Buying my first home UPDATE: offer accepted, now what?

Re: Buying my first home in a buyer's market

As others have said --
* Make sure it's a good neighborhood so you'll be able to re-sell the house in a few years per your plan
* Have someone licensed perform a home inspection to tell you the condition of the home
* Do not go for a place that requires you to use the full $100,000 you're pre-approved for. Go in with a number that you can spend per month on the mortgage plus whatever escrow the lender requires you to have (usually to cover property taxes, insurance, etc.) and do not exceed that number (the realtor should be able to tell you what figure you're looking at on a particular home)
* Prior to placing an offer on the home, have the realtor provide you with a CMA so you can make a smart bid, for far less than the asking price
* As others have said, look around the neighborhood to see the condition that others have for their homes, cars, yards, etc.
* Buy a place that feels like "home" to you where you can live the commute and the distance from stores/restaurants
* If possible, get a police report for the last 6-months, 12-months, whatever for the neighborhood so you can see if there have been any crimes there, a problem with speeders, etc.
* A home warranty is always a good idea, whether you purchase it or have the seller buy it for you as part of the contract.

 

Re: Buying my first home in a buyer's market


Get a 15-year mortgage (or 10) and not one year higher.

You do not want to be trying to sell your place in a few years and wondering, "Why do I have only $1.97 in equity on this house I have been paying thousands on?"

 

Re: Buying my first home in a buyer's market

A 15 year mortgage or 10 for that matter is not cheaping than renting. I can tell you that much. There is no equity in renting.

 

Re: Buying my first home in a buyer's market

Remember home ownership isn't for everyone, though. It's a lot of repairs and unexpected money to do things someone else was always responsible for.

If you want to be a homeowner, go for it. Great advice on this thread so far.

But I'd caution against doing something just because the monthly payment is cheaper. Buying a home is a huge life decision. Making a wrong move (which I've done) can really strap you down.

Think beyond "a few years when the market turns around." Let's hope it does, but if the market is still slow, is it still the right decision for you?

If your buyers' agent hasn't asked you how long you plan to live in your house, give that one thought. A lot of times, it takes more than a couple of years to build enough equity. I don't know what the rule of thumb is these days, but the stuff I read prior to buying my last house was if you're not going to live in it at least five years, it's not worth it.


Oh, and you can have bad roommates in a house, too. Trust me on this one.

 

Re: Buying my first home in a buyer's market

Yeah, I'm about 90 percent sure I'll never own a home for exactly what KJIM said. No. 1, I love the convenience of any problems being someone ELSE'S problem. No. 2, No yard work. No. 3, I have never lived in the same place for more than 18 months. I get bored, and move.

 

Re: Buying my first home in a buyer's market

Since this is a starter home that you're hoping to sell in a few years, do yourself a favor and find out exactly what public schools it is zoned for, from elementary up to high school. Do not trust the realtor, who will just look at the closest school and assume; school borders are drawn in all sorts of irregular fashions. Then go to greatschools.net and check out the standardized test scores. I don't mean to open a political can of worms with a discussion of standardized testing and No Child Left Behind, but the simple fact is the raw test scores of individual schools are an enormous determining factor in real-estate prices.

 

Re: Buying my first home in a buyer's market

Try not to "fall in love" with a house or a neighborhood and make irrational decisions.

Keep in mind that it is a business deal. It's not personal. It's not some sort of a contest.

Offer what you want to and can pay. If things aren't working out, walk away. There's another house out there.

Find a qualified home inspector and have the house completely looked over. Don't necessarily use some company mentioned by the realtor.

 

Re: Buying my first home in a buyer's market

Understand that you are being qualified on GROSS income so determine how much house you can buy based upon your take home.

Someone making $60K a year doesn't take home $5K a month but that is how lender see it.

 

Re: Buying my first home in a buyer's market

Thanks all — great advice all around.

I definitely am not looking to spend at the high end of what I'm approved for, especially in this market.

Unfortunately, I just had my first setback. Found two that I liked for amenities, location, etc. Checked the Gross AV for '08 and home sales for the past four years on their respective blocks, and both were going for far less than their apparent value.

Unfortunately, both are now pending sale, so now I'm back to square one. (I get the impression those bids went in within the last 48 hours.) So now I'm even more frustrated that I didn't start looking sooner.

If I have an accepted offer before April 30, there is a tax credit by which I get 10 percent of the purchase price back, up to $8,000. But I'm being very picky and hoping to catch a diamond in the rough, so if the deadline passes it passes.

 

Re: Buying my first home in a buyer's market

You can't love moving that much! U-Haul . . . starting and disconnecting utilities . . . change of address problems . . . lugging that sofa up to the second floor . . . UGH!!!

 

Re: Buying my first home in a buyer's market

$100,000? That wouldn't even buy a house next to a crack den in my area. The northeast is certainly expensive. I will echo what Oggiedoggie said and get your own home inspector. Any problems that he finds needs to be worked out with the seller ahead of time (either come down in the price, or rectify the problem before you move in).

Hiring your own real estate lawyer--someone who specializes in the field, not some ambulance chaser on TV--would also make a lot of sense. Spend a little now and avoid big pitfalls in the future.

 

Re: Buying my first home in a buyer's market

Guy told me something the other day i never thought of:
When buying a home that you likely will want to re-sell, don't buy anything less than three bedrooms, 2 baths. his reason? you want a home that will be attractive to couples that have kids because that's the bulk of your re-sale market.
i have no idea if what he said is true, but it made some sense.

Also, you can go the 30-year mortgage and pay extra on the principal each month and lower the life of the loan considerably. We bought our house in 1991 on a 30-year fixed. we re-fi'd to a 15-year loan in 1999 and i made my last payment on the house last June.
Other than sonner buying a round of cold beer, it was a great feeling of accomplishment.