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Searching for a new home, help

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Re: Searching for a new home, help

  • lyndausvilyndausvi Western Slope, Colorado mod
    Moderator Knottie Warrior 10000 Comments 500 Love Its
    MadHops21 said:

    I've got zero info on actually buying a house, but I do want to say - closings can be done faster than the 4-6 week timeline. I don't think it's recommended, and if the sellers are living in the house it's probably not possible. BUT. The timeline on the new house we had to get last spring went like this:


    3/26 - the house my parents bought in 2000 with no intent to buy another home ever, burned to the ground. My youngest sister, myself, and my parents are living there.
    3/31 - insurance puts all four of us in a tiny hotel room. We bum around for a week feeling sorry for ourselves.
    4/5ish - we figure out that we can't bum around feeling sorry for ourselves in a hotel room forever. We start finding houses we want to see on the internet.
    4/9ish - we see our new house, along with several others, with our realtor.
    4/13 - we put in an offer.
    4/14 - offer accepted.
    5/1 - closed in AM, moved right in.

    Now, obviously that timeline is not a normal timeline for house purchasing, and we were in somewhat of an emergent situation, but it's possible that a closing can happen on fast-forward under some set circumstances.

    Also - DEFINITELY get a realtor you're comfortable with. It will make your whole entire life so much easier for the whole time you're house-hunting, and if you sell, you've got someone you're comfortable with to go talk to. And don't be afraid to go separately to see houses to weed out ones that look good online but suck in person.
    Wow, that's the fastest I've heard of before. If you close in the morning, you can move right in in the afternoon? I never knew how it worked once it was all done and over with, like how long you have to wait after closing to move it. Once it's closed, do the people that own the house leave before then? I'm assuming, but I just don't know. Like, if we closed on May 20th, do we have to wait a certain amount of time before moving in and getting furniture set up? 

    ETASPellingishard
    My parents have bought and sold a shit ton of houses.   Everyone we moved in the same day as the closing.

    Basically they move out a day or so before.   You go in the day before or morning of the closing to do a walk-through.   Basically making sure there are not major issues that have popped up since the last time you went in.  I.E big stains on the floors, holes behind furniture.  Make sure things that were suppose to be left are indeed left.   Or things that were to be fixed are fixed.

    At closing you get the keys.   I had some reno to do and my lease was not up yet at my rental so I waited a month to move in.  But as I said as a kid we moved in the same day.

    My parent's current house was a nightmare.  They former owners did not do what they were suppose to do.  Closing took 6 hours.  They were about to walk away.  Finally they closed.  Then they had to sue the former owners for work not done or not done properly.      They won. $30K.






    What differentiates an average host and a great host is anticipating unexpressed needs and wants of their guests.  Just because the want/need is not expressed, doesn't mean it wouldn't be appreciated. 
    AprilH81
  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer
    lyndausvi said:

    MadHops21 said:

    I've got zero info on actually buying a house, but I do want to say - closings can be done faster than the 4-6 week timeline. I don't think it's recommended, and if the sellers are living in the house it's probably not possible. BUT. The timeline on the new house we had to get last spring went like this:


    3/26 - the house my parents bought in 2000 with no intent to buy another home ever, burned to the ground. My youngest sister, myself, and my parents are living there.
    3/31 - insurance puts all four of us in a tiny hotel room. We bum around for a week feeling sorry for ourselves.
    4/5ish - we figure out that we can't bum around feeling sorry for ourselves in a hotel room forever. We start finding houses we want to see on the internet.
    4/9ish - we see our new house, along with several others, with our realtor.
    4/13 - we put in an offer.
    4/14 - offer accepted.
    5/1 - closed in AM, moved right in.

    Now, obviously that timeline is not a normal timeline for house purchasing, and we were in somewhat of an emergent situation, but it's possible that a closing can happen on fast-forward under some set circumstances.

    Also - DEFINITELY get a realtor you're comfortable with. It will make your whole entire life so much easier for the whole time you're house-hunting, and if you sell, you've got someone you're comfortable with to go talk to. And don't be afraid to go separately to see houses to weed out ones that look good online but suck in person.
    Wow, that's the fastest I've heard of before. If you close in the morning, you can move right in in the afternoon? I never knew how it worked once it was all done and over with, like how long you have to wait after closing to move it. Once it's closed, do the people that own the house leave before then? I'm assuming, but I just don't know. Like, if we closed on May 20th, do we have to wait a certain amount of time before moving in and getting furniture set up? 

    ETASPellingishard
    My parents have bought and sold a shit ton of houses.   Everyone we moved in the same day as the closing.

    Basically they move out a day or so before.   You go in the day before or morning of the closing to do a walk-through.   Basically making sure there are not major issues that have popped up since the last time you went in.  I.E big stains on the floors, holes behind furniture.  Make sure things that were suppose to be left are indeed left.   Or things that were to be fixed are fixed.

    At closing you get the keys.   I had some reno to do and my lease was not up yet at my rental so I waited a month to move in.  But as I said as a kid we moved in the same day.

