Ohio Chatter
Ohio Chatter

Forums

All Threads Serious Business Sports Politics Archive Pick 'ems
Log In Create Account

Best advice for buying your first house?

Home ▸ Archive ▸ Serious Business ▸ Best advice for buying your first house?
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Sep 13, 2010 10:51 AM
Homework, homework, homework. Do any homework necessary. Find out how much you can afford. Find out how much money for which you can get a loan. Ask any and all questions necessary about the house. Ask, ask, ask, ask. Don't come up with questions after. Ask them before.
Sep 13, 2010 10:51am
S

Sonofanump

Sep 13, 2010 11:18 AM
If I were buying now in this market, I'd look in the tuesday paper for the sherrif auctions.
Forclosed houses for 70-80% of value. See if you can walk thru the houses first to make sure because they are as is.
Sep 13, 2010 11:18am
thedynasty1998's avatar

thedynasty1998

Senior Member

6,844 posts
Sep 13, 2010 11:51 AM
fan_from_texas;481599 wrote:Think about your long-term goals. Are you planning to be in the area for the next 30 years?
You don't have to be there 30 years. But you should commit to at least 4-6 years if you ever want to sell it and make enough to pay off the current mortgage (assuming you are going FHA and putting down 3.5%)
IggyPride00;481622 wrote:Also, whatever your budget is, make sure to buy a house cheaper than that by a decent amount as you will need a fund for repairs as things will go wrong. Whether it's you fixing them or someone else, if you're not buy a new house there will be repairs needed and it will cost money. Not enough people budget for these contingencies, and then find themselves in a big time financial pinch because of it.
I just bought a house in April and I need to replace the main water line to the house, as it has a leak, It's going to cost around $3,000, which is obviously unexpected, but I understood it's something that happens with home ownership.

Also, you will spend a lot more than just the mortgage payment, so keep that in mind. A lot of people get preapproved and see the monthly payments and think you are comfortable with that. You have to factor in PMI, insurance, taxes, utilities and cable.

Also, know that once you get in, you will spend ALOT of money in the first few months to likely furnish and do any upgrades. We ended up spending around $10,000 within the first few months on TV's, couches, paint, carpet, lawnmower, pictures, etc...
CinciX12;481984 wrote:How the hell do you look at 36 houses before you finally decided? That has to be some kind of record. Did you just have literally no idea what you wanted?
I'm a real estate agent, so I had more access than most, but once we decided to buy, I had a certain search criteria that I would perform on the MLS daily, so I looked at over a hundred online and saw enough to do walk throughs of probably 15. But most people won't have that luxury. But I agree, your realtor is getting paid to show you houses, so take full advantage. If they get tired of showing you, then find someone else who will. Realtors are not cheap, so get your money's worth.
Sep 13, 2010 11:51am
thedynasty1998's avatar

thedynasty1998

Senior Member

6,844 posts
Sep 13, 2010 11:52 AM
Sonofanump;482243 wrote:If I were buying now in this market, I'd look in the tuesday paper for the sherrif auctions.
Forclosed houses for 70-80% of value. See if you can walk thru the houses first to make sure because they are as is.

That's not realistic for most first time home buyers, because a lot of those houses won't qualify for FHA financing.
Sep 13, 2010 11:52am
Belly35's avatar

Belly35

Elderly Intellectual

9,716 posts
Sep 13, 2010 12:52 PM
Location, location, location ...curb appeal
Sep 13, 2010 12:52pm
C

Con_Alma

Senior Member

12,198 posts
Sep 13, 2010 12:55 PM
Maybe for real estate that might apply but it shouldn't matter for a home.

You can't even see my home from the "curb"...nor do I want it to be seen.
Sep 13, 2010 12:55pm
S

Sonofanump

Sep 13, 2010 1:25 PM
thedynasty1998;482288 wrote:factor in PMI

Here some advice (not to dynasty but in general), try to get 20% to avoid PMI.
Sep 13, 2010 1:25pm
thedynasty1998's avatar

thedynasty1998

Senior Member

6,844 posts
Sep 13, 2010 1:32 PM
Sonofanump;482383 wrote:Here some advice (not to dynasty but in general), try to get 20% to avoid PMI.

What first time home buyer has 20% to put down? And those who do are probably better off just keeping the cash and paying the PMI for financial security.
Sep 13, 2010 1:32pm
S

Sonofanump

Sep 13, 2010 1:37 PM
thedynasty1998;482390 wrote:What first time home buyer has 20% to put down? And those who do are probably better off just keeping the cash and paying the PMI for financial security.

The cost of money is less than financial security? What % is PMI at currently?
Sep 13, 2010 1:37pm
thedynasty1998's avatar

thedynasty1998

Senior Member

6,844 posts
Sep 13, 2010 2:58 PM
Sonofanump;482393 wrote:The cost of money is less than financial security? What % is PMI at currently?

