Tips On Buying A House

[Papist]

If you are going to hire inspectors, electricians, plumber, etc. then I highly suggest joining Angie's List, [url="http://www.angieslist.com/"]http://www.angieslist.com/[/url]

Inspectors typically do a very poor job on termite inspection. I would get a environmental/pest control company to inspect for termites.

But first things first. Sit down and make a wish list of what you want in the house. Then mark each with either [u]must have[/u], [u]like to have[/u] or [u]could easily live without[/u].

[TeresaBenedicta]

[quote name='Brother Adam' timestamp='1298992363' post='2216764']
Met with the realtor this morning. 30 years of experience, full time job, lots of certifications, a parishioner, and highly recommended, ready to help us out.

Next step will be looking at homes and getting the formal app in with the bank.
[/quote]



Yay! Very exciting!

[Mercy me]

Just because they tell you that you can afford something does not mean that you can. Honestly assess your budget, your skills and desire for repairs. A lot of people got into trouble that way. Research the neighborhood. Know the issues before moving in. How is the rest of the neighborhood maintained? It impacts property values. Make sure that you have the home inspected. GO with the inspector. He will tell you what to look for and it will serve you well in the future.

Don't panic the first year when you need to spend a hundred dollars to because a light bulb burnt out and you need to buy a ladder to reach it plus a new bulb. You will be very familiar with Home Depot.

Edited March 1, 2011 by Mercy me

[Papist]

You learn the appreciation of a pickup truck very quickly.

[Brother Adam]

[quote name='Mercy me' timestamp='1298995601' post='2216780']
Just because they tell you that you can afford something does not mean that you can. Honestly assess your budget, your skills and desire for repairs. A lot of people got into trouble that way. Research the neighborhood. Know the issues before moving in. How is the rest of the neighborhood maintained? It impacts property values. Make sure that you have the home inspected. GO with the inspector. He will tell you what to look for and it will serve you well in the future.

Don't panic the first year when you need to spend a hundred dollars to because a light bulb burnt out and you need to buy a ladder to reach it plus a new bulb. You will be very familiar with Home Depot.
[/quote]

I love Home Depot. I think $100 the first year is sorely underestimating the cost of a new home though. Lawn care itself is a pretty penny as most renters do not own rakes, gardening tools, and lawn mowers. New paint and painting supplies are a few hundred dollars. Ripping out carpet and finishing hardwood floors can be thousands. I understand for future readers you want to caution people from getting into something you are not prepared for, but at the same time I know many people who have been cautioned away from home ownership for years when it is reasonable and responsible for them to do so. The cost of owning a home is high, but the cost of paying 100% interest renting and having nothing is higher if you can own a home. Rent when it makes sense, buy a house when the time is right. I regret renting the past 10 years of my life and throwing all of that money away. Renting the first 4-6 years out on my own made sense, but afterwards it would have been more reasonable to put the cash down and buy a home.

This is something that we don't teach our kids anymore either - public schools do not teach you how to balance a check book, make a budget, save money, live without credit cards, much less buy a house. But I digress before getting into a Dave Ramsey rant.

[TeresaBenedicta]

[quote name='Brother Adam' timestamp='1298998079' post='2216804']
I love Home Depot. I think $100 the first year is sorely underestimating the cost of a new home though. Lawn care itself is a pretty penny as most renters do not own rakes, gardening tools, and lawn mowers. New paint and painting supplies are a few hundred dollars. Ripping out carpet and finishing hardwood floors can be thousands. I understand for future readers you want to caution people from getting into something you are not prepared for, but at the same time I know many people who have been cautioned away from home ownership for years when it is reasonable and responsible for them to do so. The cost of owning a home is high, but the cost of paying 100% interest renting and having nothing is higher if you can own a home. Rent when it makes sense, buy a house when the time is right. I regret renting the past 10 years of my life and throwing all of that money away. Renting the first 4-6 years out on my own made sense, but afterwards it would have been more reasonable to put the cash down and buy a home.