    My parent's current house was a nightmare.  They former owners did not do what they were suppose to do.  Closing took 6 hours.  They were about to walk away.  Finally they closed.  Then they had to sue the former owners for work not done or not done properly.      They won. $30K.
    Oh, god. Now I'm scared. Do you recommend changing locks once you buy a home, so you don't know who could have a key? I'm thinking up random questions now, sorry. I just know that my neighbors have a key, my FI has a key, think there are keys randomly around the house for "just in case we get locked out" but they were moved during construction...
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  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer
    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)

    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
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  • MadHops21 said:

    AprilH81 said:

    MadHops21 said:

    Everyone has already provided great advice.

    I will second that the bank will tell you they can give you far more than you can really afford. Crunch your personal numbers. 

    One good part of the process is that after you choose a home or two, the mortgage provider is supposed to give you what's called a Good Faith Estimate. That should show your mortgage, taxes, home insurance, and HOA fees (if applicable) in one fell swoop with a variety of mortgage/down payment options, if you ask.

    Do NOT go for a variable rate! Get a fixed rate! This is part of the reason so many people who bought in the early 2000's got into a crisis. They assumed they'd be better off financially in a few more years and could then afford a higher monthly payment or they assumed they could refinance. Nope and nope. Too risky. Lock that rate down for 20, 25, 30 years. 

    Be realistic. Please don't be like the people on House Hunters. Me, I had a very small budget so had to accept a place that was move-in-ready enough (nice kitchen, bathroom needed some work which I'm finally getting around to after almost 5 years).  I saw a much bigger place that needed serious remodeling I couldn't afford, so I had to walk away. You are probably going to have to have some trade-offs. 

    Taxes- I think listings normally say what the taxes are. If the existing homeowner gets exemptions, you're not going to get the same rate. Find out how and when the town or county re-assesses property taxes. Many people I know were swayed into the exurbs with new construction and low taxes, but then with the boom, taxes went sky-high to pay for all the new schools and services needed for a bigger population. 

    And yes, get a bigger down payment. If you borrow too much of a percentage of the purchase price, you'll throw your money away on PMI (mortgage insurance). To be perfectly honest, my parents loaned me part of my down payment and I pay them back monthly. I was skeptical when my parents offered (because I had pride and wanted to go it alone), but I actually saved money paying my parents in addition to the bank than if I had just borrowed 90% from the bank and paid PMI!  My parents saw it as an investment (yup, they're charging me interest) and I'd rather give them grocery money than give more fees to a bank. Win-win. 

    Um, that's all I got for now. Good luck OP! 


    Oh, that's brilliant. My brother actually bought my motorcycle using his credit card, and I pay him back monthly. He gets points and cash back for such a big purchase, and I don't have to pay interest for using their credit to help pay for it. Everyone wins! 
    Don't get your hopes up with borrowing down payment money.  They have really cracked down on that.  You will have to show a paper trail of where the down payment money came from (hence the several months of bank statements) and if someone is giving you a gift or a loan you will have to provide documentation for that as well.
    Oh, wow, that's crazy. If the parents deposited money into my bank account, the lenders want to know where it came from? I never knew that. 



    Oh gosh, I got an expense reimbursement check from my company of maybe $1500 during the process, and it generated a ton more paperwork and questions.

    My grandparents gave me a $10,000 check and I made the smart decision to wait until after closing to deposit it :-P

    image

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  • AprilH81AprilH81 Columbus, OH member
    2500 Comments 500 Love Its Third Anniversary 5 Answers
    MadHops21 said:

    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)


    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    1) Yes it is recommended that you change the locks (or at least rekey them) when you move in.  No one know who all has a key or where they ended up.

    A price drop is either a sign the house was over priced to begin with or the sellers are trying to sell it faster.  It doesn't mean anything is "wrong" with the house.  Sellers are required to disclose certain known issues with the home and then if they find out information following an inspection I believe they have to disclose that information to future buyers if the other buyers back out.
    photo composite_14153800476219.jpg
    MadHops21
  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer
    AprilH81 said:

    MadHops21 said:

    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)


    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    1) Yes it is recommended that you change the locks (or at least rekey them) when you move in.  No one know who all has a key or where they ended up.

    A price drop is either a sign the house was over priced to begin with or the sellers are trying to sell it faster.  It doesn't mean anything is "wrong" with the house.  Sellers are required to disclose certain known issues with the home and then if they find out information following an inspection I believe they have to disclose that information to future buyers if the other buyers back out.
    I have seen descriptions that include things like a bad foundation, water damage in basement, etc. So at least time is saved to skip over the really bad ones, or take into consideration. Normally, when things like that are disclosed, does the seller lower the price than the actual worth of the home? Or they don't and just tell you in the description, so you can negotiate a lower price because of it? 
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  • labrolabro Hotlanta member
    5000 Comments Sixth Anniversary 500 Love Its 5 Answers
    edited March 2015
    MadHops21 said:

    AprilH81 said:

    MadHops21 said:

    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)


    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    1) Yes it is recommended that you change the locks (or at least rekey them) when you move in.  No one know who all has a key or where they ended up.

