Buying my first house. Tips?

Well my loan got approved today. Meeting with the realtor tomorrow. Thanks for all the replies everyone.

 

Beating a dead horse: Home inspection! It helps to be knowledgeable yourself too so you know what to look for. I recommend reading up. Got this book years ago and it helped a lot:

$26 Inspecting a House (For Pros By Pros)

http://amzn.com/1561584622
Having a good home inspector is one thing, but they can miss things too if they're not thorough enough. Ever watch Holmes on Homes? Ha! Above all else you want to be comfortable in your new house. Good that you checked the neighborhood at different times and talked to neighbors! Good luck with your purchase! And congrats!

 

Bring an ice pick. Really.

I walked away from many houses that I liked due to insect and water damage found poking around with an ice pick.

Sill plates, sub floors in bathrooms and kitchens were the usual culprits.

I'll also add, check the plumbing and sewer system out. Run water and flush toilets to see if there's issues there.
Had to dig up and repair my sewer line about 10 feet out from my house due to tree root damage.

 

My wife has been in the Real Estate biz for 20+ years she's been very successful, mostly referrals and return customers. Lots of good advice in this thread, the market changes significantly around the country. To be sure, check out the neighborhood and surrounding areas closely, if you have kids, the schools, price, condition and terms are always the mainstays. If you plan on using a Realtor (they really can save you money and heartache) check with people you trust and have them refer you one then check their references. It sounds like you're educating yourself That's the main thing.

BTW .... Good luck, buying your first home is a lot of fun and a lot of stress

 

So I went looking at houses today and came across this. I really liked this house alot but this looks like foundation problems. What do you guys think?

 

That house settled alot, Don't mess with it

 

Thanks guys that's what I thought. Just wanted to confirm.

 

I used my VA loan back in Jan. Only piece I can throw at you is that with the VA loan, you'll have a VA fee. ~3k the first time and then doubles the second, and so on.

I found a bank here in Arkansas that paid that ~3k so that I didn't pay interest on it for 30 years. Other than that, good info here.

And the pic above, almost all houses will have some type of settling (mine does) but that shit is bad.

Like they said, runnnnnnnnnnnnn.

 

how does a realtor save you money if you are the one selling?

 

I agree with the others about paying it off as soon as possible, you'll save alot in interest in the end. We purchased a new home 2 1/2 yrs ago and financed it for 15 yrs. Next month this joker will be paid for.... yep one payment left and I'm debt free again. I'll end up saving about 16 grand in interest.

 

This is some of the most important advice in this entire thread. Make sure you are completely educated on how the mortgage works, what you can negotiate, and know your breakdown of closing costs. Your mortgage rep, realtor, lawyers, and underwriters will all be trying to hurry you through the process as fast as possible, but you should take the time to read documents and ask for explanations on anything you dont understand. It will annoy them, but you need to be prudent, its likely one of the biggest investments of your life.

Also, keep in mind that negotiating an extremely low sale price will in turn contribute to lowering surrounding home values, so if you can, try to work in closing costs to make up for a lower sale price. Take advantage of any first time homebuyer incentives (there were a lot when we bought our first home 4 years ago).

 

Ditto on the home inspector. Just had my house built 2 years ago, and the independent inspector caught about 30 different things that the city and builder didn't. Ended up getting re-insulated, a wall re-built, and cabinets re-hung. House is tight as a drum.

If you're going in to a house that's already built, the inspector can't see as much but still should have tools that let him see through walls. Pay close attention to where brick meets house, low spots where the ground meets the house, foundation cracking, roof lines, water drainage on the property, and water drainage in your pipes. Higher elevations are better than lower ones - flooding sucks - but even if you're not at the bottom of the hill you can still get flooded out depending on how water routes around the house. Make sure they do a mechanical inspection of the HVAC and water heater, and that there is excess capacity in your breaker box. Better to have more electrical capability than not have enough.

