Buying a home

KatWAG

I need some advice. H and I are starting to talk about moving to the suburbs. We currrently live in Chicago in a condo that H bought 3 years ago. However, when H bought the condo, I had very minimal input considering we were only dating. We have a budget in mind but I was wondering if you homeowners had any tips that I should be aware of before we begin shopping? What is on your list of must haves for your house? How much work/ remodeling did you do have buying?

Thanks!

elizabetheleven

We are in the process of FINALLY closing on our home. I say finally because we looked at so many that it got to the point of despising the search haha.

Our priorities were #1 the land. We live in the country and enjoy our privacy. So although we saw some very beautiful homes in suburbia, we didn't want to live in cookie cutter, Edward scissorhands type of communities.

#2 was not having to do much renovating. We own our own business so we don't have time to fix up a home other than painting and minor cosmetics.

#3 was a good neighborhood for my kids and a great school district.

My advice to you would be make a list of what you CAN'T live without out and what you can put up with. Wants and needs are 2 separate things.

Good luck and I hope you have an easier time than we did! we're picky lol

Jells2dot0

We currently own 3 homes, all of which were purchased between 2004 and now. We're actually moving into our new home next weekend!!! I'm pretty excited about it. We are going to sell one of the homes and I'll be very happy to be back down to two. It's a lot of work to maintain that many properties. All of our homes are new construction. I cannot and will not even think about renovations. However, I realize that new construction is not something everyone has access to and also some people really like older charm or make renovating a hobby. Also important to us is our commute to work. We work 10-12 hours/day so we wanted a short drive. I think I remember you mentioning having a family. So, as @elizabeth said, making sure you are in a good school district is HUGE. We ended up in a good district, but it was not of importance in our decision making process. Also like elizabeth, having privacy was a factor. I do live in suburbia, but I live on the very outskirts of it. I do not like crowds and even have a fear of them, so it was important to me to have a quiet, safe neighborhood that is set back from the hustle and bustle of stores. We ended up with more land than I actually wanted, so we're trying to figure out what to do with it. I know some people want to be able to walk to stores and be in the mix, so that is something to consider. As far a bedrooms and space, we really needed extra storage, so having a three car garage was a must. A basement was a nice to have (though in AZ, that is SUPER rare and we ended up without one) and a two story+ home was a must-avoid. So, making a list is a definite.

Good luck with the search! It can be a PITA, but it can be fun and it's always nice to start a "new life" together

KatWAG

Jells, where are you in AZ? We have a house in North Scottsdale. We are trying for a baby but nothing yet. I have actually become thinking a lot about hiring a contractor and starting from stratch. I have been searching real estate on the web and every house I look at has that I fundamentally dont like.

Yes, I understand that neighborhood and school districts are key. We are hoping that whatever house we buy/ build, will be a house we can live in for 10+ years.

Any tips on things like: is crown molding worth it?, will a dog destroy oak floors? what are your thoughts on a pool?

BangBangs39

FI and I have owned our home for 1 1/2yrs now - we looked for almost a year prior to buying.  Location was key for us.  We wanted a home close to where we grew up that was not very close to neighbors.  Everything else was just filler - I wanted 2 bedrooms and more than one bathroom, farmers porch, finished basement, fireplace, island in the kitchen, rear patio etc.  When it came down to it, price and location won all.  We ended up with a 1 bedroom, 1 bathroom home for a great price on 2 acres of land.  There is a full basement but it isn't finished.  We plan to work toward what we want. 

Jells2dot0

 

KatWAG said:

Jells, where are you in AZ? We have a house in North Scottsdale. We are trying for a baby but nothing yet. I have actually become thinking a lot about hiring a contractor and starting from stratch. I have been searching real estate on the web and every house I look at has that I fundamentally dont like.

Yes, I understand that neighborhood and school districts are key. We are hoping that whatever house we buy/ build, will be a house we can live in for 10+ years.

Any tips on things like: is crown molding worth it?, will a dog destroy oak floors? what are your thoughts on a pool?

We live in the West Valley. We love N. Scottsdale and spend a lot of time up there, but our office is about an hour west. Not worth the commute, IMHO. We're considering retiring in that area, though!

