Buying a house in 4-5 months, Help me avoid mistakes.

[rh71]

^ I agree realtors sometimes get a bad rap because they are thought to have conflicting interests but when it comes down to the actual commission they receive - the one they have to split 50/50 with their company after splitting it 50/50 with the other agent, it's not all that much of a $ difference so they would rather show that they can be trusted and helpful. They'd rather get the referrals down the road and get repeat business.

As for wifi advice since you brought it up - I'm not quite sure where I stand on the wireless router placement in the house. I have an office at one end of the house and so my dual band router is placed there. But the signal barely reaches the other end of the house. I've tried a repeater but the speed is cut in half to begin with. If you place it in the middle of your house but you have a lot of walls, it can drop the signal strength significantly also. I'm lucky the living room Roku even gets a signal but sometimes it buffers a lot which is frustrating. Someone also mentioned placing the router up in the attic and I see many people even do the basement - not sure why people would think both work.

 

[RockinZ28]

I closed on my first house on Monday. Think the hardest part was finding a house that met my requirements, and my wife's. Sounds like you have yours picked out already, so at least you don't have to worry about that.

Then shopping the best rate from lenders, god that was a pita. In the end though, everything went pretty smooth. Did drop $4.3k on appliances immediately after closing though . Still need to drop another couple on a riding mower. And then a whole shitload of other stuff lol.

 

[mmntech]

Marking this thread. I've got enough of a down payment saved up for a $300,000 home (putting 20% down). Ideally I want a small town house in a mature neighbourhood. Freehold preferably but they've really shot up in price over the last couple of years. It's rare to see them under $300k. Utilities are also skyrocketing. Natural gas just had a big jump. So I'll probably end up in a condo at this point. Shooting for two bedroom if that's the case.

 

[TheAdvocate]

1. Do NOT use the inspector that the realtor recommends, unless you've received recommendations for that inspector from at least 2-3 other, independent sources (friends, etc.). The one the realtor recommends earns their bread and butter from referrals like that, so they're (subconsciously) more likely to overlook nagging little details (which is in the realtor's favor, NOT yours). I noticed this, within the first year of owning my house, when I spotted things that should have been obvious to the inspector.

2. Make sure you thoroughly check out the neighborhood, and the house. By this, I mean go through the neighborhood (driving AND on foot), various times of the day & night, various days of the week. When I bought my house, I failed to check out the neighborhood AFTER work, thus failed to notice my neighbor's lovely pair of German Shepherds, who thought the ENTIRE neighborhood was theirs, and barked at anyone within sight......meaning, I couldn't enjoy my back yard, if they were outside, unless I was willing to wear earplugs. :thumbsdown:

Also, talk to folks you might meet in the neighborhood, and ask them about the house. If they look at you as a positive addition to the neighborhood, they're more likely to let you know about little things the realtor failed to mention, or that the owner failed to tell the realtor. Basically, how the owner has treated the house and property, during their tenure.

3. Finally, as the present owner if they can provide you an average billing for utilities, throughout the year. Most of the time, the utility bills have that information, so you can get a feel for what the water/sewer, garbage pickup, natural gas &/or electricity will run you, BEFORE you move in. Will help you to budget, that's for sure!

Good advice here. Also, when house shopping, shop neighborhoods, not houses. As a first time buyer, resale value is key, both in case you sell, and should you choose to refinance down the road.

 

[MagnusTheBrewer]

Learn about the systems of the house (hvac, plumbing, electrical, roofing, drainage etc.). There's always more to learn and using professionals to get info gets expensive quick.

 

[John Connor]

Are you going to lock in a fixed rate? The intrest is really good and would be dumb not to.

 

[jpiniero]

Good advice here. Also, when house shopping, shop neighborhoods, not houses. As a first time buyer, resale value is key, both in case you sell, and should you choose to refinance down the road.

I think anyone buying now has to realize that refinancing isn't going to happen. Mortgage rates this time next year will be 5-6% and while they probally won't go much higher they also won't be in the 3's again anytime soon.

