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Buying My First Home. - 3/24/2008 3:42:46 PM

brightspot

Posts: 3052
Status: offline

Because of the fire last August I am in the process
of looking to buy my new home soon.

Since this is the first time I will be walking out on this
limb, I would appreciate any advice on things you guy's
learned positive and negative when buying your first home.

Even though it is considered a buyer's market right now, I
feel I want to cover my ass in any ways possible.

Anything, anyone could share would be much appreciated.

Thanks Missy.

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Post #: 1

RE: Buying My First Home. - 3/24/2008 3:49:01 PM

Real0ne

Posts: 21189
Joined: 10/25/2004
Status: offline

quote:

ORIGINAL: brightspot

Because of the fire last August I am in the process
of looking to buy my new home soon.

Since this is the first time I will be walking out on this
limb, I would appreciate any advice on things you guy's
learned positive and negative when buying your first home.

Even though it is considered a buyer's market right now, I
feel I want to cover my ass in any ways possible.

Anything, anyone could share would be much appreciated.

Thanks Missy.

Get a nice low fixed rate and make sure that you can pay off only against the principal to downpay the interest. thats the main thing. Beware of flood zones, tornado etc, if its older make sure the wiring is up to code, also beware of cracked basements, possible water leaks on rainy days, look under any scatter rugs LOL Ask how long ago it was painted,roofed, sided etc.

Thats what popped into my head.

_____________________________

"We the Borg" of the us imperialists....resistance is futile

Democracy; The 'People' voted on 'which' amendment?

Yesterdays tinfoil is today's reality!

"No man's life, liberty, or property is safe while the legislature is in session

(in reply to brightspot)

Post #: 2

RE: Buying My First Home. - 3/24/2008 4:05:21 PM

Belladonna30

Posts: 43
Joined: 1/18/2008
Status: offline

Hello Brightspot,

As a mortgage broker, I deal with people buying and selling all of the time. My biggest piece of advice is to ask questions and DO NOT move forward until you fully understand what is happening in the transaction. There is a lot of fraud in the industry and to avoid being a victim, always ask questions and if something doesn't sound legit, walk away. Also, get a homeowners inspection, with so many foreclosures on the market, people have let pipes burst as well as trashed homes and allowed mold to grow, etc. spend the extra cash to save yourself a potential headache and a lot more money. Do not allow yourself to be bullied by real estate agents and loan officers or builders, they are very pushy right now as the most of them are starving and are somewhat belligerent and bull headed, remember: you are the client and they are to focus on your best interest. If you don't feel one is working for you, get a new one and try them out until you have an essence match.

Good luck!

~bella~

(in reply to brightspot)

Post #: 3

RE: Buying My First Home. - 3/24/2008 4:08:20 PM

Maya2001

Posts: 1656
Joined: 8/22/2007
From: Woodstock ONT,CANADA
Status: offline

If you are approved to say buy a $150K home... decide to set a personal limit of around $130K and look at houses only at that range or less, no sense going to your maximum and then not be able to afford the maintenance costs, like replacing the furnance or roof when they are needed

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Post #: 4

RE: Buying My First Home. - 3/24/2008 4:12:12 PM

servantforuse

Posts: 6363
Joined: 3/8/2006
Status: offline

I would first not come to this site for advice. I would get a real estate agent I could trust and most importantly get an attorney. Your own attorney not one shared with the seller...

(in reply to Maya2001)

Post #: 5

RE: Buying My First Home. - 3/24/2008 4:14:57 PM

x0aliciax0

Posts: 8
Joined: 8/1/2007
Status: offline

Belligerent and bullheaded? Way to help our industry out.

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Post #: 6

RE: Buying My First Home. - 3/24/2008 5:32:26 PM

Real_Trouble

Posts: 471
Joined: 2/25/2008
Status: offline

quote:

Belligerent and bullheaded? Way to help our industry out.

