Househunting
June 24th, 2012 at 8:03:02 AM
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We're going out looking at houses today.
Any advice on what to look for when looking to buy a house, or real estate tips in general? Thanks!
Any advice on what to look for when looking to buy a house, or real estate tips in general? Thanks!
June 24th, 2012 at 8:13:01 AM
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Quote: FinsRuleWe're going out looking at houses today.
Any advice on what to look for when looking to buy a house, or real estate tips in general? Thanks!
Cul De Sac beats busy street.
If you want a pool, don't have hot tub attached. Separate hot tub.
Buy it because you want to live there, not because it might be a good investment.
One more bedroom than you think you need.
One size larger garage than you think you need.
Minimize commute... you will make a trip to work likely 10 times a week for many years, that drive is wasted time.
June 24th, 2012 at 8:25:35 AM
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Ask how old the roof is.
Check the foundation for cracks or signs of water leaks.
Flush toilets and turn on faucets to check water pressure.
Ask how much the taxes are.
If in a subdivision, ask about covenants.
Most importantly, look past the decorations and concentrate on the structure.
Check the foundation for cracks or signs of water leaks.
Flush toilets and turn on faucets to check water pressure.
Ask how much the taxes are.
If in a subdivision, ask about covenants.
Most importantly, look past the decorations and concentrate on the structure.
June 24th, 2012 at 9:08:25 AM
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Buy low because the days of selling in 10 years at
a profit are long gone.
a profit are long gone.
"It's not called gambling if the math is on your side."
June 24th, 2012 at 10:28:19 AM
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Insist on a home inspection and do not sign a contract with a buying agent.
Whenever I was house hunting I always insisted on a copy of the multi-list booking, did drive bys, then told my agent which ones I wanted to see.
Real estate agents always think the perfect house for you is one they listed. No commission to split.
Perhaps a UK resident will see think, but I believe commission in UK is 1/2 to 1 percent, not the 6% here.
In today's market you should be able to get a decorating bonus back from a motivated seller. Never hurts to ask !
Whenever I was house hunting I always insisted on a copy of the multi-list booking, did drive bys, then told my agent which ones I wanted to see.
Real estate agents always think the perfect house for you is one they listed. No commission to split.
Perhaps a UK resident will see think, but I believe commission in UK is 1/2 to 1 percent, not the 6% here.
In today's market you should be able to get a decorating bonus back from a motivated seller. Never hurts to ask !
June 25th, 2012 at 8:02:26 AM
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It's better to have the worst house in a good neighborhood than the nicest house in a bad neighborhood. Which is just another way of saying "location, location, location"...
Each of us is entitled to his own opinion, but not to his own facts.
Preparing for a fight about your bad decision is not as smart as making a good decision.
June 25th, 2012 at 8:28:49 AM
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Buy an easily affordable home. Do not take on a mortgage that is more than twice your household annual income.
June 25th, 2012 at 9:11:36 AM
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1. You might have to sign a contract with an agent to work with them. These can be as short as one day. Make it short until you find the agent you like. The home I am buying next week took 3 agents unil I liked one.
2. You have to learn what you like. This may take 10 or more homes to start to get a feel. If you have a good agent they will learn what you like even if you cannot describe it. Trust them to at least show you things, they may be showing you one to get a feel for all of this.
3. DO NOT OVERBUY. Have a budget, stick to it. Like a new car, going up one level not only increases the price but also the gas, insurance, etc. A home is the same but bigger bounce for every extra square foot or feature.
4. Don't chase the ads with the lowest mortgage cost. Know your credit first. Get a good agent. Many people pay more upfront to get the lower rate. Nobody gets the lowest rate advertised. Rates can and do change more than one time in a day.
5. Look at how "kept" the neighborhood is. Are the lawns nice? Do people plant flowers? Or is there disrepair?
6. A personal one of mine--Avoid a single-family-detached in an HOA like you avoid 6:5 Blackjack. Nothing but toruble.
7. Do not be rushed. Closings always seem to get delayed. Keep time on your side. Having flexibility from where you are leaving helps.
