denim

I've begun a house search.

This will be my first house. I'm looking for suggestions, advice, Things You Wish You Knew When You Were Buying Your First House, etc..

I've got my pre-approval set up, I've spoken with the first realtor, and next I will try to arrange for an appropriate lawyer just in case.

I have a group of five houses to go drive by and see what I think. What do y'all say?

:::OshnSoul:::

Well, I hope I can help you with the experience of buying our first home. Here are some very important things to do:
1- make sure you are completely satisfied with the home. Any major problems should be fixed at the seller's cost. Make sure it's in the perfect neighborhood-if you have kids, see if there are other children around their age in the neighboorhood- do a neighborhood report. Do a pest & home inspection. Check everywhere yourself. If you or someone you know is good at inspecting for damage/etc., do so, on top of an actual inspector.
Ask the sellers if it is a smoke-free home, if there are/were pets there, if they know of any damages/problems. Ask what all is included in the house (aka appliances, yard tools, etc.)
Write out all of the essentials of the house you want. Then, add on qualities in which you would like to have, but aren't necessary. Give that list to a realtor so that they can better help you.
-Whatever your loan amount is for, you want to start looking at houses approx. $10-$20thousand lower than that. Also, have the seller or a broker write out an estimated monthly payment that would best suit you.
-Best at getting gas heat- electric is insanely expensive.
-Don't give into to an offer you are not completely satisfied with. Counteroffer until it won't work, there are always other houses out there.
-Pay attention to every detail as far as money/fine print on papers, the house being exactly what you want, and don't be afraid to ask questions or speak up of a concern.
I hope that helps. If you have any more questions, feel free to ask. We learned the hard way and rushed into it, although it was a pretty decent place, we weren't happy with it. Best of wishes!
-

eribrav

A lot is going to depend on the market you're searching in. Oshn's advice is really good, but in some markets my not be totally realistic. In suburban NY the past 1-2 years, many properties sold ABOVE the original asking price and were off the market within days. In cases like that, you have to really know what you want ahead of time and be bold when offering.

If you're lucky, you're looking in a slower paced market, and then you can be more selective and take your time. Look for something below your max ability to spend because there will be many expenses after you buy, that I'm sure you just can't anticipate right now.

Do be certain that you ask exactly what IS and IS NOT included. Patio furnishings, chandeliers, and other things may or mayn ot be staying behind when the current owners leave.

When it comes to your mortgage, don't get discouraged by all the obstacles the bank will throw at you. Yes, you're pre-approved for a certain figure, but that's very different from having a completed loan. There will be many more hoops to jump through before they loan you the money. Especially important, if at all possible, is to put 20% down and avoid the dreaded private mortgage insurance (PMI). PMI is expensive, not tax deductible, and does nothing to build the equity in your home. Try whatever you have to do to not have to pay PMI!

Finally, on closing day, all I can say is bring your checkbook, lube up well, and bend over and grab your ankles. Everybody is going to get a piece of you that day, but then at the end they hand you the keys and it feels good again.

You can PM me with more q's if you have them.

denim

Is it worth it to do one of those 80%/10%/10% loans to avoid PMI? And what are those loans like?

HamiC

Trust that there is ALWAYS something better out there. If you do not get this or that house, it is OK.

Check out www.realtor.com to see what other houses are being listed in a particular town....and at what price.

An even better website for real estate in massachussetts is www.newenglandmoves.com It lets you see houses currently for sale as well as what houses recently sold for.....and it shows you the street addresses.

Most importantly, the one thing you can't change about a house is location. Be picky about that......everything else can be upgraded later.

eribrav

denim, I'm not familiar with the structure of that loan. Might be something to ask a mortgage broker.

denim

A couple I know recently bought a house using what they called an 80%/20% loan. The one I mentioned sounds similar. What it seems to be is, I put 10% down, take out a mortgage for 80%, and get a loan for the remaining 10%, which covers the initial 20%. It's mentioned in the USAA Magazine I just got yesterday. I'll have to ask about it.

Currently, as a FHB, I've been planning on putting down 3% and handling the PMI. But then, that depends on what the PMI turns out to be, which I don't know.

denim

In other words, don't fall in love with a house. Gottit.

Will do, thanks!