    A price drop is either a sign the house was over priced to begin with or the sellers are trying to sell it faster.  It doesn't mean anything is "wrong" with the house.  Sellers are required to disclose certain known issues with the home and then if they find out information following an inspection I believe they have to disclose that information to future buyers if the other buyers back out.
    I have seen descriptions that include things like a bad foundation, water damage in basement, etc. So at least time is saved to skip over the really bad ones, or take into consideration. Normally, when things like that are disclosed, does the seller lower the price than the actual worth of the home? Or they don't and just tell you in the description, so you can negotiate a lower price because of it? 
    It depends. Some sellers will agree to fix the problem. Some will offer a reduction on the sale price for the value of the fix so you can fix it yourself. Some will offer a certain amount towards the fix as part of your closing agreement. Knowing about issues like a leaky roof, or foundation issues can also help you to negotiate a lower price. You can say "Hey seller, my inspector told me the roof needs to be replaced in less than a year, given that it will cost me approx. $10k to get the roof replaced, I'm asking to lower the selling price by $10k." The seller can agree or not, or they can say, we'll fix it instead, or if they are total jerks, they won't do anything at all. There are so many variables!

    When we bought our house the sellers were offering to paint the exterior of the house as part of the closing deal. We knew the house needed painting, but we wanted to select our own contractors and get it done ourselves, so instead we negotiated something like $1500 off the price of the home and had the exterior painted after we moved in with a contractor of our choice.



    MadHops21
  • thisismynickname2thisismynickname2 City By The Lake member
    5000 Comments Sixth Anniversary 500 Love Its First Answer
    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)

    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    No, don't be worried. Sometimes pricing homes can be difficult without a lot of comps in the area (comparable in quality, location, and sold in the last six months).
    For my husband's condo, he's lowered the price several times. There was nothing in the area comparable and even our experienced realtor was like, "Well, we can go for x, but know you might have to lower it..." Plus, lowering the price refreshes the listing so people who may not have seen it before will notice it, and people who liked the property but thought it was overpriced may be interested in coming back to bid. 
    Do I agree with the practice? Not necessarily, it's certainly a sign that the seller just really wants to get rid of it which doesn't bode well for negotiation on the seller's end. Which is my husband's case. Sigh. 
    ________________________________


  • A price drop isn't necessarily a bad thing and could mean anything. Maybe they were over priced to begin with. Maybe the seller needs to move immediately and can't until the house sells. Maybe it's a the market got flooded after the house went up for sale and they need to drop the price to stay competitive. 

    Don't think worst case scenario. If you move through the buying process, you'll get it inspected, so if they drastically dropped the price because they found a giant hole in the roof, you're going to find out about it too. 

    On the note of inspectors, I would find an independent one. My sister and her husband got screwed when they took the guy the realtor recommended. Apparently there was some hand shaking in the background and things weren't identified in the interest of a quick sale. Yea, awful and illegal, but it's been a total nighmare for them. Just get someone independent. Google can help.
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  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer

    A price drop isn't necessarily a bad thing and could mean anything. Maybe they were over priced to begin with. Maybe the seller needs to move immediately and can't until the house sells. Maybe it's a the market got flooded after the house went up for sale and they need to drop the price to stay competitive. 


    Don't think worst case scenario. If you move through the buying process, you'll get it inspected, so if they drastically dropped the price because they found a giant hole in the roof, you're going to find out about it too. 

    On the note of inspectors, I would find an independent one. My sister and her husband got screwed when they took the guy the realtor recommended. Apparently there was some hand shaking in the background and things weren't identified in the interest of a quick sale. Yea, awful and illegal, but it's been a total nighmare for them. Just get someone independent. Google can help.
    That is really good to know about inspectors, thanks. I'm keeping this thread and showing my FI, you all are so freaking helpful, you don't even know. :)
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    AprilH81
  • lyndausvilyndausvi Western Slope, Colorado mod
    Moderator Knottie Warrior 10000 Comments 500 Love Its
    AprilH81 said:

    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)

    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    1) Yes it is recommended that you change the locks (or at least rekey them) when you move in.  No one know who all has a key or where they ended up.

    A price drop is either a sign the house was over priced to begin with or the sellers are trying to sell it faster.  It doesn't mean anything is "wrong" with the house.  Sellers are required to disclose certain known issues with the home and then if they find out information following an inspection I believe they have to disclose that information to future buyers if the other buyers back out.


    What the sellers are required to disclose is state dependent.   Some states are more like don't ask, don't tell.


    In additional to that some people sell their homes "as is".  Meaning they don't care what shows up inspections they they are not fixing anything.

    Inspectors can be tricky.  With all the houses my parents bought they last one they got a little screwed.  They also got the inspector from the Realtor.  The inspector didn't catch things (he was sued by  my parents and they won).  In addition to that the former owners were very whishy-washy with the pre-closing walk-through.  Finally they let my parents in to view the house.  The central vacuum was sitting out like they were in the middle of vacuuming.     

