Buying a house...tips appreciated

[UOMaddog]

Well I've finally convinced the wife to buy a house (even though it means a longer commute for her). Any tips for a first-time homebuyer?? We both watch tons of DIY Network and HGTV so I feel pretty confident knowing at least some of the pitfalls to avoid, but any real-life tips would be great!

[Paulonius]

I think the most important thing is that you need to feel good about where you live. If you always wanted a garage to putter around in, don't look at houses without one -- that sort of thing. If you think that you will live there the rest of your life, sit down with your wife, talk about what features in a house are important to you and make a list.

If you will live there "forever" then I say you don't care what anyone else thinks. If not, then you might consider looking at your home from the perspective of what "everyone" wants in a home. Things like how easy is it to get to where most people work. What is parking like. How many bedrooms does it have. What amenities are nearby.

Those are my thoughts about what to buy. If you are looking at how to buy I have some thoughts there as well.

FSBO: (For Sale By Owner)
Look at these, but be aware that there are some issues pro and con. People selling their own homes generally have two obstacles 1) emotional attachment to the home and the price they paid for it, and 2) lack of broad knowledge of the CURRENT market for similar homes. Some savy individuals will minimize one or both of these, but they generally apply to anyone who is selling their own home rather than doing it for a living. In a hot market FSOB homes can often be underpriced because of both 1 or 2, but more likely 2. In a poor seller's market, like we are in now, FSOB are often OVER priced because of both 1 & 2.

Distressed Property
If you are not in a hurry, look at distressed properties. By this I mean properties that are in forclosure, have been forclosed on, or are for sale by owners who are underwater. These transactions can take a long time, but the savings can really be worth it. There are lots of stories circulating recently about people who have acquired a really nice house this way for around 60% of listed price.  

Should I get an Agent?
You used to have little or no choice because the market would not give you access to listings (MLS) unless you used an agent. The Supreme Court made that illegal and now you can get virtually all of the information an agent gets online yourself. My personal opinion is that if you know generally where you want to live you probably don't need an agent when buying a home if you can get a real estate attorney to do the paperwork. Even if you don't get your own agent, you may end up dealing with a seller's agent. Some of them will try to represent you in addition to the seller and get a double commission. This is illegal unless you agree to it, but its not readily obvious that its happening in a lot of cases. You pay for the property and the commission comes out of the money the bank/seller receive. Be aware that you can negotiate an agent's rate in most cases. Good agents will be willing to talk to you about commission in a market like this one, particularly if you found the property yourself. I still see a place for real estate agents for people who are relocating to an area they don't know well, first time buyers and on the sell side. However, I think that the commission agents generally charge is completely out of line with the value they add to most transactions.

[Endless Night]

Excellent advise paulo

A warning .. just because you watch the home channel etc...  be warned that renovation is often alot more difficult than they show (its tv after all) finding reliable building contractors and pulling permits depending on your municipality can be a real pain.  Doing the work yourself is entierly doalbe Ive done tonns... but its slow as its not your real job, you have to learn new skills and your house can be amess in the meantime but does save alot of money.

Make sure you get a full inspection of the property you wish to purchase. On the day of the inspection be present and follow the inspector around... their more likely to do a through job and they may comment on things that will not make it into the final report.  Any issues found get repair estimates to use to negotiate a lower final price.... unless its an 'asis' house.

ALthgouh you can buy it yourself  and i did myself on my first house, was a ASIS FSBO (for sale by owner).  The first time around their can be alot of issues that you dont wont have experience with and thats where a good adgent can help.  But i agree generally with what Paulo said they are over paid for what they do espeacilly if you found the house yourself.  So if you do decide on an adgent shop around get a low commision and ask them point blank what are they bringing to the table.  A good realestate attorney is very important and make sure that title insruance is in place.

Remeber the 3 most important words in realestate .. location location location....   look around the neighour hood .. can you walk to a shop to buy milk (an hr round trip will get old fast)...  how far are local restuarants, small stores, dry cleaners, gym  and all the other day to day stuff.   On the negative don't be bang on top of mayor roads or box stores..   And the number one thing with houses Schools... even if you dont have kids or dont plan to have kids,  good or bad schools are a true reflection of the neighbourshoods worth.

Depending on the area...  dont believe that you will pay the same property tax amount  and insurance rates as the previous owner is paying,  you need to confirm for yourself what your actual payments would be. The new ower could spend as much as 10x higher.  If the state is a homesteading state the existing owner probably has thier property tax locked in at the rate they purchased the house at..  Depending on how long they have lived thier they might have an massive disocunt.  If i sold my house the new owner would pay approx 7-8k in property tax a year more than im paying.  And my neighbour probably in regions of 10k+ as hes been thier for a lifetime.  Insurance could fluctuate as will if your in a high risk area...

And finally a t the end of the day if your a few 1000 over budget just role with it.. in 10 years that few k  hopefully shouldnt matter one drop...  

[TrailMyx]

For the love of God, DON'T get something with an association's fee!

[Endless Night]

For the love of God, DON'T get something with an association's fee!

I second that .. how the hell could i have forgotten that one...

[Masscre]

For the love of God, DON'T get something with an association's fee!

I second that .. how the hell could i have forgotten that one...

For those of us that live out in the sticks and hae no clue. Please explain?

[TrailMyx]

For those of us that live out in the sticks and hae no clue. Please explain?

