Advice for a first-time homebuyer

Topics in this category pertain to planning. Discussions include how to prepare yourself, your family and your community for catastrophes and what you plan to do when they hit you.

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Advice for a first-time homebuyer

Post by razi » Wed Jan 12, 2011 6:17 pm

as it says, what sort of advice would you give to a first-time home buyer? Choosing a BIL is a Big Step, and I don't think it's something that's been covered here yet (if I'm wrong, sack the thread and point me in the right direction) that probably should be.

Points of interest that more knowledgeable folks than I might wish to discuss:

Loan information; choosing a lender
Appraising a neighborhood
Appraising a house (and yard)
Home defensibility
Home improvements (what's easy, what's hard, what needs permits, etc)

that sort of stuff. :)
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Re: Advice for a first-time homebuyer

Post by nyiangelo » Wed Jan 12, 2011 6:24 pm

I would say if you are going to be applying for a loan, your gonna need at least 20% down payment or your wasting your time.
I guess as far as choosing the right property...location,location,location. This will effect everything from resale to utilizing it as your BIL.
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Re: Advice for a first-time homebuyer

Post by airexurb » Wed Jan 12, 2011 6:29 pm

check out the neighborhood at night. Most people tend to go look at a house during the day, when some neighbors are at work or school. Drive by at 8pm or so, to get a feel for what the neighborhood will be like at the time that you might want to be winding down for the evening. It would suck to find out that your neighbor likes to practice the drums before bed .

Maybe find someone you know who has lived/does live in the area. They can tell you what kind of neighborhood it is...and was. That can be pretty important.

Look under the sinks and be wary if you see a moisture barrier. When we bought our house, we didnt check. When we went to replace the cabinets, they crumbled to bit...along with most of the drywall on that wall. Turned out that there was a leak...the contractor that "remodeled" our place didnt replace the ruined drywall, just put up a moisture barrier :/

Replace the toilet seats and get new doorknobs. Those are things you have to touch every day so they might as well be nice. :mrgreen:
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Re: Advice for a first-time homebuyer

Post by Murph » Wed Jan 12, 2011 6:30 pm

Don't forget storage space.

...and a secret room in the basement.
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Re: Advice for a first-time homebuyer

Post by riverjoe47 » Wed Jan 12, 2011 6:39 pm

nyiangelo wrote:I would say if you are going to be applying for a loan, your gonna need at least 20% down payment or your wasting your time.
I guess as far as choosing the right property...location,location,location. This will effect everything from resale to utilizing it as your BIL.
20% really . What about FHA . Haven't bought one recently , but I've bought a lot for less then 20% . Id think a lot would be available on contract for 10 % . Should definitely be a buyers market . Im closing on one tomorrow that I bought for 42k and now am selling for 32k 10 years later .
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Re: Advice for a first-time homebuyer

Post by mbaz73 » Wed Jan 12, 2011 6:40 pm

Not sure if this qualifies as advice but I plan to upgrade from our condo to a single family home hopefully by the end of 2011. Here are the items that I am actively considering in my home search:

We are saving as much money as possible for the best possible down payment. Not sure if we will get to 20% to avoid the PMI but the closer we get the better off we will be.

As far as location, we are looking for towns that fit this criteria:
Close to work - I am currently commuting 30 miles one way and paying tolls. I want to eliminate the tolls and cut down on the mileage.
Major highway access - easier access to the big box shopping plazas
Highest rated public school system - luckily the towns we are looking in are in the 25% in the state with some in the top ten, this way we avoid paying for private school and taxes.
Most towns have a few farms in Central MA, would be nice to be next to at least one.

As far as the home, these are on my list:
Land - half acre or more
Single detached home
Hopefully natural gas and not oil heat
Electric hot water

Planned upgrades (would love to do these, how many I get done is another story...)
Metal roof
Rain collection for garden
New windows
Reinforced door frames with all solid core doors (internal as well, ideally the master bedroom doubles as safe room.)