I bought gorgeous engineered wood floors in the home we're selling. I spent tens of thousands on them and the cats just destroyed them!!! I was devastated! However, we cannot have real wood in AZ, so I think oak floors would be fine with a dog. Dogs don't have as sharp of nails and the floors can be refinished. Engineered wood is not like that. As for a pool, we have one in that house as well, but are not getting another one. We never use it and they are a PITA to maintain. However, I do feel that if we had young kids, we'd get more use out of it. Not sure I'd have one in Chicago, though. We can keep ours open year-round in AZ so it actually reduces the work and maintenance and I still hate it. LOL As for crown molding, I don't ever consider it in AZ because it just doesn't fit with most of the home styles, but it's certainly a nice touch! I don't know how hard it is to do after the fact, though. One thing that I do think is worth having are plantation shutters. We just bought shutters for the new home and as expensive as it was, they are gorgeous, energy efficient, and will last forever.

southernbelle0915

We just bought last year. We each sat down separately and made a list of 1) Must-have 2) want to have and 3) perks. Then we discussed and merged our lists. We went over the list with our realtor and took it with us to showings. If you're not paying cash, ensure you have your pre-approval done so if you see something you want, you can jump on it.

A couple of rules we stuck to: location, location, location; find your own inspector - be weary of one referred to you by someone who has an interest in closing the deal; do not buy a flipped house simply to get out of doing renovations; and finally, be patient and don't settle.

JoanE2012

We are moving into our new home next weekend too!  Location was top priority for us.  We wanted something located near the midpoint of our two jobs that was more suburban edging towards rural.  I hate the busy cities/towns and traffic, so it was important to get away from that.  We also wanted a slightly older house because they usually have a bit more land....the newer ones within our price range tend to be built right on top of each other with 1/4 acre if lucky.

Price was another huge factor....we made sure that we stuck to a budget that was well within our means and could be supported on one salary if needed.   We could've spent much more, but we'll save our money for traveling and retirement.  

And finally, we wanted something that was livable and needed no major renovations for the near term (especially kitchen!).   Of course, we still have a list of projects to cover the next few years.  

I found I was able to weed out most houses just by looking at photos or descriptions online.  In fact, the only house our realtor showed us was the one we ended up buying!  Good luck!

Jells2dot0

JoanE2012 said:

We are moving into our new home next weekend too!  Location was top priority for us.  We wanted something located near the midpoint of our two jobs that was more suburban edging towards rural.  I hate the busy cities/towns and traffic, so it was important to get away from that.  We also wanted a slightly older house because they usually have a bit more land....the newer ones within our price range tend to be built right on top of each other with 1/4 acre if lucky.

Price was another huge factor....we made sure that we stuck to a budget that was well within our means and could be supported on one salary if needed.   We could've spent much more, but we'll save our money for traveling and retirement.  

And finally, we wanted something that was livable and needed no major renovations for the near term (especially kitchen!).   Of course, we still have a list of projects to cover the next few years.  

I found I was able to weed out most houses just by looking at photos or descriptions online.  In fact, the only house our realtor showed us was the one we ended up buying!  Good luck!

ooo this! I realize that not everyone has the same priorities or same options, but we did this as well. I actually do not even pay for any of the expenses associated with our homes, as our finances are completely separate. I pay for all of our travel, new home projects, and place the rest into savings. My DH will retire in the next 10 years, so then I will then take over anything that has not been paid off. We wanted to allow me to save now so that I can retire as early as possible if I decide to do so. My career has been booming, so if all goes well, I may not want to retire early. But, at least the option is there IAgain, I realize that not everyone can do this because of where they live, but it's definitely the more safe option with this economy.

tammym1001

KatWAG said:

Jells, where are you in AZ? We have a house in North Scottsdale. We are trying for a baby but nothing yet. I have actually become thinking a lot about hiring a contractor and starting from stratch. I have been searching real estate on the web and every house I look at has that I fundamentally dont like.

Yes, I understand that neighborhood and school districts are key. We are hoping that whatever house we buy/ build, will be a house we can live in for 10+ years.

Any tips on things like: is crown molding worth it?, will a dog destroy oak floors? what are your thoughts on a pool?

I know you didn't ask me, but I thought I would give my .02. I have a dog and oak floors. While there are a few surface scuffs from her charging through the hallway at full speed when her daddy gets home from work she definitely hasn't ruined the floors. The little scuffs can be polished right out.

