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Looking at buying my first house: Any useful Advice?

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Looking at buying my first house: Any useful Advice?

Old 04-20-15, 02:36 PM
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Looking at buying my first house: Any useful Advice?

So the wife and i have been talking this past couple of weeks about buying our own house and this weekend we actually went to see a few homes. This is the first purchase for both of us, but i have lived in enough places to know what i want from a property (my wife has not lived in that many different places, so its all very new to her).

Anyway, we saw about 5 places so far and out of those two were really nice. The first one we saw was at the upper end of our mortgage budget, the other is much more affordable. We are going to continue to see more properties, but it has lead into the discussion that my wife thinks we should aim for a place thats at the lower end of our bank roll, whilst i think that if we see a home that we feel is perfect then then it should not matter, as long as we do not go over our agree highest amount.

I am taking into consideration the cost and time for repairs to a low cost home compared to something that is more move in ready. Also, my wife is for some reason having a hard time grasping the concept that the asking price is negotiable a lot of times. So she is being exceedingly cautious, which is not a bad thing, but i am looking at this as a long term investment and am basing it chances of the house prices increasing and of course my primary concern is location (the first two houses have a great location in a gated community).

So can anyone offer advice on steps to take or pitfalls to avoid. I am reading up as much as i can and ensuring that i ask a number of questions about each property and checking other houses in the same area to get an idea of market rates for any offers put in.

I have to admit that i am a little nervous about the whole thing. We are mot exactly in the best of economic climates, but renting is dead money and its time i started getting an investment on my money instead of paying someone elses mortgage for them.
Old 04-20-15, 02:49 PM
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Re: Looking at buying my first house: Any useful Advice?

While there is some value in owning your home in the long term, it is not really an investment, and the value of renting vs owning should not be so rapidly disregarded. As soon as you start paying your own mortgage (as opposed to someone else's), you take responsibility for all repairs and upkeep on the property. You also give up the ability to move elsewhere on fairly short notice. Look at the amount of a mortgage payment (including taxes and insurance, which are clearly not an investment, the rest is arguable) vs the amount of a rent payment for a comparable property. Then look at what you can do with the difference over the course of 30 years, and you will see the true monetary value of that "investment" into your own home. That's not to say there aren't positive aspects to owning vs renting, but viewing rent money as "dead money" is short sighted.
Old 04-20-15, 02:53 PM
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Re: Looking at buying my first house: Any useful Advice?

Purchasing a home is more or less a good idea if you don't plan on moving around a lot, I did it because my rent kept going up (it reached about $950 a month) and I realized I could have a mortgage for basically the same (loan, interest, escrow, taxes, insurance came out to about $1010). Just be sure you get those inspections done, try to push the closing costs on the seller, and evaluate the surrounding area for various things (including traffic at key points of the day).

Everything is somewhat negotiable.

I don't really have much else that I'd consider useful to add. I had my house built during the slump and didn't have to pay a cent for closing, and that is a big chunk of money. Be sure you know what you're getting into with your loan, stay away from points and Adjustable Rate Mortgages. Oh and 1 extra House Payment a year knocks up to 7 years off a 30 year loan. I lucked out a bit and had a pretty massive appreciation on value after my house closed. Also managed to avoid PMI, you may want to research that a bit.

Last edited by RichC2; 04-20-15 at 02:58 PM.
Old 04-20-15, 02:56 PM
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Re: Looking at buying my first house: Any useful Advice?

If you have kids, or are planing to, investigate the schools. Visit the campus during school hours.

When it comes time, get a really good home inspection. The only thing I regret about buying my house was that I went with an easy going home inspector that the realtor knew. He didn't find anything wrong with the house, nothing that was a deal breaker, and there was nothing wrong that was a "deal breaker" but a few months later when I got a contractor view the house regarding changes I wanted to make he just kept pointing out thing after thing that was a half-assed DIY piece of shit job. I wished I'd had that contractor do the home inspection even if he wasn't a certified home inspector. In fact, if you are considering any remodeling, get the standard inspection and then have the contractor check it out too.

Also, drive by and check out the house after dark. Sometimes you discover things about the house or the neighborhood or the street that you can't see during the day.
Old 04-20-15, 02:58 PM
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Re: Looking at buying my first house: Any useful Advice?

Spend money on the inspection, do not trust any sellers inspection. You can not only use that as a deciding factor to purchase the house, but also to negotiate price (depending on the housing market where you are)

Do not worry about cosmetic stuff, crappy paint, crappy carpet .. who cares that stuff can be replaced

Location is important, try to hit up and coming areas of town. Good rule of thumb is you would rather be the crappiest house in a nice neighborhood than the nicest house in a crap neighborhood.