[b]This is something that we don't teach our kids anymore either - public schools do not teach you how to balance a check book, make a budget, save money, live without credit cards, much less buy a house. But I digress before getting into a Dave Ramsey rant.[/b]
[/quote]

Never got any of that in college, either. Sadly. I think I was taught how to balance a check book in high school... I learned it somewhere. But I feel very inadequate with "real world" stuff and often have no idea what's going on at our Finance Council meetings or when financial stuff comes up at Pastoral Council. I know common sense stuff... but that's really about it.

Sorry.

[Mercy me]

[quote name='Brother Adam' timestamp='1298998079' post='2216804']
I love Home Depot. I think $100 the first year is sorely underestimating the cost of a new home though. Lawn care itself is a pretty penny as most renters do not own rakes, gardening tools, and lawn mowers. New paint and painting supplies are a few hundred dollars. Ripping out carpet and finishing hardwood floors can be thousands. I understand for future readers you want to caution people from getting into something you are not prepared for, but at the same time I know many people who have been cautioned away from home ownership for years when it is reasonable and responsible for them to do so. The cost of owning a home is high, but the cost of paying 100% interest renting and having nothing is higher if you can own a home. Rent when it makes sense, buy a house when the time is right. I regret renting the past 10 years of my life and throwing all of that money away. Renting the first 4-6 years out on my own made sense, but afterwards it would have been more reasonable to put the cash down and buy a home.

This is something that we don't teach our kids anymore either - public schools do not teach you how to balance a check book, make a budget, save money, live without credit cards, much less buy a house. But I digress before getting into a Dave Ramsey rant.
[/quote]


The $100.00 was the cost of replacing a light bulb! With a house there is no nickle and diming. It is ten and twenty.

But we really don't teach basic life skills anymore and I have seen so many people get in trouble because of it. It is really sad. I have seen the opposite from you where people have been encouraged to buy and also to buy what they could "afford" and not what then really could afford. Then they got into trouble and a few lost their homes.

Edited March 2, 2011 by Mercy me

[Brother Adam]

We are going to be meeting with our realtor tomorrow to put an offer on a house. It seems totally perfect for us and we fell in love with it the second we saw it - and it was only the 2nd house we actually went to look at. The price is also rock bottom and the realtor said that while we can try, the bank is not likely to make many more seller concessions. I am unsure that they will want to walk away from an offer on a house that has been listed since November though. I am trying to put together what all of our closing costs are going to entail if we end up paying all of them on a FHA loan. The house is now $12,000 below an initial short sale amount when it was listed. The entire property appears to be in immaculate shape, so sans problems with the inspector we are likely to buy it. It is only 12 years old and in a newly developed area with other newer homes. It is about 10 minutes from work out in a rural area near a town of 400. There is virtually no crime, and property taxes are very low.

[socalscout]

Check to see if it has an HOA and if so the covenants and dues. Ask the neighbors what they think of the HOA if one exists. You might save yourself some heartache by avoiding a gestapo run HOA. They can be horrible

Check the utility district this can be added costs

Check the school district. If Property taxes are very low then that could be an indicator of the schools but hat depends how much of the taxes are from the School District.

Good Luck and congrats

Edited March 9, 2011 by socalscout

[Brother Adam]

Thanks for the information about Zillow. That was interesting to see.

here is the home we are looking at: http://www.zillow.com/homedetails/1411-Adams-St-Dansville-MI-48819/74059524_zpid/

[Brother Adam]

[quote name='socalscout' timestamp='1299698527' post='2219591']
Check to see if it has an HOA and if so the covenants and dues. Ask the neighbors what they think of the HOA if one exists. You might save yourself some heartache by avoiding a gestapo run HOA. They can be horrible

Check the utility district this can be added costs

Check the school district. If Property taxes are very low then that could be an indicator of the schools but hat depends how much of the taxes are from the School District.

