We are planning to buy our first house… yay! Tips & advice plz

posted 2 years ago in Home
Post # 3
Member
9204 posts
Buzzing Beekeeper

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mariastarlove :  know your own budget – don’t trust what the bank says they’ll loan you. And keep that budget low because being house poor sucks. Beyond that I would focus on location. You may find a house that’s absolutely perfect except for the carpets, but it’s very easy to change the flooring. 

If you’re worried about property taxes take a look at the town’s budget and override history. The taxes could be reasonable now and then the schools get overpopulated and the town votes to increase the taxes by 5% next year. But also you’re unlikely to find amazing schools with low taxes. Property taxes make up a big portion of the school’s funding so they tend to go hand in hand. In that case it would be better to buy a cheaper house to account for the higher tax rate.

Lastly separate your must have list from your would like to have list. We needed 3 bedrooms, at least 1.5 baths, good schools, and close proximity to Boston. We wanted a garage, but we weren’t able to get it given our must-haves and budget. Decide what you can’t live without and focus on those things. 

Post # 4
Member
80 posts
Worker bee
  • Wedding: November 2019 - Baton Rouge, LA

We’re on the tail end of this process.  Here’s what I’ve figured out:

 

  • Get your preapproval first and shop within that budget.  You may be preapproved for more than you want to spend (we were); still, stick to the budget.  Flooring, paint, cabinets, tile, etc. can easily be changed.  Having the perfect move-in ready home won’t do you any good if you can barely afford your other bills.
  • Don’t forget to factor in taxes, HOA fees, and insurance in when deciding on how much house to buy.  You can usually figure out how much property taxes are online for any given house at your tax assessor’s website (it may not be exact, but it will give you a good ballpark).
  • Make sure you keep all of your financial documents (W2s, Tax Returns, Pay Stubs, etc) together and get them to your mortgage broker quickly when requested.  It will save you both headaches and keep the process moving.
  • Research your neighborhoods.  Drive through them on different days of the week, and at different times of day.  You can usually fix a house feature you don’t like (cabinets, paint, etc); neighborhood…not so much.
    • Don’t forget about flood zones! FEMA flood zone maps are usually available online.  Flood insurance is always a good idea, but it will be more expensive if the house has flooded before, or if the house is in a flood plain.
    • Check up on any HOAs and bylaws as much as you can.  Decide if you can live with any restrictions/rules/dues, etc.
  • Find a real estate agent you trust (referrals are great for this).
  • Decide what your must haves and dealbreakers are.  Be picky (this is your house, after all), but be realistic.
  • Keep spending/financial changes to a minimum until you close.  Don’t buy anything major (furniture, appliances, vehicles, etc) or do any serious moving of money around until the keys are in your hand.  If in doubt, check with your mortgage broker.
  • Get an inspection!  I recommend going to the inspection, so that the inspector can show you any concerns or issues, and you can ask questions over any concerns you might have.  I found this to be very helpful.
  • Don’t be afraid to ask questions.  Lots of them. This is one of the biggest financial decisions you will ever make; it’s better to ask and be sure than not and end up with a potential issue later.

This is what I can think of of the top of my head.  I’m sure other Bees have much more experience than I do.

 

Good luck, and have fun!

Post # 6
Member
3971 posts
Honey bee

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mooncrown :  I was just about to post that link here!

OP, that thread covers a lot of important things to look out for and things to think about.

Post # 7
Member
14 posts
Newbee

How exciting!

Like other bees have suggested it is important to get preapproved and then shop within that budget. Create a list of must haves/deal breakers/ would be nice to have for your home but also be willing to be a bit flexible and/or compromise. Your first home may not necessarily be your forever home. 

The housing market is rough and super competitive right now. Be prepared for the possibility of a bidding war and stick to your pre-discussed budget. There are other ways to make your offer more enticing to the seller such as: a larger earnest money deposit, flexible move-in date, a large percent of money down, absorbing the sellers closing costs, etc.

ALWAYS ALWAYS get an inspection done.

 

Good luck!

Post # 8
Member
3230 posts
Sugar bee
  • Wedding: May 2015

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mariastarlove :  how do you think amazing schools and low crime (vigilant and capable police force) are funded? Your property taxes pay for that, so I think you may need to readjust your expectations. Remember things like carpet can be torn up. 

