know how much you can afford. Also remember to include real estate taxes, homeowner's insurance, homeowner's association fees if applicable to determine how much house you can afford.

Find a good inspector once your bid on a house has been accepted.


Good luck!

[12dn94dst]

I really do appreciate it. Anyone have any thoughts about buying new construction? The homes I'm considering are in new sub-divisions.

[Eclipse]

Kelli,
If you are interested in new construction make abso-what PenguinTrax said - lutely that you check out the builder. Don't just go on the size or rep of the subdivision. As you may know, builders in GA don't have to have ANY specific qualifications to get a builder's permit. In other words, some one like me, who can barely tell a screwdriver from a hammer can put out a shingel as a builder. They still of course, have to go through inspections, but I'm sure you have seen the local reports on people with new homes who find out they have all kinds of structural problems.

Visit your proposed subdivision all hours of the day and night. That way you can see traffic patterns, habits of the neighborhood, etc.

Even if it is a new home, an independant inspector is a MUST.

The best advice I think we got before we bought our house is "Don't fall in love with a house". Be prepared, at any time, to walk away from the deal if you feel you are not being treated right. Unfortunately we were hard headed and should have walked away from the closing table because the builder started tripping. That should have told us something 'cause the so-in-so sold his last house in our very large subdivision 3 mounths after we bought ours and then disappeared. Several things that he was supposed to do he did not.

On the same none, make sure that all promises are kept before you sign on the dotted line. Assume that you will never see the builder again, because you might not. Of course if he is still building in your subdivision you have a better chance of stuff getting done.


Visit the site, at minimum, on a weekly basis. That way, you can see if they are burying construction debris (a big no-no and the cause of sinkholes), using improper material, or just generally doing shoddy work and can correct it right then and there. I have a friend that would take a level when he went to visit his house and as a result, most of his walls are actually pumb!!

Start taking those little classes at Home Depot now (how to fix a hole in your sheetrock, how to repair linolium (sp?), how to install a ceiling fan, etc. They will come in handy!!

If you can, put down enough so you don't have to get PMI.

Get the title insurance. The peace of mind is worth it.

That's it! Homeownership can be wonderful!!

[Rain Man]

Originally posted by 12dn94dst
I really do appreciate it. Anyone have any thoughts about buying new construction? The homes I'm considering are in new sub-divisions.

Having purchased a new construction home, here's my 2 cents:

First and foremost, make sure your credit is in order!

I used the builder's in-house financing company to check my credit and pay the appropriate loan fees and lock in my interest rate, but if you have a mortgage company or bank that can better help you with the interest rate, GO FOR IT!!! BTW, know what kind of financing you want (variable, fixed, 2-1 buydown, balloon, etc.)

Builder: What is the reputation of the builder? Very important; you don't want to have a home built, move in, and there are major problems with the plumbing, wiring, etc.

Type of house: Do you want a ranch, or a two story? Basement or slab? I own a 1600 square foot ranch house on a slab (no basement) with a two-car garage. Basically it's a starter home until my income improves or until I start a family. I figure I can get into something better later on. Do you want a small home or one you can "grow into" when you get married?

Subdivision/part of town: Know the part of town you want to live well enough to insure that your home will keep its value: Crime and/or a bad school district will drop a property's value with the quicks, y'unnerstan? As for subdivisions, be prepared to follow the rules of the subdivision or pay hefty fines (rules such as size of satellite dishes, no outdoor clotheslines, no metal swingsets, no chain-link fences, no wooden fences over 4 ft. high, etc.). Also be prepared to pay subdivision association dues, which can be from $100-$500/year.

Work equity: It can be a great way to cut down your down payment. But if you have the $ and don't want to put on the 'ol hard hat, you can do that too. Most work equity involves scrape and sweep of spackle off the floor, mailbox and landscape installation, which can also include seed and straw of your yard, painting your front and service doors, and installation of towel racks and TP holders in the bathrooms, to say the least.

If you don't have the full 3% down payment at the time of signing the paperwork, you may be able pay in installments while your home is being built. You may even get some of it back at closing.