You're a fellow zoomie - I HIGHLY RECOMMEND that you get your loan and homeowner's insurance through USAA. They have a BUNCH of home buying protections, fantastic homeowner policies, and discount everything when matched to car insurance. We've been with them 15 years and have zero complaints.

After you close but before you move in any furniture, seal the garage floor with an epoxy floor coating. I have the Rust-Oleum EpoxyShield, and it's been fantastic. It takes some effort to get it down, but it's been a snap to keep clean. I dropped my 2.5 ton floor jack on it, and it didn't chip. I can't recommend it enough. You will be VERY glad you did. I also repainted my garage with an indoor/outdoor semi-gloss latex, but that was because the builder used a paint not suited to a garage. Cheapskate.

Depending on what state you're in, make sure you file your homeowner's exemption as soon as you can after closing (especially in Texas). It can save a ton of $$ on annual property taxes.

I'm sure something else might come to mind. Congrats for putting that BAH to use building equity. Good decision!

 

When dealing with a realtor it is important to consider what their goals are. Obviously, they want you to buy a house because they get paid a commission that comes from the seller, out of their profit on selling the house. Generally, each realtor will get 3%. Because it is a percentage of the sale price it is in their best interest, financially, to keep the sale price higher and make your negotiations through closing costs, repair costs, etc. As stated earlier, keeping the sale price higher can potentially have positive impacts on surrounding home values (and in turn, your future resale value), but up front...it's you paying a higher mortgage every single month. So what will it be? I haven't dealt with any realtors that were truly going to bat for me, but they do exist and I hope you find one.

What are closing costs? They're basically the fees associated with selling a house, no way to avoid them, unfortunately. Also, during negotiations you're using an estimate, in my experience if it's within $500-$1000 of the final closing you're doing okay. In my area at least, buyers tend to ask for the seller to pay all or most of their closing at first and the sellers can then whittle that number down.

The third negotiating point is repair costs. Every house will need some repairs, with some buyers being very ticky-tacky and others thinking more about big picture items. You will negotiate an amount you want for repairs that you observed or think you may need. For this reason, bring along your contractor uncle or handy man brother-in-law on your second viewing. Doors that don't latch, evidence of water damage, poor water pressure, taking too long for the water to get hot, taking too long for the air to get cold, etc., can all be signs of bigger issues. Small things to look for are window screens, doorknobs functioning properly, ceiling fans functioning properly, etc. Suppose you and the seller settle on $1500 for repairs.

The process is flawed in that you do all of your negotiations and then get it inspected by the "professional" inspector, which is often times simply a guy with a flashlight and a screw driver. You pay these guys up front (~$500-$1000). Make sure yours is reputable. He should come in and look for structural concerns, electrical concerns, plumbing concerns, and anywhere the house is not up to current code. He will then provide you with a list of suggested repairs and likely advise you to get help from certified plumbers, electricians, foundation experts, etc. (That's more money out of your pocket!) Suppose his grand total is more than $1500...well now you're out of contract and all of your negotiations can fall through. The seller can either agree to fix everything on the list and not give you the $1500, you can still just take the $1500, or you can walk away. If the seller fixes it they will do the bare minimum, so consider that. If you think it's too far over...look at his estimates. I recently sold a house and the buyers inspector quoted $50 to install a striker plate on a closet door. That's a $0.98 part at every hardware store and 30 seconds of time. Now, if the repair list is full of big ticket items...consider walking away.

The information asymmetry of home buying is tricky. You have to do everything in your power to learn what the seller knows...and you can't count on them to tell you up front. They will sign paperwork saying they have disclosed any problems they are aware of and they will be lying. Do your due diligence and scrounge up everything you can about the house.

One last piece of advice - don't let the bank convince you that you can afford more than you can. You can spend your money how you please, but consider what current monthly payments might get raised, what new monthly payments might arise, emergency funds, future home repair budgets, starting a family, trading in the Tacoma for a Tundra, etc., etc. Don't spread yourself too thin with a mortgage. I purchased about $20k less than I was approved for and the flexibility was great.

