Give me your best advice about buying a house! - Page 2

[starling&diesel]

• buy near schools, bus routes, shopping ... makes for an easier life and a quicker sell when the time comes
• buy with your largest family in mind, so that a new addition will not mean a move
• know your area inside and out, knock on doors, meet the neighbours, ask them the same questions you're asking here
• buy well BELOW your means so that a job loss or injury won't mean losing your house
• don't let the banks tell you what you can afford ... they have no idea what you can afford ... decide this for yourself
• ask yourself... if worse came to worse, could we live here FOREVER ... if the answer is yes, go forward ... if the answer is no, walk away
• if the house is more than 20 years old, be prepared to put aside 20% of our approved mortgage payment for repairs and upkeep
• pay cash for repairs and contractors
• trust your gut ... it says walk, you walk
• write out a 'must have' list, then a 'wish' list, then a 'bare bones' list of what you're looking for ... decide ahead of time where you draw the line

[Pinoikoi]

Well, we bought a house with Habitat for Humanity, so we have an automatic seller if we want to sell, and woohoo! Affordable housing! I am an advocate, have to post it here!

[miss_sonja]

We didn't spend enough, out of fear, and now housing prices have skyrocketed and we wish we had at least one more bedroom.

Other than that:-), be sure to drive around the neighborhood you are planning on buying in and get out of your car and just listen. Listen for barking dogs, police cars, ambulences, noisy music, etc. Do it a few times. Also, walk around the neighborhood, don't just drive. We didn't realize how few sidewalks there are on the blocks around us because our block itself has them.

[hopefulfaith]

This is fantastic. Now that I have all of these knowledgable people here, let me ask more questions--


If a bank takes back a house in foreclosure and is selling it, can you make them an offer on a lower price or do banks do that?

Also, if the bank is selling a house "as is", what specifically does that mean for me?

Oh, and one more thing tonight - how do you know what interest rate you will qualify for? We will be debt-free soon except for my car and perhaps my student loan. Good credit report; nothing scary on it. Lots of loans and CC debt paid off. How do I know what the bank will offer me?

[EFmom]

We've sold three houses and have done well on all of them. I think the smartest thing we did was to buy in the best school district we could afford. That means sometimes buying less house, but the houses seem to appreciate much more.

[Piglet68]

Originally Posted by hopefulfaith

Also, if the bank is selling a house "as is", what specifically does that mean for me?

Around here that's real estate speak for "you'll probably want to tear this puppy down!". Major, major renovation work needed. Building likely not worth anything (price represents land value).

[FillingMyQuiver]

Originally Posted by Piglet68

Around here that's real estate speak for "you'll probably want to tear this puppy down!". Major, major renovation work needed. Building likely not worth anything (price represents land value).

Not always though. We're closing on a house 3/3 and it's being sold "as is". We've had our inspection and EVERYTHING is in GREAT shape. (Our home inspector is more than thorough, he's a friend of the family) It's being sold "as is" b/c the bank is covering themselves just in case. Since they haven't personally occupied the properties, they can't attest to the condition of the properties. One of the homes we looked at was "as is" and needs some mold remediation. B/c it's "as is", the bank isn't going to take care of that. Another home we saw needed the crawl space cleaned out and the shell of an above ground pool removed. If it was a person selling the house, you could negotiate it so that THEY took care of those things, but if it's a bank selling "as os" YOU have to take care of it if you buy the property.

[maryjane]

:

And I have a question about this:

Originally Posted by Vypros

1. Do NOT take a loan where the payment is any more than 25% of your paycheck.

2. Do not forget that taxes and homeowners insurance will be factored into said payment and they will account for at least $100 to $150 of that payment.

Are you saying that the payment INCLUDING your insurance and taxes shouldn't be more than 25 percent of your paycheck (I know DR says take-home pay, right?) Or that the loan only should be more than 25 percent?

Thanks!

[lilyka]

go for quality of quantity. You can pay for it now or you can pay for it later. It is better to just get a house with good siding, a good roof, and good electrical and plumbing. Oh and windows. . . good heavens we pay through the nose on account of our poor windows.