 

[MrSquished]

^ I agree realtors sometimes get a bad rap because they are thought to have conflicting interests but when it comes down to the actual commission they receive - the one they have to split 50/50 with their company after splitting it 50/50 with the other agent, it's not all that much of a $ difference so they would rather show that they can be trusted and helpful. They'd rather get the referrals down the road and get repeat business.

yes that's been my point so thanks for posting that. as far as commission goes most new agents start at a 50/50 split with their broker at most larger firms - i negotiated hard, used key parts of my other professional careers and how they give me a leg up and started at 61/39. Also at any agency as you pass certain $$$ milestones of transactions closed, you start getting a larger percentage of the commission. i know one major firm has 14 steps to this. like at 100k transactions you brokered, you go to 52% at 200K 54% (just making these numbers up)

as far as commission splits between buyer and seller agents it's not always 50/50. around here we can often get 6% commission from the seller - so the seller's agent usually goes for 3.5% and the buyer's agent 2.5%. If it's a 5% commission from the sale, then it's usually a split evenly. sucks because the seller's agent usually does more work.

so let's take a situation. let's say i sell your 500,00K home and we agreed on a 6% commission. so that's $30,000. now as your seller agent I get 3.5% of the 500K selling price, so that's $17,500 I now bring to my broker. there is usallly a transaction fee of 6% that also goes to the broker - after that we are at $16,500 - since i negotiated a 61% share of that, I get $10,036.

with a home inspector that cost's you $300-500 say, what kind of little kickback would i get? $50-100? And I am throwing away any potential referrals from you the seller and your network if the home inspector sucks. I could be losing a bunch of $10,000 commission checks over the next couple years. That's nuts. What I want is actually the best most ethical home inspector I can find you, cause I want them to find anything they need to find.

Personally the agents I work with don't do kickback stuff simply because it's just wrong. I don't know of any who do, but believe it or not - most of us are actually ethical agents period. Some agents aren'y very good agents, but not because of ethics, they just aren't good at doing the responsibilities of an agent such as marketing your home, or finding you the right listings, or being dis-organized and not doing things properly. We get fined for tons of infractions as well.

But if you do the math I said above, even if you WERE un-ethical, if you just had a basic grasp of numbers, why would you throw away tens of thousands of potential dollars down the road for a 100 bucks now? the only potential place i could see kickbacks making big bucks is if you have a deal in place with a mortgage lender. that would get you into a shit-ton of legal trouble, but i wouldn't doubt there are a FEW bad apples that do this. but people in this thread have been talking about small potatoes home inspection kickbacks - just makes no sense.

As I tell all my clients, I am not just trying to close this deal with you right now for the commission, I am trying to become your go-to realtor and get your referrals down the road. It's far more than this one transaction to us realtors. It's our future.

It's how all the best agents in my office start making tons of money. I know, I've asked.

 

[MagnusTheBrewer]

PixelSquish you are absolutely right in taking the long view. However, look at the business climate. You have to admit that you and others making business decisions based on long term profitability are in the vast minority. The common practice in real estate and every other business out there is to "phone it in " and do the minimum to get through the day. It isn't that there's a lot of people scamming, it's that there's a shit ton of people flat out not doing their job. That is why the op needs to be careful.

 

[MongGrel]

Are you going to lock in a fixed rate? The intrest is really good and would be dumb not to.

+1

 

[Sho'Nuff]

Don't borrow more than you can afford
Don't borrow more than you can afford
Don't borrow more than you can afford
Don't borrow more than you can afford
Don't borrow more than you can afford
Don't borrow more than you can afford
Don't borrow more than you can afford

Note - what you can afford should be based on your net pay, not your gross pay. Payment (PITI) should be no more than 25% net income IMO. <20% if you can manage it.

 

[DigDog]

save more. 30% is good when you put down 15%.

 

[Legios]

When we had to buy a new fridge, we went to a scratch and dent store and bought a unit where the damage was covered on the side by a wall. Got the discount and couldnt tell it was damaged.

 

[Virge_]

I would recommend hitting up Craigslist etc for some cheap temporary furniture to both help cushion the financial expenses and also give you a feel for what you actually want. Ikea also has some really cheap stuff that is plenty functional in short term.

Do you want bedbugs? Because this is how you get bedbugs.

 

[Rudee]

Stake out the potential house you are thinking about buying for a couple of days to see what the neighbors are like. Shitty neighbors can make a world of difference.

 

[poofyhairguy]

Don't forget to factor in "The Thousand Dollar Rule" when you decide how much mortgage you will carry.

Something breaks that you don't personally know how to fix??? Thousand bucks...

When I bought a home I just got a home warranty instead to mitigate that damage and create a more solid budget.