First Time Home Buyer Tips

posted 4 months ago in The Lounge
Post # 2
Member
9421 posts
Buzzing Beekeeper
  • Wedding: August 2012

Closing costs suck. Make sure to factor those into your budget.

There are soo many little fees that add up. Title services, home inspector, loan company, well or septic test (if applicable) etc.

eta: make yourself a budget. Do NOT go by what the bank says you can afford!

Post # 3
Member
7866 posts
Bumble Beekeeper

NikkiBee18 :  Remember taxes and insurance will go up every year so you don’t want to max yourself out at the start. I don’t know if other states have this, but I’m in Massachusetts and towns will vote on overrides to raise taxes for the schools every few years. Some towns pass them a lot – others rarely pass them (and have the schools to show for it). I know of a few people who recently bought in my town at the top of their budget and are now pissed that the rest of us just voted to jack up their (and our own!) taxes. They didn’t factor tax increases into their budget planning. 

Post # 4
Member
2214 posts
Buzzing bee
  • Wedding: October 2019 - Chateau Lake Louise

NikkiBee18 :  Buying a house is a huge step. It can be a pretty emotional experience, so just make sure the two of you are on the same page before you start, and are aware that disappointment is a very real possibility. 

Here are a few tips based on my own experience. 

Budget: This is super hard, but really important. Think long and hard about what will be comfortable. Being house poor suuuuucks. Also, consider how hard it would be to save up 6-12 months of mortgage payments in case of emergency. That’s an important measure of affordability that a lot of people overlook.

Remember this is a discussion not only about the monthly cost, but everything that goes along with it. When we moved into our house, we ended up having to spend about $20k on top of the purchase price just to get the place ready to live in. We needed a washer and dryer, a new bed, dining room furniture, rugs… the list goes on. We spent over $5k just on blinds. 

Don’t forget you will have maintainance costs as well. Gutters that need cleaning, siding that needs power washing. Do you own a lawn mower? These are frequently only quarterly or annual, but they are recurring, and will have to be considered in the overall budget going forward.

There are a lot of costs it’s easy to forget about in the home buying process. Just remember to give yourself some breathing room for those. 

Taxes: A lot of people forget to consider the cost of property taxes when buying a home, but it can make a tremendous difference in affordability. Our taxes are over $600 a month, so they have a huge impact on our payment. 

Check any listing for property tax information, and add that figure to your mortgage payment. If you are torn between a couple of options, this information can be a factor in a final decison. 

Neighborhood: Unless you have a lot of experience in the area you are planning to settle, I encourage you to spend some time in any neighborhood you are considering. Set aside a day to wander the area. Check out stores, restaurant options, public transit. Spend a day like you would if you were already living there. Try to get a feel for whether it seems like a good fit for your lifestyle. 

Must Haves: Make a list of the things you absolutely cannot be happy without. In my case it was a relatively high degree of privacy and a shower without a glass enclosure to clean. Everyone is different; just be clear on the things that will impact your quality of life if you don’t have them.

Can’t Stands: Likewise with things you know will drive you bonkers to have to put up with. Backing up against a school was an absolute deal breaker for me. 

Realtors:  Unless you have a close friend or family member helping you, remember this person isn’t necessarily looking out for you first and foremost. Above all, they want to make a sale. Don’t be afraid to ask them about their comission, and see if they are willing to negotiate. Also, don’t be afraid to shop around for someone you have a good rapport with. Anyone who is too pushy, or urges you to compromise too many things isn’t actinng in your interest. It’s okay to cut ties and find someome else, if at any point you feel uneasy about their advice or tactics. 

Feelings: It is inevitable you are going to have them. Just try not to let them overpower your practical needs. Falling in love with a house is nice, but not strictly necessary. Having a home in good condition, with favorable resale value, in an area you like is more important than having one that just speaks to you. Ultimately this is the largest financial investment you are ever likely to make; you don’t invest in the stock market for sentimentality, try not to do so here, either. 

This is a super exciting time! Good luck on your journey!

Post # 5
Member
6148 posts
Bee Keeper
  • Wedding: September 2016

Get the book The Virgin Homeowner! It’s a great book that will teach you about the various systems of your home and walks you through a lot of the information you wouldn’t know until after an issue comes up.

