Potential new home buyer needing some advice ?

[compguy786]

Guys,

Its been a while since i posted here, but i know that there are very like minded individuals on this site, so here i go.

I am 27 years old and looking to buy/build a new home. The target price im looking at is around $385000. I am saving to try to put down 20% of the house price to avoid PMI, lower interest over the years and what not.

Question is, Has anyone done it, and are there more advantages that i may not know of ? I am single and currently do not own a home. I am looking to buy for many reasons, but am also wondering the type of tax break i could possibly get.

Any ideas would be appreciated !

Thanks !

 

[RearAdmiral]

Here's one of the best sites I have used for finance questions specifically:

http://www.mtgprofessor.com/

Good luck with your home search.

 

[purbeast0]

Not sure if you are in the military or not, but Navy Federal offers conventional 30 year fixed mortgages without PMI no matter how little (0%) or how much you put down.

 

[Chaotic42]

I'm curious, what's driving you to buy a house?

 

[Zee]

you get some tax breaks but you spend more than you refund back.

in the end, market price decides whether you make or lose out at the end.

 

[BrokenVisage]

Is it just you? That's a lot of money for a house by your self, depending on the area I guess. Try to buy a new/recently built house, I kinda regret buying "used".

 

[Cheesemoo]

A word from the wise, ANYONE that ever does work on your house should be licensed, bonded and insured in your state. And ask them to show you the paperwork. I don't care that someone else can do something that works at the local plants etc. to save a buck... It is not worth the risk of liability.

 

[kaerflog]

Guys,



Question is, Has anyone done it, and are there more advantages that i may not know of ? I am single and currently do not own a home. I am looking to buy for many reasons, but am also wondering the type of tax break i could possibly get.

Any ideas would be appreciated !

Thanks !

It would help a lot if you tell us whats reasons are those ???

 

[Aikouka]

As a fellow single dude that bought a house, the first thing that raised a brow was the cost. Now, to be clear, that's because I have no idea what area you live in. Around here, $400k can buy you a pretty damn nice and very large house. (I'm talking 4000-5000 sq-ft or more.) Typically, your "starter home" is a smaller house -- especially when you live by yourself -- but in your area, $400k might be what you need for that.

One of the biggest things that burned me on my house was the home inspection. Honestly, my inspector flat out sucked. I've learned a lot since buying the house, and I'll be frank and admit that I never would've bought it if the inspector had mentioned some of the obvious faults. You might think, "if they're so obvious, why didn't you see them?" Yes, they're out in the open, but they're things that I didn't know about as a newbie. However, I'd expect a home inspector who came recommended to know about these things. I mean... who wouldn't complain about a vapor barrier being tattered and torn? It can't be a very good barrier if you can see the dirt!

So, now that my rant is over, try to find an inspector that isn't just some random guy that decided to get into the inspection business. If they used to be a general contractor, that usually works out pretty well.

 

[Imp]

One of the biggest things that burned me on my house was the home inspection. Honestly, my inspector flat out sucked. I've learned a lot since buying the house, and I'll be frank and admit that I never would've bought it if the inspector had mentioned some of the obvious faults. You might think, "if they're so obvious, why didn't you see them?" Yes, they're out in the open, but they're things that I didn't know about as a newbie. However, I'd expect a home inspector who came recommended to know about these things. I mean... who wouldn't complain about a vapor barrier being tattered and torn? It can't be a very good barrier if you can see the dirt!

I haven't used a home inspector before but I've heard similar complaints.

However, there's one thing I've come to realize a while ago: no single person can possibly know it all. You hire a plumber to do waterworks, an electrician to do wiring, HVAC guy for HVAC, architect to design the house, structural engineer to make sure it stays up, foundation engineer for the foundation, building science engineer to design the envelope and HVAC, etc.

How could one "home inspector" know it all considering that you need a decade of training and experience just to do one of those trades mentioned above?

 

[compguy786]

Is it just you? That's a lot of money for a house by your self, depending on the area I guess. Try to buy a new/recently built house, I kinda regret buying "used".

Yeah just me. It's going to be a newly built house in the Charlotte NC area. 3500+ sq ft, three car garage and all brick.