This is effectively what the realtor said. The other thing she said was not to expect everything all at once. It won't be my dream house, but it'll be a way to begin.

micah67

As I didn't have 20% to put down, I went the 80/10/10 route and saved on paying the PMI. You should definitely ask your mortgage broker about it. (I've even heard of 80/15/5 loans, it all depends on your credit score.)

I'd recommend stopping by the houses you have great interest in at different times of the day and week. Noise issues can be minimal during the middle of the day but you discover a major traffic issue in the mornings, whatever. Night air also allows more noise from further away and the distant road may become an issue. (Or the neighbors throw weekend parties?)

Be wary of those incurable defects (like being backed up to a freeway or shopping center).

Talk to neighbors about the likes/dislikes of the area, too.

If it's not attached to the house, then you should assume it doesn't stay with the house unless you and your agent put it in the offer contract.

__________________
~micah

denim

I could maybe do a 80/15/5, but getting 10% down would be difficult. I'd be left with almost no cushion.

denim

I've now looked at the first five houses. Interesting.

There was a house from 1890. TONS of character. Also a bad roof and asbestos, which the listing said the seller is going to replace and remove, respectively. Good for him, but I don't want to get stuck with a cheap roof and a shoddy job of asbestos removal, and it's too far away, so I've removed it from my list.

Two other houses, one dating from 1900 and the other from 1956, have their own issues. Eliminated.

The duplex from 1994 is too small. Gone.

Leaving one near-by house dating from 1960. Looks nice, not too small (1452sqft), in an out of the way location. Asking $150K. Ow.

It comes down to affordability.

Cynthetiq

remember that if you are putting money into the house such as renovations... you won't get the same amount back that you put into it.

maybe you'll bet 70% back depending on the renovation.

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denim

Renovations aren't even an issue at this point. If the house doesn't come as I want it, I'll have to accept the condition it's in. I won't have the money to do anything.

The more I think about this, the worse it seems as an idea.

Jim Kata

You know what...this may sound dumb...but I wish I was more aware of the sun's position throughout the day when I bought my house. Some rooms that I am in more often then others get less sun than I would like. Also the row of houses on my side of the street still have snow while the other side of the street has all of its snow melted....which sucked when it was all ice and I had to break all the ice to get rid of it in chunks.
That doesn't really have much to do with loans and what not..but I wish I had thought about that when I bought my first house.

denim

The question comes down to "how can you test this?" It'll vary depending on time of year, too. I expect I can look at trees, directions the house is facing, and the size of windows. Anything else?

cleanx

Good luck
I bought my 1st house when I was 18 for 150,000
I just it got in apprised and its worth a little bit over 500k
One thing is that you’re going in to the market when it’s really bad to buy my advice is look for "for sale by owner" you can negotiate
And fixer-uppers are the way to go if you want to save money too

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denim

How'd you finance it at 18??

denim

I've walked away from one house "deal" and my timing may have been perfect.

The seller wouldn't fix plumbing problems I and the inspector noticed. That was the official reason I walked. The real reason is, besides that, I can't afford all the work the house needs out of pocket. A new roof, chimney work, hardwood floors need to be refinished throughout, and the electrical panel needs replacing/updating. That's what's known already.

Then yesterday, my supervisor took a new job elsewhere in the company. What'll happen now is unknown, but it seems my group will be directly ordered about by our manager, who is not known for his wisdom. "Pointy-haired boss" may be a good term for it. So this may not be a good time to buy a house anyway, if my job might change drastically.

Redgirl

I noticed this thread started way back in Feb and you are still looking for a house? That's a long time to shop around!

I know you said your job may be jeopardized soon due to management changes, but if you're still considering the house thing I have some advice. We bought a house that had gone through foreclosure and got it cheap, cheap, cheap. And there was nothing wrong with it! Sometimes people junk them on their way out just to be assholes, but these people didn't do that and even left the fridge and curtains. So if you look long enough you could get lucky and find a foreclosure that is in good shape. Our house is worth about 100K and we paid 72K for it.

Plus about the loan: Look for houses listed as Freddie Mac. This is a program where you only have to put 5% down but there's NO PMI. You don't have to take out any other loans. We just did an FHA loan, put down our 5% and have a lower house payment than we did at our apartment.

So if you do it right, you can actually save money, or at least be about the same, with a mortgage instead of rent.