If you think you will send your kids to school take that into consideration.

don't rule out the "hood". everyone told us to buy the worst house in the best neighborhood. screw that . . . we got one of the nicer houses in a less than good neighborhood. It was cheap, it is huge, we rent half of it for 3/4 of our mortgage payment, and I LOVE my neighborhood. I like lower income neighborhoods, there are no convenances and people telling me what kind of landscaping I have to have, people are outside and socializing, it is ethnically and economically diverse, there are three elementary schools within walking distance and one is a charter school (we have open enrollment statewide so I can send my kids to any school that has openings and that I can get them to every day) and even when I am slacking our house still looks stellar compared to the rest and unless we are breaking city ordinances no one can or would complain. the down side - our house will be harder to sell and we probably won't make much profit but it is a good candidate for rental property which will always be good in this neighborhood. But I am not in this to make a profit. I just want a comfortable place for my family. it is still better than renting. in the end we will still walk away without having lost any money and if we can't sell it right away it is prime rental property.


where is it in relation to everything else? is there at least a convenience store you can walk to? what about pools, parks, libraries, grocery and discount stores? is it on a public transit route if there is public transit? I would pay more to live in town and would pay more to live within walking distance of stuff.

trees . . . .trees are nice. It gets hot here but because of our trees it is tolerable without AC almost year round. I am sure without the shading we have on three sides it would not be tolerable. So for us they are worth all the trouble. and they are just pretty however . . .trees can be expensive to keep up. Our city went down our block and gave us compliance slips this year for trimming. then a tree got diseased and we had to have that removed. lack of compliance within 90 days meant they would take care of it, ticket us and bill us for the trimming. we were able to do it ourselves but the average in the neighborhood was $1000. for tree trimming (we have a lot of trees in our neighborhood). if we had had to pay for tree removal that starts at about $500. make sure if you have trees that they are healthy. Also they always clog the gutters, make it hard for grass and landscaping to grow, etc. Some trees don't cause these problems . . .

look for signs of water trouble like wash outs etc. if the city has trouble with flooding ask to see the house right after a good rain.

when you look at the house look to see what the thermostat is set at. does it have to up high to stay warm?

talk to the neighbors!!! this saved us from buying a house with a huge mildew and flooding problem. the real estate agent did not mention it. fortunately I ran into a chatty neighbor. also they can tell you if people have been in and out. even if they don't know why this is a good sign that there is some sort of issue.

drive through the neighborhood morning, noon and night. how is the sound level? who is hanging around? do you see people outside playing? how are people driving? like i said . .we have rental property. we don't show it after a certain time of day :

things to think about and factor into the cost:
*what appliances will you need in the next 5 years. don't forget to check out the water heater and furnace. are they all energy efficient? will it be cheaper to replace them now?
* window treatments. we dropped over $1000 for curtains, blinds and shades and hardware. We have 18 windows. one is a huge leaded glass picture window. none of them are small. we never imagined it would cost that much. and that was all kmart curtains (I Martha Stewart)
*landscaping. will you need to update the landscaping? put in grass and or landscaping? will you need to buy a lawn mower or snowblower? we thought we could get by with just shoveling but this place has a lot of scoopable areas being a corner lot with detached double garage and all . . . .
* will you need paint or carpeting? will you need to refinish floors?
*will you need more furniture?

Do not get an adjustable rate or balloon payment mortgage.

around here as is means that they are not going negotiate stuff like new carpet,painting, cleaning etc. they aren't going to replace appliances or make a big deal to sell it. they aren't going to update anything for buyers programs (I am not sure what they are all but i know my friend had to make a big change for some low income program and then they guy changed his mind). the house was likely foreclosed on. Just be sure to have a good inspection and be realistic about what you may need to replace or any work you may need to do. the up side is that no pains have been taken to conceal things that may need repair, cleaning etc. I would rather move into a house like this than one where stuff has been cleverly disguised to make it sell.

[savithny]

Originally Posted by Piglet68

Around here that's real estate speak for "you'll probably want to tear this puppy down!". Major, major renovation work needed. Building likely not worth anything (price represents land value).

Nah, around here its "we bought it to live in for three years in grad school and we really don't have the time, energy, or money to fix it up, so be careful because you get what you're getting."

In my hometown, "as is" is how you sell houses you inherit from your dead relatives.

[mikelanza]

I wrote an article entitled "What Kids Want Most in a House is Not the House" recently. You can read the whole thing at:

http://playborhood.com/site/article/..._in_the_house/

My point in the article is that kids care very little about the house itself if the house is surrounded by a great neighborhood for play with other kids around their ages.

Unfortunately, realtors are almost always very inept at finding the homes where the great play areas are.

