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Home buyer education - 6/15/2008 3:12:48 PM

Vendaval

Posts: 10297
Joined: 1/15/2005
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Anyone on here have advice for first time home buyers?
Did you research your options before buying a home?

"In wake of home crises: buyer education"

Wed. June 4, 2008

By Nick Carey

"MEMPHIS (Reuters) - Concerned by foreclosures but keen to take advantage of sliding home prices, a growing number of prospective buyers in the United States are signing up for a different kind of class: home-buyer education."

http://www.reuters.com/article/gc03/idUSN2843971220080604

_____________________________

"Beware, the woods at night, beware the lunar light.
So in this gray haze we'll be meating again, and on that
great day, I will tease you all the same."
"WOLF MOON", OCTOBER RUST, TYPE O NEGATIVE

http://KinkMeet.co.uk

Post #: 1

RE: Home buyer education - 6/15/2008 3:33:47 PM

camille65

Posts: 5746
Joined: 7/11/2007
From: Austin Texas
Status: offline

Use an independent home inspector that is licensed.
Don't every fall in love with a house until you own it, and there will always be another house if your bid isn't the one accepted especially right now.
Remember cost if you think a house 'needs' renovated.
History of the area, crime rate, schools etc.

If you want to buy a really lovely home on 6 acres with deer, peacocks and turkeys running around then feel free to PM me.

_____________________________

~Love your life! (It is the only one you'll get).

(in reply to Vendaval)

Post #: 2

RE: Home buyer education - 6/15/2008 4:19:41 PM

bipolarber

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

#1. Ask for a market survey. Real Estate agents can tell you if the price they are asking, per sq. ft., is in the same ballpark as similar homes in the area.

#2. Be sure to ask about programs for first time home buyers. There were/are plenty of them designed to make home ownership more attractive to younger couples just starting out.

#3. Be sure to check around for HUD properties. Often, these are some of the greatest bargains around.

#4. Also check with local banks on "problem properties" that have been forclosed upon, or that reverted to them due to contractual disputes. Again, some good bargains can be had.

(in reply to camille65)

Post #: 3

RE: Home buyer education - 6/15/2008 4:22:34 PM

Vendaval

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Joined: 1/15/2005
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I would also advise checking for potential problems relevant to your area; earthquakes, flooding, brush fires, etc. Some of that information is available in county records other data will be available on government sites.

_____________________________

"Beware, the woods at night, beware the lunar light.
So in this gray haze we'll be meating again, and on that
great day, I will tease you all the same."
"WOLF MOON", OCTOBER RUST, TYPE O NEGATIVE

http://KinkMeet.co.uk

(in reply to bipolarber)

Post #: 4

RE: Home buyer education - 6/15/2008 4:50:06 PM

TheHeretic

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

Check out the builder. Our house was built in the boom prior to this, by a company that later developed a very bad reputation. It almost queered the deal, but further research showed none of the class action suits involved this development, or homes they built as early as this one.

_____________________________

If you lose one sense, your other senses are enhanced.
That's why people with no sense of humor have such an inflated sense of self-importance.

(in reply to Vendaval)

Post #: 5

RE: Home buyer education - 6/15/2008 6:19:43 PM

DomMeinCT

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Joined: 5/5/2005
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Involve someone in your search, offer, and negotiation who you know and trust and who does not have any financial interest other than good will and your best interests and who has been through the process before.

_____________________________

The meeting of two personalities is like the contact of two chemical substances:
if there is any reaction, both are transformed.
~ Carl Jung

(in reply to Vendaval)

Post #: 6

RE: Home buyer education - 6/15/2008 6:26:59 PM

pahunkboy

Posts: 33061
Joined: 2/26/2006
From: Central Pennsylvania
Status: offline

know the neighborhood inside out. the best house on the wrong block can cost too much.

(in reply to TheHeretic)

Post #: 7

RE: Home buyer education - 6/15/2008 8:20:01 PM

lighthearted

Posts: 1165
Joined: 11/26/2006
Status: offline

1. don't let emotions cloud your judgement.

2. be sure your contract is contingent on the home inspection and then be sure to hire a reputable inspector, and actually listen to what they have to say.