8. Be realistic. You are not on HGTV with a total-hottie showing you total-swanky homes.
9. Finally, if you do not like easily changable things as carperts or paint remember this--IT IS NOT WHAT YOU SEE, IT IS WHAT IT CAN BE! Use the lack of interest in the ugly place to get a good price.
Good Luck
2. You have to learn what you like. This may take 10 or more homes to start to get a feel. If you have a good agent they will learn what you like even if you cannot describe it. Trust them to at least show you things, they may be showing you one to get a feel for all of this.
3. DO NOT OVERBUY. Have a budget, stick to it. Like a new car, going up one level not only increases the price but also the gas, insurance, etc. A home is the same but bigger bounce for every extra square foot or feature.
4. Don't chase the ads with the lowest mortgage cost. Know your credit first. Get a good agent. Many people pay more upfront to get the lower rate. Nobody gets the lowest rate advertised. Rates can and do change more than one time in a day.
5. Look at how "kept" the neighborhood is. Are the lawns nice? Do people plant flowers? Or is there disrepair?
6. A personal one of mine--Avoid a single-family-detached in an HOA like you avoid 6:5 Blackjack. Nothing but toruble.
7. Do not be rushed. Closings always seem to get delayed. Keep time on your side. Having flexibility from where you are leaving helps.
8. Be realistic. You are not on HGTV with a total-hottie showing you total-swanky homes.
9. Finally, if you do not like easily changable things as carperts or paint remember this--IT IS NOT WHAT YOU SEE, IT IS WHAT IT CAN BE! Use the lack of interest in the ugly place to get a good price.
Good Luck
All animals are equal, but some are more equal than others
June 25th, 2012 at 9:27:45 AM
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Whats HOA stand for?
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
June 25th, 2012 at 9:29:22 AM
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Quote: thecesspitWhats HOA stand for?
Homeowners Association.
A flute with no holes is not a flute, a donut with no holes is a danish
June 25th, 2012 at 9:47:07 AM
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1. You might have to sign a contract with an agent to work with them. These can be as short as one day. Make it short until you find the agent you like. The home I am buying next week took 3 agents unil I liked one.
Great advice. Watch the shocked expression on an agent's face when you say you will get back to him, after you are done with your interviews.
So many people sign for 6 months with a relative or somebody at their church, bridge club, etc. DUMB
Great advice. Watch the shocked expression on an agent's face when you say you will get back to him, after you are done with your interviews.
So many people sign for 6 months with a relative or somebody at their church, bridge club, etc. DUMB
June 25th, 2012 at 9:54:33 AM
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Quote: Gabes22Homeowners Association.
Cheers, I understand the advice now.
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
June 25th, 2012 at 10:33:21 AM
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So we have it narrowed down to 3 houses. All are in Du Page County, a western suburb of Chicago. I like one, my wife likes a different one, and the 3rd one is the most affordable and has the most potential to be the best investment, but isn't as move-in ready as the other 2. The location in terms of commutes are pretty much all equal. Schools are equal. None of them are "easily affordable"
Based on the advice I received on here, the benefits for the one I like are:
Property taxes are lower than the one my wife likes
4 bedrooms instead of 3
The benefits for my wife's choice are:
Cul-de-sac location & close to a park
It'll make my wife happy
If I had to guess what will happen, it'll be that we'll act too slow and get none of the three. But I'll keep everyone updated.
Based on the advice I received on here, the benefits for the one I like are:
Property taxes are lower than the one my wife likes
4 bedrooms instead of 3
The benefits for my wife's choice are:
Cul-de-sac location & close to a park
It'll make my wife happy
If I had to guess what will happen, it'll be that we'll act too slow and get none of the three. But I'll keep everyone updated.
June 25th, 2012 at 11:03:00 AM
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DuPage County is probably the nicest county in the ChicagoLand area. You really don't have to worry about the school you are sending your kids to there. You really don't have to worry about crime either. Not to say there aren't nice areas in Cook, Lake, Will, Kane and McHenry, but I think DuPage offers the highest quality of life for the buck.