    When my parents took ownership they re-clean everything.  They went to turn on the vacuum.  Nothing.   Go to see what was up.   IT WAS NEVER EVEN HOOKED UP TO ANY POWER.   As in there was zero power even near the thing out in the garage.   So not only had the owners pretended that is worked by having it hooked up like they were using it, the inspector never even checked to see if it worked.

    Now, let me tell you.  My parents have bought/sold some 30 homes in 7 different states.    This was the only one they had an issue. They have bought and took ownership of homes in under 30 days.   It does sound scary and you have to be on your A-game, but most people do not have major issues with buying a home.  

    I think this book is  good resource for home buying.   (not sure if this cover is the most recent)

    image







    What differentiates an average host and a great host is anticipating unexpressed needs and wants of their guests.  Just because the want/need is not expressed, doesn't mean it wouldn't be appreciated. 
  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer
    lyndausvi said:

    AprilH81 said:

    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)

    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    1) Yes it is recommended that you change the locks (or at least rekey them) when you move in.  No one know who all has a key or where they ended up.

    A price drop is either a sign the house was over priced to begin with or the sellers are trying to sell it faster.  It doesn't mean anything is "wrong" with the house.  Sellers are required to disclose certain known issues with the home and then if they find out information following an inspection I believe they have to disclose that information to future buyers if the other buyers back out.
    What the sellers are required to disclose is state dependent.   Some states are more like don't ask, don't tell.


    In additional to that some people sell their homes "as is".  Meaning they don't care what shows up inspections they they are not fixing anything.

    Inspectors can be tricky.  With all the houses my parents bought they last one they got a little screwed.  They also got the inspector from the Realtor.  The inspector didn't catch things (he was sued by  my parents and they won).  In addition to that the former owners were very whishy-washy with the pre-closing walk-through.  Finally they let my parents in to view the house.  The central vacuum was sitting out like they were in the middle of vacuuming.     

    When my parents took ownership they re-clean everything.  They went to turn on the vacuum.  Nothing.   Go to see what was up.   IT WAS NEVER EVEN HOOKED UP TO ANY POWER.   As in there was zero power even near the thing out in the garage.   So not only had the owners pretended that is worked by having it hooked up like they were using it, the inspector never even checked to see if it worked.

    Now, let me tell you.  My parents have bought/sold some 30 homes in 7 different states.    This was the only one they had an issue. They have bought and took ownership of homes in under 30 days.   It does sound scary and you have to be on your A-game, but most people do not have major issues with buying a home.  

    I think this book is  good resource for home buying.   (not sure if this cover is the most recent)

    image



    I've seen "as is" in descriptions, normally on bank owned homes. I was told that banks aren't in the housing business, so they don't care about fixing anything. They just want the money for it and sold quickly. I need to find that book, I didn't realize how badly it's needed to be on your A game. So many untrustworthy people. 
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  • MadHops21 said:

    lyndausvi said:

    AprilH81 said:

    OH ANOTHER QUESTION! (So so so sorry about asking a million questions but you guys are awesome)

    Should I be worried if a house goes down in price? Some homes I've saved in Realtor or Trulia app will sometimes alert me if a price drops on a home I saved. Is there a good reason for a price dropping? Besides not selling maybe, but most homes I save will stay on the market for a few days or a couple weeks, so maybe they're trying to sell it quicker by dropping the price? 
    1) Yes it is recommended that you change the locks (or at least rekey them) when you move in.  No one know who all has a key or where they ended up.

    A price drop is either a sign the house was over priced to begin with or the sellers are trying to sell it faster.  It doesn't mean anything is "wrong" with the house.  Sellers are required to disclose certain known issues with the home and then if they find out information following an inspection I believe they have to disclose that information to future buyers if the other buyers back out.
    What the sellers are required to disclose is state dependent.   Some states are more like don't ask, don't tell.


    In additional to that some people sell their homes "as is".  Meaning they don't care what shows up inspections they they are not fixing anything.

    Inspectors can be tricky.  With all the houses my parents bought they last one they got a little screwed.  They also got the inspector from the Realtor.  The inspector didn't catch things (he was sued by  my parents and they won).  In addition to that the former owners were very whishy-washy with the pre-closing walk-through.  Finally they let my parents in to view the house.  The central vacuum was sitting out like they were in the middle of vacuuming.     

    When my parents took ownership they re-clean everything.  They went to turn on the vacuum.  Nothing.   Go to see what was up.   IT WAS NEVER EVEN HOOKED UP TO ANY POWER.   As in there was zero power even near the thing out in the garage.   So not only had the owners pretended that is worked by having it hooked up like they were using it, the inspector never even checked to see if it worked.

    Now, let me tell you.  My parents have bought/sold some 30 homes in 7 different states.    This was the only one they had an issue. They have bought and took ownership of homes in under 30 days.   It does sound scary and you have to be on your A-game, but most people do not have major issues with buying a home.  

    I think this book is  good resource for home buying.   (not sure if this cover is the most recent)

    image

    I've seen "as is" in descriptions, normally on bank owned homes. I was told that banks aren't in the housing business, so they don't care about fixing anything. They just want the money for it and sold quickly. I need to find that book, I didn't realize how badly it's needed to be on your A game. So many untrustworthy people. 