This is what's on the docket for 2011!
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Re: Advice for a first-time homebuyer

Post by riverjoe47 » Wed Jan 12, 2011 6:45 pm

Murph wrote:Don't forget storage space.

...and a secret room in the basement.
Yeah you'd definitely need a secret room .
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Re: Advice for a first-time homebuyer

Post by MVegas » Wed Jan 12, 2011 6:52 pm

airexurb wrote:check out the neighborhood at night. Most people tend to go look at a house during the day, when some neighbors are at work or school. Drive by at 8pm or so, to get a feel for what the neighborhood will be like at the time that you might want to be winding down for the evening. It would suck to find out that your neighbor likes to practice the drums before bed .
Very good advice. And as a matter of fact, if at all possible make it a warm friday or saturday night. That's when the freaks come out.
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Re: Advice for a first-time homebuyer

Post by whisk.e.rebellion » Wed Jan 12, 2011 6:54 pm

MVegas893.1 wrote:
airexurb wrote:check out the neighborhood at night. Most people tend to go look at a house during the day, when some neighbors are at work or school. Drive by at 8pm or so, to get a feel for what the neighborhood will be like at the time that you might want to be winding down for the evening. It would suck to find out that your neighbor likes to practice the drums before bed .
Very good advice. And as a matter of fact, if at all possible make it a warm friday or saturday night. That's when the freaks come out.
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Re: Advice for a first-time homebuyer

Post by MVegas » Wed Jan 12, 2011 6:58 pm

whisk.e.rebellion wrote:
MVegas893.1 wrote:
airexurb wrote:check out the neighborhood at night. Most people tend to go look at a house during the day, when some neighbors are at work or school. Drive by at 8pm or so, to get a feel for what the neighborhood will be like at the time that you might want to be winding down for the evening. It would suck to find out that your neighbor likes to practice the drums before bed .
Very good advice. And as a matter of fact, if at all possible make it a warm friday or saturday night. That's when the freaks come out.
Trust me.
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Re: Advice for a first-time homebuyer

Post by TacAir » Wed Jan 12, 2011 7:21 pm

I'm going to be off track and tell you to hold off on buying right now - unless the
place(s) you are looking at are less than thr tent you pay now.

When 2 buy? I would say wait till after the next election cycle. THen you might have a better idea of how things will go - up or down.

More land is better than less.

Check taxes in your area - they can be an ugly shock.

Check for deed restrictions/HOA rules and all that other crap that can make your life a living hell in some parts of the country. Get everything on restrictions in writing.

You don't mention the area where you will looking/now live. If it snows, check local plow routes and so on.

As far as the house itself - find and hire a good inspector - and get a report in writing - you may be able to get a better price owing to needed repairs.

As far as the other - watch a few episodes of Holmes on Homes. The more the better, Mike seems to find some doozys, but all are worth the time to view.
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Re: Advice for a first-time homebuyer

Post by AZMedic » Wed Jan 12, 2011 7:56 pm

I am buying one right now and I had some very specific things I wanted.

Good Schools.

Not a major road or have cars come by every minute of the day.

No HOA I have never seen a good one they will fine you left and right but then when they need to fix the park for the kids I have never seen one do it. Ok one but it was expensive fees.

But as far as being prepare goes. The only thing I can think of it too make sure you have adaquate climate controlled storage.
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Re: Advice for a first-time homebuyer

Post by midgetyaz » Wed Jan 12, 2011 8:12 pm

Talk to friends, family, coworkers... get a recommendation for a good realtor. They usually have people they use and trust. Although, feel free to get quotes from different mortgage brokers, though. Someone else recommended an inspector, and I can't agree more! Be aware, though, that a general inspector can only give an inspection of what he sees. If you think there is damage to the attic, roof, septic tank or other specific stuff, you'll have to get another inspector.

Also, try your daily commute from that location. Yes, you are looking for a BIL, but you'll be living there, and will have that drive everyday.

Don't be afraid to ask for what you want. If the windows don't have screens and you like open windows, ask for them (or for a drop in price).
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Re: Advice for a first-time homebuyer

Post by AZMedic » Wed Jan 12, 2011 8:25 pm

Forgot to chime in on the negation part of the contract.