A flute with no holes is not a flute, a donut with no holes is a danish
June 25th, 2012 at 11:20:55 AM
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Quote:Cul-de-sac location & close to a park
It'll make my wife happy
Happy wife, happy life. :)
I've never heard of signing a contract with a real estate agent just to go looking at houses. To sell one, yes, but never just to go driving around.
FYI, there is an agreement among agents that when a client visits a property for the first time with one agent and then decides to use a different agent when they sign the contract to buy that property, the original agent is the agent of record and gets the selling part of the commission, so changing agents midstream to screw someone out of a commission won't necessarily work.
June 25th, 2012 at 11:38:01 AM
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Cul-de-sac is French for more grass to cut and water with an irregular shaped lawn.
I heart Crystal Math.
June 25th, 2012 at 11:45:11 AM
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Quote: tsmithQuote:Cul-de-sac location & close to a park
It'll make my wife happy
Happy wife, happy life. :)
I've never heard of signing a contract with a real estate agent just to go looking at houses. To sell one, yes, but never just to go driving around.
.
Depends on the local law and custom.
All animals are equal, but some are more equal than others
June 25th, 2012 at 11:49:12 AM
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Don't trust zillow zestimates for how much a house is worth. Rely more on your appraiser's value, and consider getting a second opinion.
June 25th, 2012 at 12:40:09 PM
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Quote: CrystalMathCul-de-sac is French for more grass to cut and water with an irregular shaped lawn.
Unless most of the back yard is a marsh with river access for kayakers!
I love the cul-de-sac because I have a squillion kids. Cars don't come by here unless they belong here. There's only one family that needs to pass our house, and they're retirees who spend winters in Florida.
I vote for making the wife happy.
Each of us is entitled to his own opinion, but not to his own facts.
Preparing for a fight about your bad decision is not as smart as making a good decision.
June 25th, 2012 at 1:19:13 PM
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If you get pre-approved for a mortgage (and you should), don't assume that you can afford a house priced at the maximum of the pre-approval amount.
When my wife & I purchased our house 14 years ago, we were pre-approved for $350,000. We purchases a house at $187,000. It was a struggle paying the mortgage and other bills for the first few years.
When my wife & I purchased our house 14 years ago, we were pre-approved for $350,000. We purchases a house at $187,000. It was a struggle paying the mortgage and other bills for the first few years.
I invented a few casino games. Info:
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Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
June 25th, 2012 at 1:46:04 PM
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Quote: DJTeddyBearIf you get pre-approved for a mortgage (and you should), don't assume that you can afford a house priced at the maximum of the pre-approval amount.
When my wife & I purchased our house 14 years ago, we were pre-approved for $350,000. We purchases a house at $187,000. It was a struggle paying the mortgage and other bills for the first few years.
When I recently bought my house, my offer was lower than the asking price and it was bank owned (it was a good deal already). My lender sent me a new pre-approval letter that showed only a little over the offer. He said that the bank is much less likely to counter offer if they think that you are at your limit. It worked, and we got a great deal for the neighborhood. It's probably the same with any seller. If they know you are approved for more, they will be less willing to bargain.
I heart Crystal Math.
June 25th, 2012 at 1:54:10 PM
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" I've never heard of signing a contract with a real estate agent just to go looking at houses. To sell one, yes, but never just to go driving around. "
They are called buyer's agents and will charge 1 to 2 % or more and lock a chump in for 3 to 6 months.
They are called buyer's agents and will charge 1 to 2 % or more and lock a chump in for 3 to 6 months.
June 25th, 2012 at 7:20:03 PM
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My 2 cents, from experience:
It might be better to spend 20k more than you
were thinking about than to get a good deal on a house
that you like, but over time you sink 40k into
improvements. Sortof like what "a guy I know"
did.
See: Happy Wife, Happy Life.
It might be better to spend 20k more than you
were thinking about than to get a good deal on a house
that you like, but over time you sink 40k into
improvements. Sortof like what "a guy I know"
did.
See: Happy Wife, Happy Life.