Good Luck and congrats
[/quote]

No HOA. School district is blah, but we home school, so its all good.

[homeschoolmom]

[quote name='Brother Adam' timestamp='1299700008' post='2219599']
Thanks for the information about Zillow. That was interesting to see.

here is the home we are looking at: http://www.zillow.com/homedetails/1411-Adams-St-Dansville-MI-48819/74059524_zpid/
[/quote]
It's lovely! I hope you get it.

[quote name='Brother Adam' timestamp='1299700432' post='2219601']
No HOA. School district is blah, but we home school, so its all good.
[/quote]
Even so, the school district can effect selling your house if you should ever need to. But yeah... not likely to matter too much.

[Brother Adam]

We were told we are going to get an answer tomorrow. I am not sure that is a good sign since this is an approved short sale.

[southern california guy]

Uh oh, it is a "short sale".. A "short sale" is when the bank allows the owners to sell for less than they owe on the mortgage -- and consider the mortgage paid in full. The problem with a short sale is that the owners usually take out a second loan -- an "equity loan" -- to do repairs and such. And in a short sale the bank that holds the mortgage, plus the lender who made the second loan, have to sign off the papers to sell it. The lender who made the second loan basically doesn't get anything out of the deal so there's no real benefit for them to sign. They'd rather wait until the foreclosure -- when they can get something out of the deal.

I guess that the best that you can do is to make an offer and find out if there is a second lender involved. If not then you have a good shot.

Good luck!

PS The one possible positive of it being a short sale is that most people don't want to mess with a short sale because if there is a second lender involved then the sale can drag on for months. But if it turns out that there is no second lender then you might get it for a steal.

Edited March 15, 2011 by southern california guy

[Brother Adam]

Right, which is why we are concerned we are hearing back after only a week. Though it might make a difference that previous buyers evaporated after the bank approved everything. Maybe they are just waiting for a buyer at this point. We'll see.

[Brother Adam]

Everything is approved with the sale. We are now working on our to do list for our mortgage company to get formal approval. There is just one big ? mark in the balance, if we get that sorted out we should be able to move in by the end of April or early May.

[Brother Adam]

Well, we are listening to our friends and are now getting competing offers. Our first bank gave us an origination fee of nearly 2%. The second bank said "pft we've got you covered, we'll do .5% and cut the interest rate". First bank is upset they might lose us. We'll see what third bank says. Hoping this thread is helpful for other people!

[Brother Adam]

Got the inspections done. It was well worth it to pay on the higher end and have a great inspector. He immediately caught things we never would have thought of. If the seller agrees to do a repair on a leak he found we will have cleared that hurdle and it just leaves us with financing. We will have three competing lenders by the end of the day.

[Brother Adam]

We got the appraisal back today, which turned out fine (as expected). We tried for and found out we do not qualify for downpayment assistance in our state. Even though our income is 1/2 the limit, it does not pay with the government to work hard and save money. We had slightly more liquid assets than allowed.

Due to IBR (Income Based Repayment) rules with our student loans and the home lender rules everything is very up in the air for us. It is far too complex (and private) to type out here. We may or may not qualify for the home with the lender. However, after being pre-approved and conditionally approved a lot of people, including the lender would lose a lot of money if it doesn't go through. At this point my expectation is to be denied for the loan, but we are praying it does go through. With the appraisal done the only thing left is to wait on the underwriter. Our prayer is to get the clear to close soon, which means we would have to close on 4/25.

[Brother Adam]

More information we learned - our D-to-I ratio actually is a moot point, we figured out how to get around it with the school loans. The trustee on the short sale was transferred and a new trustee has been brought in. This trustee feels that the price on the home is too high and is making all parties re-write the sales contract for $6500 less (!!!). That makes the home $68,000 less than what it was bought for in '05. Due to the complex nature of the short sale and our finances it could take anywhere from 2 weeks to 2 months to finally close on it if nothing else goes terribly wrong.