[brittneyscott]

Same as the pp I say make SURE you can afford the note along with extras no matter what. We just bought a house a couple of months ago and I'm already stressing over it. We needed to move when we did and I LOVE our house but still. Its in a great neighborhood, great school, great church nearby, lots of land with extras, nice big house. Its perfect except the note. Before we bought I planned our budget repeatedly to make sure we could afford it and we could on our lowest monthly income with extras. Our taxes and insurance ended up skyrocketing right after buying it and raised our note a lot. With that and rising gas and grocery prices we are in a bind now. Our highest monthly income barely leaves any extra and I'm praying for the next year to pass safely so we can refinance. Its scary to think that if prices keep rising and things don't get any better we may end up losing our house... that we just bought!

[xekomaya]

All the advice given looks great. I don't know that I really need to add anything, but I will

We bought a house @ 82% of what we were approved for and it is HARD. Don't forget the approve you based on your pretax income, but you pay out of after tax income.

We bought a tiny house on the outskirts of the best neighborhood we could afford. Our home value has stayed steady despite falling real estate prices, and comparable homes are still selling quickly - even though we're not leaving, it feels good to know we could if we had an emergency.

We used a buyers agent. I would never consider buying a home without one. It doesn't cost you money so I don't know why you wouldn't. Find someone you trust, who seems to "get" your taste and seems to have good negotiating experience. Check out their certifications to get an idea of how seriously they take their responsibility as a buyers agent - some people specialize in it.

Maintenance costs are around 3-5% of your house value per year. Don't pretend you can get away with less because then the roof will start leaking and you won't have saved up anything to handle it.

Know the area *VERY* well. Know where the schools are, the police station, the crime rate, walking distance to a corner/convenience store, distance to the grocery store, etc. Our agent (and DH) wanted to look in another part of the city not too far away where we could have had more space and a yard for what we paid. I refused to even look at houses over there and I'm SO glad I didn't cave to the pressure. With a little one on the way I would have felt so isolated in that neighborhood -- and their home values have dropped significantly

Shop for your mortgage. Check out any credit unions, ING, banks, Lending Tree.. any place you can get a basic estimate, go for it. There are HUGE differences in closing costs between lenders (my credit union wanted 11k to close, we ended up paying ~$400), and small differences in interest rates make a big difference in the long run. You don't want to take a mortgage and plan to refinance - the future is never guaranteed.

Don't forget moving expenses and initial fix-ups. Even if you buy a house in great shape you'll want to paint, change faucets/shower head, buy new curtains etc.
Even if you do it carefully, your old furniture isn't all going to work with your new home. I thought we could just use what we had for a year until we could save for new thing, but somehow the furniture we had in a 550 sqf studio was way too big for a 650 sqf house with walls. Nothing fit and we were miserable. I felt like we lived in a maze, and we still had piles of boxes/books because of the closet space difference - so putting in closets and bookshelves was at least $1000 unplanned in the first 3 months. In a bigger/suburban home this may not be such a problem, but its at least something to consider. Even "cheap" Ikea book shelves can be pricey

Thats probably enough outta me GL

[brewgirl]

My thoughts:

-Be choosy about your lot. You can change the house, but you can't change the size/shape/locatoin of the property that it sits on.
-Location matters. Check into schools, major employers, what's within walking distance, etc. Our first home appreciated like crazy and sold quickly in large part b/c of it's location.
-Figure out what's comfortable for you to spend. Decide on your upper limit and stick to it. I agree with the poster who said that a big part of the fun of owning a house is being able to make it truly your own with paint and landscaping. You want to have money for those things.
-Find a buyers agent. Make sure that it's someone you like and are comfortable being with. The buyers agent for our first home was, eh. The second time around we had an amazing agent and he was a huge asset.

[amyamanda]

I wish we had considered the method and cost of heating the house. In 2003 when we bought this place, no one we knew was talking about oil prices going up, or peak oil, or anything like that. We have a 2400sf split ranch with three zones, oil-heated hot water, and water pipes that wrap around the outside walls of the house (coldest walls, hardest to heat).

I would not buy a house with oil heat. I would buy a smallish/modest house with the water pipes in the middle of the house (I'm not exactly sure how to tell where the pipes are, but check location of bathroom, kitchen, laundry, etc and where the pipes go up in the basement). I would buy a house that had a good central location for a woodstove, or a fireplace that could be converted to a woodstove.