We also have crown molding in our living room and dining room. I like the looks of it and I think it's a personal preference. I wouldn't get it if you're just thinking about resale value because it may not be important to the next person.

Pools are a ton of work. I live in Ohio and we've had one and not had one. I prefer not having one. They are a lot of work for only a few months out of the year and unless you don't work they really only get used on the weekend.

alm&mdm

I'm a Chicago native too and would recommend you also think about what county you're looking at. Getting out Cook can provide major drops on the tax base and things like car insurance. But you also have to be careful cause sometimes property taxes can add up faster. We own a condo in the city and a couple of buildings that are rental investments and it's always the tax fees and such that end up really effecting price. Most people forget it's not just a mortgage you're taking on.

JoanE2012

Jells2dot0 said:

JoanE2012 said:

We are moving into our new home next weekend too!  Location was top priority for us.  We wanted something located near the midpoint of our two jobs that was more suburban edging towards rural.  I hate the busy cities/towns and traffic, so it was important to get away from that.  We also wanted a slightly older house because they usually have a bit more land....the newer ones within our price range tend to be built right on top of each other with 1/4 acre if lucky.

Price was another huge factor....we made sure that we stuck to a budget that was well within our means and could be supported on one salary if needed.   We could've spent much more, but we'll save our money for traveling and retirement.  

And finally, we wanted something that was livable and needed no major renovations for the near term (especially kitchen!).   Of course, we still have a list of projects to cover the next few years.  

I found I was able to weed out most houses just by looking at photos or descriptions online.  In fact, the only house our realtor showed us was the one we ended up buying!  Good luck!

ooo this! I realize that not everyone has the same priorities or same options, but we did this as well. I actually do not even pay for any of the expenses associated with our homes, as our finances are completely separate. I pay for all of our travel, new home projects, and place the rest into savings. My DH will retire in the next 10 years, so then I will then take over anything that has not been paid off. We wanted to allow me to save now so that I can retire as early as possible if I decide to do so. My career has been booming, so if all goes well, I may not want to retire early. But, at least the option is there IAgain, I realize that not everyone can do this because of where they live, but it's definitely the more safe option with this economy.

Good plan!  We are in NJ and get eaten alive with property taxes, so that affected our purchase too.  Though we also were fortunate to lock in a rate at the lowest, so that helped.    Good luck with your move!

Jells2dot0

@Joan- I was actually talking to my parents yesterday about the property taxes in NJ. It's obscene compared to AZ. Our sales tax and personal tax (car registration, for example) are more, though. But, generally, it's much less expensive to live in AZ, hence why so many people retire there! I guess I'm lucky to have a head start

Ajuliana

New construction can have just as many issues as established homes. I will never buy a tract home because I have read about so many lawsuits over poor construction and cutting corners ex) entire rooms without insulation. Of course, a good home inspection can help alleviate fears too. I'm mostly concerned about safety and having a large yard for our future children, but we don't plan to buy until after the wedding next year.

Peaseblossom55

We just closed on a home in April. We wanted to be less than a half an hour from our current job, semi near a train station if we decided to get jobs in the city and of course to be in a good school district.  We had a budget and we mostly stuck to it we paid a little more than we wanted to but we loved this home. We wanted a lot of land too.  It just sucks in NJ property taxes are so high.

Jessica41381

We have been in our house for a year and 3 months and when we were looking besides price, we wanted a backyard because we love to have people over, fenced yard, something that didn't need much work but wasn't someone else's perfect either, and a good neighborhood. One thing we didn't think about was the flower beds and a tree stump at the far end of our property. The previous owners were the only owners and took great care of the house but neglected areas of the yard while "fixing " up other parts and when I say fixing I mean putting down in various areas about 50 of those cement type decorative borders. After many hours outside and many trips to the dump we have it almost exactly how we want it. After the wedding we are either going to remodel inside or go for an inground pool. Not things we need but things we want.

Jells2dot0

We just got back from the Jersey Shore last night. My DH has only been there a few times, as we don't go back to visit my family very often. We spent almost 2 weeks there this time, so he got to see a lot more of the area and now he wants to buy a shore home!!! Aah-No more homes!! LOL So, if he gets his wish, I guess I'll be in for some property tax woes too!

