Looking into buying a house...... Advice?

[GuitarGuyLP]

That is why you need an independent inspector, and be there when he goes around the house. If you are paying him he will let you know about everything. If there are problems, and he tells you about it you would probably use him again. If the bank, or seller hires the inspector I wouldn't trust him.

 

[bartmcartman]

I would consider finding a good, reputable real estate agent to meet with and discuss your options. He or she can find out what your needs are and set you up with a search to find only houses that meet your criteria rather than going on a wild goose chase. You should also meet with a reputable lender to see how much you are qualified for and get a "real" idea of closing costs, fees, monthly payments etc. If you know any homeowners that have had great experiences with their agent get their number and give them a call. If you don't you can PM me and I can see if I can help find you a highly qualified agent. As far as inspections go, pick someone with a good reputation. Your agent should have some recommendations as far as that goes. Now is a great time to buy especially if you don't have anything to sell! Good luck

 

[ranalli]

start watching HGTV.

seriously, there are a couple good shows to watch, that show what to look for and how to evaluate some things.

I like house hunters or property virgins...

things you will want to check, how long the house has been for sale? what they are asking....have they dropped the price recently...any offers put in....there is a website i think through caldwell banker that lets you see the average price of houses sold in that area the past 6 months or something. That will let you know if the price you are paying is maxed out for that neighborhood, or if/when you decide to sell it, you will get some appreciation value. Also if you want to upgrade anything, you dont want to be the most expensive house on the block because of upgrades.

If you do find a house...home inspections are huge....

Home inspections and appraisals are a sham. The bank you're buying from sends them out to "OK" the property, so of course if they want to continue doing business with that bank, they'll not "find" anything wrong.

My house had termites. Evidence was there before we moved in (boards had visible damage in the attic) but nothing was said or noted. The next "season" (spring). I find little dirt spots on the walls in the master bathroom, I cut it out with a drywall knife, and there's termites all over.

No recourse...

So, what I'm saying is educate yourself first...

While I'll agree that the banks have the appraisers and inspectors on some form of payroll, as far as the inspection that should have been arranged independently by the buyer. Even if it's a new house or building I would recommend getting one done.

 

[Skirmish]

I`m no expert when it comes to buying a house, but I`m an expert when it comes to finances and I would never ever go under 40% down. If you can`t do that: Move and keep renting until you have the dough. Remember subprime?

 

[Drew]

As mudder said, first go to a trusted mortgage broker and have them evaluate your finances and determine what you can afford. They should give you several scenarios regarding down payments and different types of loans. Have them "pre-approve" you and give you a letter saying so.

Then contact a realtor and tell them you have been pre-approved with a mortgage broker. Most experienced realtors won't want you to waste their time if you are not sure what you can afford yet. The fact that you have taken the time to meet with a mortgage broker and had them analyze your situation carries some weight.

 

[kannibul]

start watching HGTV.

seriously, there are a couple good shows to watch, that show what to look for and how to evaluate some things.

I like house hunters or property virgins...

things you will want to check, how long the house has been for sale? what they are asking....have they dropped the price recently...any offers put in....there is a website i think through caldwell banker that lets you see the average price of houses sold in that area the past 6 months or something. That will let you know if the price you are paying is maxed out for that neighborhood, or if/when you decide to sell it, you will get some appreciation value. Also if you want to upgrade anything, you dont want to be the most expensive house on the block because of upgrades.

If you do find a house...home inspections are huge....

Home inspections and appraisals are a sham. The bank you're buying from sends them out to "OK" the property, so of course if they want to continue doing business with that bank, they'll not "find" anything wrong.

My house had termites. Evidence was there before we moved in (boards had visible damage in the attic) but nothing was said or noted. The next "season" (spring). I find little dirt spots on the walls in the master bathroom, I cut it out with a drywall knife, and there's termites all over.

No recourse...

So, what I'm saying is educate yourself first...

While I'll agree that the banks have the appraisers and inspectors on some form of payroll, as far as the inspection that should have been arranged independently by the buyer. Even if it's a new house or building I would recommend getting one done.

Yeah, my case is an example of why someone should do something like that. Live/learn.

 

[guitarslinger]

I`m no expert when it comes to buying a house, but I`m an expert when it comes to finances and I would never ever go under 40% down. If you can`t do that: Move and keep renting until you have the dough. Remember subprime?

with that rationale, wouldn't the buyer want to pay 100% cash?