I'm not sure the %, but say someone is buying a house for $150,000, 20% would be $30,000. So, say a first time home buyer does have $40,000 cash, which isn't the norm, my argument would be to put down as less than $20,000 so that you do keep some cash for personal security.
Sep 13, 2010 2:58pm
NWIndianNation01's avatar

NWIndianNation01

Senior Member

996 posts
Sep 13, 2010 3:28 PM
Crazy...I was seriously just about to ask this same question...pretty much.

My wife and I are looking to buy our first house, but have no clue where to start. What are some of the things you need to do first...as soon as you decide that you want to try to buy a house?

With our crazy student loans, finances are somewhat tight, but we feel that we are wasting money on renting. So we want to look into foreclosures...do we get a realtor for that or how does that work?

Any info will help.
Sep 13, 2010 3:28pm
S

Steel Valley Football

Senior Member

4,548 posts
Sep 13, 2010 3:52 PM
Con_Alma;482355 wrote:Maybe for real estate that might apply but it shouldn't matter for a home.

You can't even see my home from the "curb"...nor do I want it to be seen.

Do you realize a house can have curb appeal without having a curb...or even if you can't see it from the curb? Curb appeal is simply another way of saying to keep the outside of a house neat and tidy so potential buyers will want to see the inside.

With that said, I'm not sure what the hell Belly meant by "location, location, location...curb appeal" as advice for buying a house. That makes no sense.
Sep 13, 2010 3:52pm
S

Steel Valley Football

Senior Member

4,548 posts
Sep 13, 2010 4:05 PM
Some advice i would give is to do research the neighborhood. Don't compare the list price of the home you are looking at to other list prices in the neighborhood - compare it to recent sales of similar properties. This is because realtors, for the most part, pull the list prices out of their ass...regardless of whether it's a valid list price or not. Whoever said offer 10% below list price gave bad advice because if the list price is way too high you'll end up still paying above market value. If the list price was spot on then you will have just bid yourself out of the home. Do your homework in the neighborhood. Use the county auditor and other real state websites for your data and compare your house to sales of similar homes in the neighborhood.

The "best" advice would be don't buy a new-build from a builder like Dominion, M/I, Homewood, Maranda, Rockford, Duffy and a slew of others who offer financing to their buyers because you WILL lose value immediately after building.
Sep 13, 2010 4:05pm
S

Sonofanump

Sep 13, 2010 4:10 PM
thedynasty1998;482460 wrote:I'm not sure the %, but say someone is buying a house for $150,000, 20% would be $30,000. So, say a first time home buyer does have $40,000 cash, which isn't the norm, my argument would be to put down as less than $20,000 so that you do keep some cash for personal security.

My question is what is the PMI % fee?

I do disagree with your personal security theory despite being highly risk adverse. The cost of the money is too high versus the security.
Sep 13, 2010 4:10pm
F

fan_from_texas

Senior Member

2,693 posts
Sep 13, 2010 4:11 PM
CinciX12;481984 wrote:How the hell do you look at 36 houses before you finally decided? That has to be some kind of record. Did you just have literally no idea what you wanted?

We probably looked at more than that. We spent every weekend for several months looking at places. It's a big investment. Might as well spend some time upfront doing the research to get what you want.
Sep 13, 2010 4:11pm
Cat Food Flambe''s avatar

Cat Food Flambe'

Senior Member

1,230 posts
Sep 13, 2010 10:26 PM
Don't know about you guys, but if I'm going to drop $150K-$300K on a house, I can't afford NOT to make the time to look at 36 houses.
Sep 13, 2010 10:26pm
F

fan_from_texas

Senior Member

2,693 posts
Sep 14, 2010 1:26 PM
Cat Food Flambe';483174 wrote:Don't know about you guys, but if I'm going to drop $150K-$300K on a house, I can't afford NOT to make the time to look at 36 houses.

Exactly. What is a typical commission for a realtor today? 3%? On a $300K house, they'll make $9,000. If you only look at 5 houses (like most people typically do), you may be paying $1-2,000 per house you view, and you get some help filling out a very standard, straight-forward form contract for your offer.

Get your money's worth. This is likely the biggest single expenditure of your life, as well as a place that you have to live in for awhile. Make sure you do your homework first.
thedynasty1998 wrote: You don't have to be there 30 years. But you should commit to at least 4-6 years if you ever want to sell it and make enough to pay off the current mortgage (assuming you are going FHA and putting down 3.5%)
I'm not suggesting that you have to be there 30 years, but banking on 4-6 yrs isn't necessarily super safe. E.g., there are plenty of people who bought in 2005-2006 who lost 30% or more of their value. Unless they plan to take a massive hit, they'll be forced to wait it out much more than 4-6 years.