JoanE2012

Jells2dot0 said:

We just got back from the Jersey Shore last night. My DH has only been there a few times, as we don't go back to visit my family very often. We spent almost 2 weeks there this time, so he got to see a lot more of the area and now he wants to buy a shore home!!! Aah-No more homes!! LOL So, if he gets his wish, I guess I'll be in for some property tax woes too!

hahaha!  If I ever was going to get a shore home, it'd be down in one of the Carolinas.  Even though I lived in NJ all my life, I like the beaches down south much better.  Mostly due to the fact that the water temperature is never warm enough for me to go in here.  

Jells2dot0

 

JoanE2012 said:

Jells2dot0 said:

We just got back from the Jersey Shore last night. My DH has only been there a few times, as we don't go back to visit my family very often. We spent almost 2 weeks there this time, so he got to see a lot more of the area and now he wants to buy a shore home!!! Aah-No more homes!! LOL So, if he gets his wish, I guess I'll be in for some property tax woes too!

hahaha!  If I ever was going to get a shore home, it'd be down in one of the Carolinas.  Even though I lived in NJ all my life, I like the beaches down south much better.  Mostly due to the fact that the water temperature is never warm enough for me to go in here.  

I agree! He has never  been down that way, though I have been many times. The water was freezing this past week, too. Plus, being in the Carolinas means not being within immediate driving distance of mom and dad! I love my family but they can be a bit much. LOL

GetThePointe77

Now I havent ever bought a house, but I will caution you that you need to be careful about the timing of new construction, it is a lot easier to have delays (although this may be more true in Florida because of the weather), and you don't want to get your heart set on a move-in date until you have your CO. With that said I have moved into new construction (apartments) twice and it is SO MUCH BETTER to have noone have lived their before/no problems (compared to the house I'm in now which is from the 70s lol)

SewInLoveWithDMB

My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.

Check for radon in the basement.

Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.

This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.

You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not  in a time crunch to move.

If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.

Good luck - house hunting is fun, but also stressful!

Ajuliana

SewInLoveWithDMB said:

My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.

Check for radon in the basement.

Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.

This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.

You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not  in a time crunch to move.

If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.

Good luck - house hunting is fun, but also stressful!

I've never understood why homeowners would prefer to sell their house to an all cash buyer than a regular 20% down payment with the standard mortgage term.  In the first instance, they get the cash [from the buyer].  In the second instance, they get the cash [from the bank].  In the second instance, only the bank assumes the risk.  

Or am I totally misunderstanding this?  

FI and I have 20% put away already, but we are still 1.5 years from when we ideally want to purchase a home.  (He is considering starting a masters program but we don't know where yet...).  Should we put away more??

Jells2dot0

I just moved into my new home this weekend. I've owned a few times before, so this wasn't a first time deal. I have never put down more than 20%. We considered doing it this time, but I'm glad we didn't because we have needed cash for a few things for the home, including ~$10K for window treatments. The company we chose charged 3% for CC transactions, so I just wrote a check. We've also spent money on random things like a water softener install, a new fridge, lighting, ceiling fans, and we're going to start thinking about our backyard (it's new construction so nothing was really in place.) We do not want to dip into any of our retirement savings or emergency savings, so it's good to save more than 20% but keep some of it for misc expenses. I think we'd only consider doing all cash for a home close to retirement when we don't have as substantial income. The mortgage write off helps us reduce the amount we pay every year at tax time.

SewInLoveWithDMB

Ajuliana said:

SewInLoveWithDMB said:

My advice would be to put as much as a down payment in as you possibly can (or all cash offer) since buyers will choose those over lower-percentages-down.

Check for radon in the basement.

Painting and other cosmetic fixes are easy (although a pain in the butt) but a house painter can fix ugly paint in no time.

This is obvious, but kitchens and baths are the most expensive to redo. If a house has these updated, it helps a lot.

You can get great deals on a short sale, but be prepared to wait many months. In the end, the savings can be worth it, but you might need a strong stomach until you hear the final "yes - your offer was approved by the bank." These are also good if you are not  in a time crunch to move.

If you want to or can swing it, you can rent the townhouse that H owned before you were married to help cover any additional costs with your new home. That will obviously only work however if the rent you receive is more than the mortgage or other monthly costs associated with that property.

Good luck - house hunting is fun, but also stressful!

