House Buying Time...

[Fingolfin269]

Imagine I know nothing about where to begin as far as buying a house. The following are the facts of my situation:

1) I am able to spend between $1000-$1200 / month on mortgage+insurance+taxes
2) I live in TN so don't look at that figure and chuckle.
3) I will have 0% to put down so I know that I will need to get a loan to cover the cost of the 20% to avoid additional mortgage insurance OR I will need to find some sort of first time buyer's loan.
4) I have no idea where to start the process of finding a house other than driving around and saying 'Wow, that one looks nice'.

I'm really scared about this. I'm single and will be dealing with all of this on my own. I'm afraid I'll end up screwing up what is probably the most important purchase a person will ever make. I'm also in a serious debate between house vs. condo. Both do have significant advantages/disadvantages.

ALSO, I do know that I would prefer finding an older house that is not in the current trend of a subdivision where your house will be one of three different house types. Woo!

Cliffs:
I think it's time to buy a house/condo and I'm really at a loss as to where to begin. How do I avoid getting screwed and how do I go about getting the best first time buyer's mortage I can get.

 

[mrrman]

You will have to see a lender 1st to get preapproved, after that you will have an idea what you can buy. If buying a used house and you are not familar with roofing,electrical,heating etc I would recommend a person to complete a home inspection subject to purchase. You dont want to buy someoen elses headaches. Thats a start I guess.

 

[EatSpam]

Steps:

1) Find a bank to prequalify you for a mortgage. They'll let you know about 0% down and stuff like that.
2) Find a realtor. There's good and bad. Ask friends, coworkers, etc. for recommendations. They'll show you houses/condos/trailers - whatever the style is in Tennessee.
3) Find a house. Your realtor will show you some. Otherwise, try http://www.realtor.com
4) Sign a purchase agreement. You'll probably have to do a few things - pay for a home inspection, radon check, etc. If you have a good realtor, they'll basically tell you what to do.
5) Then you close on the house. Sign a bunch of papers. Go into debt. Then you get keys.

Home buying is really simple, assuming you qualify for a mortgage and can find something you like.

 

[Fingolfin269]

I like the trailer idea. Thanks guys.

 

[thedarkwolf]

I went with an FHA loan and was able to go 0% down and actually walked out of closing with a check for around $350. My house payment is $380 a month btw. Its great not living near the coasts .

 

[IrocZman223]

I am in the process myself. First time homebuyer and I went with an FHA loan. I put very little down and went with a new home. The price was about $100,000 and the payment (pricipal and interest) will be about $591. I live in Indiana BTW.

 

[Fingolfin269]

I would love to find a house I like in that price range. But, that's the problem. House prices went insane in middle TN over the last few years.

 

[conjur]

Do NOT get an adjustable rate mortgage unless you can lock in within 12 months with no penalties.

Keep your total housing costs as low as possible.

New construction can appreciate more quickly than existing homes but the housing bubble is starting to burst.


Oh, and go to www.myfico.com and pull your credit for all three CRAs and check for problems.

 

[iamwiz82]

Get pre-approved first, start looking at houses, find one, make offer, sign life away, move in.

BTW, be sure to have any house you are serious about inspected.

 

[CrimsonChaos]

It sounds like you can afford a mortgage around $120,000 depending on the interest rate you are able to get. You may have to get an FHA loan as well.

The steps EatSpam laid out are on target. However, let me take this from a different angle. Here are the DO NOTS of home buying:

--------- FINANCING ---

1. Do NOT go with the first lender you find -- shop around.

2. Do NOT get a variable interest rate on your loan, unless you do not plan on staying at the house very long.

3. Do NOT get a loan that has a pre-payment penalty. Even though you'll struggle to make payments at first, as you begin making more money it will become very easy to start paying down the mortgage quicker - you don't want to be penalized for this.

4. Do NOT get a loan that has PMI. Get an 80/20 loan if you need in order to avoid this. (However, if you get an FHA loan, there is something called MIP (different than PMI) that is mandatory and won't be removed for 5 years).

5. Do NOT get one of those new-fangled front-loaded-interest loans. They're nothing but trouble.

--------- REALTOR ---

1. Do NOT settle on a realtor you are uncomfortable with or the first one you meet. You may even want to "interview" a few prospective realtors and pick one from there.

2. Do NOT be fooled by your realtors comments as you look at houses. Realtors have many tricks they use to persuade you to buy a house. If you don't buy, they don't get commission.

3. If you find a house you like, *** DO NOT *** use your realtor's inspector, engineer, or pretty much anyone that is associated with the realtor. It's a conflict of interest, and can only work against you.

4. Do NOT let your realtor make an easy buck. Ask them to pull the comp rates, to find out how long the house has been on the market, to find out if the house has had previous listings, and even to find out the builder of the house if it's a newer home.

5. Do NOT let your realtor take you to houses that you don't want to see. Be very specific in what you are looking for. For example, when we went looking for our house, our list looked like this:

External Cosmetics:
- Lots of "peaks" and protrusions (no flat or "square" designs).
- Clear view of the house (no big trees blocking view of it)
- Nice landscaping
- All-house front (No garage door showing on the front of house)
- All-brick or All-vinyl (no brick facade unless it blends nicely)

* Nice patio is a plus, but not a must (deck is OK too, but it must be VERY nice)
* Pool is OK but not really desired (if there is one, it must be in-ground).