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denim

That sounds really good! What are the financial limits on Freddie Mac? Foreclosure... as you said, there can be issues with these. The question comes down to, WHY did they walk away? If they did.

Polyphobic

I closed on our first house 3 weeks ago. Our mortgage broker set us up with a first time home buyer loan through US Bank. No down payment, no PMI, and a 5.95 interest rate. It helps that our FICO scores are in the upper 700s.
Being that I live in Denver, we could either buy a used home (fixer upper) or a small new home. We decided on the fixer upper. I have plenty to do but am much happier. We received a $$ credit on our closing costs for most of the items that need fixing. Our out of pocket was $1550.
My only advice is to find a mortgage broker that is located in your area. Our first mortgage broker was located in Atlanta. She approved us for $160,000. In Denver that will get you either a crappy house in a bad neighborhood or a condo/townhome. The local mortgage broker approved us for $185,000.

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denim

This realtor makes a used car salesman look really feeble.

Now she's telling me that the issues the house has are being looked at, the roof doesn't need to be done right away, the chimney ditto, the floors are up to me, the electrical is probably a good idea, and there just aren't that many houses out there right now in my price range (under $190K). Well, of course not if she wants me to buy this one. It's just seeming to me as though self-interest and mine are getting further apart. I dunno. Maybe it seems like that all the time for everyone?

Polyphobic

Not with my realtor. He was a pretty good guy. Not to concerned with making a buck. Most of his $$ comes from his rental management business.

__________________
<--The great infidel-->

denim

This lady's side business seems to be high school tennis coaching. Her license plate is "SIX LUV", which should get the idea across if you know anything about tennis: she likes to win by crushing her opponent. Not an unusual idea, really. It just occurred to me that she might have made a good Viking.

I just have to keep in mind that our goals are not similar.

eribrav

denim, you didn't mention if you are using a buyer's agent or not. If she's a seller's agent, you have dramatically underestimated how different your goals really are. She does not work for you aand has no interest in your well being. She works for the seller and acts accordingly.

maleficent

Then fire her and find another broker. Surely she's not the only broker in town.

I have been going thru that myself. Brokers are a dime a dozen, you'll find one that's hungry and will work for you and will have your goals in mind.

__________________

denim

Yes, she was supposed to be a buyer's agent. However, this particular house is represented by her agency, so she's a "disclosed dual agent" with regard to this property.

Redgirl

I don't know what the limits of Freddie Mac are. You'd have to google it. But as for your agent, get rid of her. We had a shitty one at first too, who was not nice to us. We ditched her after a few months and the next realtor we got was great. We found our house in just a couple of weeks after we met with him And it was a house we wanted that other biatch to show us and she never would. Finding a good agent is key and there's enough of them that you don't have to put up with any shit from them.

__________________
Thought for the day: Men are like fine wine. They start out as grapes, and it's up to the women to stomp the crap out of them until they turn into something acceptable to have dinner with.

denim

For now, I'm working on getting my money back. She's opened up the search service again, so I'm seeing properties. What I'll do after I have the deposit back, I can't say yet.

NoSoup

One other decision you should make before purchasing a home is your reasoning behind doing so.

If you are looking to purchase a home to live in forever & ever, and are not really concerned with selling it, you would want to act completely different than if you were using a home as a tool to build equity for your next, bigger/better/more suitable home for you.

If you are looking at a home that you may live in forever, plan on doing so, although statistically, more than likely you will move out.

On the other hand, if you are looking to buy a home and use it strictly for profit, go into the deal with your eyes wide open and do not, even for a moment, consider staying there 10 seconds longer than originally planned...

If you need a better explanation/have questions, feel free to post on the "ask the loan officer thread" in the finance forum, or send me a PM, just in case I don't check back here for a while

In the meantime, good luck!

raeanna74

I didn't catch this thread on it's first time through. I'm going to keep watching this thread now as hubby and I are just now wanting to do the same thing. Looks like lots of good suggestions so far.

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denim

I've effectively called off my house search for now. I can't afford to buy, since I don't have the reserve to pay the mortgage for a couple of years in case of job problems. AND I don't feel I have enough of a downpayment. AND I don't like the prices at all.

So I'm moving into a big apartment and putting money into investments instead. Part of what I want to learn now is "how much living space do I actually need?" The new apartment is 1250sqft, but has no basement.