_____________________________

"Thou art to me a delicious torment." - Ralph Waldo Emerson

(in reply to Vendaval)

Post #: 8

RE: Home buyer education - 6/15/2008 8:28:46 PM

Irishknight

Posts: 2016
Joined: 9/30/2007
Status: offline

Look carefully for unmarked graves.

(in reply to lighthearted)

Post #: 9

RE: Home buyer education - 6/16/2008 12:36:29 AM

proudsub

Posts: 6142
Joined: 1/31/2004
From: Washington
Status: offline

quote:

"MEMPHIS (Reuters) - Concerned by foreclosures but keen to take advantage of sliding home prices, a growing number of prospective buyers in the United States are signing up for a different kind of class: home-buyer education

My daughter and her b/f recently bought their first home. Before looking at any homes they took a 4 hr. class and found it very helpful. They also did a lot of research online both for general knowledge and to view houses to narrow their search.

_____________________________

proudsub

"Without goals you become what you were. With goals you become what you wish." .

"You are entitled to your own opinions but not your own facts"--Alan Greenspan

(in reply to Vendaval)

Post #: 10

RE: Home buyer education - 6/16/2008 2:52:36 AM

JulieorSarah

Posts: 552
Joined: 8/25/2007
Status: offline

Hi not sure of the US process, but in general,

Identify what you want from the new home ... # of bedrooms, bathrooms, garage, carpot, front/back yard/ ground floor unit/secure building. Start looking, what you can afford is bound to not include the full wish list. Prioritise what's more important, could you park on the street and gain an extra bedroom? do you really need 4 bathrooms? Who is in the family pr you know who could repair that problem, how much would it cost is it worth buying this and fixing it. How far to the schools/work/family/friends? Close enough vs far ennough away, other stuff that's important to you.

Determine how much you can spend, assume there will be interest rate rises, and only borrow what you can service including the yet to happen rate rises
Factor in the costs of having the home, land/water/other rates, council charges, What happens if you lose one job or both? Is their mortgage insurance in the US?

Don't sign anything or commit to anything (or make an offer contingent on the results of) the building inspection (by an accredited not-connected) builder, pest inspection (same deal). Also when you've found 'the' home you want. Drive past or park nearby at all times of the day and early evening/night for short periods, is it on a truck route, if it's near a bus depot/train station/line check out the time tables. Street lights, do they glare into the windows highlight your yard. Are your kids going to be the only ones in the street, schools, entertainment movies/pubs/restuarants/parks, are they close enought to get to far enough to not hear. If you have your heart set on a unit and you see a house or visa versa) and you can afford it ... look at it ... does it fit the wish list? that vacant block down the road, what's going to happen to it ... in australia it's called 'searches' the solicitor checks out for roads to be built, developments that approvals have been given or have been lodged in the area What's the history? is it built on a swamp, an old army shooting range. Talk to the long term locals in the coffee shop/pub ... how long have the (potential) neighbours been there? Look at the proprerty with a bit added on/taken off, better garden/a shed out the back? Do you work from home, what's the technology like in the area?

Do you know of anyone that has bought or sold lately, what did they do they wished they hadn't, what would they do now that they didn't why?

Buying a home is a major long term commitment .. most people spend more time sorting out the car purchase than the home purchase. If you have doubts, and you can't see an easy way of addressing them ... don't.

Over the years I've bought two homes, sold one. and sold several others from my parent's estate, for the dispersal. The buyer will try to hide the faults as they see them as much as (or more than) the law allows. The real estate agent is acting for the seller ... he'll be a well-honed trained spin doctor. Look at it with your eyes. Your brother's an electrician, so there's only one badly prositioned power point in each room ... for you it's not a problem. However you can use that as a negotion ponit.
It's going to cost X$ to have an electrician put all the power points in we need. The carpet needs tightening, there's no clothes line, the driveway is cracked ... (it's your dream home .. but any defect you see point it out to the real estate agent before you put in your first and low end of the range you think it's worth.

all this may not apply the bottom line is go into the debt with your eyes open, and into the home, mould and smell are not good things to notice, cracks in plaster. Only discount problems if the building inspection (in writing) says it's not big deal. The cracked window pane can be replaced! vs it's an indication that the buidling is shifting too much ...