    You can't even IMAGINE.  My seller's realtor even emailed MY attorney claiming I would be homeless if they didn't set the closing date in February (not true).  Why did she think my attorney wasn't aware of my own situation?

    image

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    MadHops21
  • JoanE2012JoanE2012 Exit 21 (Jersey!) member
    5000 Comments 500 Love Its Fourth Anniversary 5 Answers
    AprilH81 said:

    MadHops21 said:

    AprilH81 said:

    MadHops21 said:

    AprilH81 said:

    MadHops21 said:

    AprilH81 said:

    Very good advice, thanks! Glad to hear other's stories and learn more from it.

    I have another question, if we get married in June, when should we actually buy? I know that sometimes an offer takes a while, then might be rejected, then you have to look again, but if we want to move in about a month before (so May), when's the best time to say "This is the house, here is our offer." ? I don't know the general rule of thumb for how long it takes, just been told "it can take a while". 
    Traditional closings (no short sells, foreclosures or estate sales) usually close in 4-8 weeks after the signed offer.  If both parties have their acts together regarding paperwork and there isn't protracted negotiations over the inspection results it will be closer to 4-5 weeks.  My first house was a foreclosure and closed in 6-7 weeks, my last two houses were "normal" sales and closed in 4 weeks.

    After the sale price is accepted and contract signed you will need to get an inspection (you pay this out of pocket, usually about $400-500 depending on the size of the house and market).  Once you get the results you negotiate with the seller to address any major issues.  You can ask for them to fix it or you can ask for a reduction in sale price, but nothing is guaranteed.  Save this for MAJOR issues (furnace, roof, water damage, foundation, true safety issues, etc.).  If it is a "minor" issue you are better waiting and fixing it yourself or hiring someone you trust to do the work.

    After the inspection is finalized you start working closely with your mortgage lender to finalize your application.  You will need to provide two years worth of tax returns for everyone on the mortgage, your last two pay stubs (for both of you), two months worth of bank statements for any accounts you will be drawing from for your down payment, copies of investment documents (non-retirement) and possibly more paperwork based on your individual situation.  The faster you do this the faster your closing will be.

    At the same time you are working with your mortgage broker they will be ordering an appraisal and the seller will be working on any items that they agreed to fix in the Request to Remedy.
     
    So you need to get an offer accepted before doing the inspection? Can you take it back if the inspection shows up something bad, like a bad foundation or...something horribly expensive? I don't think I know what "sale price being accepted" means.
    Sale price being accepted is my poor way of saying that both parties agree to a selling price.  It may take a few rounds of negotiation to get to that point and that process can take several days depending on the agents involved and how stubborn the buyers and sellers are.
    Ohhh, got it! I thought that meant money already in the process of paying for the full mortgage, not just the sale price being finally done negotiated. That makes more sense now. Thanks! You really know your stuff. I'll window shop for now using my apps, and when the time comes closer, I'll be sure to follow these steps. This is completely new to me. 
    Good luck!  It is a very stressful process, but it can also be a lot of fun.  Attend open houses in neighborhoods you are interested in.  That will allow you to see homes in a low pressure situation and get a feel for what homes in your preferred area are like and what they cost.

    Also, keep in mind when you are browsing online that good Realtors know how to take pictures to mask flaws and make rooms seem larger/brighter than they really are.  :)
    One of my brothers told me this. I was showing him homes, and he didn't like how one house showed the home from a corner shot or something, so make it look bigger than it actually was (or something like that). He has a townhome with his wife and kids and wants to move out, but with my nephew having leukemia, he had to put his move on hold. I never knew pictures could be deceiving for homes, now I'm wary of looking through apps with fabulous pictures. Would you recommend walking through open houses when I'm just looking and haven't done a pre-approval yet with a bank? 
    Yes, it doesn't hurt to look, but if you see something you want you may get your heart broken because it might sell before you get everything together, just be prepared.

    For an open house you can come in, speak to the seller's realtor (listing agent) and then usually are free to wander around the home without anyone hovering.  Other people may be in the house but the sellers are usually not there.  If you find "the one" you can get your own agent and put in an offer.

    I warned you about the pictures because we thought we found several "perfect" houses online and then once we got to the property there was a power tower in the back yard, the house was smaller than the pictures indicated or an awkward layout that wouldn't show up in pictures anyway.  Just take the pictures with a grain of salt (both good and bad).  On the flip side, bad pictures doesn't mean the house is bad.  The sellers may be unwilling to stage the house properly or it could be that the agent is a bad photographer.


    Haha, I can relate!  We used virtualearth for every listing we were interested in.  We eliminated many because we were able to see a power tower, or a busy road, or a river, etc.  When a price seemed a little better than expected, virtualearth often was able to explain it.
  • Chipmunk415Chipmunk415 at the corner of Wine Ave. and Margarita Ln. member
    500 Love Its 1000 Comments Second Anniversary Name Dropper
    Madhops, passing you wine, as DH and I are in the same boat! We're hunting, discussing our price range and absolute reqs. DH is much pickier than I am on some aspects while on others I'm the PITA. 