My realator said do not ask for anything that is going to drop the asking price by more than 10% since sellers tend to blow ya off then.

I asked for a 7% total price drop which includes comps and eventually settled on a 5%

They dropped the price by 2k and paid 3% for closing costs and such and paid for my home warranty. They said they sold it as is and where is. And wanted their title company since they get a discount.

At first they said the 3% included home warranty then I said well if you aren't going to repair or do anything else then I want my warranty and since your saving money with your title company then why not pay for my warranty.

But ya don't be afraid to say I don't like the color and want $500 for new paint or something just understand its bargaining.
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Re: Advice for a first-time homebuyer

Post by riverjoe47 » Wed Jan 12, 2011 8:32 pm

midgetyaz wrote:Talk to friends, family, coworkers... get a recommendation for a good realtor. They usually have people they use and trust. Although, feel free to get quotes from different mortgage brokers, though. Someone else recommended an inspector, and I can't agree more! Be aware, though, that a general inspector can only give an inspection of what he sees. If you think there is damage to the attic, roof, septic tank or other specific stuff, you'll have to get another inspector.

Also, try your daily commute from that location. Yes, you are looking for a BIL, but you'll be living there, and will have that drive everyday.

Don't be afraid to ask for what you want. If the windows don't have screens and you like open windows, ask for them (or for a drop in price).
Check out the upcoming auctions . Yes it's a little scary but if you do due dilligence you can really get a good bargain . Take a contractor friend around with you to check basement walls etc . Line up your financing . Decide on a price so that even if you are surprised with some quirk you won't care because you've bought it so cheap . I don't mess with them unless there is no reserve or if there are a bunch of heirs . Usually somebody needs money now and they will let the property go cheap just so they can settle an estate . I bought a few this way and some I broke even on , but one I doubled my money in 6 months .
Some states like Mi. also have really great tax sales . The state has already taken possesion so usually the reserve is just the unpaid back taxxes .
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Re: Advice for a first-time homebuyer

Post by Launchteam1 » Wed Jan 12, 2011 9:44 pm

Either have or get knowledge about such things as Electrical, Plumbing, Construction, Roofing, etc. This way you can look at a house and see the "bones" of it. This always drives me crazy on the "Home" shows my wife watches. People will complain about paint color, furniture, carpeting, etc. FORGET all that junk and make sure the house itself is a good, solid, sound investment. If there are problems, make the seller aware that you KNOW there ARE problems so they don't try to pull the wool over your eyes! Good luck!

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Re: Advice for a first-time homebuyer

Post by Qasim » Wed Jan 12, 2011 10:00 pm

I am in the process of buying. We bid more than 10% lower than list and got it. Seller couldn't justify it through the comps.

Location and yard were big factors. Things I'd recommend that haven't been touched (or that are so critical I wish to re-emphasize)

1. Check for HOA/covenants, understand what they are, be prepared to walk if you can't live with them
2. Calculate full burden of ownership: mortgage, taxes, homeowner's insurance, and pro-rated cost of replacing roof (20-30 years depending on type) water heater (~10 years) other appliances, etc.
3. Plan for storage, think how you live
4. Check out a copy of "The Not So Big House" from the library, think of how you live your life
5. FBI has crime statistics broken out by Census parcel, very handy
6. Ditto with sex offender data. I think all states keep it as well
7. Some school districts have digitized maps with boundaries & very good data on school performance

I disagree with previous post to wait until after the next election cycle. With respect, consider that interest rates, while no longer at an all-time low, are very low historically. One factor driving this is the Fed's six-month round of quantitative easing. Basically, the US government is printing extra money for the next several months, making it cheap to borrow. I predict interest rates will shoot up after the QE is done. Housing prices will not immediately drop accordingly. So, in that respect, now is a good time to buy because money is cheap. If one is concerned about stability of the Euro, American debt (I am) or other large problems in the world, many of these can drive up interest rates in the US. In the future it could become much more expensive to buy.