I guess also see if there is an HOA, beyond costs they can be a pain to deal with ... but they help keep property values up. You probably need to be honest with yourself, if you do not see yourself mowing the lawn once a week, stay clear of HOAs
Old 04-20-15, 03:05 PM
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Re: Looking at buying my first house: Any useful Advice?

If you are looking for it to be an investment, when you are considering houses make sure you evaluate the house on the idea "this is where I'm going to live for the next 7 or so years". Don't just consider the property for today. If there is unsold land around it, or a big housing development going in close by, be aware that things are going to change somewhat over the timeframe you are going to live there and may affect re-sell value. Generally, the thought is you need to live in the house for 5-7 years to make money when you sell. More so if you invest a lot in to the house (landscaping, fencing, finish a basement, etc.)
Sounds like you are already on top of the location, location, location idea so you're on the right path.
Old 04-20-15, 03:41 PM
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Re: Looking at buying my first house: Any useful Advice?

Some interesting points, and a few things i have already noted to keep a check on.

Well the two houses we liked are in a very nice gated community, so a drive by at night is not gonna happen, but i do know the area a bit and its very quiet which is high on our needs list. Both houses are actually listed for below asking for the area. Generally in the area house prices are the high 200's, but these are way under (the one i like is listed at $210,000 and the one my wife likes is listed at $160,000). For the cheaper one we actually got to meet the owners and they are living in an almost empty house as they are looking to move to Chicago to be closer to their daughter. They are also the only people to have ever lived in the house (and its been kept in good condition). It helped that they said they would be happy to deduct money if and evaluator gave a lower valuation based upon the area and they would also look at concessions for remodeling the kitchen. So they are really wanting to move (and they are obviously willing to go below asking to do so). I think that both houses will be very good at holding their value or hopefully increasing in years to come. I am going to research the area to see how much houses prices in the area have fluctuated and sold for.

My long term plan is moving to the US, but we feel that we could look at selling or renting if we moved, and we are not going to be moving i don't think for a few more years at least. Now i know this has its own set of headaches and pitfalls (i have a few friends who rent), but we are looking at the long term and short term and all eventualities. We are not rushing into anything and are sitting down to discuss every aspect as we go along. If it comes down to it and i have even the smallest doubt i will be happy to walk away. I know the market is picking up, but i think that time is on our side a little at the moment.
Old 04-20-15, 03:54 PM
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Re: Looking at buying my first house: Any useful Advice?

What country are you in?
Old 04-20-15, 04:01 PM
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Re: Looking at buying my first house: Any useful Advice?

Real estate is all about location, location, location. Think long and hard about that area's future prospects and the school system, even if you don't have children.
Old 04-20-15, 04:01 PM
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Re: Looking at buying my first house: Any useful Advice?

I just bought my first house this past year. Home inspection is key. I actually backed out of a purchase after my inspector gave me a long list of issues including water leaking on an external breaker box and a weakened structure on the external garage. Amazing the things that an inspector can find when the inspection is during rainy weather.

I made good friends with Zillow. Heck, I wonder how easy that app made Realtor's jobs. We knew more about the houses we looked at than our Realtor who had to catch up and read the specs whenever we went in to view a house.

Once you find a place and purchase it, I recommend the Houzz app. Loads of decorating ideas.
Old 04-20-15, 04:11 PM
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Re: Looking at buying my first house: Any useful Advice?

Ok, since the OP is not in the US, I don't know how much of our advice is relevant. But some advice I would give is find a realtor who you can trust. Make sure they are experienced, know the market, etc.

Also, as has been said, location is paramount. But that doesn't mean the same thing to everyone. What "location location location" means in the real estate world is first, you can't change it so it must be something that you like. Your comment about a "gated community" seems to be that type of response. But more important from the investment point of view is that the location be something that will always be desirable, that it is near something fixed. So, for example, a home near the downtown area will always have value, whereas a gated community 5 miles away may have a different gated community built a mile further out, and suddenly your 15 year old homes don't look as nice.

For example, in my town, the homes on the west side are up against the mountains and those homes will always hold their value because teh mountains aren't moving!
Old 04-20-15, 04:13 PM
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Re: Looking at buying my first house: Any useful Advice?

Originally Posted by Mabuse View Post
What country are you in?
I only know the country he is not living in....................

Last edited by DirkUSA; 04-21-15 at 11:24 AM.
Old 04-20-15, 04:25 PM
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Re: Looking at buying my first house: Any useful Advice?

I would recommend working with an real estate agent, the agents commission is paid by the seller, not the buyer. So they would be able to do a fair amount of the work on your behalf.

Do you have children? I would try to find locations with good schools as well.
Old 04-20-15, 04:40 PM
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Re: Looking at buying my first house: Any useful Advice?

I think he's in Puerto Rico, and I don't think things are done very differently there.
Old 04-20-15, 04:58 PM
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Re: Looking at buying my first house: Any useful Advice?