    I might by that book myself. Need to figure everything out in the next two months- planning a trip to area we are moving to in order to check out some places, maybe make an offer. Looking into getting pre approved as well.
    MadHops21
  • huskypuppy14huskypuppy14 Boston Suburbs member
    2500 Comments Fifth Anniversary 500 Love Its First Answer
    edited March 2015
    AprilH81 said:

    I've got zero info on actually buying a house, but I do want to say - closings can be done faster than the 4-6 week timeline. I don't think it's recommended, and if the sellers are living in the house it's probably not possible. BUT. The timeline on the new house we had to get last spring went like this:


    3/26 - the house my parents bought in 2000 with no intent to buy another home ever, burned to the ground. My youngest sister, myself, and my parents are living there.
    3/31 - insurance puts all four of us in a tiny hotel room. We bum around for a week feeling sorry for ourselves.
    4/5ish - we figure out that we can't bum around feeling sorry for ourselves in a hotel room forever. We start finding houses we want to see on the internet.
    4/9ish - we see our new house, along with several others, with our realtor.
    4/13 - we put in an offer.
    4/14 - offer accepted.
    5/1 - closed in AM, moved right in.

    Now, obviously that timeline is not a normal timeline for house purchasing, and we were in somewhat of an emergent situation, but it's possible that a closing can happen on fast-forward under some set circumstances.

    Also - DEFINITELY get a realtor you're comfortable with. It will make your whole entire life so much easier for the whole time you're house-hunting, and if you sell, you've got someone you're comfortable with to go talk to. And don't be afraid to go separately to see houses to weed out ones that look good online but suck in person.
    Wow, that's the fastest I've heard of before. If you close in the morning, you can move right in in the afternoon? I never knew how it worked once it was all done and over with, like how long you have to wait after closing to move it. Once it's closed, do the people that own the house leave before then? I'm assuming, but I just don't know. Like, if we closed on May 20th, do we have to wait a certain amount of time before moving in and getting furniture set up? 

    ETASPellingishard
    Possession of the house is also negotiated.  Mostly it is "possession upon closing" meaning you get the keys at closing and you can move in whenever you want.  Sometimes people delay moving out because the sellers are waiting to close on a new house.  If that is the case you can close on the house and the sellers "rent" the house for the agreed upon period.  If you do that make sure that there are protections in place about property damage.

    _______________________BOX__________________________________________



    Yes, we did this when we bought our house. The sellers were closing on their new house the week after our closing. They needed the money from the sale of their house for their new house. We were getting married in two weeks and were not planning on moving for 3 weeks anyway, so we let them stay in our new house for 2-3 extra weeks and they paid us pro rated amount for our mortgage.

    In Massachusetts you need a lawyer to buy a house anyway, so he wrote up the "occupancy agreement" as well. He made very sure not to call it "renting" because then they would be tenants and Massachusetts has strict tenant laws. They also kept 5K back that the lawyer held onto in case there was any damage to the property after the closing. They got their money back after we ok'd everything when we moved in.  I wouldn't recommend this for everyone, but our sellers were extremely nice and responsible and we had no problems with them.

    Also, in regards to 20% down, we only put 10% down, but we avoided PMI by doing an 80/10/10. This means we have a normal large mortgage of 80%, a smaller loan of 10% and we paid the other 10% in cash for our down payment. Not all banks do this, and we have very good credit, so this worked for us.

    Our bank needed 2 months of bank statements. Like I said, we were getting married 2 weeks after the closing. So my parents had put money in my account in early January or late December. And then waited until the day after the closing to give me the rest of the money to pay for the wedding!  We had some large purchases during that time (like we bought our wedding rings) but the bank doesn't care how much money is going out, just what's coming in. 
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  • FiancBFiancB MinnesOOOta member
    500 Love Its 1000 Comments Second Anniversary Name Dropper
    If you live in a snowy area, I'd also caution you against buying in the winter. Sometimes you can get a good deal since the market slows. But one of the many problems that my friends had was that the inspector couldn't get a good look at the roof due to the snow. Everyone thought it would be fine because the roof was 5 years old. Well, it turned out it was made with faulty shingles that had since been recalled, so it was rotting and leaking and needed replaced. The sellers didn't disclose this and the realtor was no help. So that was an unexpected huge expense that needed to be taken care of within the year. 

    In that vein I would definitely buy less than your max because there are always unexpected costs like this. It's easy to forget that you'll need to buy a lawn mower, maybe a snow blower, all kinds of stuff you don't need until you buy. 

    I'd also try to figure out who your neighbors are and do a little internet stalking on them. Cray neighbors are the worst. 
    image
  • APDSS22APDSS22 O-K-L-A-H-O-M-A is OK member
    Fifth Anniversary 1000 Comments 500 Love Its First Answer
    We just closed on our first house at the end of Feb. so I feel you on how overwhelming it can be.  We ended up with a house that looked like crap on zillow and in the selling realtor's website because the seller just did not care about picking up her house.  Subsequently, we were able to knock down the price and have her throw in her riding lawnmower that she didn't need anymore and we would since it was a multi-acre property.  We only ended up looking at it because there isn't a large market in this area for exactly what we wanted.  Now we're renovating the master suite before we move in.  We got the keys at closing, stopped by Lowe's that day and bought locks that my husband re-keyed and dead-bolted the house with that day.  I definitely recommend this as you never know where all the keys to those locks ended up. 

