House question...

Patience. We were house hunting for almost 2 years before we got our awesome deal on the house we live in right now.
Figure out exactly what you need, what you can afford and how you can make those things come together (often either the budget or the needs have to change)

i wish i knew! we're house hunting, too. it's really not my idea of a good time.

You seriously might want to consider getting temporary living arrangements now if you HAVE to move right away (or just staying put for a while longer if you just WANT to move) and waiting until the fall or even better, winter, to buy. These are very slow selling seasons and you will be able to negotiate a much better price.

Look for a bargain on a house. Rather than saying you want the perfect house, be more flexible and look for a very good price on one. Don't be afraid to make a low offer, the worst they can do is just say no to it. My parents have gotten great deals on their 3 rental homes by buying 2 foreclosures, and 1 that they just made a low offer on and the buyer countered with something that was near what they had offered. Someone else had said foreclosures are too good to be true, they usually aren't. It's just someone who got into trouble and couldn't pay for it. You can usually look and see what shape the house is in, but of course, with all real estate transactions, you want an inspection, and the inspector will find the things you don't necessarily see. Look past things that are cosmetic and can easily be fixed like paint, drywall, etc. Pay careful attention to plumbing, foundation, etc, that is hard to fix.

Go here and read all the threads you can find on anything having to do with real estate, these people are very savvy and frugal:

http://www.fatwallet.com , click on Forums, click on Finance

This is all great advice. Our house was a HUD house (foreclosure) the only thing wrong with it was the previous owner had painted every room (including the ceilings) in the most awful, flat dark colors you can imagine. We felt from looking at it that it was structurally sound and had a thorough inspection done to make sure. There are a foreclosures that have not been well taken care of so you have to look at a lot to find the gems.

I also second the know what you can afford advice. Never let anyone else tell you what you can afford, only you know your budget. The mortgage company can tell you what they will loan but you by no means have to buy the max of what you can get loaned. I think a safe number for a mortgage payment (and what banks used to loan on, the percentage has gone up now) is no more than 19% of your gross monthly income.

The only other piece of advice I would give is to not get emotionally attached to a house. This is probably the hardest thing to do but if you can remain objective, this is a huge purchase and an investment, you will be better able to negotiate and better able to walk away if the deal is going sour. Remember, there are many, many homes on the market and you will find another one you like as much or not more if you have to.

Best wishes!

There's one more thing I forgot to say before. When getting a buyer's agent, definitely look for one that will kick back part of their 3% back to you (they get paid 3% of the selling price of the house by the seller when the house is sold). It's not too hard to find ones that will kick back 1%, but 1.5% can definitely be done by looking around for one and asking, sometimes you can even get 2% back (you might have to find someone that is both a broker and agent for this, since an agent normally has to give part of their commission to the broker running the agency).

If you are looking at FSBOs (for sale by owners), try to leave an agent out of it, since the seller will not have to pay the 3% a buying agent gets and will be more willing to reduce the price, but definitely know what houses are selling for in the area. A quick look at http://www.zillow.com is a good start for that. Don't overpay, and still have an inspection period and get an inspection. There are lots of websites for FSBOs, two good ones to start looking at are http://www.buyowner.com and http://www.owners.com .

Also, if you do a search for flat-fee realtors (these are selling agents which will list a house on the MLS, which is the database realtors use to find homes that are listed, for a flat fee instead of the normal commission-based 3%) and find the ones in your area, take a look at the listings they have (normally you can access these from their websites). If you go into these without a buying agent, it's normally just like buying a FSBO without a buying agent, the seller does not have to pay the 3%, so will be more willing to work with you on price.

Look at 100+ houses. Drive around, go to all the open houses, pick up all the brochures and flyers that you can find in boxes in front of houses, research, research, research.

Use a buyer's agent, absolutely.

Make your offer contingent upon an inspection and pay extra to make sure termites and pests are taken care of.