 

[Skirmish]

I`m no expert when it comes to buying a house, but I`m an expert when it comes to finances and I would never ever go under 40% down. If you can`t do that: Move and keep renting until you have the dough. Remember subprime?

with that rationale, wouldn't the buyer want to pay 100% cash?

Well, yeah. But that`s unrealistic so my advise is to keep it as safe as possible financially speaking. And everything under 40% is too high of a risk still imho unless you have a super safe job that guarantees you yearly salary raises etc... Usually the brokers will recommend a lower percentage because they want to make money.
So I second what Digital Jams said and from what I`ve read so far, the main reason for Juggernaut to look into houses are the annoying neighbours. He also said that his wife is not working full time yet, so unless they can afford a down payment of 40% I would suggest renting a house instead to stay more flexible as it still solves the original issue.

Good luck in any way though Juggernaut!

 

[GuitarGuyLP]

I`m no expert when it comes to buying a house, but I`m an expert when it comes to finances and I would never ever go under 40% down. If you can`t do that: Move and keep renting until you have the dough. Remember subprime?

with that rationale, wouldn't the buyer want to pay 100% cash?

Well, yeah. But that`s unrealistic so my advise is to keep it as safe as possible financially speaking. And everything under 40% is too high of a risk still imho unless you have a super safe job that guarantees you yearly salary raises etc... Usually the brokers will recommend a lower percentage because they want to make money.
So I second what Digital Jams said and from what I`ve read so far, the main reason for Juggernaut to look into houses are the annoying neighbours. He also said that his wife is not working full time yet, so unless they can afford a down payment of 40% I would suggest renting a house instead to stay more flexible as it still solves the original issue.

Good luck in any way though Juggernaut!

40% is not realistic for a lot of people, or just in a lot of markets. If I went by that rule I would have needed a $140,000 down payment for a starter home where I live. How many years would you have to save up for that. Buying real estate is an investment. As such it does have a risk to it. I think that the worst of the sub prime is over, and I would say that doing a proper budget where your house payments, utilities, and taxes are 50-60% of your monthly budget at the most is much more important then having a 40% down payment.

 

[Mudder]

I have to agree that 40% is not feasible for most people. Even those that could afford that rarely put that sort of money down. I'd say if you can come up with 20% and have no other bills you're in great shape. You're better off paying off any bills that have an interest rate greater than your mortgage.

 

[chakosh]

+1 on a lot of this. I'll add get a sewer line inspection done too just to make sure there's no surprises from a messed up sewer line. One of my coworkers just had to drop $6,000 on a new sewer line.

 

[trey85stang]

DON'T BUY A HOUSE WITH:

1. a one-car garage
2. no basement
3. flood problems
4. a septic tank
5. water from a well

considering he is in texas, the only thing on that list he will probably be able to meet is #3.

Minimum of 20% down is a must, dont work just to keep the house as in dont have a huge morgage payment. Interest rate s are great...............if ya have the credit score.

Lots of forclosures, dont be afraid to get a house that has potential and getting your hands dirty these days.

LOCATIO LOCATION LOCATION.

20% for sure if you can afford it... but plan on a minimum of 6-7% to be able to get the loan.

 

[ranalli]

I`m no expert when it comes to buying a house, but I`m an expert when it comes to finances and I would never ever go under 40% down. If you can`t do that: Move and keep renting until you have the dough. Remember subprime?

I think 40% is a bit aggressive and your mortgage success depends on more than simply that. With that being said if you can scrape 20% I think that's reasonable in most(not all cases).

 

[Anonymous]

do comps on the area you plan to buy. fuck the real estate agent/ not really unless she`s hot/buy what you want. the agent will try to get the most for themselves. 20% max and if you have good credit 10% but you might get into pmi. look the house over like you were the home inspector/ dont be afraid to say something is fucked up like on the internet. it is your money or your financed money

 

[Anonymous]

look out for home owners insurarance. mine $2300 a year. went up after i bought. i am used to it now

 

[LedZep77]

I'm also looking to buy a house in the next few months. I talked to a mortgage broker today, who happens to be one of our clients, and he told me to put down 10% minimum.

One cool thing the government is offering is the First-Time Home Buyer's Tax Credit. Basically, they give you a $7,500 tax credit if you buy a home on or before June 30, 2009. There is an income limitation, but I believe phase-out begins sometime after a MAGI of $150,000. Don't quote me on that number, though. The cool thing is that even if you buy your house in '09, you can treat it as purchased during the 2008 tax year, so you can file an amended return and get your $7,500 right away.

