Buying a House

[Remster 24]

Especially now. Its a buyer's market,

Remster

[The111 0]

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Especially now. Its a buyer's market,

It is far beyond a buyer's market at this point. Even if I had unlimited cash I would not buy houses for at least two years, or until I see a definite sign price declines are over (a definite sign would be a measureable increase).

In the condo community where I'm renting, units were selling for $220k less than 6 months ago. Right now there are 5 units for sale, the two lowest prices are asking $150k and $160k and they still aren't moving. That's a 30% drop in 6 months. Not all areas are this bad, but the bubble was nationwide (it even affected some surprisingly remote areas), and the return to normalcy (and possibly beyond, if fear is as strong on the way down as greed was on the way up) will also be nationwide.

Folks who laughed at me for refusing to buy two years ago are already underwater. I've been "throwing away $10k a year on rent", true... but some of them are $50-100k down in loss of "equity" that never made economic sense in the first place. And I'm still refusing to buy.

Give this one a few years to cool off, it made history on the way up, and it will make history on the way down. Those who think RE never goes down need to study some history, both in this country and others. LAND is what they aren't making any more of, but we still have plenty left. On the other hand, we have far too many houses. Supply increases... you figure out the rest. People thought basic economics didn't apply to houses because they are really big. That's like saying physics doesn't apply to whales. Houses are a good.

www.WingsuitPhotos.com

[algboy 0]

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I feel like I'm getting ready for a royal fuckin on this.

It's a Buyer's market, there's no need to settle.

Yep it is. Houston evidently is still holding up well in the market though, and seems a lot of sellers aren't willing to negotiate as much as I would've wished.

It's wearing me out and I think my Re/Max realtor is bordering on incompetent.

Beerlight, this recovering (former) realtor/mtg broker asks you to please keep this in mind:

1) You'd be buying at the peak of a rapidly declining RE market (country wide). How much has the seller reduced, 5%, 10%? Patience, Grasshopper, unless you like catching falling knives . . . .

2) As far as realtors go: would you ask a barber if you needed a haircut? I didn't think so.

3) Don't believe anything from a seller about what's a "fair price"--it's probably what they need to get out from under their alligator with a little bit of walking money. It's not your problem.

4) In a declining market your "asset" is a depreciating one. That means you can't borrow against it. If you have to sell it, you're gonna have to come to the closing table with CASH.

5) Run from any of the "toxic/suicide loans" and especially anything with interest only or negative amortization. You'll be just another foreclosure statistic if you do. [up over 200% in AZ this year]

6) And yes . . . it's entirely possible your realtor IS incompetent. What'd she do before? Many are returning to their former "careers" since many of the newer agents haven't sold a thing all year.

7) It is a BUYER'S market. [wash, rinse, repeat] A house is just a piece of meat. Don't fall in love with it. Either the numbers work--or they don't. It's OK to walk away.

8) if you MUST buy, be prepared to hold it for years and years. This market is not heading for a "soft landing" no matter what the MSM/NAR shills try to sell you.

9) Finally, will your TOTAL housing costs take no more than 40% of your monthly income? If more than that, you're buying too much house. WAIT.

10) Unless you HAVE to buy--rent for another year or two--then maybe buy. The phrase "pennies on the dollar" comes to mind.

My $0.03. I could be wrong . . . but I bailed in 2003 when I saw how insane the market was getting even back then. My shadenfreude-meter is off-the-charts lately.

[Beerlight 0]

holy fuck, that's a lot to digest! Everyone thanks for all the advice. After today, when my lender sent me a GFE loaded with bad info, I pretty much made of my mind that this wasn't for me.....

I sure didn't want to make this move and go into another apartment, but it may be the way for a while.

Plus, NASA might close its doors in a few years and BAM, outta a job........

[skymama 35]

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7) It is a BUYER'S market. [wash, rinse, repeat] A house is just a piece of meat. Don't fall in love with it. Either the numbers work--or they don't. It's OK to walk away.

I just want to reiterate that. I work for my Dad, who has been a Broker/Builder for 40 years. He always says it is just a house, YOU make it a home.

She is Da Man, and you better not mess with Da Man,
because she will lay some keepdown on you faster than, well, really fast. ~Billvon

[itllclear 1]

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I would buy the house with my boyfriend. He is in the construction industry, so could handle a lot of repairs and work around the house, maybe even improve the value a bit.

2 issues:

1 -- make sure you each get a lawyer to go over a co-ownership agreement. What are each of your obligations during the co-ownership, and what are the remedies if one of you defaults? What if down the road one of you wants to sell and the other doesn't? How will the title be held, and what happens if one of you dies? etc, etc. It's better to talk out these issues BEFORE you take ownership. If your relationship isn't strong enough to handle this conversation now, what happens if something happens down the road?