There's emptiness behind their eyes
There's dust in all their hearts
They just want to steal us all and take us all apart
June 25th, 2012 at 9:47:14 PM
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Bah on that happy wife happy life bs. She don't pay the bills here...lol
Never have a mortgage that is more than 25% of your take home pay. A 15 year, fixed rare mortgage that is. That number is what most people can "easily afford". 30 year mortgages are for suckers or fools. As well as adjustable rates, or balloon mortgages. Just plain silly.
Never have a mortgage that is more than 25% of your take home pay. A 15 year, fixed rare mortgage that is. That number is what most people can "easily afford". 30 year mortgages are for suckers or fools. As well as adjustable rates, or balloon mortgages. Just plain silly.
Before you diagnose yourself with depression or low self-esteem, first make sure that you are not, in fact, just surrounded by assholes." ~ William Gibson
June 25th, 2012 at 10:07:16 PM
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Quote: JohnnyQ
See: Happy Wife, Happy Life.
Yeah, thats an hour to hour deal. It gets old. Constantly
appeasing your wife so she won't act like she's your
mother loses it glow over time..
"It's not called gambling if the math is on your side."
June 25th, 2012 at 10:33:48 PM
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Quote: dlevinelawDon't trust zillow zestimates for how much a house is worth. Rely more on your appraiser's value, and consider getting a second opinion.
Here is a dirty little secret there--if zillow shows an increasing value it may just be the local county reassessed the place. My parents didn't like their reassessment and I did some research. Zillow showed the increase TO THE DOLLAR of the reassessment.
If you have time and your county is online you can research comp sales on the street and neighborhood. Be aware this can take time. Allegheny County, where Pittsburgh is, has a pretty good system. I am a trained abstractor. And it still can take me half an afternoon to get a value I am confident enough to use to make a bid or in that case an assessment appeal.
All animals are equal, but some are more equal than others
June 25th, 2012 at 11:51:15 PM
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Quote: FinsRuleIt'll make my wife happy. If I had to guess what will happen, it'll be that we'll act too slow and get none of the three. But I'll keep everyone updated.
Well you can't really over-ride your wife, the best you can do is to make her think her mind has been changed. The fourth bedroom is very valuable since you can always make it a den, but it is easier to sell. Rich people can build a 10,000 sq ft house with 2 bedrooms, but for most ordinary people resale is very valuable.
A little "sweat equity" can be the easiest money you ever made. If the house just needs some paint you are being well paid for your work.
Never have the nicest house on the street. You are much better off with the crappiest house on the street where your sweat will provide the greatest return.
Always remember that the REALTOR represents the homeowner, not you. It is very important to have an independent assessor inspect the house. If the REALTOR is pressuring you to up your offer, remember that they don't work for you.
Do a lot of research on comparable houses on your own. Use Zillow and/or the county tax records. I just spoke to someone who was being pressured by a REALTOR to up his bid since the house had just come on the market a few weeks before he made his offer. I found out that the owner had been trying to sell for two years with another agency.
Find out what the homeowner paid for the house. Theoretically, that should be irrelevant, but in reality it often has huge emotional impact on the seller. Someone who bought 5 years ago, often doesn't want to sell for less than what they paid.
Quote: avargovBah on that happy wife happy life bs. She don't pay the bills here...lol
Never have a mortgage that is more than 25% of your take home pay. A 15 year, fixed rare mortgage that is. That number is what most people can "easily afford". 30 year mortgages are for suckers or fools. As well as adjustable rates, or balloon mortgages. Just plain silly.
This advice is easily followed if you are nuclear engineer working on a power plant in a small rural community, and you can find a decent house for twice your annual salary. It is more practical to get a 30 year mortgage, and add an extra $200 per month to the principal. If you change your mind you can always stop paying the extra amount.
June 26th, 2012 at 5:42:02 AM
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Quote: pacomartinThis advice is easily followed if you are nuclear engineer working on a power plant in a small rural community, and you can find a decent house for twice your annual salary. It is more practical to get a 30 year mortgage, and add an extra $200 per month to the principal. If you change your mind you can always stop paying the extra amount.