Really, really know what you are looking for (after you look at 100 houses, you will probably have a very good idea of what you want and what you can live without).

Drive around all of the neighborhoods that you are considering many times, during the morning, rush house, around midnight.

Right before you tour any homes with your realtor, do a quick check and see where the sex offenders and predators are in that neighborhood. It'd be horrible to buy a house and realize that next door there is a sex offender that did "something" to a child under 12, right? (there is a house like that about a mile from here, cute house, too, but I hope no children move into it)

Make sure that you know what homes are going for in that neighborhood. Ask your realtor (buyer's agent) to print off lists of the homesales in the last month for the areas you are interested in for you to look at. Get a really good idea of what homes in that area should go for, so that if you find a really good deal, you will be knowledgeable enough to jump on it.

Depending on the market and where you live, you might want to consider low-balling. If you offer a low price on 20 homes, chances are that one of them might accept your low offer and as long as you love the house, you'd be getting a great deal, too. Talk it over with your realtor, first, because some realtors are not willing to lowball, others are willing to give as many offers as you'd like them to give. Find one that you really feel you can work with and one who isn't rushing you to make a deal when you are not ready to do so.

Make sure you know what you can afford and what you want to spend and look in that price range. You might be able to go up into the next higher price range and offer less to still stay in your price range.

We purchased a home at the very tip top of our price range, after considering homes much less that we would have lived in but we would have been dreaming of having other amenities and wondering when we should try to upgrade. Instead, we purchased a home with an extra bedroom and a pool, a fenced yard, decent neighborhood, etc., and we are SSSOOO happy that we did that. We could stay here another ten years (perhaps more) and never want or need to move. Some people suggest buying less than you can afford, which is also great, as long as that makes you happy. We are glad that we stretched our budget a little and feel like we are on vacation all the time.

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I don't really agree with this. I think that "you get what you pay for" really applies in this situation. If your realtor has 3 clients actively searching for a home, and 2 of them both want 3 bedroom 2 bath homes. One is only paying 1.5% and one is paying 3%. The realtor gets an e-mail from another realtor, "heads up, I've got this great property coming up and before I list it on MLS, I am advertising it to just a few realtors that I know." Well if I was the realtor, I'd call my highest paying client and get them to run over and look at that house, then if they didn't want it, I'd call my second highest paying client.

Same deal, if I have two clients, one paying double what the other is, who am I going to go all out for most? The one paying me more for my time.

Find a wonderful realtor through recommendations, as many as you can get, or by interviewing several and getting references. Don't use a friend as your realtor, get a realtor that is going to do a fantastic job for you!

"Used" houses come with 2 types of problems:

Fixable problems... ugly paint, ugly carpet, dark kitchen, cluttered, overgrown shrubs, in ground oil tank, etc.

Unfixable problems... busy road, bad structural issues, major design flaws, concrete slab construction in cold climate, etc.

I have gotten "good deals" on houses with fixable problems. Ugly carpet became a nice hardwood floor. We put insulation in the attic to fix a hot 2nd floor (previous owners suffered for years with babies and no attic insulation!) We replaced hideous front light fixtures for a few hundred $.

Also, look for something special in the house: a good view, a stone or brick front, etc. Our current home is south facing with a view of pond. Very nice!

A "good" real estate agent can help you find a "good" deal. Elbow grease and an elecrical contractor can do the rest!

A word about NEW construction: avoid like the plague! My BIL got a newly built McMansion. It came with a noisy low-end dishwasher, "cosmetic" cracks in the basement foundation, and a cheap, mercury containing thermostat. Yes, the builder was reputable. But there is a lot of focus on the "large" look of the house, and not too much attention to quality. A local model house has a master bath of well over 200 square feet, and 2 staircases. Not a good use of space.

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There's at least one broker/agent in this area that gives 1.5% back to all his buying clients, so you'd have no conflict like that with him, since none of his clients would be paying the full 3%. Perhaps looking for a realtor like that would be ideal.