house hunting soon ... need does and dont's advice

GreenLantern

Me and the eventual misses are probably going to start looking for a house starting in April, and since we're both novices (first time buyers) at this I was hoping to tap into the wealth of information from a lot of people on this board. Any and all replies would be great, but right now we haven't even gone to a realtor so I'm wondering what are some of the things I should be concerned about in the first phase of this task?GL

susie

I'm not a realtor, but have moved a lot and bought two homes so far. Here are a few things you need to think about. Are you going to be staying in the same area for a length of time? Will children come in to the picture at any time? Is convenience to social activities a must? Privacy or land a factor? Take all of these things into account for resale value, and quality of schools and access to things to do. Once you have settled on a few areas to look at drive through the neighborhoods and get a feel for the area. Check for homes for sale by owner. I suggest driving through during a large rainstorm to check for flooding/standing water problems. Also think about utilities and costs, ask the owners what their average utility bills are for each season. Check the heating and cooling systems of the homes, insulation, and structural soundness (foundation). This can be checked by looking in the attic as well to check for separation of beams. realtor.com is a pretty good website that shows listings and you can tailor your search for area, price, sqft., number of bedrooms and bathrooms. Hope this gets you started.

concealedG36

Also, remember that the price you pay per month for the mortgage is NOT the total price. For example, if your new house costs $100,000 and you put down $10,000 (10%) you'll be financing $90,000. The bank will tell you that your monthly payment may be around $600 or $700. But, you may ALSO have to pay home owner's insurance, taxes, city-utilities, etc. This can bump the original figure to $1000 or more per month. This is very important if you're trying to meet a goal (like no greater than $800 per month TOTAL).I have also found that it is important to find out whether appliances, ceiling fans, drapes/curtains, etc. are included. Some sellers take EVERYTHING with them.Finally, the sellers are supposed to complete a disclosure statement (in Michigan anyway) to tell you about anything that may be wrong. This includes things like lead-based paint, flood/fire damage, etc. Make sure you ask them for one of these and have them sign it. Then, if they tried to hide something from you, you may be able to make them pay for it later.Good luck!!G36p.s. Remember that you will "grow into" a house, usually. So, don't go too inexpensive because what seems very expensive today may be very affordable tomorrow.

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Gun Control Disarms Victims, NOT Criminals

beachmaster73

Green Lantern.....location, location, location, and if I didn't mention it location!!! Always go for a smaller house in a nicer neighborhood(unless you need a larger house for the eleven children and three spinster aunts!)You will be able to sell it later more quickly and usually at a higher profit margin than a larger house in a not as nice neighborhood. Everyone has hit on good advice for you with the other replies. If you are looking at buying a new house don't become "house poor". Remember that a new house needs curtains, landscaping, shelves in the garage, shelves in the basement and a million other little things that can quickly drive up the purchase price. An older home usually has most of that stuff even if it is not perfectly to your liking. Have fun in your quest......Oh did I mention location, location, and location? Beach

badboybob

I am a Realtor.Check your Sunday paper for Home Place magazine and choose a Realtor. Or drive around town and note which agency has the most listings. Then when you have chosen a Realtor, tell him you want him to act as your agent. This puts him squarely in your corner. The laws of agency vary from state to state and if the realtor is showing you a house he or his agency has listed it is generally required to disclose this.ALWAYS ask for an inspection by a certified inspector.Bargaining about the selling price may save you a few pennies on your monthly mortgage, but getting closing agreements with the seller can save you big bucks right now. For example you can have the seller pay all closing costs over, say, $500, give a new carpet allowance, make all repairs needed in the inspection report. etc.Be sure to get nothing less than a warranty deed.Generally you will not need your own lawyer as your lender will require a title search and title insurance.All Realtors are held accountable to a very high standard of ethics, so you can feel comfortable about their professional conduct.

