I am looking to buy my first house/condo (not really sure which I prefer, both sound fine to me, it’s more about affordibility at this point). I probably won’t be buying one until late summer/fall but I want to start putting things together now so that I’m not overwhelmed at one time.
So for those of you who have gone through the house buying process I would appreciate any tips or advice you may have to offer me.
Thank you! :thumb:
Get a penthouse! You get a special elevator button with the letters PH on it! Oh and be sure to check out the foreclosure listings… you can find really nice houses on those listings for decent prices and pay no downpayment. My dad started investing in homes this way, we own like 10 houses now. We’ve sold all of the foreclosures, but they really helped a lot. Oh… and try and find houses on your own rather than through an agent, you’ll find that you get a much better deal. Considering all of the commision costs agents charge, you could save a good 20-30k going directly to the buyer.
Man, I would recommend taking your time (if possible). Don’t dive into anything. If I were to do it over again, I’d buy a smaller house in better shape instead of a (relatively) big house in **** shape. Also, our goal for our next house is to be within easy walking distance of a decent grocery store and a bar… the essentials of life. 
Seriously, if you can walk to places that you go to regularly you’ll save tons of gas money, the environment, and get good exercise.
thats a good tip about walking places…
our house is right near a milk bar, shopping center (well, almost a mile away, but it’s good riding distance) and a train station, and it’s so convenient.
just curious, why exactly are you looking to buy a house?
So that I have some place to live.
Its all about the credit dog.
Make sure your credit is in good standing. Also get a copy of your credit report and challenge any discrepencies that might be on there. Companies have like 60 days to challenge your challenge. Most often they do not get back in time so they are removed (even if you did mess it up)
why not rent an apartment or house?
Yeah Fester, good point. Thankfully I’ve been good with my credit. Do you know of how to get a credit report? I would like to see the official thing just to be sure.
As far as renting? I think it’s a complete waste of money to pay hundreds of dollars a month and not own anything. I’d rather pay a bit more and actually own something that I can later sell and, hopefully, get out of it what I have put into it.
You need to keep up on your credit report. There are 3 bureaus (Equifax, Experian and Transunion). You can go tot each of their sites and buy one, or you can go to annualcreaditreport.com I think it is and get a free one from each every year. If you go that route, you don’t get your score though. You have to buy it seperate.
As far as buying a house, I would recommend you DO go with a realtor. The seller pays the commission, not the buyer. They get 3% (on average) of the selling price of the house. The selling agent also gets 3%. The good thing about a realtor is that they help you make sure things are on the up and up, like suggesting you get a home inspection which the seller should pay for. They also make sure all the papers are in order and you understand the conditions of any contracts.
I don’t know how it’s done in the US, but I got a house in Britain last year. We went to a mortgage broker and they worked out how much we could get and which of the available mortgages was the best. Every thing after that was much easier.
i’m not trying to steer you either way, i just think too many people think buying a home is the smart thing to do financially because it’s what their parents did and what older people recommend. i think it’s important to consider all of the costs involved on both sides. in buying a house some, but not nearly all, costs to consider are:
also, you have the added risk that your home won’t appreciate in value. so you could be selling for less than you paid. assuming you’re looking in southeastern michigan, this could particularly impact you because the automotive industry isn’t getting better anytime soon and the state’s not doing anything to promote job creation outside of that industry. so people won’t be able to afford to take on mortgages as easily and more people are likely to rent than in the past. that could give you difficulties in trying to sell. but that also means that people are defaulting on their mortgages and there are tons of houses that are in foreclosure or in pre-forclosure that you can get for cheap.
btw, what area are you looking at?
Those are some good points bwh2. Didn’t you use to live in Michigan? I thought I remembered seeing that on here somewhere.
I am looking for something near Romeo/Washington/Shelby Twp or close to that area.
I see what you’re saying about potentially losing money but I still think that I’d lose less than if I just chose to rent and of course there is an equal chance that I make money when I sell.
As far as all the extra costs. Yeah, I’m aware that they are there and that is one reason I’m trying to get as much info as I can before I get too far into this. I’m the kind of person who likes to have everything covered and avoid financial surprises.
