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Old 07-27-2003, 08:08 PM   #1 (permalink)
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Location: Seattle
First time home buyer

So anyone have any good advice for someone who is trying to buy his first home?
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Old 07-27-2003, 08:39 PM   #2 (permalink)
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What exactly are you looking to find out? I am a loan officer in Indiana. In general follow the two year rule. Two years on the job, and two years with no negitive credit and you will find it easier and cheaper to acquire financing. I can finance almost anyone though with the right job history or credit level(As should any Loan Officer). Fha loans help a lot of people get a low rate, but they are also very stringent and picky when it comes to getting approved. check all your options...interest only loans, A.R.M.s, Fixed, etc. I really hope that this helps you out a little.
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Old 07-28-2003, 05:16 AM   #3 (permalink)
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Location: Sooner Nation
Don't let the Real-Estate agent talk you into more than you can afford (to increase their commission)....Remember there will be upkeep costs, deposits, taxes, insurance, etc....
Location is important (distance/access to work, shopping) and a strong selling point if/when the time comes.
Research the utilities cost. Age/type of HVAC system & insulation can mean $50 - $200 a month difference in utility (electric/gas) costs.
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Old 07-28-2003, 05:51 AM   #4 (permalink)
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Location: In the garage, under the car.
Bobaphat:

Take your parents (or anyone else who has owned a home) with you when you have found a house you like. They'll be able to see things about the home (i.e. stuff that will need fixing or will otherwise irritate you in the future) that you won't see.

Speaking from experience.
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Old 07-28-2003, 07:32 AM   #5 (permalink)
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1. Don't waive your inspection
2. Try for an FHA loan for your first home. They allow gift money from charities like Ameridream.

I recently bought a condo on and FHA loan. Had to pay 625 total for the earnest money and inspection. No down payment, and walked away from closing with a check for $479.

Don't forget that you'll also be putting property taxes and insurance into escrow each month, so be SURE you can afford it on top of your P&I. Yes, the P&I on a $100,000 house is affordable for most lower-middle incomes, but if your in a high tax area you could potentially have to add $300/month to your payment.

Most of this stuff is pretty fresh to me, and I did a considerable amount of reasearch in this area before my purchase, so PM me if you want to know anything specific.
 
Old 07-28-2003, 07:38 AM   #6 (permalink)
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Location: Charlotte, NC
Also most neighborhood have home owner dues ranging from 40 bucks a year to two hundred or more a month.
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Old 07-28-2003, 11:52 AM   #7 (permalink)
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Location: NYC Metro Area
Get a good real estate agent...Make sure they have a brokers licence and have degrees like a "CRS" or a "GRI" Ask around, and good realtors get recommended...before you go to an agent research on your own (Realtor.com)...Good Credit is an absolute must, as is a decent down payment and money for closing which should also include monies for a home inspections.
All loans require an appraisal, the company lending you money wants to make damn sure if you bolt they can sell the house and get thier money back...Location, Location, Location, you can make all the improvements you want to a house , but you can never move it.
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Old 07-28-2003, 12:12 PM   #8 (permalink)
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I used a mortgage broker, one that I didn't have to pay for but was paid on commission based on the mortgage that I qualified for...not the one that she needs to upsell.

Remember that you are buying a house, you remember you will be living in it for a good while, it's not common to just up and sell it and buy another one next month like you do an apartment.

school districts tend to be the barometer for determining if it's a good location or neighborhood. Even if you don't have kids or plan not to have kids it is something that will add value to your home. Also in religious areas like the northeast, accessiblity to synagogues and other houses of worship also increases value.

Good luck!
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Old 07-28-2003, 01:25 PM   #9 (permalink)
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Location: Memphis
In 2 weeks we close on our first home.

One of the most important things we learned was to get a good home inspector! He/She will be one of the only people in the entire process looking out for your best interests.

Ours was absolutely brutal and saved us from buying a disaster we had fallen in love with.