The truth hurts; this is not true of everyone in real estate, but it's true of a lot of them.

My advice would be as follows:

1 - Don't buy, rent.

2 - See point 1.

The reason for this is simple. Housing prices are continuing to drop across the majority of the US (if you are in one of the few places that avoided the insane run-up and now blow-off, you might be wise to jump in, but those are few and far between), and I've always advised that unless people feel like speculating, you should never try to catch a falling knife. Wait for prices to hit bottom and start to rise slowly again.

Yeah, you might lose out a little bit on the "best" price you could have found, but what you prevent is trying to call a bottom to the market and losing a lot if you are wrong.

If you absolutely must buy, make sure to do all of the homework on the process that you can on your own. Do not trust your agent, do not trust your broker, and so on. There is a saying in finance that there is a sucker in every transaction, and if you don't know who the sucker is, it's you.

Educate yourself as much as possible. Google is a powerful tool. Once you've done that, you can make an informed decision on what you want to do, from both the finance and logistics standpoints.

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Post #: 7

RE: Buying My First Home. - 3/24/2008 5:58:07 PM

KatyLied

Posts: 13029
Joined: 2/24/2005
From: Pennsylvania
Status: offline

quote:

Belligerent and bullheaded? Way to help our industry out.

Isn't it customary to have an attorney look over all of the paper work? I had an attorney look over every piece of paper I signed for my mortgage. I did not go through a real estate broker though, I went through a bank for a construction loan.

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Post #: 8

RE: Buying My First Home. - 3/24/2008 6:01:36 PM

Elegant

Posts: 1024
Joined: 3/15/2005
Status: offline

Get a qualified buyers agent

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Post #: 9

RE: Buying My First Home. - 3/24/2008 6:09:34 PM

Aileen1968

Posts: 6062
Joined: 12/12/2007
From: I miss Shore, New Jersey
Status: offline

Get a fixed rate mortgage and pay down on the principal.
Use the best home inspector you can find. Bring a friend who's knowledgeable in construction too, if possible, to give advice on possible renovations and repair costs.
Go sit in the neighborhood for a few hours on weekdays and weekends at different times to see traffic patterns, noise issues, crazy neighbors, etc to see things that you wouldn't notice while looking at the house. Check tax rates. Check sex offender sites...see who's living in the area.
Don't fall in love with any house until after you've bought it or you'll be tempted to pay too much for it or become disappointed if you don't get it. Don't look at anything above your top price range...there's that temptation factor again. Remember that room colors are the most easily changeable thing in a house.

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Post #: 10

RE: Buying My First Home. - 3/24/2008 6:09:53 PM

Real0ne

Posts: 21189
Joined: 10/25/2004
Status: offline

Another thing is calculate your budget extremely conservatively. Do 2 scenarios. Expected case and worst case income for instance. Never buy more then a few percent over your worst case income scenario.

You also want to take into consideration inflation as they can decrease your buying power such that if everything winds up costing considerably more for the same products you need you may run short of cash to pay your bills.

Expect a nice tax increase in the near future too.

Speaking of make sure to find out if you are well insulated and what the utilities cost. What the rules of the area are as well as some communities are next best thing to nuts. Thats it for now.

_____________________________

"We the Borg" of the us imperialists....resistance is futile

Democracy; The 'People' voted on 'which' amendment?

Yesterdays tinfoil is today's reality!

"No man's life, liberty, or property is safe while the legislature is in session

(in reply to brightspot)

Post #: 11

RE: Buying My First Home. - 3/24/2008 6:11:05 PM

bipolarber

Posts: 2792
Joined: 9/25/2004
Status: offline

Well, if you are a "first time buyer" you might want to check with your agent to find out what special programs might be available to you, as a 1st. Some of them used to be amazing deals, like Urban Homesteader from HUD, and various others designed to help bring back depressed areas.

Take your time. Right now, witht he housing market in a slowdown, you don't need to rush at all.