Paco, I generally agree with your posts. As a matter of fact, at this risk of sounding like a brown-noser, I enjoy reading them because of their accuracy. I have to respectfully disagree with you on this one. The little formula I outlined works everywhere, if your mortgage is over 25% of your take home pay, on a 15 year, fixed rate mortgage, then you cannot afford the home. Of course, you have to remove yourself from the paradigm that you have to have a car payment, 3.2 credit cards with a balance, et cetera.
Most people, when given the opportunity to pay the extra $200 bucks per month, just won't do it. Something else comes up, you know, the emergency dinner out on Friday night, the new shoes they have been dying for, or any other thing that people want. Because they know they only "have" to pay the 30 year term payment. I am not saying that the intention to pay the extra wasn't there, only that it slips away. Kinda like credit cards, they want to pay it off every month, sadly however, most carry a balance.
In conclusion, if you need to make a larger down payment to get the mortgage of the 25% or less range then do it and wait to buy. Or perhaps, as I said, you can't afford that house. And wasn't that a huge factor in the current "downturn", people in mortgages that they couldn't afford to begin with? Instant gratification is for children, adults "should" have a plan and stick to it, even if they have to wait a while before purchasing.....anything.
Sorry for the ramble, but I can go all day on the perils of debt of any kind. Risk is seldom factored in. Now, back to my cave! (which is all I could afford at less than 25% of my take home pay ;-)
Before you diagnose yourself with depression or low self-esteem, first make sure that you are not, in fact, just surrounded by assholes." ~ William Gibson
June 26th, 2012 at 7:10:14 AM
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Get the 30-year and have the extra principle amount be an automatic bill payment so you forget about that money. Then you won't be tempted to use the money for something else unless it's a TRUE emergency. I have a 15-year and two 30-year mortgages, and while the 15-year will be paid off in 5 years, the payment is almost double what we pay on a 30-year for a home that cost about the same initially.
Interest rates are just so low, it makes sense to lock in for the longer time. If you have to refinance later, there's no guarantee rates won't be back up around 8%.
Interest rates are just so low, it makes sense to lock in for the longer time. If you have to refinance later, there's no guarantee rates won't be back up around 8%.
Each of us is entitled to his own opinion, but not to his own facts.
Preparing for a fight about your bad decision is not as smart as making a good decision.
June 26th, 2012 at 7:10:29 AM
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I don't know how all you people have so much money.
The house at a 30 year mortgage will end up being about 30% of our take home pay. Car payments - 8%. Student loans - 21%. Daycare - 8%. Utilities - 6%. Gas/Car Insurance - 7%. That leaves 20% to pay for food, and anything else that comes up. So, we'd be living paycheck to paycheck, just like we are now.
I guess the good news is that we only have 5K in credit card debt...
The other good news is that the hope is that our income will only go up, while all the payments stay relatively flat.
The house at a 30 year mortgage will end up being about 30% of our take home pay. Car payments - 8%. Student loans - 21%. Daycare - 8%. Utilities - 6%. Gas/Car Insurance - 7%. That leaves 20% to pay for food, and anything else that comes up. So, we'd be living paycheck to paycheck, just like we are now.
I guess the good news is that we only have 5K in credit card debt...
The other good news is that the hope is that our income will only go up, while all the payments stay relatively flat.
June 26th, 2012 at 7:18:05 AM
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Quote: FinsRuleI don't know how all you people have so much money.
The house at a 30 year mortgage will end up being about 30% of our take home pay. Car payments - 8%. Student loans - 21%. Daycare - 8%. Utilities - 6%. Gas/Car Insurance - 7%. That leaves 20% to pay for food, and anything else that comes up. So, we'd be living paycheck to paycheck, just like we are now.
I guess the good news is that we only have 5K in credit card debt...
The other good news is that the hope is that our income will only go up, while all the payments stay relatively flat.
We had so much money because we bought a house that was half as much as we could afford! We used the extra money to buy rental properties for income.
Each of us is entitled to his own opinion, but not to his own facts.
Preparing for a fight about your bad decision is not as smart as making a good decision.
June 26th, 2012 at 7:22:02 AM
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Take it from a younger, financially responsible person: you can take on a bigger mortgage with a longer term, as long as you have a well prepared budget (I use Quicken and track my spending somewhat religiously). Older or more cautious people will tell you to take a smaller mortgage / shorter term mortgage, and pay it off as soon as you can. I swear some of them forget that interest rates aren't 20+% any more.