Extras: This is the fun part, but it can tack on to your purchase price, and mortgage payment. Do you want vaulted ceilings, a spare bedroom to be converted to a den, complete with french doors? How about an extra bathroom or a built-in microwave? Bay windows perhaps, or a special phone line for Internet access? Where do you want the lines for cable TV installed? Type of front door and kitchen cabinet style? A loft in the upstairs bedroom overlooking the downstrairs so you can see those bad kids tearing up your living room at all times. You get the picture. Also keep in mind that unless you plan to live in that home for the rest of your life, some extras you may need just to help make the home more marketable for a prospective buyer.

Construction issues: Stay on top of the progress of your home being built at all times. If the foreman isn't TCBing, call him out on it. Don't be afraid to be a pest or bug him with issues that concern you. However, please be tactful; I have heard stories of workers doing some nasty stuff to be spiteful (like leaving a pile of excrement in an isolated corner of your home).

TAXES. Be prepared to get a sudden hike in your mortgage payment for property taxes. Because the property may not be assessed by the county at closing, the taxes due may accrue from the time of closing up to a year after the closing. The builder will pay all taxes up to closing. Your method may vary, depending on the county you live and how they accrue and collect taxes.
Also, know the GEOGRAPHIC address in which you live as well as the school district so that you know which taxes you have to pay. This can make the difference b/t whether or not you have to pay school district taxes and/or a higher city tax rate. New build subdivisions often do not have clear geographic locations and with village and town annexations this can often obscure the issue even more

For instance, my postal address is not the same as my geographic address, and neither of the above is the same as the school district I live in. BTW, my postal address is at least 7 miles away from the actual city itself, while I live within 20 feet of a village whose post office I can walk to in 2 minutes. Go figure.

Hope this helps you.

RM

[treblk]

I recommend NACA. Neighbor Assistance Corporation of America
www.naca.com

If you want to go through an organization or a program, this is the best one. They guarantee you no down payment, no closing cost and 1% interest rate BELOW market value. Ya can't go wrong. It takes a while for things to get hopping with them, but they are thorough.

I get qulaified on July 15th. Pray for me ya'll, it's been a long time coming.

Kelli, sands I sent you a LONG PM (sorry ) but I had a lot to say that I didn't want to wiegh down the board.

[AKA2D '91]

A checklist for those interested in purchasing a home:

http://homeadvisor.msn.com/homes/che...s/seehome.aspx

[AKA2D '91]

The 3 worst reasons to buy a house

Buying a home . . . that's what everyone says you should do, right? Get the lowdown on home values, costs of ownership and your own financial situation before making a big commitment that truly isn't for everyone.

By Liz Pulliam Weston


If you’re feeling pressure to buy a home, you’re not alone.

Home prices are spiraling ever upward, indicating a demand that’s outstripping the available supply. Wait too long to buy a house, many people fear, and you could find yourself priced out of the market -- or at least out of the neighborhoods you like best.

Meanwhile, mortgage lenders are bending over backwards to give people money to buy homes. They’re allowing people to take on more debt or get loans with worse credit, than ever before.

But that doesn’t mean everyone should be a homeowner. It’s a bigger commitment and more expensive than most first-time buyers ever realize. You should have a clear idea of what you’re getting into before you commit to 30 years of payments -- and you shouldn’t let any of the following popular myths guide your decision.

A house is a better investment than the stock market’
It’s become popular, with the current anemic stock market, to tout homeownership as the new best way to build great wealth.

When, oh when, will we learn that past performance is no guarantee of future results?Check out your options.
Record low rates
could save you a bundle.



It’s true that owning a home can be a good financial foundation, because it forces you to save (in mortgage payments that build your equity) and offers you the potential for great leverage. Leverage, simply put, is the ability to invest just a portion of the purchase price, borrow the rest and reap outsize rewards from any appreciation.

Say you put down $20,000 on a $100,000 home, borrowing the balance. If your home appreciates 10%, your equity in the home has grown by 50%. ($110,000 minus the mortgage of about $80,000 equals $30,000, or 50% more than you invested.)