dont' have that i've got to have it mentality. Have the i'm not willing/able to go over this$ approach ... and walk away other properties will come along and save in the meantime and look at what's happening ... it's amazing how quickly you get a feel for the market.

good luck

(in reply to proudsub)

Post #: 11

RE: Home buyer education - 6/16/2008 4:12:28 AM

MmeGigs

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Joined: 1/26/2008
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There's an organization here that does first-time home buyer classes. It's a pretty thorough series of sessions that goes over how the process works, explains all of the terminology and what all the fees and such are for and what other costs you're likely to face, the advantages and disadvantages of different financing options, what to look for and look out for. They've been doing this for at least 20 years. They were an independent non-profit, when their funding went away the county housing dept. picked up the program because they felt it was an invaluable resource for the community. I'd guess that there are similar programs elsewhere.

(in reply to Vendaval)

Post #: 12

RE: Home buyer education - 6/16/2008 4:53:20 AM

housesub4you

Posts: 1879
Joined: 4/2/2008
Status: offline

Never ever for any reason take an adjustable rate mortage! Go to your bank first and find out the amount of mortage you can get and at what rates.

When my son bought his first house 4 years ago, with very little job security they said he could get a mortage up to $450,000. I told him they where nuts, he ended up buying a house for under $200,000 and is not concerned with the market because he bought smart.

Don't let your emotions talk you into something you know in the long run you can't afford. With the mortage market so tight, hopfully this won't happen

(in reply to MmeGigs)

Post #: 13

RE: Home buyer education - 6/16/2008 5:11:51 AM

Sternhand4

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Joined: 3/6/2005
Status: offline

Once you have identified the house your interested in make sure to talk with some of the neighbors. Many times they can tell you if there are problems with the house that the seller won't identify. ( like the basement floods etc.. ) Plus they sometimes know the "desperation level" of the seller.

Then go to the county office that records the deeds and check out the last selling price for the home.
Look to see if there are any encumberances ( like shared driveway etc... )

You can also verify taxes and building size. Watch out if the have added on with out a permit as you can end up paying more taxes if the info the city/ town has is wrong, when they reasses the property.

Good luck with the first home.

(in reply to housesub4you)

Post #: 14

RE: Home buyer education - 6/16/2008 7:54:56 AM

sub4hire

Posts: 6775
Joined: 1/1/2004
Status: offline

Everything everyone else said. With the addtion of...if there is no real inspector in your state. Find somebody who is trustworthy and use them as your inspector.
Reason being...California has certified inspectors and they will even write down a crack in the concrete.
Here in NE they have inspectors but as long as the house is standing...its an ok house. It could be filled with mold...falling down in areas...what have you..it is still a good house.
So, go with an independant inspector in places like these. Make sure they know what they are doing.

In whatever state you are in....look into the program. Just what education they have to have to get the license and stay certified. Here it means being a real estate agent for 2 years...which means nothing in the grand scheme of things.

In todays day and age read your mortgage contract well. How much is your interest and how long is it going to stay that way?

(in reply to Vendaval)

Post #: 15

RE: Home buyer education - 6/16/2008 8:06:03 AM

xxblushesxx

Posts: 9318
Joined: 11/3/2005
From: Kentucky
Status: offline

Go to www.gardenweb.com and go to the home buying and selling forum.

I also went to the realtor forums (did a google search) when we were looking.

_____________________________

~Christina

A nice girl with a disturbing hobby

My femdom findom blog: http://www.MistressAvarice.com

(in reply to sub4hire)

Post #: 16

RE: Home buyer education - 6/16/2008 8:56:15 AM

philosophy

Posts: 5284
Joined: 2/15/2004
Status: offline

quote:

ORIGINAL: Irishknight

Look carefully for unmarked graves.

...also Indian Graveyards.....

(in reply to Irishknight)

Post #: 17

RE: Home buyer education - 6/16/2008 4:56:33 PM

Vendaval

Posts: 10297
Joined: 1/15/2005
Status: offline

Great advice everyone. Keep the information coming...

