Buying your first house

[DJL 232]

I'm looking into buying a house and could use some help. Does anyone have suggestions for reading material to figure out the finacial aspects as well as the searching and realestate value aspects?

Edit: I'm looking into a single family home w/ at least 3 bedrooms so that I can have roommates.

"I encourage all awesome dangerous behavior." - Jeffro Fincher

[psw097 0]

I'll sell you mine, its a pain in the ass and I'm thinking about quiting this whole adult thing.

[EdC 0]

Start here.
Next find a realtor or look in the classified section for FSBO (for sale by owner) listings. FSBO can save you 5-10% due to no realtor fees. Also, once you find a home you like, make the sales contract contingent upon the findings of a home inspection. If there is a problem, you can back out or renegotiate the sales price to reflect the repairs needed to the property. Also, check zoning in the area to make sure a chemical plant or some other nuisance type of property does not set up shop next door. Avoid busy streets, they may be cheaper, but it will cost you when it comes time to sell. Trust me on this one. You may also want to check with the county sheriff for a list of sex offenders in your area and also check the rating of the school system. You'll probably want to sell that house some day and if it has three bedrooms, a young family could move in and they will pay more for a good school system. Also, older people will like a one story or ranch style home because there are no stairs to climb with a bad hip or knees. You could also check the national realtor association web site for listings in your area but then again a realtor will want their 7% of the sales price as commission. Good luck.

Big Ed

[Deuce 1]

Buy an existing home. I bought new, cause I was young and thought it was cool. Let somebody else make all the improvements.

I'd really suggest using a real estate agent, they know what they're doing, and if they screw up you can sue the broker. Unlikely to get anything out of a for sale by owner, but that works for some.

Buy the least expensive house on the street and you'll usually get the best return. Buying the most expensive house on the street usually means less equity increase over time.

In California, there's no faster way to make money.

[Vertifly 0]

You may need to be a bit more specific to have that answered. Many things in real-estate differ with the location. You'd be surprized how easy the bank makes it for you to afford a house now-a-days. They probably offer many of the services that could help.

I own a bunch of homes so feel free to ask me any questions you like via email or message. Here is a tip for calculating how much it will cost you monthly:

1) Figure out how much you have for a downpayment.

2) Figure out how much the taxes are in the area you are interested in. Divide that by twelve (months).

3) Do a search on Mortgage Calculators.

4) Place the specs into the calculator (i.e. cost of house, interest rates, and the number of years you wish to finance for.



5) Add the amount from line 2 (taxes monthly). THIS IS YOUR MONTHLY COSTS OF THE HOME.
(minus any escrow costs (water taxes, etc. -it depends on your locality).

[JadedLady 0]

Thank you all so much. This helps me a lot as well. I think I have found the house I want. It is a little older (about 3o years, I think) but it is great. It is a three bedroom that can be made into four. I just need to talk to a realtor. My step dad thinks I can probably talk the homeowners down to $80k. I am so excited. I am very ready to have my own place. It is about time, I'm 21 for crying out loud!

~~~~
Rachel
~~~~~~~~~~~
-Converting the world one whuffo at a time.

[Jimbo 0]

I'm in the same boat you are, hopefully I'll buy within the next 90 days.

If someone could explain what costs are included in "closing" costs, and the various types of financing, I'd appreciate it.


Thanks,
Jim

"Like" - The modern day comma
Good bye, my friends. You are missed.

[Michele 1]

Quote

look in the classified section for FSBO (for sale by owner) listings. FSBO can save you 5-10% due to no realtor fees

Sorry. Not true.

Here's the reality of FSBO's.

When someome decides to sell their home themselves, they will price it at or above market value. They will do everything they can to dissuade a person to use a realtor. They will cite "you'll save $$"...but who's saving it?

The SELLER! Why? Because the SELLER pays the realtors' fees. Both of them.

The buyer will be paying the same price, or less, when working with a realtor. And unless he has someone advising him, he can run into some serious issues.

But guess what? The seller doesn't save it, either. Because, in my state, 74 things must occur before a home can close escrow - and that's a simple, straightforward deal. Escrow companies are NOT allowed to give advice. Title companies are not allowed to give advice. So, after a screw up or two, and a delay in closing because certain paperwork is not in (but you don't know which peice of paper isn't there, because NO-One can tell you...), or the appraisal isn't ordered, or the inspection isn't done, or there are repair issues which need to be resolved, or there are issues with a cloudy title, someone usually heads off to a lawyer. By then, the deal is sooooo screwed up, the buyer usually tries to bail. And the seller is back at square one...or, if the seller gets a lawyer, the buyer gets a lawyer. And lawyers fees are far more, by the time everything is said and done, than any fee I've ever gotten. Additionally, who's going to supply the contracts/paperwork/messenger services? Hell, who's got E&O insurance (homeowners does NOT cover this...)...and so on. And lastly, the deals I can cut because I handle XX amount of transactions with a certain escrow, title, or mortgage co can amount to thousands of dollars. (Can you tell I've been hired to straighten stuff out??? Sigh...)