2 -- What happens if your boyfriiend gets hurt or sick, and can't do the manual labor, especially if you were in the middle of a project and had half the roof off? Before my wife and I got together, my wife and her room mate were going to buy a "fixer upper" which would give the room mate's father, a retired contractor, something to do. Before they found a house, he died of a sudden heart attack.

Shit happens. Know your E.P.'s before you get into a project.

Think of as many "what if's" as you can and make sure you have the answers before signing anything.

Good luck

Harry

"Harry, why did you land all the way out there? Nobody else landed out there."

"Your statement answered your question."

[PLFXpert 0]

I LOVE real estate.

Tips:

1. Get a good inspection--nothing "major" should come up that wasn't on the inspection.
2. Keep a liquid "shit happens" fund. $10k is generally a good # that should cover anything immediate that comes up that HOI (home-owner's insurance) will not cover.
3. I personally do not escrow. If you're worried about the unpredictability of tax/HOI increases and/or aren't fantastic at saving, however, escrow is a good idea. (Either way, your taxes & insurance will go up each year. If you escrow, this means your payment will increase.)
4. My only surprise in my RE endeavors was my HOI tripling last year. I shopped it and saved a few hundred but, it certainly made me edit my plans for the new home purchase. Living on or near water and similarly other areas will cost more and be more difficult to shop HOI. I like an AMBEST A-rated company.
5. Put at least 20% down--especially if the home purchase is long-term. Get a fixed rate--again, since it sounds like your purchase is long-term.
6. Most important--do not be embarrassed, feel silly, or refrain from asking any question you might want.

As to putting more down, or less & putting it in CDs and bonds, it really depends on where you live & personal preference/comfort.


Edit: Keep us posted! It's tough to drop a load on anything, and your worry is understandable. Having said that, I'm super-exited for you and would love to hear a follow-up after you're in your first place!

Paint me in a corner, but my color comes back.

[scottjaco 0]

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My boyfriend and I would like to buy a house as soon as we are able to.

You really should think about that statement. You are making a major joint financial investment without being legally joined to each other.

Get a wedding ring before you buy the house.

[ACMESkydiver 0]

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holy fuck, that's a lot to digest! Everyone thanks for all the advice. After today, when my lender sent me a GFE loaded with bad info, I pretty much made of my mind that this wasn't for me.....

I sure didn't want to make this move and go into another apartment, but it may be the way for a while.

Plus, NASA might close its doors in a few years and BAM, outta a job........

Ahhh...oh wells! At least you know what you want.
For us, we have kids and needed the space, so yes an extra $400/month was worth it (and we bought 6 years ago in a different market).

~Jaye
Do not believe that possibly you can escape the reward of your action.

[PLFXpert 0]

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You really should think about that statement. You are making a major joint financial investment without being legally joined to each other.

Get a wedding ring before you buy the house.

While I see the point you might be trying to make...



A wedding ring can't stop someone from taking your house. A prenup might, but...

My "boyfriend" of seven years and I do/buy everything together. We are partners in every sense of the word.

I'm confident karenmeal is smart enough to make her own/good decisions.

Paint me in a corner, but my color comes back.

[itllclear 1]

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My "boyfriend" of seven years and I do/buy everything together. We are partners in every sense of the word.

Business partners should have a written partnership agreement.

I'm not saying "don't do it," I'm just suggesting a way to reduce the possible misunderstandings.

My wife and I bought our house together 4 years before we got married. Talking about and formulating a joint ownership agreement answered a lot of questions while there no pressure when things have come up.

Harry

"Harry, why did you land all the way out there? Nobody else landed out there."

"Your statement answered your question."

[PLFXpert 0]

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My wife and I bought our house together 4 years before we got married. Talking about and formulating a joint ownership agreement answered a lot of questions while there no pressure when things have come up.

That's a little different than "get a wedding ring first", isn't it?

Paint me in a corner, but my color comes back.

[itllclear 1]

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That's a little different than "get a wedding ring first", isn't it?

Still no rings. Exchanged closing pin necklaces after a jump into Lang Creek Brewery with Mad John officiating.

"Harry, why did you land all the way out there? Nobody else landed out there."

"Your statement answered your question."

[freeflysteve 0]

PMI is slightly different in UK yes it does cover the lender if the loan defaults and the lender makes a loss BUT it is for the lender only.
The insurer will then come after you for the loss they have paid out on.
A very good deal for the lender!! and the borrower just pays to be sued!!

Swooping, huh? I love that stuff ... all the flashing lights and wailing sirens ... it's very exciting!