Gordian Blade

My wife and I have purchased or built six houses. Always consider whether the next buyer will want to buy your house. Make sure that you get a reliable and thorough mechanical/electrical inspection, someone who will look into every nook and cranny, someone who has a reputation for being very picky. We thought we were getting that on a new construction house we bought, only to find out a year later that the house had significant foundation problems. You can fix the cosmetic stuff like painting and woodwork a lot easier than the fundamentals of the house.

woodsrunner

I bought my first 2 1/2 yrs ago.1) buy high ground!! I'm only a couple miles from lake Ontario, even in a drought my basemnt is wet.2)Go for a mortgage less than the maximum ammount you are approved for. Like someone said above you pay other things with that payment. My school taxes went up 10% last year and may do so again next year.3)Meet ALL the neighbors before you put in a purchase offer!!! check nieghborhood gossip too. I've got one who finds something to petition about every year. When I bought this place there was a dead tree on the property line. I had a tree service out to remove it, he went away for the weekend and parked his van under the tree. Had a wind storm, tree fell on his van, then he tried to sue me. For some reason since I bought my Harley and shaved my head, he doesn't speak to me anymore.(I'm so disapointed!) Then again that might be because of the pig roast last summer he wasn't invited to attend.WOODS

wundudnee

I would look for a small well built house on a large lot. More than likely this isn't where you are always going to live but if you ever want, you can add on or build that big garage in the back if you have access. Get your parents involved and maybe you can eliminate any mistakes they may have made. No offence to badboybob but Personally I would prefer having my own attorney go over the purchase agreement. It's probably the most money you are ever going to spend in one place. Real estate agents are good people to know when you are trying to arrange financing, they can find money sources you don't know exist. But they are in business to sell real estate and your attorney just works for you. There aren't to many things more exciting than buying your first house. Good luck.

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"It's great to be great, but it's greater to be human." Will Rogers[This message has been edited by wundudnee (edited 03-20-2002).]

Varmintmist

Dont belive anything a Realtor says. They work for the sellor, period. Unless you hire one as a buyer broker, and want to pay the extra commission. Most are out to sell you the house they think you should buy (read highest priced). Try this test, look at your watch as you sit down with a realtor, look at again as soon as he mentions a company he works for to get you preapproved, look at it again when he/she goes over your price that you already mentioned. 5 min or less, remember, he gets his commission if you can afford it next year or not. Get your own inspector, look into inspectors before you look at realtors.Using realtors is like getting the kids toy out of the commode when its backed up. You need to do it no matter how distastefull.Yall get the feeling I really dont care for the "proffession" of realtor?

badboybob

Varmint I told Greenlantern to have his realtor act as his agent. This is a legally enforceable agreement signed by the Realtor and Greenlantern. I have already explained dual agency.Your reply indicates to me you've had a bad experience with a used car dealer. Relators are held to a much higher standard of conduct.