It's a question of risk. Generally, you can buy a place and get out in 5 years without taking a big hit. But preparing yourself for the bad scenarios (home loses 30%, can't afford to sell it; stuck with the mortgage for the foreseeable future) can help cushion the blow in bad times.
Sep 14, 2010 1:26pm
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Sep 14, 2010 1:32 PM
3% Commission??? Damn! Our realtor was 6%!
Sep 14, 2010 1:32pm
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Sep 14, 2010 1:34 PM
FFT... I bought in 2005. I don't want to know how much I lost on my house! I just know that there are comparable houses selling for way less than what I bought it then!
Sep 14, 2010 1:34pm
thedynasty1998's avatar

thedynasty1998

Senior Member

6,844 posts
Sep 14, 2010 2:06 PM
ernest_t_bass;483733 wrote:3% Commission??? Damn! Our realtor was 6%!

6% is the total commission, split between the two agents; unless you had a dual agent who represented the buyer and seller.
Sep 14, 2010 2:06pm
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Sep 14, 2010 2:11 PM
thedynasty1998;483771 wrote:6% is the total commission, split between the two agents; unless you had a dual agent who represented the buyer and seller.

DURRRR. Makes sense now. I'm skeptical of dual agents.
Sep 14, 2010 2:11pm
F

fan_from_texas

Senior Member

2,693 posts
Sep 14, 2010 3:40 PM
thedynasty1998;483771 wrote:6% is the total commission, split between the two agents; unless you had a dual agent who represented the buyer and seller.

Whoops, yes--should've clarified. After looking at a number of places and talking to a number of realtors, we decided to work with a buyer's agent. We wanted to make sure that whomever was helping us out was legally obligated to have our best interests in mind. My understanding is that unless you have a specific buyer's agmt with an agent, they're an agent of the seller and don't represent your interests. That's something to keep in mind when they're showing you places.

Another factor to consider is that an agent's interests aren't necessarily aligned with yours. They're paid based on the price, so they have an incentive to (1) encourage high prices, and (2) encourage you to make an offer quickly and close, so they can move on to the next sale. Don't be pushed into something you're not comfortable with. If possible, get a realtor referral from a friend or someone you trust.
Sep 14, 2010 3:40pm
D

dave

Senior Member

4,558 posts
Sep 14, 2010 3:51 PM
like many said, just look at a shitload of houses. this isn't 10 yrs ago when they were hard to find. we just bought a house in May, probably looked at about 60, drove past another 60 the we ruled out without needing to enter, looked at another couple hundred online. this was over about 4-5 months. we found 2-3 that we really liked but there were 1 or 2 things we really didn't like and wouldn't be able to ever change. don't settle, you will find what you want if you are being realistic.
Sep 14, 2010 3:51pm
S

Steel Valley Football

Senior Member

4,548 posts
Sep 14, 2010 5:38 PM
fan_from_texas;483859 wrote:Whoops, yes--should've clarified. After looking at a number of places and talking to a number of realtors, we decided to work with a buyer's agent. We wanted to make sure that whomever was helping us out was legally obligated to have our best interests in mind. My understanding is that unless you have a specific buyer's agmt with an agent, they're an agent of the seller and don't represent your interests. That's something to keep in mind when they're showing you places.

Another factor to consider is that an agent's interests aren't necessarily aligned with yours. They're paid based on the price, so they have an incentive to (1) encourage high prices, and (2) encourage you to make an offer quickly and close, so they can move on to the next sale. Don't be pushed into something you're not comfortable with. If possible, get a realtor referral from a friend or someone you trust.

This is usually not the case. Most realtors know that an overpriced house will just sit on the market and they'll make no commission at all. More often than not, the homeowner is behind the higher price because they've either overimproved or added in the cost of their non-value adding improvements.
Sep 14, 2010 5:38pm
F

fan_from_texas

Senior Member

2,693 posts
Sep 14, 2010 5:45 PM
Steel Valley Football;483989 wrote:This is usually not the case. Most realtors know that an overpriced house will just sit on the market and they'll make no commission at all. More often than not, the homeowner is behind the higher price because they've either overimproved or added in the cost of their non-value adding improvements.
I think we agree here--realtors make money by (1) increasing the price of the homes they sell; and (2) selling them quickly. From the perspective of a seller, (2) is the major concern, while from the perspective of the buyer, (1) is the bigger issue. It's quite clear that, similar to lawyers billing by the hour, the incentives between the realtor and the buyer are not directly aligned. That's not to say that realtors are dishonest as much as it is to let buyers know that the realtor has incentives that are not necessarily aligned with their own.

All else being equal, a realtor earning X% of the sales price would prefer you to pay $Y + $10,000 instead of just $Y, as that will yield an additional X%*$10,000 in commission.
Sep 14, 2010 5:45pm