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Buying my first home

Discussion in 'Stocks & Investments' started by Gear Head, Jan 20, 2014.

  1. Jan 20, 2014 at 7:31 AM
    #1
    Gear Head

    Gear Head [OP] Well-Known Member

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    So I'm looking at buying my first home. I've got my eye on a house 1.5 mi away from my work that is listed for $129,900. I'm ready to make an offer but I have never done this before and don't know where to start. Tax value on the property is $116,000 but all tax values in this county were recently reduced. The house is in very good condition and has had a nice deck added and half of the basement has been finished. They are also leaving all of the kitchen appliances. Closing costs are going to be around $3800.

    With that said I'm thinking of offering $126,000 and having them cover closing costs. Thought's or opinions? I'm really in the dark here. I don't have an agent and don't really want to bring one in now and have them make commission for simply submitting and offer since I found the house and viewed it myself.

    The house has been on the market since Oct of 2013 and I know the sellers personally and they are moving into her parent's second home and are just waiting to sell this one. They are motivated and really want to sell it to me over anyone else, I'm just nervous about submitting the initial offer since I have no idea if what I have in mind is a good start.
     
    Last edited: Jan 20, 2014
  2. Jan 20, 2014 at 7:49 AM
    #2
    WoadWunner

    WoadWunner Well-Known Member

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    See if you can find out what comparable homes went for in the area, that will help you determine the value. Agents usually do the work for you. As to requesting closing cost, that sounds reasonable.

    Good luck and hope you enjoy being a home owner
     
  3. Jan 20, 2014 at 7:50 AM
    #3
    Delmarva

    Delmarva Mayor of TW

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    For your first one, I recommend using a realtor to help you thru the process...

    Are you pre-qualified for a mortgage? That's typically a first step before even looking...

    I'd also offer lower than that... depending on the type of market you're in and the amount of time the house has been on the market...
     
  4. Jan 20, 2014 at 7:54 AM
    #4
    Gear Head

    Gear Head [OP] Well-Known Member

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    It looks like most of the homes in the area are valued at $102k-$115k according to Zillow. The owner is the original owner and purchased the house in 2005 for $115. Like I said, he's added a very nice oversized deck, finished 2 rooms in the basement (an oversized laundry room and a finished living room), and has a hot tub out back. I'm just hesitant because it is a little higher than what's in the neighborhood but the only thing it needs is paint.
     
  5. Jan 20, 2014 at 7:56 AM
    #5
    Gear Head

    Gear Head [OP] Well-Known Member

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    Yes I have already been pre-approved for the list price and I am considering calling the realtor that my loan officer put me in contact with just to be safe. Normally I would have no issue lowballing to start and negotiating from there but as I said, I know the sellers personally and don't want to disrespect them with a ridiculous offer.
     
  6. Jan 20, 2014 at 7:58 AM
    #6
    toyotaman29

    toyotaman29 Well-Known Member

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    I think that sounds like a fair offer, I would start at 120K and then go from there but if you really like and want it off the market then go higher. I would make sure to get a home inspector to check the house over good including a pest-termite check to be safe, if it has not been done, good luck with your new home.
     
  7. Jan 20, 2014 at 8:00 AM
    #7
    TrdSurgie

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    You're not the one who pays the Realtor.
     
  8. Jan 20, 2014 at 8:04 AM
    #8
    ndcmack

    ndcmack Well-Known Member

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    Get a realtor. Seller pay commissions in house sales, it will cost you nothing more and the contact will be done correctly.

    Remember this is still a business transaction regardless of if you know them.

    I sure wish houses where that cheap out here!
     
  9. Jan 20, 2014 at 8:05 AM
    #9
    newertoy

    newertoy Well-Known Member

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    Also--have someone INSPECT the home--friend, relative, builder-ECT.
    be sure there are no problems.
    I am not a builder but have put an 980 ft addition on my home.
    My daughter was buying a first home-I did the look over--there were many discrepancies that were corrected BEFORE she bought the home. Had it not been inspected--I am SURE they would not have been fixed.
    If you know the current owner--ASK what is his best price- Negotiate.
     
  10. Jan 20, 2014 at 8:13 AM
    #10
    Gear Head

    Gear Head [OP] Well-Known Member

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    Jacob
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    Thanks a lot for the information and the quick response guys. I just got off the phone with a realtor and we are going to try and check out the house again later today and go from there. I have spoken to their realtor and the way the contract that he has written is contingent upon a home and termite inspection so all that will come before everything is finalized.
     
  11. Jan 20, 2014 at 8:15 AM
    #11
    Dave23487

    Dave23487 Well-Known Member

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    There's a lot that goes into that so I'd check out some of these guides. You may want to either skip to the step you're on, or ensure that you've covered all your bases and look back through the other recommended tasks.
    My buddy just bought a house, and a month later the water main broke, they have racoons living in the attic, and the water heater broke. So make sure you do a good inspection, and some of that stuff just cannot be anticipated, so ensure you have enough money to cover those kinds of possibilities.

    http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home
    http://money.cnn.com/magazines/moneymag/money101/lesson8/
    This one looks a little cooky and 90s websitey but has some great info and ideas - http://michaelbluejay.com/house/

    Good luck!
     