The catch is that you do have to pay it back, but it's interest-free. The repayment period begins two years after the tax year in which the credit was claimed. The loan is repayed with a $500 liability applied to your tax return for 15 years (15 x $500 = $7,500). If within those 15 years you sell your house for a gain, I believe you only pay back the lesser of the gain or the balance remaining on the loan. Can't remember what provisions were if the house is sold for a loss.

 

[ratter]

That is why you need an independent inspector, and be there when he goes around the house. If you are paying him he will let you know about everything. If there are problems, and he tells you about it you would probably use him again. If the bank, or seller hires the inspector I wouldn't trust him.

I would agree and go a step further to say, don't just go with your independent home inspector, go with him and TEAR THAT SHIT APART (the current owners won't, or shouldn't, be there). The damndest things will show up after you move in, so before you put your money down, go over every inch of the place with a fine toothed comb. Use the home inspector, but don't trust him or anybody else to find everything for you. If you are friends with any contractors/plumbers/carpenters/exterminators(!)/priests, buy them lunch and have them come along too.

Example - my first house, the home inspection was pretty clean. One of the very few things that turned up was that the water was turned off to one shower and you couldn't get to the valve without opening a panel that had been painted/caulked shut. You can probably already see where this is going. So OK, no problem, I thought. They'll open the panel, turn on the water, and done deal. My first shower in the new house was not only a shower for me, but a shower coming out the can light in the ceiling directly under me, on the floor below.

The first rainstorm, the front entry flooded. Turns out it was a known problem in this neighborhood of townhouses (same builder/design). Did anybody mention it? Did the realtor who had sold umpteen houses in this neighborhood mention it? No. Did the next door neighbor (your new 'buddy') mention it? No, but hey after we moved in, it turns out he's a contractor and can fix it for $6k. Thanks, buddy!

So, just some random tips off the top of my head in addition to what has already been mentioned, re: inspection.

1. If at all possible, go during bad weather...ie rainstorm.
2. Run all appliances/systems for a good length of time. Full dishwasher load, washer/dryer, oven, microwave. Crank the AC. Crank the heat.
3. Run every faucet/shower/hose for at least 20-30 minutes, hot and cold. Flush every toilet multiple times.
4. See any spots outside where you'd suspect a possible roof/window/whatever leak? Get the garden hose on them and find out.
5. Look over, under, and behind everything.
6. Open and shut all the doors firmly (in other words, slam them), open and shut all the windows, feel/push on all the walls (don't ask me how I learned about that one) and tile surrounds in the baths.

You get the idea. Test everything to the point where if it was going to fail under reasonable circumstances, you'll see it fail.

 

[trey85stang]

do comps on the area you plan to buy. fuck the real estate agent/ not really unless she`s hot/buy what you want. the agent will try to get the most for themselves. 20% max and if you have good credit 10% but you might get into pmi. look the house over like you were the home inspector/ dont be afraid to say something is fucked up like on the internet. it is your money or your financed money

fyi, if you go with a FHA loan, your stuck with mortgage insurance wehther you are below the 20% equity cap or not. I just recenetly wen mortgage shopping.. and probably 80% of banks are pushing FHA loans over any other.

 

[ranalli]

1. If at all possible, go during bad weather...ie rainstorm.
2. Run all appliances/systems for a good length of time. Full dishwasher load, washer/dryer, oven, microwave. Crank the AC. Crank the heat.
3. Run every faucet/shower/hose for at least 20-30 minutes, hot and cold. Flush every toilet multiple times.
4. See any spots outside where you'd suspect a possible roof/window/whatever leak? Get the garden hose on them and find out.
5. Look over, under, and behind everything.
6. Open and shut all the doors firmly (in other words, slam them), open and shut all the windows, feel/push on all the walls (don't ask me how I learned about that one) and tile surrounds in the baths.

You get the idea. Test everything to the point where if it was going to fail under reasonable circumstances, you'll see it fail.

All good advice...this is the kind of list you need. When I was house shopping this one brown-stone was completely gutted and re-done divided up into 3 separate residences. Being concerned that the floors were too thin I made the agent go upstairs and jump up and down as hard as he could while my girlfriend watched and I listened below. I learned a lot this time around and my next time I will be shameless in my inspections...on new or used properties.

 

[Anonymous]

i didnt say a thing about a fha loan did i? 2-3k homeloan i would give them the least down payment. i use their money and keep mine elsewhere.