I've never understood why homeowners would prefer to sell their house to an all cash buyer than a regular 20% down payment with the standard mortgage term.  In the first instance, they get the cash [from the buyer].  In the second instance, they get the cash [from the bank].  In the second instance, only the bank assumes the risk.  

Or am I totally misunderstanding this?  

FI and I have 20% put away already, but we are still 1.5 years from when we ideally want to purchase a home.  (He is considering starting a masters program but we don't know where yet...).  Should we put away more??

I agree - but in our experience and my family's experience, they go with the all cash.

Ajuliana

Well unless our families are feeling generous, it's just not plausible for us to have an all cash offer at 25. We have only been salaried for a year!

SewInLoveWithDMB

There are other negatives with all cash offers beside being very difficult to swing - paying a mortgage also gives tax breaks.

A sizeable down payment however will show sellers that the buyers are very serious bidders and could be a good fit as they sell their home.

Putting 20% down shows that are one is really trying, rather than 1% down (and then a very high mortgage). It just doesn't make for as strong of a candidate.

Jells2dot0

SewInLoveWithDMB said:

There are other negatives with all cash offers beside being very difficult to swing - paying a mortgage also gives tax breaks.

A sizeable down payment however will show sellers that the buyers are very serious bidders and could be a good fit as they sell their home.

Putting 20% down shows that are one is really trying, rather than 1% down (and then a very high mortgage). It just doesn't make for as strong of a candidate.

Do the banks even allow that anymore? I've never purchased a pre-existing home, so I've always dealt directly with the builders. All of them required 10% earnest money down that was rolled into the mortgage at closing. So, at the very least, I had to put 10% down on every home. I *think* you could possibly get the cash back at closing, but I'm not certain. So, that is also something else to consider for those who want to purchase new construction. Even though it takes around a year to build, many builders require quite a bit of money upfront to get started. So, you can continue to build savings while the home is being built, but you will need a good chunk at the very start.

SewInLoveWithDMB

As of a few years ago, I had heard of someone buying $590,000 with $20,000 down. That's less than 4%. I have no idea what the monthly payment is, but it can't be good! 

(I don't know if there was a cosigner, or a first time home buyer credit or anything - those are just the facts that I heard. Crazy)

southernbelle0915

SewInLoveWithDMB said:

As of a few years ago, I had heard of someone buying $590,000 with $20,000 down. That's less than 4%. I have no idea what the monthly payment is, but it can't be good! 

(I don't know if there was a cosigner, or a first time home buyer credit or anything - those are just the facts that I heard. Crazy)

I think the lowest you can go these days is 3% with an FHA (govn't) loan. There's no point though unless you are super cash strapped (in which case a $590K home probably isn't a good idea). Anything less than 20% and you're paying a higher mortgage PLUS the PMI. 

SewInLoveWithDMB

Exactly - in that situation, I personally would buy a less expensive home.

angelica101511

I actually am a Real Estate professional, so this is my area of expertise!  You've heard it before, Location, Location, Location!!!  Once you've established one that you are happy with consider what the norm in the community is.  For example, if you're in a neighborhood where houses are nice, and the house you choose to buy is the only house without a garage, or the only 2 story house, future buyers may not be as forgiving as you. 

We have a house in LA (Calabasas) and one in Thousand Oaks, CA (Ventura Co) that is a rental.  Both are designed by Mid Century Modern architects:  Joseph A. Eichler and Richard Dorman.  Everyone loves an open floorplan and post and beam construction is highly sought after, so I know that if I ever have to sell, it will take me all of 5 minutes after it is listed.

As far as loans are concerned, suck it up.  Save your minimum 20%.  It is not worth paying all that Mortgage Insurance with FHA.  I refuse to do FHA loans.  The only time I have ever done them is when I have a new couple who is graduating from Med School or Law School in the near future and NEED to have THAT house, RIGHT NOW!, so it's the only loan out there for them because they are cash-strapped.  However, after their residency is over or they land a big contract at a law firm, they will be able to refinance into a conventional loan without mortgage insurance, and even pay down the balance a bit so that it completes their "should have been original 20% down". 

I am trying to sell my rental because I am OVER having tenants and the extra work!

http://www.zillow.com/homedetails/1557-Fordham-Ave-Thousand-Oaks-CA-91360/16425856_zpid/