  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer
    FI was looking around on Trulia at homes and found this one that fit most of our criteria, so FI showed it to his dad for input and told us that the land was too low and it would be problematic for flooding. The description didn't indicate this, and I couldn't see it on lower land in the pics. It was in a perfect spot for us, and in an area that we wouldn't bother neighbors when FI works on cars and uses loud machines. Such a disappointment, but it's all a learning experience right now. 
    ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 
    Funny Awkward animated GIF
  • My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area?

    The one rule of thumb I learned from it was that you should buy a house that is 3 times your yearly salary.  So you make $50k per year, you should try for a $150,000 house.  This should generally work, but you still need to look at your current debts, property taxes, and insurance to make sure it would be a comfortable price point for you. 

    For a realtor, I would ask around for recommendations first.  If you hear of someone who had a great experience with their realtor, then maybe add them to your list of realtors to interview.  I found my realtor from a co-worker.  It is his aunt and almost everyone in my department used her services and loves her.  She is a real advocate for her clients and doesn't just want to get a commission with any under handed shadiness.

    When H and I put my first home up for sale last year, we knew it was going to be a tough sale.  So we didn't go serious house hunting until we have a contract on our house.  But we did go to open houses of places in our targeted area and price range.  It really helped us learn what we could get for our money and what would happen if we stretched our budget by $10k to see the upgrade in properties. 

    It also helped us realize really quick how great a deal our current house is!  We have a 4 bed, 2 1/2 bath house with a formal living room/dining room, family room, and partially finished basement.  The house is still original from the early 70s, so its dated, but we also know that we can put all of our finishing touches on it as we go.  It will also help us build equity in the house since we will be putting in the updates instead of buying a updated house.  We never thought we would be able to find what we found in our price range!

  • cupcait927cupcait927 Western NY wine country member
    Seventh Anniversary 2500 Comments 500 Love Its First Answer

    My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area? 


    H did the first time homebuyer grant as well, before we were married. There were income limits so we needed to buy before getting married so we wouldn't exceed the limit (I believe it was $56,000/year), though we both contributed equally throughout the whole process. We had to make monthly deposits for 10 months of at least $181 so we put in $200. After the 10 months was up, we received our grant - $7500 if I remember correctly. The nice thing about buying the house only in H's name was that it kept us from buying more house than we could afford. He was approved for a certain amount based on his income alone and we still ended up buying way below that. We can still afford to keep our house even if we end up with just one income. Our house isn't a forever home, and we definitely plan on selling the second the 5 years is up, but it's definitely taught us a lot about being homeowners without breaking the bank.
  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer

    My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area?

    The one rule of thumb I learned from it was that you should buy a house that is 3 times your yearly salary.  So you make $50k per year, you should try for a $150,000 house.  This should generally work, but you still need to look at your current debts, property taxes, and insurance to make sure it would be a comfortable price point for you. 

    For a realtor, I would ask around for recommendations first.  If you hear of someone who had a great experience with their realtor, then maybe add them to your list of realtors to interview.  I found my realtor from a co-worker.  It is his aunt and almost everyone in my department used her services and loves her.  She is a real advocate for her clients and doesn't just want to get a commission with any under handed shadiness.

    When H and I put my first home up for sale last year, we knew it was going to be a tough sale.  So we didn't go serious house hunting until we have a contract on our house.  But we did go to open houses of places in our targeted area and price range.  It really helped us learn what we could get for our money and what would happen if we stretched our budget by $10k to see the upgrade in properties. 

    It also helped us realize really quick how great a deal our current house is!  We have a 4 bed, 2 1/2 bath house with a formal living room/dining room, family room, and partially finished basement.  The house is still original from the early 70s, so its dated, but we also know that we can put all of our finishing touches on it as we go.  It will also help us build equity in the house since we will be putting in the updates instead of buying a updated house.  We never thought we would be able to find what we found in our price range!

    I'm doing ~50k a year, so $150k sounds reasonable. We don't have much debt besides car payments and insurance, then eventually phone, but no student loans (my dad is paying that off as a gift for me, so lucky). It's hard to find a home in this area at that price without being a "rehab" home or in a bad area. 

    If I do, say ~50k, and Fi is about the same, is it smart to just stick with $150k homes and not look higher? He wants to stay relatively cheap, and him and his family have a lot of handymen to do work if something needs to be done, like flooring, but the homes I'm finding at that range are bank owned and foreclosures and in really bad shape. The apps don't show the foreclosures pictures, just an aerial view from Google maps. 

    Are foreclosures good to look at? It looked like they're being auctioned off, and I don't know anything about auction homes. 
    ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 
    Funny Awkward animated GIF
  • OliveOilsMomOliveOilsMom South Jersey member
    Eighth Anniversary 5000 Comments 500 Love Its 5 Answers
    MadHops21 said:

    My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area?