Internal:
- Vaulted/raised ceilings (especially in living/family room)
- Fireplace
- At least 2 floors plus basement (no ranches or bi-levels).
- 2 to 3 Bathrooms (at least 1 large master bathroom)
- 4 to 5 Bedrooms (at least 1 large master bedroom)
- Newer build (but can be a little older if in good condition)
- Land size: 0.333 to 1.5 acres
- Neutral color scheme

* Loft is a plus, but not a must
* Library a plus, but not a must

Misc:
- Cost: Between $250,000 to $350,000.
- Cost ratio: Less than $130 per square foot of house.
- Taxes: Less than $2,500 per half.
- Spacious environment (not too close to neighbors).
- Should be about 30 minutes to 45 minutes from Downtown (between 20 and 40 miles).

6. Unless you trust your realtor implicitly, do NOT sign a contract without having your own realtor attorney review it first -- not even a bid on a house. If you aren't going to have an attorney look at it, AT LEAST put an "attorney rider" on the contract that says "Contract is subject to approval by buyer's attorney". This might put a seed in your realtor's head and hopefully make them less inclined to screw with you.

--------- HOUSE-HUNTING ---

1. Do NOT go out only one or two times. I'd recommend looking through at least 20 houses, even if you think you found one you like.

2. Do NOT forget to take notes and/or pictures. You'd be surprised how quickly the houses you're viewing begin to blend together. Without proper documentation and pictures, it's easy to forget what you liked or didn't like about a house.

3. Do NOT neglect to take the neighborhood into consideration. As they always say, location location location.

4. Do NOT overlook foundation problems. One of the first things I look for in any house is the basement. Numerous cracks, or stair-cracks, could be indications of serious foundation issues. If you are seriously considering a house with these types of cracks, have a reputable structural engineer look at it.

5. Do NOT buy a house without viewing it at least twice, in addition to when you have it inspected. You'd be surprised at what you may miss (positive or negative) the first time around.

6. Do NOT buy a house simply because you are tired of looking. If you have gone through numerous houses and haven't found what you want, maybe the timing just isn't right. It might be time to put aside the idea of a house until next year.

---

Hope these help. I know it's an intimidating process, but if you use common sense and don't let people push you around, you'll be fine. Remember, the realtor is not your "friend" -- they are just a tool you use to obtain what YOU want. Don't let them make you think any different.

 

[thedarkwolf]

I kept a three ring binder with a sheet of paper at the front listing every MLS number of houses I looked at and a print out of the house. On the print out I would right down what I didn't like about it in order to keep things fresh. I must have done drive bys of 200 houses and walked through 40 or 50 though so things started bluring together. I did most of the house hunting myself and would just call up my realtor if the house seemed nice after the driveby. She kept trying to show me houses that just didn't fit my needs and the house I ended up buying she didn't like .

 

[SearchMaster]

Originally posted by: thedarkwolf
I kept a three ring binder with a sheet of paper at the front listing every MLS number of houses I looked at and a print out of the house. On the print out I would right down what I didn't like about it in order to keep things fresh. I must have done drive bys of 200 houses and walked through 40 or 50 though so things started bluring together. I did most of the house hunting myself and would just call up my realtor if the house seemed nice after the driveby. She kept trying to show me houses that just didn't fit my needs and the house I ended up buying she didn't like .

To go one better, use a video camera to really record details about each house. Comment on what you like and don't like as you go through rooms. This will help keep things straight because, like he said, things will start to blur.

But what do I know - I bought and still live in the first house I looked at (and instantly jumped into $65K equity) .

 

[spaceman]

My fiancee and I are closing on a house April 3rd.
From my own experience, finding a house is a pain in the balls..unless of course you have unlimited funds.
a couple things to keep in mind.
1.Lowball
2.Buyers Agents IMO are worthless.DIY and agree to nothing.
3.Self Medicate frequently

 

[Kelemvor]

And most importantly, ALWAYS, ALWAYS, ALWAYS get the home checked over by a certified Home Inspector before buying it. Most offers can be written with a contingency that the home inspector finds nothing wrong with it.

Ever see the show on HGTV where the idiots buy the house because it "looks good" to them... then they bring in the home inspector who finds $20,000+ of repairs that have to be done before the house falls down... Don't get sucked into that.

I know it's different in other parts of the country but it's pretty much unheard of here in SE WI to have an offer on a house that doesn't have the Home Inspection contingency in it.

And use the internet. It's by far the easiest way to at least find out about houses you might like and then you can go check them out. If you use a REALTOR, get a referrl from a friend, co-worker, etc. There are lots of great Realtors out there, but there are also a lot of hacks that don't care about you or your house and just want to get paid.

 

[iamwiz82]

One more thing, if you get buyers agent, negotiate the price. We paid only 1.7% total realtor fees for our house. Completely worth it at that price.