By then, the market has changed, and the value it was when all this started (back 120 days ago) now is defunct. And the Seller is having to spend more $$, in the end, to buy his replacement property...thus no savings...

And what about contingent sales - rentback? Or closing date difficulties? Termite reports? Earthquake statutory disclosures? And on and on and on...

DJL, give me a pm with your area, what you want, how much you can spend, and all that jazz. I'll hook you up with a good realtor in your area, and you'll be fine. Your very first step, however, is to get prequalified by a real live lender, not an internet site. person to person. If you need help getting one in your area, again, let me know. I'll be happy to help.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Michele 1]

Quote

If someone could explain what costs are included in "closing" costs, and the various types of financing, I'd appreciate it.

Closing costs are all those things you will have to pay (usually out of pocket) to get the deal closed.

They include:
Title fees, escrow fees, inspection fees, points (if any), taxes, supplemental taxes, assessments, and all other incidental things.

As a buyer, in my state, I generally advise about 3% of the sales price. If you are a seller, I advise between 7-8%, depending on commissions.

Various types of financing is very vague - there are so many different kinds it would take about 3 hours to cover all of them. If you have a specific scenario, let me know, and I'll see what I can answer for you.

If anyone has any questions about buying or selling a home, feel free to PM me.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[DJL 232]

I would love to find a dump with a good structure and go to work on it. I helped a friend strip and rebuild her interior and she made $150,000 profit on it. We took the place from a flop-house to looking like something out of a magazine.

Edit: Granted, she was in an improving area.

"I encourage all awesome dangerous behavior." - Jeffro Fincher

[cvfd1399 0]

If your a first time home owner use the FHA loan it is a government set up loan that locks in your interest rate and lets you put up like 3,000 down payment instead of the usual 20,000. Plus if you lock a low interest rate in now when you go to sell your house later on down the road and the interest rate is higher than when you bought it anyone buying your home can get it at your original low interest rate. That is a good selling point.

[EdC 0]

Thanks for your input. We work in very different markets. California and Ohio are very different markets. A typical, informed buyer would not pay over market value for any given property if an equal substitute were available at a lower price. Without realtor fees, a seller can discount a property by the amount of the commission normally given to a realtor. Typically, a property that is FSBO will be priced at or below market value, depending on the market, due to competition from similar listings in the market area. Often when sellers decide to go at it themselves, they do not have enough equity in the property to price it at market value and still cover the realtor fees due to recently purchasing the property or they originally paid too much for the property to start with and need to sell quickly or the market has changed. Depending on external market factors any given property may increase or decrease in value if there has been a shift in the base economy of the market area. In my experience and opinion, you can save money buying FSBO, estate sales and foreclosure sales. You need to do your homework and always be willing to walk away from a deal that sounds too good to be true.

Big Ed

[Jimbo 0]

Quote

Typically, a property that is FSBO will be priced at or below market value, depending on the market, due to competition from similar listings in the market area.

Doesn't market value for a home usually include the fees? Why should a seller ask less when he knows he can get more?

-
Jim

"Like" - The modern day comma
Good bye, my friends. You are missed.

[Michele 1]

Quote

A typical, informed buyer would not pay over market value for any given property if an equal substitute were available at a lower price.

What systems are in place for someone to find that equal property without a realtor?

Yes, our markets are very different. However, I don't think they are all that different - people are people, and sellers are sellers. With the stabilization of interest rates so low, unless someone has boxed themselves into a corner, simply refinancing will create the ability to hang onto the property. Trust sales, foreclosures, and so on are generally pigs in pokes, without lots of room for negotiating in any direction. This does not always create value for the buyer, because they end up with something which can suck $$ out from under them - with NO recourse.

None of the issues I brought up are negated by the market differences...there are still cloudy titles (especially in foreclosure/trust/tax sales). Misrepresentation is still going to be rampant. Inspections still need to be done.

The only difference would be the amount of properties to choose from - and I wonder how you'd combat that if you don't have access to a realtor and an MLS system.

Most buyers I work with are first timers (I love them best). They generally have no idea what goes into a transaction...and that's where my value is created. In taking the 60-75 hours of paperwork off their shoulders, location of property, and experience and industry contacts tend to save the buyer something like 4% - which, in a market where I have 10X the buyers as sellers, that's a value not to be misunderstood.

I appreciate your feedback, as well. I simply disagree, and again point out that the seller pays the realtor fees...and bargains are not always that in the end.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[Gravitymaster 0]

Hire a buyers agent and let them do all the work for you for a fee. The Buyers Agent is paid by you not by the seller. A good one will take it to the hoop for you.

[dbattman 0]

Welcome to one of the most stressful decisions of your life. Is it too much, is the area right, will it appreciate godd, blah blah blah.


WHEW! I'm SO glad I'm done with that.

Here's what I found out during my first home purchase:


GET A GOOD AGENT! YOU ARE CLUELESS! YOU DO NOT HAVE A CLUE WHAT YOU ARE DOING!