Our realtor got a bit lazy once the contract was signed. The yard that was immaculate when we were looking suddenly stopped getting mowed once we signed. Keep on top of them.

Research the neighborhood and visit the house at different times during the day and night. Also helps to talk to the prospective neighbors.

Shop around for financing. We were able to get a grant to cover our closing costs.

It's much cheaper to assume a termite contract than to start a new one.

Oh, and try to arrange it so that you're not moving in the hottest part of the summer. Sweltering doesn't begin to describe an attic in Memphis in July.

Enjoy yourself. This has been a blast for us.
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Old 07-28-2003, 03:10 PM   #10 (permalink)
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1) Know what you can afford. Figure it out before you go looking for houses. Don't go out on tours, find a house that you love, and then try to figure out if you can afford it, because chances are you won't be able to, and then you'll be heartbroken and no other house will look as good, or you'll try to afford it anyway and fail.

2) On the topic of affordability, keep in mind that you also have to pay property tax (varies by county), most mortgages require you to have a home insurance policy (which is a good idea anyways), and if you put less than 20% down, you'll have to pay PMI (property mortgage insurance). Those add up.

3) Also on the topic of affordability, keep in mind that closing costs can easily be $5,000, especially if you're buying somewhere near a city.

4) On the good side of affordability, note that your mortgage _interest_ (but not principal) is tax deductible. Since you pay something like 95% interest, 5% principal the first year, this is a big tax savings.

5) Finally, if at all possible, try to close the sale at the end of the month. Mortgages are paid a month behind, so you won't have to make a first mortgage payment until the start of the second month (eg, if you close April 26th, you won't make your first payment until June 1st). _However_, you have to pay interest (but no principal) to cover the days from when you sign till the end of the month (so, if you close April 26th, you have to pay 5 days interest). This is all interest, no principal, _and_ it's due at signing. Keeping the signing near the end of the month reduces the amount you're shelling out at closing.

Hmmm. Other useful tips:
* Before you start looking for houses, get yourself pre-approved by a mortgage company. Some sellers will refuse to seriously deal with anyone who is not pre-approved. Being pre-approved doesn't mean you _will_ get the mortgage, but it's reasonably certain.
* Get the house inspected by a certified inspector. It'll cost $200-$300. Get it done anyway. At worst, you find nothing wrong with the property. At best, the problems that are found result in a cheaper selling price, or you not buying a place that would be a money pit.
* Talk to your possible neighbors. Ask them about the neighborhood. Are kids outside playing? Where's the nearest: convience store, school, hospital, police department, grocery store, etc?
* How long will it take you to commute to work?
* It may vary based on your locale, but in some places, a buyer's agent is your friend. Most take a comission from the seller, so they're free for you, and they know how the market works, if this seller is trustworthy, etc.
* Take a walkthrough of the house at least 2-3 weeks before closing, with the seller's agent, and the inspector. Make sure that anything the inspector finds is reported to the seller's agent, and get an agreement that either the problem will be fixed or the price lowered before the selling. Take a second walkthrough the day of, or day before, the selling, to make sure the problems were indeed fixed.
* If, for whatever reason, one or more problems are not fixed, the seller may offer to escrow part of the payment. The way this works is that a contract is written up that the seller cannot take this money unless the problem is fixed; if it's not fixed, the money is returned. If you agree to this, make _sure_ that the escrowing party is neutral -- do not let the seller's agent, or the seller's lawyer act as the escrowing agent. Also, make sure it's specified how long the problem has to go unfixed before you get your money back.
* A real estate lawyer may be a good idea, especially if the house has problems. One'll probably run you $500.
* Ensure that there is no prepayment penalty in your mortgage (no penalty for paying early; this would also apply if you sell the house). Prepayment penalties are illegal in some states, but not all.
* If you're not going to live in the house for at least five years, it is probably not cost effective for you to buy, as opposed to rent.