Things to consider . . .

Good luck,

Qasim

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Re: Advice for a first-time homebuyer

Post by rhi » Wed Jan 12, 2011 10:51 pm

Meet and talk to some of the neighbors. You'll be the "new kid", so try to see if you'll like the folks around you. They're what they are and not going to change for you. I didn't do this...

(Context: I'm in a seasonal community, but I live there full time.)
Just after settlement, I went back to my new home to drop off a buttload of stuff I'd bought (vertical blinds, kitchen stuff, paint, etc). I just got out of my Tahoe when one of the neighbors comes running up to me. She tells me: "Hi, I'm <insert name>. I'm a RESIDENT. Everyone on the block gives me a set of their keys so I can check up on their place when they're not here." This is complete with her hand out, fingers wriggling, looking for keys. I responded: "Nice to meet you, <insert name> and I appreciate the offer, but I don't know you and I'm not about to give you any keys. Have a nice day." Thirteen years later, I'm still the black sheep on the block. Not that I really care. :twisted:

As soon as possible after settlement, change all the locks. No telling how many keys are floating around out there.
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Re: Advice for a first-time homebuyer

Post by Crimson Phoenix » Thu Jan 13, 2011 2:54 am

This seems to be overlooked, but since you mentioned modifications and refits in the future, look at whether or not the house has insulated windows and if it does, make sure they're sealed properly. Same goes for the door, as well as weather stripping and/or draft guards for the exterior doors. An insulated garage door would be great too, especially in places with hot summers. If a house you settle on doesn't have these features, look into how much it would cost to get them fitted at a later date. These aren't must-have items, but most people are oblivious to the amount of waste heat that bleeds out through just the windows and doors or how much excess heat comes in through the windows with the daylight in the summer (it happens year round, but you wouldn't mind the extra warmth in the winter, right?). I doubt it would be cost effective to check the insulation of the home, but that helps too.

Plumbing has been mentioned, but also look into the age and maintenance on the hot water heater as well as central air and heat if you can. Are they efficient? See what the local regulations are on getting solar water heaters or solar panels in the future, and if you're interested, what the homeowner's association would have to say about it. In the past, you could get energy credits and tax reimbursements on such features, but I don't know what the local situation is for the area you're looking, since it changes from state to state and between different utility providers too.

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Re: Advice for a first-time homebuyer

Post by KnightoftheRoc » Thu Jan 13, 2011 4:20 am

Been reading up on this thread, and I can't think of anything to add that hasn't been covered already. My own experience in real estate has been limited, so I'm always looking to learn something new. I'm seeing HOA (Home Owner's Association)'s mentioned quite bit both here and in other threads, and I have to wonder, having never dealt with one myself- How is it that these HOA people have any say at all about a place you bought, that they did not sell to you? Is there some legal basis that prevents someone from buying a home, and then telling the local HOA to cram it with walnuts? Granted, being a legal issue, the answers will vary from place to place, but I'm just looking for a generalism here.
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Re: Advice for a first-time homebuyer

Post by oldsoldier » Thu Jan 13, 2011 7:54 am

mbaz73 wrote:Not sure if this qualifies as advice but I plan to upgrade from our condo to a single family home hopefully by the end of 2011. Here are the items that I am actively considering in my home search:

We are saving as much money as possible for the best possible down payment. Not sure if we will get to 20% to avoid the PMI but the closer we get the better off we will be.

As far as location, we are looking for towns that fit this criteria:
Close to work - I am currently commuting 30 miles one way and paying tolls. I want to eliminate the tolls and cut down on the mileage.
Major highway access - easier access to the big box shopping plazas
Highest rated public school system - luckily the towns we are looking in are in the 25% in the state with some in the top ten, this way we avoid paying for private school and taxes.
Most towns have a few farms in Central MA, would be nice to be next to at least one.

As far as the home, these are on my list:
Land - half acre or more
Single detached home
Hopefully natural gas and not oil heat
Electric hot water

Planned upgrades (would love to do these, how many I get done is another story...)
Metal roof
Rain collection for garden
New windows
Reinforced door frames with all solid core doors (internal as well, ideally the master bedroom doubles as safe room.)