_____________________________

"Beware, the woods at night, beware the lunar light.
So in this gray haze we'll be meating again, and on that
great day, I will tease you all the same."
"WOLF MOON", OCTOBER RUST, TYPE O NEGATIVE

http://KinkMeet.co.uk

(in reply to philosophy)

Post #: 18

RE: Home buyer education - 6/16/2008 7:17:41 PM

Griswold

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

quote:

ORIGINAL: Vendaval

Anyone on here have advice for first time home buyers?

Yes...when you can afford to, buy. Then treat it as a home...not an investment.

If you're buying to make money, i.e. to turn...or to rent out (whether in 1980, 1990, 2000 or today), buy what you can afford to make payments on and assume it'll be vacant for 50% of the time (it won't be). If you can afford to make payments on it during 50% of an average year with no income...you'll do well.

This will, in most cases, cover the broken faucets, bad tenants, roof leaks, bursting water heaters, etc.

Also (if you're buying to rent or turn), have at least 6 months income in the bank before you start (this is on top of your down payment and other related costs) and then don't touch that money unless your car lights on fire while you're shopping (carry a fire extinguisher at all times just in case). You may never use it, and if you don't, hooray for you...but always remember...that money doesn't belong to you (the 6 months reserve isn't your money....it belongs to your tenants...they'll just never see it).

And if you never use it....you either planned well or got lucky. In either case...you'll sleep better knowing your butt is covered.

There's no better time (and that includes now) to buy real estate than today.

I've purchased somewhere around 35 properties since I was a kid and sold each one for a profit. Some were sold within weeks...most were sold after about 8 years of holding.

Over 75% of them were purchased at the top of the market...meaning...I didn't buy well. I still bought.

Real estate is always a long term hold, and anyone that thinks or acts differently is either stupid...or lucky.

And the ones I didn't buy well....I sold well. That's always the key.

There's always a new top in real estate...and as long as people need a place for keeping their CD's, old photos and copies of really crappy movies on VHS...there will always be a need for real estate.

The current situation, as with all lows in real estate, is temporary. This one will probably last 12 years as opposed to the typical 8 - 10...but there will come a time in your lifetime when you'll look at todays prices and say...."I should have bought that house next door when I could".

(You still can).

< Message edited by Griswold -- 6/16/2008 7:18:46 PM >

(in reply to Vendaval)

Post #: 19

RE: Home buyer education - 6/16/2008 7:26:27 PM

Real_Trouble

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

My thoughts:

Now is not a good time to buy unless you are compelled to do so. I never like to try to "catch a falling knife", by which I mean buy while prices are dropping. By any objective measure, we have several million more foreclosures coming onto the market in an atmosphere of tightening lending standards. Less buyers. More sellers. Prices go down.

Be patient. Wait for prices to start to go up a bit before you buy, and do not under any circumstances believe any reports from the NAR, or any reporting that references them. Those people cannot do basic math; if you want some idea of what is going on in housing, just read Calculated Risk.

Second, when you buy, make sure not to go for any fancy mortgage product, and if you have to stretch to make something work, you are better off saving and waiting. Nothing hurts you more than over-leveraging and then getting caught in a downturn, so don't do it. Rule number one is always "don't lose money".

Third, a lot of the practical advice through here (get an independent inspection, get the house assessed, don't get into a bidding war, etc) is all good. Also, location, location, location really is true, but no location is worth overpaying for unless it's spectacularly good. Such as, say, a penthouse in Manhattan, but I doubt that's what most people are looking at.

Fourth, I will disagree with Griswold here:

quote:

The current situation, as with all lows in real estate, is temporary. This one will probably last 12 years as opposed to the typical 8 - 10...but there will come a time in your lifetime when you'll look at todays prices and say...."I should have bought that house next door when I could".

The problem is opportunity cost. Say I shell out $200k on a house now, then it goes down in value for a few years before going up in the long run and I make money. Was that a good deal?

The answer to that question depends on what else I could do with the money. If there was something else (stocks, bonds, commodities, whatever) that I could have done to make more money, then that's my true cost. It's not just "did I lose money or make money on this" but also "could I have done better with something else" that really kills people.

For instance, I passed on buying property but held short positions in several financial institutions and long positions on several oil related stocks...

_____________________________

Send lawyers, guns, and money.

(in reply to Griswold)

Post #: 20

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