Home prices, however, don’t always go up.

Ask homeowners in Boston, Dallas, Houston, Anchorage and Southern California -- all of which suffered major real estate recessions in the past 20 years.

After dropping more than 20% in the 1990s, Los Angeles home prices took almost 10 years to regain their peak, says real estate expert John Karevoll, an analyst with DataQuick Information Systems. Anyone who lived here during that time knows people who were “upside down” -- owing a bigger mortgage than the home could be sold for. Thousands of people simply walked away from houses they couldn’t sell, trashing their credit ratings in the process.

It’s hard to know, in advance, when you’re buying into a real-estate bubble. That’s why you should be relatively sure you won’t need to move anytime soon if you buy a home. Three years is probably a minimum, five years is better and 10 or more will help you ride out all but the worst real-estate crashes.

‘I’m tired of throwing away money on rent’
You’re not really throwing money away when you send a check to your landlord. You’re exchanging it for a place to live. You’re also getting flexibility and freedom -- things you sacrifice when you buy a home.

When you’re a renter, it’s the landlord, not you, who is generally responsible for maintenance, repairs and fixing the toilet that blows up in the middle of the night. If the neighborhood should start to slide, or you get or lose a job, you can up and move with a few weeks’ notice (less, if you don’t mind losing your deposit).

It’s true that you may have to deal with rising rents and recalcitrant landlords. Homeowners, however, are often stuck with rising taxes and maintenance costs, as well as recalcitrant neighbors.

Moving is never fun, but moving when you own a home is an expensive, time-consuming process. Finding a buyer can take months in all but the hottest markets, and you should figure selling costs will eat up about 10% of your home’s value, once you add agent commissions and moving expenses.

In other words, homeownership is more like marriage; renting is more like living together. Make sure you’re ready to be wedded to a house before you propose to leave behind life as a renter.

‘I need the tax deduction’
Would you give someone a buck just to get 27 cents in return? That’s essentially what you’re doing when you take on a mortgage just to get a tax deduction.

If you’re in the 27% federal tax bracket, every dollar you pay in mortgage interest only saves you 27 cents in taxes.

Don’t misunderstand -- the tax break is nice, and you need somewhere to live. But you should make sure you can really afford to own a home before you take the plunge.

Remember that many of the real costs of owning a home aren’t deductible. Uncle Sam won’t give you a break for insurance, repairs or maintenance, for example -- and those costs can really add up.

Most homeowners should plan to spend at least 1% of their home’s purchase price each year on maintenance and repairs, says finance expert Eric Tyson -- and more if they plan to hire someone else to do all the work. Tyson, co-author of “Home Buying for Dummies,” recommends setting aside some money each month into an emergency fund. You may not spend the whole amount every year, but sooner or later a big expense will come along -- a new furnace or roof, for instance -- that will consume several years’ worth of savings.

If you fail to maintain your home properly, you’ll pay even more when it comes time to sell. Many buyers won’t even bid on a property that shows significant neglect. Even in hot markets, buyers are likely to ask for expensive concessions to pay for the repairs you should have been doing all along.

The best advice on the issue of whether to buy vs. rent remains the time-tested version: Buy a home when the timing’s right for you, when you can swing all the costs and when you plan to stay put awhile. That way you can ride out any downturns in the market and benefit from any appreciation while enjoying a nice and affordable home in the meantime.

[AKA2D '91]

Single Female ISO Home
You're a single female, somewhere around 30 years old, making decent money and feeling like you should buy a home. I know you—I even know the reasoning you use to talk yourself out of home ownership: "I'm single." "Owning a home is costlier than renting." "It's too much commitment." Or this classic: "I'm living with my boyfriend/girlfriend right now."


Those excuses kept me from buying a home as Seattle's housing market shot skyward. Finally, I came to my senses and bought a miniscule starter home on an even more miniscule income. Financially, it was one of the best moves I've ever made. Emotionally, there's nothing that compares to the feeling of purchasing your first home all by yourself: Want to feel some real girl power? Just sign your name on those closing documents.