Make sure the appliances all work if they are included. Check the Air Conditioning and water heater. Look up at the ceilings. Look for cracks that could be evidence of something larger lingering behind the wall. Look for water stains, mold, etc.
Old 04-20-15, 05:18 PM
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Re: Looking at buying my first house: Any useful Advice?

Originally Posted by RichC2 View Post
I think he's in Puerto Rico, and I don't think things are done very differently there.
Moving to British Expats in Puerto Rico Realty Talk.
Old 04-20-15, 05:24 PM
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Re: Looking at buying my first house: Any useful Advice?

buy the shittiest house in the best neighborhood.
Old 04-20-15, 06:48 PM
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Re: Looking at buying my first house: Any useful Advice?

Don't hesitate to make a lowball offer, as you never know what may happen.
I looked at a few dozen homes before finding almost exactly what I wanted; however, the price was $20k over my max budget. I told my agent to offer my max, and he laughed and thought I was crazy. I said "what's the worst that can happen?", he agreed and made the phone call. He called me back later and said that they had shockingly accepted the offer. As it turned out, it was a military family that had to relocate quickly and was still able to pocket about $1600 with my offer. They also left all of the appliances, lawn equipment, etc. for me that were only a year old.
It was definitely a stroke of luck, but you may find that yourself too.
Old 04-20-15, 07:00 PM
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Re: Looking at buying my first house: Any useful Advice?

I don't know if it's the same in Puerto Rico, but on the mainland US, what bankers tell you is affordable and what is really affordable are two different amounts (in my opinion). I bought a house last year, and I spent 70K less than I was approved for. I am so glad I did, because I would really be struggling if my mortgage were hundreds more every month.

If the house has a hot tub or any other external feature and you don't want it, ask the sellers to remove it. I didn't, and I hate that thing. It'll be a pain to remove when I get around to it because it's down in the deck.

I think it's pretty typical to get a house for less than asking. I offered 10K less w/ seller paid closing costs (so about $15K under asking) and they accepted. That was for a small house; what would be a starter house for many. Don't trust Zillow values too much, though it's a good site for browsing. My house value on Zillow was relatively close to real market value. My parents sold their house last year, for over twice what Zillow said it was worth (it was crazy--Zillow valued their house at like $210,000 and they sold for $550,000--obviously, they had some real flaws in their estimating.) So Zillow is useful but not too accurate.

Last edited by tasha99; 04-20-15 at 07:08 PM.
Old 04-20-15, 07:48 PM
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Re: Looking at buying my first house: Any useful Advice?

just don't.
Old 04-20-15, 08:48 PM
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Re: Looking at buying my first house: Any useful Advice?

1. Don't view a home as an investment but rather a place to live on a set budget.
2. Get preapproved by a lender before making an offer as what you think you can afford may not be the case when getting approved for a mortgage.
3. Everything is negotiable.
4. Home warranties are not worth it. Instead of having the seller pay for one, ask for price reduction of equal value.
5. Average person refinances, pays off mortgage, or sells on average every 5.6 years. Most of time, not worth paying points.
Old 04-20-15, 09:16 PM
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Re: Looking at buying my first house: Any useful Advice?

Originally Posted by tbone View Post
1. Don't view a home as an investment but rather a place to live on a set budget.
2. Get preapproved by a lender before making an offer as what you think you can afford may not be the case when getting approved for a mortgage.
3. Everything is negotiable.
4. Home warranties are not worth it. Instead of having the seller pay for one, ask for price reduction of equal value.
5. Average person refinances, pays off mortgage, or sells on average every 5.6 years. Most of time, not worth paying points.
The refinancing timeline is interesting. I've been in my home 10 months, and I already refinanced once (with no fees). I hadn't paid points, and now I'm glad I didn't!

I wonder if there is an opening up of credit again, because my refinance had no income check (and I was in fact, unemployed at the time, which was just crazy to me.)
Old 04-20-15, 09:57 PM
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Re: Looking at buying my first house: Any useful Advice?

I've been a homeowner for 4.5 years now (I'm 30 years old) and a good piece of advice my father gave me was to visit the area at different times of the day (maybe take a drive through the neighborhood at 2AM). Also, visiting the closest grocery store on the weekend will give you an idea of the community.
Old 04-21-15, 12:52 AM
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Re: Looking at buying my first house: Any useful Advice?

Originally Posted by MLBFan24 View Post
I've been a homeowner for 4.5 years now (I'm 30 years old) and a good piece of advice my father gave me was to visit the area at different times of the day (maybe take a drive through the neighborhood at 2AM).
That is very smart advice. Traffic patterns can change drastically based on time of day and day of the week. A neighborhood that looks peaceful on Sunday may be rowdy on weekdays.
Old 04-21-15, 06:47 AM
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Re: Looking at buying my first house: Any useful Advice?

Buying a house?

Look for location, location, location.

Then get inspection, inspection, inspection.

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