This is a fee that you "Massacre" has to pay on a monthly basis to use the roads, facilities, maintenance, and allow a group of elected "officials" to harasses you because you like to put up pink flamingos in your front lawn.  My girlfriend pays $300/month for this experience.

[UOMaddog]

Thanks for the tips so far. I should have given a little more detail on my situation so you can tailor your advice a little better.

#1. Do not worry, we will never live anywhere with an HOA! We deal with that now as renter's and it is HELL!
#2. We pretty much have our location already picked. It's a bedroom community that 10 years ago was about as "rural" as can be, but has quickly become a nice town of developments with plenty of decent retail nearby.
#3. We will be probably living in this house close to forever. It's our house to "settle down", start/raise a family, etc. With as good as the market is now, we can get close to our "dream house" for the same price we would have gotten a starter home a couple of years ago.
#4. We have kind of started working with a realtor because she is a family friend of many years who has worked in the same area for longer than we've known her so she has a great grasp on the market. We haven't really talked commission or anything yet (but I plan to this weekend when we meet with her to visit a few homes).
#5. When I referred to DIY/HGTV, I was mainly thinking about the actual purchasing of a house not the renovation part. I am actually well-versed in renovations since my parents started working on their house when I was about 12 and I put more blood, sweat, and tears into their house than they probably did! We did an addition to the house, new flooring throughout, finished the basement, redid a bathroom, did a little kitchen remodeling, and also rewired the entire house (upped our electrical service, added outlets/lights/fans and also ran Cat5/cable as well). So I am not afraid of a renovation, although I will say, I'd prefer NOT to do a kitchen because they're honestly the worst! I'd ideally like a house with just an unfinished basement that I can customize and perhaps lacking a deck or something that I could add easily.

Hopefully that gives you a little better glimpse of what I'm looking for!

Thanks again for the tips so far! Keep them coming!

[NObama]

HOAs have an upside, too:  If, say, your neighbor likes to park his boat on the front lawn, you can call the HOA and get it moved. 

True story, btw.  Dude parked his BOAT on the FRONT LAWN.  Who does that?

[Endless Night]

HOAs have an upside, too:  If, say, your neighbor likes to park his boat on the front lawn, you can call the HOA and get it moved. 

True story, btw.  Dude parked his BOAT on the FRONT LAWN.  Who does that?

Dont need a HOA for that... that can be a city ordinanace and cost you nothing.  Here in miami beach we have that ordinance.... you can park a boat but has to be behind the front of your house and not visible from the street.     The island/city over doesnt have that ordinance and thiers quiet alot of boats in the front yards.

When buying my house i didnt know about that .. didnt know i would like a boat either.. sadly no way can i get a boat down side of my house.... so It a monthly dock payment or storage fee for me....

Same with most of the other HOA ordinances can be city things as well.. but im against all that .. I say I purchased the house if i want pink flamingos and tutu whereing knomes I'm just adding excentricity to the hood  .. as long as well kept do what you want i say.

OW one thing that i looked for when i purchased a house .. and this might seem stupid... but SIDEWALKS.... down here in South florida for some odd reason people have removed the sidewalks.. and the city has left it so.. forcing you to walk on the street....  drives me nuts.  Needles to say my hood has most of its sidewalks still intact.

[Newsman]

The age of the house matters.

Older homes frequently have/had lead paint, asbestos shingles and/or insulation, or the insulation in homes from the 50s and earlier may be nothing more than newspaper from the 40s and 50s. 

Be aware of these things.

[NObama]

Before you decide to buy, drive by the house several different times during the week.  At night, during the day, on the weekend.  You'll get an entirely different impression of the neighborhood.  For example, in the house we're renting now, I had no clue that there were 6 cars being parked across the street at my neighbors' house.  They're nice enough folks, but that could just as easily have been a nightmare.

[Endless Night]

Carefull with newer homes in case they have any of that Chinesse drywall .. that vents toxic fumes.  



- Make sure you inspection inspects for this along with, older home issues of asbestos... and make sure you get a radon gas test.

[UOMaddog]

Finally back home from a busy weekend of house-hunting and other crap. We did find a beautiful home that we both love and is a great price! It's actually brand-new construction from a well-respected local builder with tons of "upgrades" but at a steal of a price! There were only 3 lots (about .6 acres each) but all were level lots and positioned perfectly to give each one more privacy than I ever would have expected. Also, there is an elementary school 2 "blocks" away (that's "country blocks" not city blocks) and there will be no more houses going in (except for the 3rd on that they're currently finishing). The first one already sold (for $10k less than list price so we could probably get it for the same), we'd be buying the second one, and the third one would be sold by the end of the year most likely. It really has everything we could every dream of in a house! It IS on well water, though it appears that it was a good well (good GPM flowrate and excellent depth), but we still have public sewer which is nice! Also, with new construction, we don't need to do a house inspection (which saves a couple hundred dollars usually) since we can pull all the inspection reports from the township. We're also in the process of finding out about any sort of home warranty since it is brand new.

I'll keep you updated as we hear more, but we could be putting in an offer as quickly as next weekend!!!

[Paulonius]

Don't skip the inspection just because its new construction. I would not recommend relying on a city inspection. They are not looking at the same issues and may miss things that you will care about. Get an inspector that your real estate friend likes -- its absolutely worth a few hundred dollars. You have the advantage of having the builder to go to for outstanding issues on new construction, which is nice. Take anything your inspector finds to the seller and ask them to fix it.