Last edited by magua; 07-28-2003 at 03:13 PM..
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Old 07-29-2003, 09:17 AM   #11 (permalink)
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Location: South Ca'lina
Your realtor will ask what price range you are looking for. Usually, he will then show you lots of houses at the top of the range, and some that are over your range. This is because some realtors say you should buy as much house as you can afford. But, if you do, there's a chance you can wind up house-poor. In other words, you'll have a great house, but you'll have to eat ramen noodles for the rest of your life. I'd advise keeping your house payment below 30% of your take-home pay. This will allow you to pay your other bills and still make provision for saving money.
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Old 07-29-2003, 01:12 PM   #12 (permalink)
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My fiance and I close on our first home in 2 weeks. Everything people are saying here is true. Be prepared for it to be a very stressfull and scary experience. The best advice we have received is from our parents. Generally they are the ones who have bought numerous homes throught the years and understand all the bullshit that goes on.
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Old 08-06-2003, 01:40 PM   #13 (permalink)
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go to Lendingtree.com and you can pick a realtor in your area that not only will do what everyone said above, but you can qualify for cash back or home depot gift card. Also if you are a member of costco, you can go thru their website and take you to the same place but get more cash back.
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Old 08-06-2003, 08:44 PM   #14 (permalink)
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From personal experience--- get pre-approved & don't overextend beyond that amount, as stated above get a professional inspection done and attend the inspection,you'll learn a lot.Don't be afraid to make a concern of yours be a condition of sale--we have well water and made water purity a condition.Be wary of any agents or brokers who you did not contract with & cautious of the ones you do.A seller & his agents are always motivated to take your money.
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Old 08-08-2003, 07:51 AM   #15 (permalink)
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spend the $$$ on a professional house inspector and listen to what he says. Also make sure that your p&s states that you get your money back if the inspector gives bad report, etc.
The main reason to have a home inspector is to help remove the emotion from your decision. You will "fall for" a house and make an emotional decision to buy it. This happens to almost everyone - no shame in it. The home inspector will give you a dose of reality and put a price tag on the problems that might burn through the emotion of "loving" the house. It saved me.

Another thing that saved me was having my own lawyer review and make revisions to the p&s. Otherwise you are signing a contract that was made to favor the realtor, etc. and not you.

Another thing that saved me was having my own lawyer do a real title search, etc. This way, they found a missing party to an estate that the bank lawyers missed and I bought title insurance. BTW, buy title insurance for yourself. The mortgage makes you buy it for the bank - fun. you should have it for yourself.

After you buy - go to the county deed registry, etc. and file for the "homestead act" I'm no expert, do more research, but this protects you up to 150k or more so you won't lose your house so easily. Also, get an umbrella personal liability insurance - cheap and can save you from losing your house if someone sues your ass.

all for now...
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Old 08-08-2003, 08:19 AM   #16 (permalink)
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Location: Memphis
Good advice jbrooks, thanks.
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Old 08-08-2003, 09:55 AM   #17 (permalink)
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Do yourself a favor. Please check this link out by NOLO PRESS. They are the best self legal resource out there.

http://nolo.com/lawcenter/index.cfm/...4FF25438CB52DF

Take some time to read all the FAQs there. The most important think is not to overextend you credit. The last thing you want is a mortgage default (unless you can pay all in cash )
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Old 08-08-2003, 09:56 AM   #18 (permalink)
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Be wary of sub-division houses built in the last 15 years (newer is worse). This depends on the area and contractor, but corner-cutting has increased and quality has decreased in general over this time frame. The combination of poor build quality and over-crowding make these homes a very poor investment. Taking a 30 year mortgage on a home that might not be standing in 30 years is a bad thing.

This isn't just true about "cheap" homes, many nice homes are being built the same way. Some of these homes are so bad that you can walk up to the house and cut your way into the home with a box cutter (as long as you can fit through an 18" wide hole).