Thanks for the info.
yeah, i used to live in madison heights and then moved up to richmond for awhile. so i’m familiar with the area you’re talking about.
one thing to really look out for in the area is property taxes. b/c areas like richmond, shelby township, etc. are growing really fast, they need funding to support it so they are really hitting up homebuyers with property taxes. so the cities have these really disproportionate taxes b/c the property taxes are based on purhcase price. so new homebuyers are paying much, much more in property tax than people who have lived there awhile.
in addition, look at the school taxes. if you’re like richmond, you basically pay the school taxes for people in areas like memphis and a handful of other small cities. it might not seem like much, but it really adds up, especially if you don’t even have kids who will benefit.
also, a word of warning about new homes (b/c they are abundant and not that expensive in the area)… it might not be apparent at first, but many of the newly built homes in the area have significant problems, both structural and non. i would highly advise against buying a new home (built since 2002). if you are really interested in one, i would seek out information from others living in homes by that builder to see if they’ve had problems. for instance, on parents’ street, it’s all new homes. i would say 80% would have major problems. by major i mean costing thousands of dollars to repair if repairing is even possible.
Yeah, this whole house buying thing seems intimidating. I’m going to meet with someone on Friday to help me sort things out a little better and see what I can realistically look at buying.
As far as the newer homes having problems, you’d almost think they’d have to with how fast this area has grown over the last 5-10 years.
btw, how’s nyc?
NYC, home of the billion dollar apartment.
(exaggeration)
if it’s a mortgage broker, they’re going to basically give you the absolute max you can afford, so keep that in mind.
yeah, i think it’s a number of things, many of them being related to how quickly the area has developed. i think a lot of homebuilders were inexperienced and just throwing up homes without all of the knowledge they need. i also think the law sucks in protecting homebuyers. for instance, most cities have inspectors that have to approve the house through various stages. so they’re supposed to come out and test to make sure everything’s up to code.
unfortunately, that’s not always the case. worse yet, neither the city nor the city’s inspector can be held liable for any damages due to their negligence. so if you’re a homebuyer who has a small time homebuilder (most builders in the area are small time), you can end up being screwed if you have any problems with your home b/c …
so if you try to do 1 or 2 and lose, you can get royally F’ed. not only do you get nothing for the damages, but the bank who gave you the mortgage can call it all back if the home problems prove to be structural (b/c that drastically reduces the resale value of the home). so you’ve got a huge mortgage to payback in basically zero time. that’s why i advise against buying a new home.
nyc’s been ok. i’ve had an apartment there the last 8 months. however, i’ve been traveling 6 days a week for work since then, so i’ve spent very little time in the city. rent is ridiculously high though. i have a pretty sweet place and my room overlooks the hudson river. i’m 4 blocks from times square.
Google Maps of my apartment building. I’m on the side of the tennis courts.
i may buy a house in the next year or two for investment purposes, but probably not to live in. i have no idea what city or state that would be in.
Yeah, it’s a mortgage broker I’m going to see.
Thanks for all the info you’ve posted, really appreciate it. Renting is starting to sound better all the time! :thumb2:
Thankfully I’m in no need of finding a place immediately, so I have time to shop around and work out the numbers. It’s exciting and scary all at once!
WE purchased a condo so that we would not have to shovel snow, rake leaves or mow a lawn. What we got was a great view, home ownership without the hassles AND condo fees, association fees and special assessments. Before all of those were added we would have been paying about half of what our house cost per year. However these fees brought us to paying almost equal and they seem to be increasing every year!
My point? If you purcahse a condo, be sure you know all of the associated fees and what the 5 year projection for them is.
My wife and I bought “100 Questions Every First Time Home Buyer Should Ask”
Definitely worth it. Talks about your credit, how to determine how much you can REALLY afford (not what the mortgage guy tells you you can afford), different things to consider when looking for a home,etc. We bought that when we were looking to move out of NYC. We ended up buying in Florida, right at the start of the real estate boom down here. That book has some really good info, and I’ve already loaned it out to several friends of mine looking for their first house.
Good point about the condo fees. I’ve wondered how much easier it would be to not have a yard and all of the house repairs/maintenance, etc, but then figure I’d probably be paying at least as much for a condo, plus all the fees.
I agree with you about renting. Even with a slow real estate market like in MI (I believe) the odds are that your house will sell for more than you paid for it, depending on how long you’re in it. Why bother paying rent to somebody else, when you could be paying for your own home?
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