Interest rates are rock bottom, and in the US will stay that way for years. You should be selfish in this regard and borrow as much as you can reasonably afford, and pay off as little of your mortgage until ALL credit card and ALL student loans are paid off. I'm SURE the interest rates there are higher than any mortgage. If the bank lets you, consolidate your loans into an even bigger mortgage.
Living 'paycheck to paycheck' isn't so bad if you have a line of credit to buffer the cash flow fluctuations. Don't use a credit card to manage that, get an unsecured LOC if you have to. I have no savings, but I do have some stocks I pretend are savings. The rest of my assets are my house, financed by a large mortgage. For my age, I am proud of my net worth. I have a solid credit rating which allows me to maintain extremely low interest LOCs. Essentially, I am living on my future earnings, and loving it.
My biggest secret: Don't buy CRAP. Stay away from department stores and only buy things you need. All you have to do is ENSURE your monthly earnings exceed your actual spending, and your debt-load will slowly drop. Cut out the fat and live with what you have in a nice house, and you'll do great.
Interest rates are rock bottom, and in the US will stay that way for years. You should be selfish in this regard and borrow as much as you can reasonably afford, and pay off as little of your mortgage until ALL credit card and ALL student loans are paid off. I'm SURE the interest rates there are higher than any mortgage. If the bank lets you, consolidate your loans into an even bigger mortgage.
Living 'paycheck to paycheck' isn't so bad if you have a line of credit to buffer the cash flow fluctuations. Don't use a credit card to manage that, get an unsecured LOC if you have to. I have no savings, but I do have some stocks I pretend are savings. The rest of my assets are my house, financed by a large mortgage. For my age, I am proud of my net worth. I have a solid credit rating which allows me to maintain extremely low interest LOCs. Essentially, I am living on my future earnings, and loving it.
My biggest secret: Don't buy CRAP. Stay away from department stores and only buy things you need. All you have to do is ENSURE your monthly earnings exceed your actual spending, and your debt-load will slowly drop. Cut out the fat and live with what you have in a nice house, and you'll do great.
Wisdom is the quality that keeps you out of situations where you would otherwise need it
June 26th, 2012 at 7:23:08 AM
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Or buy rental incomes. That also works for my cousin. Keep in mind being a landlord is work, at least a PT job.
Wisdom is the quality that keeps you out of situations where you would otherwise need it
June 26th, 2012 at 7:37:42 AM
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Quote: FinsRuleI don't know how all you people have so much money.
The house at a 30 year mortgage will end up being about 30% of our take home pay. Car payments - 8%. Student loans - 21%. Daycare - 8%. Utilities - 6%. Gas/Car Insurance - 7%. That leaves 20% to pay for food, and anything else that comes up. So, we'd be living paycheck to paycheck, just like we are now.
I guess the good news is that we only have 5K in credit card debt...
The other good news is that the hope is that our income will only go up, while all the payments stay relatively flat.
Me and my wife (+2 kids) lived in a $120k home for 15 years. Our annual income at the time was about $150k. We bought our current home for $240k ($160k mortgage). We both drive Honda's (bought with cash), never had any credit card debt.
We have money because we CHOSE to save and invest- not to borrow and spend.
I retired at 41. It wasn't luck. It's a choice.
June 26th, 2012 at 9:07:49 AM
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" The other good news is that the hope is that our income will only go up, while all the payments stay relatively flat. "
That thinking has caused a lot of grief. A job loss, downsizing, etc.
That thinking has caused a lot of grief. A job loss, downsizing, etc.
June 26th, 2012 at 10:33:28 AM
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Quote: dwheatleyOr buy rental incomes. That also works for my cousin. Keep in mind being a landlord is work, at least a PT job.
My current plan. Closing next week on an up down duplex. Renter will pay the mortgage. Very basic part of town but soon I will buy another. I am getting off the corporate merry go round. Rental income will let me go freelance.
All animals are equal, but some are more equal than others