 

[compguy786]

As a fellow single dude that bought a house, the first thing that raised a brow was the cost. Now, to be clear, that's because I have no idea what area you live in. Around here, $400k can buy you a pretty damn nice and very large house. (I'm talking 4000-5000 sq-ft or more.) Typically, your "starter home" is a smaller house -- especially when you live by yourself -- but in your area, $400k might be what you need for that.

One of the biggest things that burned me on my house was the home inspection. Honestly, my inspector flat out sucked. I've learned a lot since buying the house, and I'll be frank and admit that I never would've bought it if the inspector had mentioned some of the obvious faults. You might think, "if they're so obvious, why didn't you see them?" Yes, they're out in the open, but they're things that I didn't know about as a newbie. However, I'd expect a home inspector who came recommended to know about these things. I mean... who wouldn't complain about a vapor barrier being tattered and torn? It can't be a very good barrier if you can see the dirt!

So, now that my rant is over, try to find an inspector that isn't just some random guy that decided to get into the inspection business. If they used to be a general contractor, that usually works out pretty well.

Yeah well im going new for that reason. I want everyone to be handled by the builder. Our custom.home we built we went through a lot of crap and that's why I'm not going that route. I have a strict budget. Im going more future proof as I doubt I'll be able to save money like this later down the road.

 

[Aikouka]

How could one "home inspector" know it all considering that you need a decade of training and experience just to do one of those trades mentioned above?

I agree that it's not easy to simply know everything. That's part of why I suggested not just finding someone who got into the inspection business but rather had experience in the field. For example, if you can find an inspector who used to be a general contractor, that usually works out pretty well. Although, I'm not going to rag on someone for not knowing the really advanced stuff, but I'd prefer if they had some good, general knowledge. To me, it seemed like these home inspectors are simply trained to look at very specific things and check them off their list.

The thing is... most of his comments were things that weren't a huge issue. For example, he brought up the dishwasher's drain line not being routed high enough to avoid wash back. Should that be fixed? Sure, but that's not going to make me not buy the house. However, if you bring up a potential issue with the floor, then I'm probably going to think twice.

Yeah well im going new for that reason. I want everyone to be handled by the builder. Our custom.home we built we went through a lot of crap and that's why I'm not going that route. I have a strict budget. Im going more future proof as I doubt I'll be able to save money like this later down the road.

Just to be clear, you should still have a house inspected regardless of whether it's new or not. There's absolutely no guarantee of the quality of workmanship on a day-to-day basis or overall, and I'm sure you'd rather have a third party verify that things were done correctly.

 

[Red Squirrel]

I bought my house at 23, and was best thing I did. Something great about having a real place to call home, and not someone else's place that you can't really make changes to or call your own. It's nice when it really is yours.

That said, make sure to get a mortgage preapproval, 385k is quite high up there especially if you don't have that much credit history. Me personally my max was 200k so I knew to go for cheaper, did not want to actually go for the max. And yeah get an inspector, but it helps to be a bit handy too as you can look for stuff yourself as you're looking at different houses. But don't let that, or a handy man replace getting an actual inspection. Older (but not super old) construction is actually better in some cases, but newer will usually be more efficient, better insulated, vapour barrier installers knew what they were doing etc... One issue with my house is that they skimped a lot on the proper seaming of the vapour barrier, and I pay for that in winter. Any walls that I've had to open there was not even any tape or acoustic sealant. In '65 vapour barrier was a new thing and most workers did not really know the purpose. Plans say to put it there, so they did. But not very well.

Getting a good realtor helps too, and does not really cost you much as a buyer (I can't recall if it even cost anything at all). They will take care of lot of the logistical stuff and it makes it easier to actually get a viewing, since you don't have to handle having to call individual sellers, the realtor calls you and basically says "wanna go look at houses, I got 5 we can go look at". Doing that on you're own will involve making all sorts of appointments with people etc and trying to work around people's schedules. I had a really good realtor myself and could tell he was not in it only for a quick sale, but wanted to make sure I would be happy with what I get. It was actually a pretty fun experience.

 

[compguy786]

I bought my house at 23, and was best thing I did. Something great about having a real place to call home, and not someone else's place that you can't really make changes to or call your own. It's nice when it really is yours.