  12. Jan 23, 2014 at 6:10 AM
    #12
    maxpower29

    maxpower29 Well-Known Member

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    If it's the house you really want, it's nice to get it as cheap as possible. But really, the general rule is if you pay 2% or less of the asking price you got a good deal. Won't effect your payment much so just be happy is the main this.
    I have bought 2 house now and am buying a 3rd (will be a rental like my other and I live in the biggest house). I almost lost the bid on the house I'm in now because I went too low and 3 others put bids on. I changed mine to 203K (30 mins before, just in time) when it was listed at 205k just to make sure I got the house. It was a foreclosure and worked out great. I just got it assesed at 273k. So I will never bicker much about purchase price if the house is what I want. Good luck
     
  13. Jan 23, 2014 at 2:14 PM
    #13
    Gear Head

    Gear Head [OP] Well-Known Member

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    Well I am now working with a realtor so she should be able to help me with negotiating when we do find something we like and we're also taking a look at some other options. Thinking I can get more for my money. I've looked at 2 others so far and going to look at 2 more tomorrow. I found a house I LOVE but the area it's in and around is a little ghetto so idk about that
     
  14. Jan 23, 2014 at 2:35 PM
    #14
    toyotaman29

    toyotaman29 Well-Known Member

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    I think that's good to look at some more and see if the first one has a lot of things you like, just remember you can change a lot of things in a house to make it your own but you can't change the location it is in, at least not easily.
     
  15. Jan 23, 2014 at 2:36 PM
    #15
    Shetto24

    Shetto24 Well-Known Member

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    Congrats on making on making a decision to buy your first house. I've been a 1st time homeowner for just under a year now, and couldn't be happier with making the decision to buy a year ago. I would definitely recommend getting a realtor. Someone who will represent the buyer as there were tons of legalities involved with my purchase. I had learned a lot of it, but having a person who's job was dependent on it was invaluable. Mine seemed fairly simple, but I bet legalities could be expounded on depending on contingencies, property types, loan types etc. I bought my house at asking price but seller paid 100% closing. I think they agreed to do such as they had relocated out of town already and the house price fair market. Most importantly, after you've got your offer accepted, is to find a good reputable home inspector for inspection. I would do this independently from your realtor should you choose to get one. This way, they wouldn't have any mutual interest in the sale of the property. Your inspection will likely find some faults as no home is perfect. Including new construction. I did my own detailed inspection prior to scheduling the official one though. If all is good an you are ready to purchase, then I'm pretty sure that most buyer agents are paid on a percentage cut from the selling agent. May not be true 100% of the time though. Mine was like this and I didn't have to pay a dime to her. Good luck.
     
  16. Jan 23, 2014 at 2:41 PM
    #16
    Gear Head

    Gear Head [OP] Well-Known Member

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    Thanks for the info. I signed a 3 month contract with my realtor and she charges no fee, her money comes from the sale of the home. And yeah I know about getting the inspection and everything. I plan on trying to get them to cover closing as well but in the case they don't, can those expenses be rolled into the mortgage? Or do those have to be paid up front? I keep hearing conflicting statements about this
     
  17. Jan 23, 2014 at 2:49 PM
    #17
    PB65stang

    PB65stang Well-Known Member

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    You generally have to bring closing costs to the sale, but there may be some loan programs that allow you to absorb them into the loan (whether that's a good idea or not is another discussion).

    Lots of good advice already on the thread. I would second the person who said that you can change a house, but you can't change the location. WHERE you buy a house is almost as important (if not more) than what house you bought. Even if you don't have kids, schools matter, as does traffic, crime, etc. So don't fall too in love with any specific house...IMO, there's always another one that you will find that you like just as much.
     
  18. Jan 23, 2014 at 2:58 PM
    #18
    Gear Head

    Gear Head [OP] Well-Known Member

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    I'm hoping to get them to to cover the costs or have them rolled into the mortgage. I know financially speaking you should finance as little as possible but I have just enough saved up to put 5% down, buy an engagement ring, and have a nice cushion left over for unexpected home repairs or other events. I have been making $8/hr for a few years and because of this I am generally very frugal with my money but have recently landed a good paying job and am shooting to have whatever I buy paid off in 15-20 years (30 year mortgage). I am trying to plan the best I can for kids and schools though I have not started my family yet. This whole thing is definitely a huge learning experience for me.
     
  19. Jan 23, 2014 at 2:59 PM
    #19
    Shetto24

    Shetto24 Well-Known Member

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    I think you may have options. I've heard of people coming in with the check at closing time, to adding it to the purchase loan, and even the seller increasing the price of the home in order to cover what the buyer doesn't have in case to pay the closing. Your mortgage rep and realtor should have details and tactic options available.
     
  20. Jan 23, 2014 at 3:01 PM
    #20
    whitetaco07

    whitetaco07 Well-Known Member

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    Look into for close homes.. There good ones for cheep
     
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