Beyond that...home buying is fun. Much more fun than home selling.

 

Lots of ways price is one, they have the tools to accurately price your home. "Everyone wants a deal......Everyone is selling the Taj Mahal", understanding how to make company like "American Home Shield" work for you (paying for repairs). Many,many ways ......Keep in mind I said "a good, honest and experienced"

I will say MANY realtors are flash in the pan agents who stand at the curb with their hand out. Also, in our area it's very much a sellers market.

 

I cannot see how giving up a 6% commission is ever going to save me money as the seller. To me, the realtor will not save you any money...ever.

That being said, I closed last Thursday on selling my house and I used a realtor. About a year ago I listed it as a for sale by owner, within one week I had numerous full price cash offers (very excite!). My God, what a shitstorm that turned in to. If you enjoy talking to people, are okay with them showing up unannounced with a fleet of specialists disguised as family members, and are good with negotiations...then by all means...bypass the realtors. If those are not your strengths then I can see how a realtor is a good investment...although certainly not a money saving one. Those are not my strengths, so I was out of my element and found the whole process to be very stressful and consuming.

I ended up renting it to my brother when people annoyed me to the point that I told them I was no longer interested in dealing with them, they fell off the face of the earth, or we were unable to reach a final deal. A little over a month ago we listed it with a realtor and once again, within a few days we had offers. What did I pay the realtor for? Nothing really, she listed the house on the MLS and scheduled showings. I still had to crunch all of the closing numbers and correct hers when she tried to do them on her own and head all of the negotiations (albeit, through a web of realtors now instead of face-to-face with the potential buyer), which is really what I wanted out of her.

In the end, I wanted that 6% to cushion my profit margin, and while i'm still not sure exactly what my realtor did to earn it...she (or her army of minions) did close the deal so I am thankful for that. So, I suppose i'm glad I hired her and the headache is over, even if it meant a smaller profit margin. My next time around I will probably try FSBO again and use what I learned in this experience and hope for better results.

 

^^^^^^^ Good luck and I wish you well

 

I have 2 VA loans. Shoot me a message if you need any other guidance than previously stated.

First thing though, have you pre-qualified yet? If not, find a very military friendly bank that does many VA loans. USAA can be good, but they aren't the best. I hear QUICKEN actually has a very good program for home-loans, and re-fi's.

 

Yes

Yes I have been pre qualified and pre approved through veterans united. They have been great so far.

 

Here's what I can add...Mind you I'm on my phone so sorry for typos, ext.

First...if you can bring someone else along to everything. Preferably someone who has bought a house before. For me I used my parents. They went to the bank with me, went to the houses with me, basically did everything with me. Why do I bring this up? It's a second set of eyes and ears who aren't invested in anyway. I loved a couple houses but then my mom or dad would show me things I hadn't noticed. I mention using someone who has bought before only cause they will at least have an idea on all the processes and can help call bs when needed.

When you do find houses you like...go back again. Don't just look once. I went back a second time to a few houses I initially liked. The second time I found things I didn't care for (layout type stuff). Going the second time you aren't still in the initial awe of seeing it.

Set some money aside for when you do move in. You'll find you will want to buy plenty of stuff. New grill, lawn mower, ect. Might be cheaper stuff but it does add up. Budget for it now and it won't be a strain later. Even household items if it's your first house add up. Garbage cans, soap dispensers, garbage bags, all crap I didn't have that I had to go out and buy once I moved in.

That's all I can think of right now. It's a exciting but scary thing buying your first house. But it is well worth it!

 

No. Usually a bad idea. Lets say you didn't have a problem making the payments for the first 3 years. Something comes up down the line with career or family emergency and it's not so easy to make that big minimum monthly payment anymore. You won't "pay your house off quicker" with a 15 year loan if you're smart with a 30 year.

It's more important to make sure that there is no prepayment penalty on your loan. Then if you have your budget under control you can set aside a few thousand per year that you don't need for anything else and write a check to mortgage company straight to principle.