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PC=BS

offeror

I went to a friend with a good amount of experience with her realtor's license. She showed me houses from all realty companies, not just her own. I bought a house from another realtor and the two realtors (mine and the seller's) split their commission. I think this is the most objective way to go. If you have a good realtor he or she can make the process fairly simple for you. One thing I learned the hard way is to be careful if you request any repairs to be made before the sale. After the required home inspection identified a couple problems, I stipulated a couple of things be done prior to sale, including a new damper in the fireplace. The repairs were made by the owner himself, but after I took possession I found that he was a poor handiman. He had installed a damper on top the chimney using flammable caulk and in the process he had cracked two of the tiles that line the inside of chimney. It was unusable without $400 of tile repair. He also offered to close and cover the pool prior to moving, but never cleaned a treeload of leaves out of it first, so the water was pure black in the spring. I didn't find any of this out immediately so I ate the cost.Moral: If your inspector recommends repairs and the seller agrees to make them, check the work after it's been done before signing on the dotted line. The second piece of advice has been touched on but I'll say it squarely. Don't buy as much house as your budget allows for. If you do, you won't have any money left over for paint or the absolutely inevitable repairs. With a home, you must factor in some monthly money for upkeep. Also, try to save some money in case of a layoff. You don't want to be in immediate trouble if your household loses all or part of its usual income for a period of time. And finally: As a homeowner, you'll get offers to take out additional loans with your house as security. NEVER TAKE OUT A BILL CONSOLIDATION LOAN IN THE FORM OF A SECOND MORTGAGE OR HOME LOAN. If you do, you'll be doing the banks a big favor -- taking unsecured credit card debt and turning it into debt secured by YOUR HOUSE. Then if god forbid you ever need to hold off creditors and/or take a bankruptcy, your house will be tied to the debt represented by that second mortgage. This may force you to include the home in the bankruptcy rather than making a deal with your primary mortgage company to keep it. Foreclosures are up, probably because people are not keeping homes tied to big bill consolidation loans on their home, making the monthly payments higher than they can continue to afford. And never borrow more on your house than it is worth. Once you buy, you'll need to keep a home 3-5 years just to pay a normal mortgage down far enough to make your money back when you want to sell and get into something else. I'm done now. I hope it was helpful. If you have any doubts, print this thread out and show it to your new agent. Ask them straight out if they are planning to be solely your buyer realtor. They'll know what you mean. [This message has been edited by offeror (edited 03-20-2002).]

Varmintmist

Several "realtors" not car dealers. Ethics are a passing fancy in your chosen proffession. I currently have a dual agency in a contract with a realtor, I know what it means and what it doesnt. I have bought and sold a few houses, and land.When the "realtors" call for sale by owner sellers "bad people" (they do) what kind of ethics does that represent?You know how long it took the "realtor" to show me properties that were 400% higher than the figure I specified? 22 hours. The day after that he was suggesting property that was 1/4 the size, in a different area (developments) than what I requested. The "lending agency" he recommended qualified me for about 150,000 more than I know I can afford. So, from the get go, where are his ethics? In dealing with about 15 different realtors in my house buying carreer, I have yet to find one who acted differently. Its more sins of ommission than a active screw up, mainly because you have to do something in order to do somthing wrong.And anything less than a buyer broker is representing the seller in some way, read more money for the realtor.I hope that you are a execption.[This message has been edited by Varmintmist (edited 03-20-2002).]

jhj370

On your inspection, make the seller agree to have work done by a professional, and insist on seeing the invoices. Also, double check, sewage or septic, pro's and con's on both, but with sewage, your water bill may double. My sewage is equal to water, ie, $15 water = $15 sewage. This suck, b/c there usually is only one water provider. Ask to see copies of gas bills, 2 story homes with open ceilings may cost you a bundle in gas. Walk the entire lot, and check for erosion, pine beetles, anything that may lead to problems in future. Look at not only the street the house is on, but the area. There's not a seller alive that will tell you they are moving b/c the area is getting bad. Remeber the 3 p's, prayer, patience, and persistence, you'll need to excersize all 3 numerous times daily.

William81

Get yourself pre-approved at the Bank or lending institution you intend to use. Sellers are more motivated to deal with you when they know you have already quailified for a loan and that you are not just fishing.....The biggest pain in the rear to us when we were selling our old house was dealing with people who could not possibly afford our house or ever get a loan to begin with. No offense to BBB, but when we purchased our new house last summer and sold our old one, our Attorney caught a couple of items in the agreement that would have cost us money. I am sure he saved us close to 1000.00, so he was well worth the investment. Finally, and again no offense to BBB, check out several Realtors, find one you are comfortable with, you may have to spend a lot of time with them.Good luck, you are in for an interesting adventure....

mudge

Keep looking until you find what you want. Don't give up looking and "settle" for something because you're tired or frustrated. The house you're looking for IS out there.FIND IT. Mudge the tireless

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I can't come to work today. The voices said, STAY HOME AND CLEAN THE GUNS!

ibtrukn

GL----NOT WITHOUT A LAWYER!!!