Post # 6
Member
172 posts
Blushing bee
  • Wedding: City, State

teamroro :  made so many good points! Most of what I was going to say.

A few others I can think of:

– Some people are dirty or have poor taste, so when you are touring try to imagine thinks like new carpet, new paint, a solid cleaning crew and your decor. Sometimes it is SO hard to envision but the skeleton of the house is more important. Paint and carpet go A LONG way. 

– Similar to above, focus on the neighborhood, cost and skeleton of the house. Many things can be changed, including doors, fixtures, blinds, and any other cosmetic related item. It’s hard to not let style & cleanliness get in the way of how you feel about an otherwise good house! 

– Don’t go to the top of the bracket you’re approved for, and be sure to run the numbers in a spreadsheet including your expenses for groceries, future child care if you want kids, and remember that utilities (gas, electric, water & trash) are a lot more expensive for a house than an apartment. For 1300 ft house with an OLD inefficient AC, we spent up to 400 a month for electric in the summer. 

– Seconding what she said about factoring in moving and settling costs. I moved from my moms house with a bed and dresser only basically, so I spent a good 25-30K just on furniture and moving in items. Trash cans, towels, ladders, tool kits.. the small things add up quick. There are also fees to set up electric, water, cable TV, alarm companies, etc. 

Post # 7
Member
152 posts
Blushing bee

We’re currently in the first time home buying mess!  Less than 2 weeks from closing (maybe. God willing).  Other pp’s are hitting all the important points.  What I have to add is, start collecting all your financial documents now – pay stubs, W-2s, bank statements, etc.  Have absolutely everything ready for your mortgage lender so that the process goes as smoothly as possible.  My husband is in a unique line of work which has made our mortgage application a tad trickier than most.  He’s insanely organized and had [what we thought] would be every single relevant document.  Nope!  Every time we think we’re done, they still need “one more” thing.

Also, be realistic about what a real quality house looks like.  Flipping is a huge industry lately and it’s really easy/cheap to make a beater look cute.  Don’t let a fresh coat of paint, subway tiles, and vinyl flooring seduce you into thinking a house is a winner.  Those are relatively simple modifications you can do yourself.  The age and condition of the roof, A/C, electric, plumbing, etc, should be your primary concerns.  A house can have really good, solid bones but not look like much.  Keep an open and practical mind when looking at the ones that don’t immediately “woo” you.  When we first saw the house we’re currently under contract for, the overall feeling for me was “meh”.  But after comparing it to dozens of other contenders, it has the newest roof, the newest A/C, the biggest backyard, and it’s in my ideal neighborhood.  It was just initially hard for me to connect with it because the whole place is painted an awful shade of brown.  But with enough research, I can finally see the true value.

Other things I considered:  How close is it to train tracks?  Google says you can hear a train from just 6 miles away.  Think about airports too.  How close is it to high traffic streets?  I didn’t want to hear cars wizzing by at all hours while sitting on my porch.  What kind of neighborhood are you comfortable living in?  We started with a long list of places we wanted to see, but did some drive bys on our own before going to see them with the realtor.  We crossed off about 90% of the list just by doing this because we realized immediately that the streets they were located on didn’t feel right.  On that same location note, what is it near?  Are you right next to the grocery store or a bunch of pawn shops and liquor stores?  I never thought I’d be this person, but our budget increased pretty dramatically once we learned what our “ideal” budget would buy us.  Safety and ambiance is something I’m willing to pay top dollar for.  You want to feel proud and secure driving up to your home.  It’s a huge purchase, so don’t feel bad about being picky with certain things.

And if you’re in central Florida, let me know so I can recommend my realtor.  He’s been incredible!

Post # 8
Member
3038 posts
Sugar bee

NikkiBee18 :  

see a lender now!

We went to see one about a year before we were ready and she really help us put our finances in order and let us know what to do/not do as we headed into it. They can run some numbers for you (monthly, down payment, interest rates, etc.) so you can start playing around with your budget and see what works for you. 

Closing costs are a little higher than estimates given (i think ours was about $1200 extra) so plan for extras or unforeseen costs. 