There is a woodstove in our current house, but it's on the same flue as the furnace so it can't safely be used. If there is a woodstove, check to make sure it has its own flue. Make sure to get the chimney inspected if you plan to use it for heating.

Also we discovered afterward that our steep hill road is NOT plowed by the town and that it's impossible to get up in winter without four-wheel-drive. We bought in the spring/summer and it didn't occur to us to ask about the winter access. Hindsight is 20/20.

In our 2400sf, 3br home, we ended up not using one of the bedrooms at all for a couple of years (!) and the downstairs playroom hardly gets used at all. Wasted space, which we pay to heat and maintain.

If the basement is damp, you'll have to buy a dehumidifier, unless there is one down there that they'll sell you with the house.

In some states the fridge isn't included in the sale. Silly but true. You might want to negotiate for the fridge in the sale price so you don't have to buy another one.

Our neighbors took a seller's word that the roof was in good shape, instead of having it inspected. They had to replace it a year later. We had an inspection and knew exactly what was wrong with our roof and negotiated for it in the price. We had a couple of different contractors come out to give us estimates on things that weren't visibly obvious when we made our offer but came up in the inspection - a bowed wall, aging pool liner, roof issues. They brought the price down 12K when we itemized the things that needed fixing and took into account what it was worth to us.

Try to get a feel for what the neighbors are like and whether the neighborhood is busy/loud or quiet.

Ask them to pump the septic tank for you before you move in, or negotiate that in the price, so you don't have to pay for it later.

Just go in with your eyes wide open and try to be aware of things you'll need to pay for later, so you can take that into account when thinking about how much you can spend up front.

Those are the biggest things I can think of right now. Good luck!

[Jessie D]

I haven't read the replies, but I am in a hurry and wanted to put my 2 cents in.

We found a mortgage calculator, and basically played around until we found a monthly payment that we knew would fit into our budget. The mortgage companies and realtors will tell you that you can afford more, DON'T believe them. You know what you currently pay in rent and utilities, and what your discretionary income is.

Get your realtor to get you average monthly utilities, YES they can, don't let them tell you that they can't. They can contact (or current owner can) the utility company and find out the past 12 months charges.

Don't forget to add escrow to your monthly mortgage payment. Where we live almost a third of our monthly payment goes into escrow to pay taxes and insurance. That's a big difference when the realtor tells you your monthly payment will only be $433 a month, but in reality, you pay more than $200 more just for taxes and insurance.

When your mortgage company refunds you some escrow the first year DO NOT SPEND IT!!!! Our company refunded $2,000 in escrow, telling us they estimated our escrow wrong. We spent it, and then the next year, they told us we owed $2k to our escrow account and in order to make it up, they DOUBLED our mortgage payment for 10 months to put that money back into the escrow, all the while charging us interest on negative balance.

Don't try to save $30 a year by skipping appropriate flood/earthquake insurance even if it's not likely you'll use it. If you are in an earthquake prone zone, but there hasn't been a significant earthquake in 30 years..... when your house falls over becaue a big one finally broke loose, you'll still be paying on a house that isn't even there.

Get lots and lots of reffereances for realtors we just picked someone randomly and they didn't know squat about what we were doing. They took 3 weeks just to find out what school we were zoned for, knew nothing about VA loans... it was ridiculous.

Don't forget to take into consideration what kind of work the house will need in the next 10 years. I you do your inspection and the guy tells you you'll need a new roof in 5 years, will you have relpenished your savings account to afford a $10k new roof?

Make sure you save some of your nest egg for emergency repairs. A new furnace can cost a couple of thousand dollars. Your appliances will now become your resposibility, not the landlords, kwim?

Good luck!

[lilyka]

Originally Posted by Jessie D

Get your Realtor to get you average monthly utilities, YES they can, don't let them tell you that they can't. They can contact (or current owner can) the utility company and find out the past 12 months charges.

This is great advice but also don't count on yours being as low. (always better to over estimate) if someone moved into our house and expected the utilities to be the same as ours they may be sorely disappointed. In the summer we only turn on the AC when the heat is over 100 for more than 3 days in a row maybe a week or two out of the year and then only one window unit for a three story house and only intermittently) and in winter (not this winter but most winters) we keep our heat down to 60 during the day and 50 during the night. living like normal people would likely double or triple our utilities (at least our electric).