This is what's on the docket for 2011!
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Re: Advice for a first-time homebuyer

Post by BigDaddyTX » Thu Jan 13, 2011 8:35 am

KnightoftheRoc wrote:Been reading up on this thread, and I can't think of anything to add that hasn't been covered already. My own experience in real estate has been limited, so I'm always looking to learn something new. I'm seeing HOA (Home Owner's Association)'s mentioned quite bit both here and in other threads, and I have to wonder, having never dealt with one myself- How is it that these HOA people have any say at all about a place you bought, that they did not sell to you? Is there some legal basis that prevents someone from buying a home, and then telling the local HOA to cram it with walnuts? Granted, being a legal issue, the answers will vary from place to place, but I'm just looking for a generalism here.
There's a big thread on it somewhere, but basically when you buy the house, you buy into the HOA, it's not something you can choose to be a part of. Sometimes it's good, usually it sucks, it just depends. If you're the kind of person who doesn't leave their crap out on the driveway and hates when others do, it's not a bad thing. It's the unreasonable crap like someone in your yard with a ruler who then posts a notice on your door telling you your grass is 3.1 inches, and the HOA says it can only be 3 inches so mow or be penalized.
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Re: Advice for a first-time homebuyer

Post by Gristle McThornBody » Thu Jan 13, 2011 9:17 am

TacAir wrote: As far as the house itself - find and hire a good inspector - and get a report in writing - you may be able to get a better price owing to needed repairs.
This, although it shouldn't be a 'may'. You should be able to talk the price of the home down any amount necessary to bring the house up to code; if the realtor is unwilling, find a different realtor.

Like this (recently occured with a contractor I work with): List price of home, 200K. Repairs necessary to bring home completely up to latest code (not code when the house was built), 30K. This includes but is not limited to roof, wiring, plumbing, windows and insulation (many counties/cities and some states have codes requiring a certain R value for exterior wall insulation and for windows to also be a certain R value). Total price you should pay for home 200K - 30K = 170K. If you have the paperwork in hand stating that the repairs and modifications will cost that much, I can't see too many realtors refusing to deal; you just pointed out to them how difficult the house will be to sell!

For an added bonus, many of the mods can be done by yourself with the proper tools and knowledge, so while you might save 30K on the home, you may only spend 10K (or less, if you're capable/clever) to bring that home up to snuff. Now spend that 20K on preps to fill your new BIL, and you're set!
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Re: Advice for a first-time homebuyer

Post by KYZHunters » Thu Jan 13, 2011 9:28 am

Razi,

On the house, look for recent "improvements." Before we bought our place, the owners did A LOT of wallpapering to cover up the mess beneath. After a few years it began coming loose and beneath was a disaster; we're just finishing up removing wallpaper, sheet rocking and painting the last room.

If you're buying rural property, pay attention to the wiring. Older places might have, old school, two wire service in the walls that you need to replace. When remodeling we found old, cloth covered wire, some of it worn/chewed through, in a lot of places. Also, ask what kind of service is coming from the meter to the house. We had to replace the 100-amp service with 200-amp; back in the day there were way fewer electrical appliances and many older homes don't have enough power to supply a modern home.

You don't say how much property you are looking for, but it matters to lenders. If you aren't looking for a big piece of property, most of the below won't apply.

Here in Ky. a lot of lenders have a limit of 50 acres before you have to start hoop jumping. Beyond that, what they do is give you two loans, one on the house and 10-acres (the homestead) and another 'bare land' loan on the remaining portion. Bare land loans tend to have a higher interest rate and a shorter term. Also, the value of the homestead has to be worth 60% of the total price.
You can skip this process by going to your local ag extension office and getting a 'beginning farmer loan' they have competitive interest rates, a 40-year term and don't care how big the place is.

Those are the first things that come to mind, good luck with your hunt.
crypto wrote:It's not that you were being "harsh" so much as a "douchebag".

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