Look at areas that are coming back. Often, you can get a deal on a big, older home (if that is your taste) and if it's in an area of your city that is becoming popular, chances are you will accrue a good bit of equity.

Ask for a market survey on any home you are interested in. This will tell you what homes in that area have been selling for, and what they've been doing in previous years. Rememeber, there is no such thing as too much information!

Once you have established that the house is something you are seriously interested in, have an inspection done, and listen carefully to what the professional is telling you. It's $150 to $200 well spent, when compared to the hundreds of thousands you'll be on the hook for, once you close.

Depending on the climate of the area you live in, be sure to ask if the insulation is up to code, or surpasses it. Energy costs are one of the biggest costs in the month to month running of a house, so it pays to get something insulated and weather tight.

Make absolutely sure it has space enough for you, anyone living with you, and for "entertaining" (wink, wink, nudge, nudge) Basements are especially good for dungeon space.

(in reply to KatyLied)

Post #: 12

RE: Buying My First Home. - 3/24/2008 6:15:57 PM

MissHarlet

Posts: 2728
Joined: 9/11/2005
From: El Paso , TX US
Status: offline

My roommate is buying her first home as well ... my other advice is be prepared to look at LOTS of houses and make sure you love it .. not just something you can live with ... so to speak ...

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Post #: 13

RE: Buying My First Home. - 3/24/2008 6:19:49 PM

TheHeretic

Posts: 19100
Joined: 3/25/2007
From: California, USA
Status: offline

quote:

ORIGINAL: x0aliciax0

Belligerent and bullheaded? Way to help our industry out.

     You guys have passed used car salesmen on the most widely despised profession list. That was a pretty mild statement.

      We bought with a VA loan that simply mandates a lot of protections people are going to try and tell you aren't necessary. Fixed rate, impound account, seller pays all closing costs, home inspection (that was the only thing we had to pay for).

        This isn't just a buyers market. This is a buyers DREAM market. Don't be afraid to drive a harsh bargain, and make it very clear you will walk away from anyone who tries to lie to you, or screw you over.

    Location, location, location, and insist that any repairs be completed and inspected BEFORE you sign those closing papers.



< Message edited by TheHeretic -- 3/24/2008 6:21:33 PM >

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Post #: 14

RE: Buying My First Home. - 3/24/2008 6:23:17 PM

Griswold

Posts: 2739
Joined: 2/12/2007
Status: offline

There's an old rule...."location, location, location".

Now there's a new rule...."negotiate, negotiate, negotiate".

Do NOT be afraid to ask for a better deal.

(From a fellow who has bought roughly 25 pieces of real estate over the last 20 years...and has never lost money on one of them).

By the way...don't assume from the above that I'm really good at this shit....some of the stuff I bought at the top of the cycle, and I held it to the next top. Other stuff I just got lucky on....and I made shitloads of money on same.

Nevertheless....

a) There's never a bad time to buy real estate.

b) There are lots of bad times to sell.

c) Sometimes you have to hold your dirt longer than you planned.

d) If you hold it long enough....real estate is a sweet gig.

One more thing....

In today's market, if you plan on holding for 10 years or longer....at any price (interest rate), get a fixed rate, fully amortized 30 year mortgage. If rates go down by 1.5%, renegotiate your loan....NEVER do an interest only loan unless you have very high income, and you can control your income such that it's advantageous.....in almost every case, it's a bad move to do interest only.

(I do a lot of interest only deals, but I'm very conservative with my cash....most people aren't....if you're not...get an amortized loan).