GreenLantern

Wow! Thanks everyone for your input so far!! I'm going to have to re-read this post a few times to make sure everything sinks in. Some of things mentioned I sort of knew about, a lot of it I didn't!Also had another thought! The girlfriend is still in school but should graduate in May. Would it be smarter to try to get the pre-approval/financing after she's out and has a job rather than before?[This message has been edited by GreenLantern (edited 03-20-2002).]

offeror

Not necessarily smarter, but maybe easier. Depends on your own credit whether you can get preapproved alone. But with two incomes, they'll just tell you that you can afford a more expensive home, which may or may not be to your advantage. They will approve you for a lot more than you want to spend. They tend to approve you for every spare penny you'll have, which is unrealistic, especially if you don't budget clearly. You have house payment, utilities (water, gas and/or electric, phone, TV cable, cell phone, whatever), car payment(s), trips to the grocery, drug store, doctor bills and medical insurance, house maintenance, house stuff like mower, hoses, doghouse, lighting, garbage service, furnishings, clothing budget, and miscellaneous. Your house and car payments, in my opinion, should be only half of what your regular monthly net income is. The main thing is, start saving right away. If your bills are too high to save, you're spending too much. And keep off the plastic. Credit card balances'll kill you, because you're spending money you don't have yet, meaning you're already spending what you will make in the future.

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"The 2nd Amendment is about defense, not hunting. Long live the gun shows, and reasonable access to FFLs. Join the NRA -- I'm a Life Member."

BoltactionMan

GreenLanern, I am VP at a bank. I finance about 100 homes a year.1) Find a realtor. Find one you can work with. Yes they work for the seller but they also (in most states) have to get seller's disclosure statement, use standardized contract forms, etc. to maintain their license. You can do this with out one, but you are at greater risk.2) Ask about utilities. Have everything inspected, mechanical, pest, etc. 3) Get pre-approved for your mortgage. Use a bank not mortgage broker (my bias). Here's why banks have money most brokers don't. You may sit at your closing for hours waiting for some third party to wire your money in from another state. Or, worse change the terms of your approval to hold you ransom.4) It will probably be easier with girlfriends income. She needs to copy her diploma and transcript. This counts as job time when she takes a job in her field. Credit issues are the only thing your lender can't fix.5) Check into any "first-time" homebuyers loans. Many states have them and Fannie Mae and Freddie Mac offer easier approval terms. Some programs even come with grant money to help with closing costs.6) Stick with conventional loan or FHA. Any advertisement with the words "bad credit not a problem" is a problem.7) So called "no closing costs" loans aren't. Things cost money, you will be paying for it somewhere.8) Get a Good Faith Estimate of Settlement Costs from your lender. By law they have to give you one within 3 days of your application. Look for: Processing Fees, Document Prep. Fees, Tax Service Fees, etc. they are legit, but should be more than $300.00. Loan origination fees, discount fees, broker's fees etc. ARE POINTS. These will be reflected in the APR of your Truth in Lending disclosure. For example, if your rate is 7.00% but your APR is higher than 7.125%, you are paying sizeable fees and better back up.I hope this wasn't too boring and I hope it helps. My advice to people like you is to relax and have fun looking. If you have done your homework and are prepared, you have nothing to worry about.Good Luck!KC

HAIRY

For those recommending a lawyer, remember this: half of them are wrong--always!!! My favorite lawyer told me once when I mentioned the above, "you're mistaken; lawyers are wrong more often than 1/2 the time; that's why they settle."

Otoman

If you tell the real estate people that you are dealing with, what features you would or would not like in a house it will eliminate a lot of wasted time looking at Homes you probably won't be interested in...Don't forget to get the good garage, or have a lot the size you can add a detached garage to later, so you can play with your toys in it.

martzkj@msn.com

Try to keep your payment low. The bank will have you eating beans and hot dogs. If you buy what they say you can afford. I like keeping the total payment (taxes and insurance), a quarter of our monthly income. This will keep the gun case from collecting dust.

gunpaq

One thing to consider after doing all your research on the property is the "vibes" or was this a happy household and did it provide an element of tranquility to the old owners. It's just a gut feeling.