That said, make sure to get a mortgage preapproval, 385k is quite high up there especially if you don't have that much credit history. Me personally my max was 200k so I knew to go for cheaper, did not want to actually go for the max. And yeah get an inspector, but it helps to be a bit handy too as you can look for stuff yourself as you're looking at different houses. But don't let that, or a handy man replace getting an actual inspection. Older (but not super old) construction is actually better in some cases, but newer will usually be more efficient, better insulated, vapour barrier installers knew what they were doing etc... One issue with my house is that they skimped a lot on the proper seaming of the vapour barrier, and I pay for that in winter. Any walls that I've had to open there was not even any tape or acoustic sealant. In '65 vapour barrier was a new thing and most workers did not really know the purpose. Plans say to put it there, so they did. But not very well.

Getting a good realtor helps too, and does not really cost you much as a buyer (I can't recall if it even cost anything at all). They will take care of lot of the logistical stuff and it makes it easier to actually get a viewing, since you don't have to handle having to call individual sellers, the realtor calls you and basically says "wanna go look at houses, I got 5 we can go look at". Doing that on you're own will involve making all sorts of appointments with people etc and trying to work around people's schedules. I had a really good realtor myself and could tell he was not in it only for a quick sale, but wanted to make sure I would be happy with what I get. It was actually a pretty fun experience.

Very cool ! Thanks for sharing your experience. At 27 i have enough credit history and also enough for a downpayment on that house. I highly doubt i will get issues going for it. Preapproval for sure ! Older construction is available, but its going at almost the same rate as new. Plus, none of them have 3 car garages. Efficiency is something that i want to take advantage of. Older insulation, wiring and piping and windows can lead to energy loss, so trying to avoid that as well.

Yeah i do look forward to owning something. I want to invest in something i can truly enjoy as well.

 

[Aikouka]

Getting a good realtor helps too, and does not really cost you much as a buyer (I can't recall if it even cost anything at all).

Typically, a portion of the proceeds will be earmarked for the realtors (both buying and selling) to split. If I remember correctly, it's usually 6% with each realtor getting 3%. So, the buyer usually pays nothing, and the seller doesn't pay upfront costs, but has to cut a portion of the sale to the realtor.

I do agree that it helps to have a good eye look over everything. I did have one of my friends who owns his own home take a look with me. I figured any homeowner would have run into things during their time, and would know about things to look out for. Well, it turns out that I invited the wrong friend! One of my other friends came over after I bought the house, and he looked around and pointed out a ton of small details from poorly painted/mortared corners to undersized sub-flooring (the sub-floor has a gap between it and the drywall, which is fairly visible based upon the carpet's rapid drop at the edge).

 

[lykaon78]

Yeah just me. It's going to be a newly built house in the Charlotte NC area. 3500+ sq ft, three car garage and all brick.

Have you thought about how much time you're going to spend cleaning, mowing, and just general maintenance? Unless marriage and kids is in the picture soon it seems like a lot of house for a single dude. 2400 sq ft is plenty for my wife, daughter, and myself.

Unless you believe that house will be $500k in 5 years and are thinking of it as an investment. You're much better off in your bachelor pad tucking that money away and getting out of any other debt you have.

 

[BurnItDwn]

3500+ sq feet ... yea, I wouldn't want to clean/maintain all that if it was just me.

Though 3500 sq feet you could have a kickass home theater, a nice home library, an excellent home office, and a big good kitchen and living room area for drunken parties and such ... Still would have room for a nice indoor pool too...

3 car garage ... depending on your toy collection, hobbies, and how rural of an area you are shopping, have you given any consideration to erecting a pole barn instead of or in addition to the Garage?

 

[NetWareHead]

The best way to make sure you don't get your pants pulled down on a house deal is to educate yourself as much as possible, surround yourself with people you trust who can advise you and not be afraid to bend some rules and get your hands dirty in pursuit of information . My last purchase, the home inspection took over 3 hours. I developed a nice rapport with my inspector, He is one of those guys who is really smart and likes to talk out what he is thinking as he goes throughout the house. I fed into it and asked his opinion on things I saw and we bounced ideas off of one another. The seller's agent was bored out of his mind following us through the house while we analyzed every nook and crannie, but that was his problem. He said it was the longest home inspection he ever participated in.