Now, let's take on some of those excuses:


"I'm single."
In 2001 the typical homebuyer's household consisted of a married couple in their mid-thirties with an average household income of $71,300, according to the National Association of Realtors. That statistic doesn't mean that you, a single female with an income closer to $35,000, aren't allowed to buy a house. Do you think real estate agents will slam doors in your face? Laugh at you? Hey, your money pays a commission just like the money of those nice married folks. Also, it's illegal for an agent to discriminate based on familial status, race, skin color, national origin, gender, disability or religion. So if someone refuses to help you out, sue for a huge settlement and use the proceeds to buy a really nice waterfront rambler that will be the envy of married couples everywhere.


"Owning a home is costlier than renting."
Owning a home does feel more expensive than renting at first, especially when you've scraped your savings account clean to supply earnest money and a down payment, only to learn that you must also pay for arcane items like title insurance and escrow fees. But the major difference between a mortgage payment and a rent payment is this: You may recover some of that mortgage payment when you sell your house. Your rent is simply a non-recoverable expense: Your landlord's mortgage payment. Of course, profit from owning a home depends on the market you're in and whether you bought your home for what it was worth, but in general, short-term pain means long-term gain in real estate. Also, a home is one of the few things you can buy that generally appreciates in value with age, and mortgage interest is tax deductible.


Hardcore renters invariably raise this point to defend their refusal to buy: "When my appliances blow up it's not my responsibility." True. And as a veteran of 11 rotten rentals and multiple appliance blow-ups, I entered my first house trembling, braced for the leaky water heater, shorting stove and overflowing washer that I would have to (horrors!) tend myself. But nothing much happened. Homeowners generally take better care of things than renters and landlords, and busted-down appliances just weren't the ordeal I thought they would be.


"It's too much commitment."
After you buy a house, you can sell it. End of commitment. And sold houses won't call you in the middle of the night asking why you broke it off, they won't start dating other houses you've lived in, and they won't stalk you. They just put money in your pocket if you've played your cards right. One single homeowner friend in her late thirties put it succinctly: "My house is the best relationship I've ever had."


Now, I'm not advising you to buy a house if you know you'll be moving elsewhere within a couple of years. Nor should you buy a house as an investment in a market that's plummeting. But if you yearn for a place where you can plant rose bushes and paint the walls any color you want, don't let an ambiguous fear of commitment stop you. Just keep repeating this mantra: "Nothing's permanent."


"I'm living with my boyfriend/girlfriend right now."
I let this one keep me in rentals for years. What I should have done was purchase a house as soon as I qualified, and charge the boyfriend rent to live with me. That would have separated the man from the boy. Don't let a live-in relationship keep you from owning a home. A good real estate lawyer can write up a contract for the two of you, should you decide to buy a home together, or you can buy a home on your own if your live-in is reluctant to commit to homeownership.


Of course, both choices will test the relationship. Buying a home on your own may even test a dating relationship. When I purchased my tiny starter home, the man I was dating at the time was quite peeved regarding the whole matter. But he swallowed his pride, rolled up his sleeves, and helped me refinish the wood floors of his 700-square-foot rival. We eventually married, and the sale of that little house provided a hefty down payment for the home we now own together.


Enough of excuses. So what now? Do you live in a place where housing prices are steadily rising? Do you compulsively pull flyers from "For Sale" signs? Do you long to own the roof over your head? Then buy a house. Don't accept the notion that there is some mythical state of personal readiness (i.e., a husband) that must be achieved prior to homeownership. You need only two things to buy a home—a desire to do it and enough money in your bank account.


Finally, if you decide to take the plunge, savor the fact that you have no one to compromise with. This may be the only time in your life when you, and you alone, get to choose the house you want. Then you can paint those walls purple. You can turn the front lawn into a vegetable garden. You can convert the garage into a studio. This may be your only shot at buying and owning a house without having to use the phrase, "What do you think, Hon?"


Good luck, and happy (solo) hunting.