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Pack slow, fall stable, pull high, hit dead center.

seb1999

Remember - realtors are the same as used car salesmen except they have a cell phone!As mentioned previously, location, location.I have moved 10+ times in the US and Canada and have owned 8 houses. Oops make that 9 I still own # 8 and I have always bought the most house I could afford that was within walking distance to the BEST ELEMENTRY school.Who wants their kids bussed no matter how big a palace you might own??The reason I still own # 8 is because the rent for that pays the mortgage on # 8 & # 9 as well as my "bar bill" and ammo bill!!!Remember: Experience is the direct result of poor judgement!

seb1999

Oops I shold have read all of the posts.If you are a first time buyer there may be a lot of incentives available.Try to qualify with the lowest income (before the misses is in the workforce) because there will be more $ available to you.My daughter is in this position in DC (noone in their right mind should want to live there. Where did I go Wrong?). She recently qualified for low rate financing as well as incentives and then she just got a 4K/yr raise and it did not affect anything

smooth_operator

Hey....I should've asked this question last January before I bought my first house.-smooth

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Life is the leading cause of death.Everything else is just a contributing factor.

Rafter-S

I didn't read, in detail, the previous replies. So if I have duplicated, I offer my apologies. 1. Get a title policy. Most of the time that is standard, unless you buy from someone direct and they do the financing. A title policy guarntees you there are no outstanding leins and that the property can be sold by the seller.2. Check insurance requirements by keeping you agent in the loop. As an example: here in Texas, when a house gets 40 years old it falls into a higher rate category.3. In the late 60's there was a copper shortage. As a result, many houses built during that time had aluminum wiring. Aluminum wiring is NOT GOOD! Aviod houses with it.4. Hire a qualified and bonded inspector to check out the house for you. It is important he be bonded in case he misses something big that ends up costing you a lot of money.5. Don't buy a house in "low land" such as near a creek, river or lake. If you do, make sure you know "exactly" where the 100-year flood line is.6. Avoid houses with swimming pools unless you think you just have to have one. Their maintenance and insurance costs are pretty high.7. Bargain for appliances such as refrigerators, freezers, washers, dryers, TV antennas, lawn mowers, fireplace sets, furniture, etc. A lot of sellers will throw them in on the deal if negociated.

barto

you can ask that the seller deduct from the price the cost of any minor (or major, if your the handyman type) repairs needed.when you finance for decades, the interest can add up to 3 times the cost of said repairs.better than money in the bank, imo. barto

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the hard stuff we do right away - the impossible takes a little longer

booger

Loans: The only way to go is a conventional 15 year fixed rate. All the others are a rip-off and if you can't afford the numbers that a 15 year fixed produces, you can't afford it then.My .02

sandman2234

I just sold a house, seller wishes he had asked for a 5 day before closing option to turn the utilities on, to check that sort of stuff, that ended up being a MESS. Being empty for a while, everything leaked.. Get Title insurance that covers you and the bank. Simolanteous or something like that. More later, gotta runIf you put 20 percent down, you will save the fees of the mortgage insurance. Turns out to be a lot, LOT of money over the term of the loan.

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Have Gun, will travel[This message has been edited by sandman2234 (edited 03-22-2002).]

daddo

Once you are serious about buying the home, it is a good idea to have professional inspections done. I'm sure the regular home inspector can "look" at things but is not an expert-I KNOW! I'm an A/C contractor and see it time after time when owners of a used home have to spend big dollars to replace Heat and A/C systems not long after the purchase. The home inspector is not a trained tech. and will not be able to find "real" problems. Do yourself a favor (even if you pay for it yourself) and hire reputable A/C tech., electricians and plumbers to inspect the home and get an evaluation in writing. A new heat & A/C system can cost $3,500.00 to $7000.00.