My home inspector also found a problem that was beyond his area of expertise: live knob and tube wiring that was illegally spliced into modern day romex (Not even in a junction box, just hanging and stapled into a basement floor joist and some electrical tape to hold it together ). The splice itself could have been upgraded to a safe junction box but I believed I was seeing just the tip of the iceberg.

Went to town hall and researched all construction permits pulled on the actual property and found nothing regarding electrical. Told the seller what I found and demanded a separate followup inspection with my electrician. Seller thought we were being excessive but I said I was willing to walk away from the deal. So we went through that entire house and found the knob and tube was all over the place, not just in that splice. The seller's agent had enough of me and didn't accompany us during this secondary inspection. To his client's disadvantage, we ended up removing nearly every switch and outlet wall plate and did other dismantling to see the entire picture of the wiring. Otherwise normally you are not permitted to do this on someone else's property. He concluded that we needed to rewire over 50% of the house to eliminate all the unsafe wiring and shoddy workmanship. Got the price of the home reduced by the estimate.

Home inspectors are very careful to word their contracts that absolve themselves of any responsibility or liability for problems. And for good reason. Many times you have issues that cannot be uncovered with a reasonable inspection (aka latent defect). Many issues can only be uncovered through a destructive testing and it is unreasonable that a seller will allow a buyer to destroy the property. Someone else in this thread posted that sheer volume of knowledge in so many areas of expertise an inspector must possess to give a thorough inspection and that as well amounts to an impossibility. Inspectors also wont go wading in insulation, crawl on their belly in a house crawl space etc... so that means you have to if you want that information you better be ready get dirty.

 

[Ns1]

395k around here will get you a 1k sqft 1 BR condo

 

[compguy786]

Have you thought about how much time you're going to spend cleaning, mowing, and just general maintenance? Unless marriage and kids is in the picture soon it seems like a lot of house for a single dude. 2400 sq ft is plenty for my wife, daughter, and myself.

Unless you believe that house will be $500k in 5 years and are thinking of it as an investment. You're much better off in your bachelor pad tucking that money away and getting out of any other debt you have.

So getting married/kids is in the picture real soon. I dont intend on moving away from this house for a very very long time. I dont have much debt outside of this (19k) and may get rid of most of it real soon. It is alot of house, but i wont be able to save as much as i have now when married with kids. The area is booming and so far this is the best bang for the buck ive seen, and has all the amenities i look for.

 

[compguy786]

3500+ sq feet ... yea, I wouldn't want to clean/maintain all that if it was just me.

Though 3500 sq feet you could have a kickass home theater, a nice home library, an excellent home office, and a big good kitchen and living room area for drunken parties and such ... Still would have room for a nice indoor pool too...

3 car garage ... depending on your toy collection, hobbies, and how rural of an area you are shopping, have you given any consideration to erecting a pole barn instead of or in addition to the Garage?

Im looking in the suburbs. Reason why i want a 3-car is due to expansion whenever it comes. I also may put in a lift as i do like to work on my cars. I currently have 2 (had 3 but sold one this week) and want to be able to park inside. The extra garage is 15k but also extends the bonus room above it quite a bit...so you get 2 birds with 1 stone type of deal. They are giving 5k worth of credit....but im going to try to squeeze more out.

Has anyone been able to negotiate on a brand new home build before ? Thats something i feel like is unheard of ?

 

[MrSquished]

395k around here will get you a 1k sqft 1 BR condo

Yeah in my market where I work as an agent, Jersey City, 400-450K will get you like 600 square feet for a cute 1BR condo in nice shape.

OP you can negotiate new construction for sure. I've seen it recently on a 6 unit 2-family development priced at 500-600K and a 20+ unit condo development priced from 620K to over a million

 

[thedarkwolf]

Biggest regret I have about buying my house 16 years ago is getting a 30 year loan instead of a 15. House would have been paid off by now and the payment wouldn't really have been much higher.

 

[purbeast0]

Biggest regret I have about buying my house 16 years ago is getting a 30 year loan instead of a 15. House would have been paid off by now and the payment wouldn't really have been much higher.

You do realize you could have paid it off in 15 years if you wanted to, even with a 30 year mortgage, right? You can pay more than the monthly payment that is your mortgage.