We bought our home in 2000, and our house was build in 1980. We loked at quite a few homes built from 93 - 95 in the same price range and the all had worse locations, much smaller lawns,
and were in much worse shape ( leaking skylights, warped surfaces, cracked hollow doors, chipped paint, etc...)
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Old 08-27-2003, 02:17 AM   #19 (permalink)
Tilted
 
Location: Midwest
1. Buy modest. Tell yourself "this is not the home I want to retire in" and use it as a stepping stone. Figure you max budget and then buy UNDER that.
2. other good advice above is definately pay the $300 or so for a home inspection, make your contract pending the outcome and if there's something significant that is found, make the seller get it fixed or significantly adjust your offer.
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Old 08-28-2003, 10:49 AM   #20 (permalink)
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Location: Sunny California
a great website is homegain.com -- you can have realtors fighting over giving you the best commission.
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Old 08-28-2003, 04:23 PM   #21 (permalink)
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Location: NorCal
Don't let the bank roll your insurance and taxes into your monthly payment. Pay it yourself.

I did that, and the bank stopped paying the tax man. Soooo... I discovered that I was still on the hook for property taxes even though I'd paid them as part of my monthly mortgage. Telling the tax collector that you paid the bank and that he can expect a check from the bank is about as effective as telling him your mommy promised that she'd take care of it.

Sure, the bank was legally obligated to pay up. And after hours and hours of tele-bullshit they finally did pay. But who needs the the aggravation?

BTW - Wells Fargo Bank can KISS MY ASS, YOU GOAT-RAPING SHIT-EATERS! I'D RATHER STICK RABID WEAZELS IN MY PANTS THAN DO BUSINESS WITH YOU AGAIN! ...whoa. sorry. Somtimes that just pops out.
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Old 08-29-2003, 09:21 PM   #22 (permalink)
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Wow, so much good advice. I was gonna say...nope, saw that...then I was gonna say...well, gee somebody said that too. What a great group of people here!

For home inspection, make sure the inspector is a (contributing) member of the American Society of Home Inspectors. Useful, governing body.

Make sure you have just a little more room than you want. You'll want it later for *something*.

Dont buy next to a park, a busy road, a forested area, a scummy area, a house with too many cars, or a house with a definite lack of maintenance. Here's why:

park: people will congregate, including teens with beer. You dont need to be calling the police all of the time.

busy road: self explanatory. it will be difficult to sell, too.

Forested area: it could easily get mowed down and become another busy neighborhood.

near a scummy area: people drift, and just might think that your begonias are a great place to pee.

near a house with too many cars: they lack basic cleanup skills. You'll get tired of the junk. it will be difficult to sell, too.

dont buy a house with a definite lack of maintenance: lots and lots of hidden things will break after you move in, maybe even the furnace.

Oh, by the way, have fun.
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Old 09-03-2003, 02:47 PM   #23 (permalink)
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Location: Seattle
I have just a couple of more tips.
1. Check to see if you can get a Freddie Mac loan. If you are buying a house for less than 300K, you most likely qualify. These loans are great because you don't have to pay PMI, even if you put less than 20% down.
2. Drive around any house that you may buy during rush hour. Are the roads busy? Are they tolerable?
3. Check out the parking situation by going to the house on a Saturday morning. That is usually when the most cars will be there.
I hope these tips help.
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Old 09-03-2003, 10:42 PM   #24 (permalink)
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WOW! All great advice. I have a couple of things to add, though:

Minimize conflicts of interest: research and hire your own inspector- don't let your realtor do it. Whether they are honest or not their motivation is the same- to make commision on your purchase. Therefore, it is important that people giving you advice on the health of the home be totally independent.

If you hear yourself (or worse, your realtor) saying "...it's a little small, but we could just push out that wall or convert the garage..." then look for something else. Remodeling is hard, and it is expensive. I bought a fixer upper four years ago and all I've done since then is work on the frickin' house!

Good luck!
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Old 09-04-2003, 02:37 PM   #25 (permalink)
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Location: ÉIRE
Dont take everything the sales person tells you, and most important Make sure everything you are after is in the contract before you sign it.
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