Post # 9
Member
496 posts
Helper bee
  • Wedding: June 2018

Factor in closing costs as PP said. Honestly, Darling Husband and I forgot all about this and were sticker shocked when we were expected to drop another $5k we planned to use for some initital renovations. We ended up rolling our closing costs into our mortgage though so we had that extra $5k to make initial changes to the house. Hopefully that is an option for you, I think it only added like $6 to our mortgage. 

Don’t NOT turn a house down or pass one over by the pictures (or even what it looks like in person) because you have the power to change near any part of the house you’d like when you purchase. Keep this in mind for that house you REALLYYYYY love, but ugh that pink carpet or blue bathroom (my home had a 1965 all blue bathroom like EVERYTHING) because you can replace carpet and remodel the bathroom, but again – think about that in your budget. 

DOWN PAYMENT. 

 

Post # 10
Member
1192 posts
Bumble bee
  • Wedding: July 2019

You can request that the seller pay your closing costs. We did this and they agreed.

Post # 11
Member
7866 posts
Bumble Beekeeper

maybeee :  Other things I considered:  How close is it to train tracks?  Google says you can hear a train from just 6 miles away.

This made me giggle a little because we live near a train and we actually love it! We are in a no-horn area and I find the soft rumble really relaxing. I convinced my toddler that if she goes to sleep while the train is going by that she can “catch it” and it will take her to a special dreamland; that has saved a disasterous bedtime more than once lol. We ride it daily which is part of why we love it too.

Post # 12
Member
2527 posts
Sugar bee
  • Wedding: September 2018

Lots of good advice already.

I will stress, DO NOT go to the limit of what the bank is preapproving you for. We ended up spending about $80,000 less than we were technically approved for. Owning a home is expensive. There’s no more landlord when the roof leaks or when an appliance breaks. Make sure your payment is very comfortable and you can still save monthly for emergency expenses. 

Also, just in general the first few months of owning a home are extremely expensive. Moving costs, random home purchases like new paint or blinds or yard equipment. Be prepared and have extra saved. 

Post # 13
Hostess
3831 posts
Honey bee
  • Wedding: November 2016

wineosaur :  We did this as well!

The “mortgage calculators” on all the websites are wayyyy off.  Definitely don’t go by those.  I agree with other posters to really consider what your “must haves” and “would likes” are.  We live in a very HCOL city and only wanted to live in a few different neighborhoods.  It took us longer to find something in a comfortable budget and we had to sacrifice some of the “would likes,” but that was worth it for us.  Start looking now to see what you can get for your budget and track the market.  We had to cross some neighborhoods we loved off of our list because they were way out of our price range. 

Depending on where you live, be prepared for bidding wars.  Try not to get too attached when you make an offer.  We got lucky with our house, but I know a lot of people who went over asking price and still lost the house to another buyer.  Oh and don’t completely drain your savings!  It may feel great to put 10% down, but it might be smarter to put 5% down and keep your savings stacked.  One of my friends moved in and had a ton of mud fill up her basement within the first few months and it was not cheap to take care of. 

Good luck!  House hunting is stressful but so exciting!

Post # 14
Member
112 posts
Blushing bee

See if any realtors in your area offer a first time homebuyers class. We did this and it made the process easier to understand and we were made aware of a $5,000 grant which served as our downpayment.

Post # 15
Member
506 posts
Busy bee
  • Wedding: July 2018

My husband and I just bought our first home! Some tips…

– Get pre-approved

– Figure out your budget on your own dont just go off what you’re preapproved for because that doesn’t consider the fact that you’d want to eat, spend on more than just bills and save for the future. Consider what you’ll be comfortable affording a month with all your other bills (tv, phone, gas, electric, water, cars, spending, saving etc) and consider that the number will go up each year because of taxes

– Closing costs can be really high. Save as much as you can for them, but you can always try to get the seller to pay some or get a sellers concession where it rolls into your mortgage if you find a house that comes in under your budget 

-Go to open houses to meet realtors and see who you click best with. Make sure your realtor is very experienced! Our realtor was amazing, he had awesome negotiation skills and worked really hard. There were multiple offers on the house we wanted and he really pushed so it would be ours 

– Get a really good home inspector 

– Budget for unplanned costs once you move in. Our house had a plumbing issue that wasn’t caught during inspection and we had to spend a few grand to fix it very shortly after move in

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