SO MANY HOUSES! THEY ARE EVERYWHERE! BIG ONES, SMALL ONES, FAT ONES, RAISED RANCH, FULL BASEMENT, THREE BEDROOM, WALK OUT BASEMENT, FOUR SIDES BRICK, AAAAGGGH AAAGGGGH

HAHAHAHAHAHAHAHAHAHAHAHAHA



Oh, I'm sorry, where was I?

Oh yeah, GET A GOOD AGENT AAAAGGGHHH!

[DJL 232]

Quote

GET A GOOD AGENT! YOU ARE CLUELESS! YOU DO NOT HAVE A CLUE WHAT YOU ARE DOING!

Oh yes, if there's one thing I know...it's that I haven't the slightest...

"I encourage all awesome dangerous behavior." - Jeffro Fincher

[happythoughts 0]

Around here, it is $200 for a professional home inspection. You would be amazed what those guys can tell you.

Either pay for one or get a book on the subject and really read it. If you buy a book, spend the time. It could save you big problems.

[Michele 1]

Quote

GET A GOOD AGENT! YOU ARE CLUELESS! YOU DO NOT HAVE A CLUE WHAT YOU ARE DOING!

LOL...that was funny.

Ciels-
Michele

~Do Angels keep the dreams we seek
While our hearts lie bleeding?~

[ACMESkydiver 0]

Quote

Hire a buyers agent and let them do all the work for you for a fee. The Buyers Agent is paid by you not by the seller. A good one will take it to the hoop for you.

-Not in Washington state. The buyer's agent is also paid by the seller.

States differ quite a bit on real estate law, so investigate yourself. A good and FREE source to check out is your county assessor's office...request a 'property profile and comparibles' on the address you are looking at. It will give you some solid info on your prospective new home. I have a sign on, if you wanted to PM me an address I can pull it up and send you the details on it.

One other important thing to consider is Home Owner's Insurance costs. Depending on the area you live in, it can be fairly steep. Property taxes are an issue too...you'll need to factor those in when you are considering how much house you can afford.

Another tip - DO NOT open or apply for ANY new lines of credit right now. Sounds basic, but I just can't tell you how many times I've had to decline a mortgage app because goofball and wife bought a brand new Ford Expedition to go with the new house they thought they'd be getting...wait until you have the keys in your hand and you close escrow!!

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

[EdC 0]

Market value is what a typical buyer will pay for the house. As for the fees, those come from the seller in most markets and are deducted from the sales price which may or may not be market value. A seller won't ask for less but they won't sell it for more than a comparable property in the same market.

Big Ed

[EdC 0]

Michele, we will have to agree to disagree. A realtor can be helpful to those who need one and there are those who can do without. You can still have title issues, misrepresentation and other delays with or without a realtor. For a first time buyer, get a realtor but just be careful.

Edited because I can't spell at 6:22 A.M.

Big Ed

[newsstand 0]

No matter how you do it, realator, buyers agent, FSBO, get a real estate lawyer involved. They can give you a fixed prive to review all of the paperwork and make sure everything is in order. I have bought two houses and came close to getting screwed on both because the title company can't talk and the agent doesn't always get it right. They are also worried about the sale going through and tell you to not worry about things. One of the things we got told to not worry about was the county inspection of the waste water system (septic tank). It wasn't up to code, getting it up to code cost the seller money and couldn't be re-inspected until after we closed. Guess what, the closing wasn't valid. Then the seller wanted rent because we had moved in. We would have paid had it all been up front but since we thought we owned the house we had bought a shitload of supplies to do some redecorating and couldn't afford the rent. Seller got screwed here in that they had to make an extra payment on our house plus rent on the place they moved to.

"Truth is tough. It will not break, like a bubble, at a touch; nay, you may kick it about all day like a football, and it will be round and full at evening."
-- Oliver Wendell Holmes

[meltdown 0]

What I've learned from the real estate transactions I've been involved in is this: trust no one but yourself. A great many of the people involved in this industry (realtors, escrow agents, inspectors, etc) are simply not competent (as in any industry). I would highly recommend the following:
1. Get the house inspected, and be there for the inspection. Follow the inspector around and make him explain everything to you. Look for rotted wood, evidence of water penetration (rotted siding along the foundation line, water stains on ceilings and walls), cracks in sheetrock/brickwork, etc. You cannot trust an inspector to find everything, and some of them are just plain stupid.
2. Read and UNDERSTAND the closing documents. In my last home sale, there was a mistake on the closing paperwork, which I brought to the attention of the escrow officer and my realtor in closing, but they assured me it was correct, so I went ahead and closed. I still wasn't confident so I went over everything with a fine toothed comb, and sure enough I was right. They fucked up the paperwork to the tune of $1200.00.

Bottom line is be careful and learn all you can about the transaction. It's not fun even when everything goes right, and it plain sucks when there are surprises.

[skyminxx 0]

Paul: That would imply that you are actually doing the adult thing!

Doug:
Didnt Jonathan just buy a house? Im sure that he did tons of reseach:

You are led through your lifetime by the inner learning creature, the playful spiritual being that is your real self.-Richard Bach