< Message edited by Griswold -- 3/24/2008 6:27:08 PM >

(in reply to brightspot)

Post #: 15

RE: Buying My First Home. - 3/24/2008 6:24:27 PM

popeye1250

Posts: 18104
Joined: 1/27/2006
From: New Hampshire
Status: offline

quote:

ORIGINAL: Aileen1968

Get a fixed rate mortgage and pay down on the principal.
Use the best home inspector you can find. Bring a friend who's knowledgeable in construction too, if possible, to give advice on possible renovations and repair costs.
Go sit in the neighborhood for a few hours on weekdays and weekends at different times to see traffic patterns, noise issues, crazy neighbors, etc to see things that you wouldn't notice while looking at the house. Check tax rates. Check sex offender sites...see who's living in the area.
Don't fall in love with any house until after you've bought it or you'll be tempted to pay too much for it or become disappointed if you don't get it. Don't look at anything above your top price range...there's that temptation factor again. Remember that room colors are the most easily changeable thing in a house.

Just what I'd do as well as getting a lawyer to help you through the process.
And don't worry about the closing, the lawyer should have checked all the documents by then so all you'll be doing is signing papers.
As for renting, you're just flushing your money down the toilet every month and you won't ever see anything from it.
The housing market is shaking out still but it is starting to turn.
When you hear people saying all kinds of bad things about it that's the time to start buying just like in the stock market! "Buy low, sell high."
Don't worry, you'll do fine and you are making a very wise decision that you'll be proud of yourself for in the years ahead!
And, you'll own it and can make many changes to it to make it more comfortable for yourself.
Congradulations!

_____________________________

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Post #: 16

RE: Buying My First Home. - 3/24/2008 6:48:13 PM

Griswold

Posts: 2739
Joined: 2/12/2007
Status: offline

quote:

ORIGINAL: popeye1250

And don't worry about the closing, the lawyer should have checked all the documents by then so all you'll be doing is signing papers.

Congradulations!

Ahhemmmm....

NEVER trust your lawyer.

(Always have one....but do your own homework)

And it's....."congratulations".

(in reply to popeye1250)

Post #: 17

RE: Buying My First Home. - 3/24/2008 7:07:47 PM

DomMeinCT

Posts: 2355
Joined: 5/5/2005
Status: offline

Sign a buyer-broker agreement with your realtor that ensures s/he works for you, and not the seller.

Don't sign too long a contract with the realtor in case you don't find them effective - a couple of months is more than enough to start.

Make SURE the contract excludes paying him/her a commission if you find the house yourself (such as on www.isoldmyhouse.com, or other do-it-yourself websites/listings). If you don't exclude these in your contract and find the house of your dreams, it's unlikely the seller will be willing to pay the commission and you'll be stuck for it. (Although they may tell you otherwise, nothing in the standard buyer-broker agreement is required - you can exclude any parts the two of you can agree on.)

Hire the best home inspector you can afford, as referred by other sellers (call your local friends who are homeowners) and not just by your realtor. If you home has a particular feature that can't be verified for good functioning by your inspector (such as for septic), hire an expert. This could save you thousands up front.

Don't feel bad about renegotiating for a lower price after the inspection if it turns out that costly repairs are needed. Don't negotiate to have the seller fix the items - plan to pay for them yourself with the savings to ensure quality repairs. If you do trust the seller to repair, you'll end up having to have the inspector in again to ensure the work was completed properly (unless s/he is willing to revisit for free).

< Message edited by DomMeinCT -- 3/24/2008 7:08:42 PM >

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Post #: 18

RE: Buying My First Home. - 3/24/2008 7:43:24 PM

SugarMyChurro

Posts: 1912
Joined: 4/26/2007
Status: offline

Real_Trouble is right. Right now that is the best advice.

(in reply to DomMeinCT)

Post #: 19

RE: Buying My First Home. - 3/24/2008 7:54:34 PM

MissMenagerie

Posts: 66
Joined: 2/10/2008
Status: offline

While I'm not the original poster, this thread has been very helpful to me, too. We're waiting a year, until a while after the wedding and giving us time to build the best credit we can. Thanks, everyone.

(in reply to DomMeinCT)

Post #: 20

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