first time home buying tips..?

posted 3 years ago in Home
Post # 16
Member
1547 posts
Bumble bee

This might sound silly but make sure the area you looking at is suitable for your local weather for example in the UK we have some problems with houses being sold cheap on floodplains but not disclosing that information to buyers, then once that house has been flooded, insurance is difficult to get and the selling price drops even lower so you lose out on money. If the house is a new build, make sure the foundations are good and sizes of rooms are right because you cant always tell before moving in (new build houses in the UK now make garages that dont fit an average car and bedrooms that dont fit a double bed). 

Post # 17
Member
712 posts
Busy bee
  • Wedding: October 2017

Yes you do need a lawyer. Getting a lawyer is the best thing you can do for yourself to protect you, your money, your closing date and anything that may happen in between. Go through several, find someone you trust, don’t skimp on a lawyer. I’m surprised no one has mentioned this. 

Post # 19
Member
7892 posts
Bumble Beekeeper

People like yards. Make sure to consider resale value in the home. You’re going to have to sell it at some point unless you die with it. Even if a characteristic doesn’t bother you, you might have a hard time selling if it’s a dealbreaker for other people. 

Post # 20
Member
7 posts
Newbee
  • Wedding: November 2017

BUMP to receive more info! 😀

Post # 21
Member
1326 posts
Bumble bee
  • Wedding: City, State

Please be conservative!

Calculate how much cash you’ll have each month for housing costs, then use that number to find out how much you can maximum afford to pay each month.  Then back out $500-$700* monthly (for all of those repairs and upgrades).  What’s left is your maximum mortgage payment.  It will likely be less than what you ‘qualify’ for with your bank– they don’t count your retirement plans, fixing plumbing, replacing cabinets or all of the real life things you’ll need to pay for. 

Make a similar calculation for your downpayment.  Start with all of your downpayment funds, subtract $15k* for minor home repairs, new furniture, exterminators, painting/ flooring, etc.  What’s left is your maximum downpayment. 

Since your realtor gets paid on commission, there’s no incentive for them to get you to shop for less house than you can possibly get. 

OH and I made these kinds of conservative corrections when buying… and we were SO LUCKY we did.  We didn’t have to run up cc debt to finish our home and we have more cushion for random repairs.  

People rarely regret buying less house than they can afford. They often regret buying too much house.

 

*ETA: Obvi, this depends on cost of living/ housing/ labor in your area.

Post # 22
Member
2888 posts
Sugar bee
  • Wedding: April 2017

View original reply
coffeecakez :  As a Realtor myself, it’s amazing to see how many people want to buy more house than they can comfortably afford.  It’s my job to prevent them from doing that, and that’s where we butt heads a lot.

View original reply
maebae :  Making a budget is a huge first step.  Not only determine how much you can afford in the mortgage itself, but you also have to account for utilities (some areas you pay a flat fee for water, some you pay on consumption, for example), property taxes (are you going to escrow them into your mortage or are you going to keep the money in your own account and pay them twice a year), HOA fees, AND have a healthy savings cushion for WHEN things go wrong, not IF they go wrong – things always fall apart in a house.

Then research areas.  Since you said this is your first home, determine how long you want to stay there (ideally) and if/when you plan on moving.  Will you move before your (future) kids start school?….school district is a big deal where I live.  You can change anything about a house except the location.  Do you want a cul-de-sac? (you usually pay more for homes on one)  Do you want a corner house? (sometimes they are harder to sell)  Is it on a busy street? Are there high power lines nearby?  There is a brand new subdivision near me and it backs right up to freight train tracks.  I looked at a potential home there for a client and noticed how loud the train was when it came through, even though there is a brick retaining wall.  I took it off my list.

If you’re looking in a neighborhood or subdivision, you’re much better off buying the smallest house in that kind of area vs the largest.  Look at the comps in that area.  If you want to buy a fixer upper for example, see what other people are doing.  This unfortuantely, is where keeping up with the Jones’s can come into play, but at the same time, you don’t want to outprice your house when you do go to sell.  For example, I showed a house last weekend in a subdivision that’s about 20 years old.  The neighbors are updating their kitchens with granite.  The couple instead wants really expensive quartz countertops.  I warned them if they’re only looking at resale, they most likely won’t get that investment back because everyone else has granite and doesn’t want to pay for quartz.  In other words, you don’t want to be the most expensive house in the area.

I also cannot stress enough that just because the bank approves you for a certain amount does it mean you have to spend that much.  My husband and I were approved for much more than we actually spent.  Again, it goes with how much can you afford on a month to month basis.  You will never regret spending below your means.

Also realize that you will most likely never get every single thing on your wish list unless you have a really large budget.  You’re going to have to compromise and only you and your SO can decide on what that is.  For us, my husband at first wanted something completely move in ready.  He didn’t want to have to do anything (except paint) before we moved in.  In order to get a house like that, in the area we wanted, we would have had to spend a lot more than I wanted.  Instead, we bought a house that needed updating and did that before we moved in.  We were able to put our own stamp on it and every single day, my husband comments on how happy he is that we went the route he did.

Last thing – don’t fall in love with a house.  It is a big emotional decision, but if that house that you love has major issues that you don’t want to deal with, you may overlook that because you’re afraid that you won’t find another.  Trust me, there will be one that you like even more.  I see it all the time.

Sorry for the long post.  Good luck on your search!

Post # 23
Member
733 posts
Busy bee

View original reply
maebae :  My husabnd and I went with a realtor, and we seldom ever use professional help for things.

He was able to find us a house in the middle of a epic housing crisis in our area, it was SO worth it! My advice is to make sure everything is inspected, and when you are told things, video tape what you are told and get it all in writing. I did so, and it helped a lot

Also, when you go to see places, video tape yourself walking through them. One reason is you may not always be able to look at houses together, so if one has to show the other, videos are much better than still shots! If a house just screams no, don’t consider it even if it is a good deal. We came very close to offering on a place that was all wrong because houses were so hard to find. While we were discussing if a offer should be submitted or not, our house came up on the matrix on line listing, I text-ed our agent and he made arrangements for us to be the first ones to see it the next morning. From what I hear we beat out 30 other offers. Main reason? our loan was secure and we were flexible in moving time. We were able and willing to close in less than 3 weeks which is what the seller needed.

I can’t stress having the place inspected enough. Hold out for a fixed rate loan, they are worth it!

Post # 24
Member
1192 posts
Bumble bee
  • Wedding: December 2012

Spend way less than what you are approved for.  Life is expensive. This is especially true if you plan to add kids to the mix, do renovations, etc.  We were approved for like $400,000 or something crazy and we bought our house for $213,000.  6 years and nearly 2 kids later, I’m so glad we didn’t overspend on our house.  Two in daycare plus a mortgage is outrageous.

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