Post # 9
Member
1363 posts
Bumble bee
  • Wedding: September 2017

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carolinabelle :  thiiiis. Reading this as a real estate agent, all I can see is “want, want want” but don’t want to pay for.

 

So my best advice would be, make sure your budget allows for all of those things. And if it doesn’t, you’re going to have to adjust your expectations 

Post # 11
Member
80 posts
Worker bee
  • Wedding: November 2019 - Baton Rouge, LA

The higher taxes could be because of any homestead exemption that might exist (my state has a pretty decent-sized one).  There’s one on our new block that has property taxes a good $700/year more than the rest of the street.  It’s also not the owner’s main residence, so no homestead exemption.

As for what to be flexible about, I’d say cosmetic things are always something to be willing to give on.  Carpet/flooring, paint, color of the cabinets, back splashes, crown molding (or lack thereof), even some appliances (read: not HVAC) are easily replaceable/fixable if they’re not to your taste.  The bones of the house (including the roof, foundation, and overall structure) need to be solid.

Post # 12
Member
247 posts
Helper bee
  • Wedding: September 2018

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mariastarlove :  Where are you getting the tax info? Redfin/Zillow aren’t necessarily reliable. Depending on where you live, your taxes might change (a lot) when you buy the house. You can go to the appropriate local websites to figure this out. Aside from what was previously mentioned about the homestead exemption, many areas have property increases capped to a certain amount/percentage each year, so that’s why you see the wide variations – one person may have lived in the house for decades and have really low taxes that are going to be adjusted as soon as the house changes hands.

Post # 13
Member
80 posts
Worker bee
  • Wedding: November 2019 - Baton Rouge, LA

@hotdoglover: Agreed.  Zillow and Redfin were waaaay off on ours.  OP, check your local tax assessor’s website.  We pulled records for a variety of homes: some of which were sold years ago, some a couple of years ago, and the one or two we could find that were sold in the last 6 months to one year.  It gave us a really good idea of what to expect with property taxes.

Post # 14
Member
380 posts
Helper bee
  • Wedding: City, State

Carpet can be torn out! Someone else said this but don’t worry about cosmetic items (carpet, paint, doors, wallpaper, ugly things) that can be changed. Sometimes it is VERY HARD to vision yourself living in a gross / dirty / ugly house, but try to picture it with YOUR belongings. Getting in there with Molly Maids and a Painter can do wonders! Focus on the shell of the house, the structure & layout, roof, AC unit, backyard, etc. Also it is better to buy the worst house in the best neighborhood than the best house in the worst neighborhood because of things like this – just invest in making it what you want it to be! 

Also, you don’t necessarily need to consider low taxes just need to look at the final payment (Principal, interest, PMI if you have it, HOA if you have it, taxes and insurance) and see what that bottom line is monthly. 100% go less than you are qualified for. You can get a place in a super high tax area say if it is 5-10K lower asking price than another home in a lower tax area… it is the overall monthly payment you need to assess. 

ETA someone else just mentioned this but drive by the house at various times of the day and week, right after work, rush hour, Saturday mornings, etc. to see what the neighborhood is like. Look at things like grass being kept up, traffic, are people out walking their dogs and mowing their lawn or is it a ghost town, etc. 

Post # 15
Member
2797 posts
Sugar bee
  • Wedding: May 2015 - St Peter\'s Church, East Maitland, and Bella Vista, Newcastle

Anything cosmetic shouldn’t be a dealbreaker.  When we bought, our place needed painting and new flooring, and as we discovered after living there for a week, the kitchen was badly laid out and there wasn’t enough cupboard space.  But, it is a really good size, the bedrooms are huge and the location is great.  We painted and recarpeted the upstairs before we moved in, and then after about eight months we redid the kitchen and living area – we decided we needed to live in it to work out exactly what we wanted that space to be, which was a really good decision.  What we ended up with was not what we’d originally talked about doing by a long shot.

Also, spend less than you’re approved for.  We spent $150k less than what the bank agreed to loan us and have never regretted it.  Mortgage payments are lower, which means we can pay extra off it, saving us a fortune in interest.

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