    The one rule of thumb I learned from it was that you should buy a house that is 3 times your yearly salary.  So you make $50k per year, you should try for a $150,000 house.  This should generally work, but you still need to look at your current debts, property taxes, and insurance to make sure it would be a comfortable price point for you. 

    For a realtor, I would ask around for recommendations first.  If you hear of someone who had a great experience with their realtor, then maybe add them to your list of realtors to interview.  I found my realtor from a co-worker.  It is his aunt and almost everyone in my department used her services and loves her.  She is a real advocate for her clients and doesn't just want to get a commission with any under handed shadiness.

    When H and I put my first home up for sale last year, we knew it was going to be a tough sale.  So we didn't go serious house hunting until we have a contract on our house.  But we did go to open houses of places in our targeted area and price range.  It really helped us learn what we could get for our money and what would happen if we stretched our budget by $10k to see the upgrade in properties. 

    It also helped us realize really quick how great a deal our current house is!  We have a 4 bed, 2 1/2 bath house with a formal living room/dining room, family room, and partially finished basement.  The house is still original from the early 70s, so its dated, but we also know that we can put all of our finishing touches on it as we go.  It will also help us build equity in the house since we will be putting in the updates instead of buying a updated house.  We never thought we would be able to find what we found in our price range!

    I'm doing ~50k a year, so $150k sounds reasonable. We don't have much debt besides car payments and insurance, then eventually phone, but no student loans (my dad is paying that off as a gift for me, so lucky). It's hard to find a home in this area at that price without being a "rehab" home or in a bad area. 

    If I do, say ~50k, and Fi is about the same, is it smart to just stick with $150k homes and not look higher? He wants to stay relatively cheap, and him and his family have a lot of handymen to do work if something needs to be done, like flooring, but the homes I'm finding at that range are bank owned and foreclosures and in really bad shape. The apps don't show the foreclosures pictures, just an aerial view from Google maps. 

    Are foreclosures good to look at? It looked like they're being auctioned off, and I don't know anything about auction homes. 



    I got my original account back now!

    I live in a higher cost of living area, so I had problems staying at the 3 times your income price range for the same reason you stated.  So I did go over the 3 times thing both times we have purchased.  But we didn't need to go over by that much to find something suitable in a good area.  It's really only a guideline to follow and if you feel comfortable going to something higher than 3 times your income, than go for it.

    Auction homes can be tricky.  You are almost always buying "as-is", I think you need to bring a certain amount of money with you to the auction, sometimes you cannot even see inside the house before the sale, and if its a sheriff's auction - I think there is a time period after you agree to purchase it that the original home owner could pay off what they owe and get their house back.  I feel auctions can be very tricky and I personally would never buy a house at auction.

    If you have no hurry and really like a foreclosed house or a short sale, then I would take a chance on dealing with the bank to make the purchase.  But again, it is your personal preference.  We looked at a few bank owned or short sale houses, but they just weren't the house for us in the end.

    Also, there is a difference between being a rehab house and being dated.  This is why a good home inspector is key.  They can tell you whether your ugly and dated bathroom (mine our yellow and powdered blue!) is functional and usable or needs immediate replacement.  As I said above our house is dated, but all functional.  We did purchase a new stove immediately because the original 70s stove was scary to me!  We also replaced the yellow and blue toilets, but we knew a plumber to do it on the cheap and the original toilets held so much water, we saved money on our water bill replacing them. But we also probably could have lived with that stove and the toilets for a while, if needed.  I hope that makes sense.

  • Just a word of warning about auction houses.... sometimes you cannot see the house before you bid on it.  And, you often will need cash at the time of the auction ready to go, so if you're getting a mortgage, you basically cannot buy the house.  I wouldn't recommend anybody buy a house at an auction unless you're an experienced buyer.
    Married 9.12.15
    image
    huskypuppy14
  • labrolabro Hotlanta member
    5000 Comments Sixth Anniversary 500 Love Its 5 Answers
    MadHops21 said:

    My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area?

    The one rule of thumb I learned from it was that you should buy a house that is 3 times your yearly salary.  So you make $50k per year, you should try for a $150,000 house.  This should generally work, but you still need to look at your current debts, property taxes, and insurance to make sure it would be a comfortable price point for you. 

    For a realtor, I would ask around for recommendations first.  If you hear of someone who had a great experience with their realtor, then maybe add them to your list of realtors to interview.  I found my realtor from a co-worker.  It is his aunt and almost everyone in my department used her services and loves her.  She is a real advocate for her clients and doesn't just want to get a commission with any under handed shadiness.

    When H and I put my first home up for sale last year, we knew it was going to be a tough sale.  So we didn't go serious house hunting until we have a contract on our house.  But we did go to open houses of places in our targeted area and price range.  It really helped us learn what we could get for our money and what would happen if we stretched our budget by $10k to see the upgrade in properties. 

    It also helped us realize really quick how great a deal our current house is!  We have a 4 bed, 2 1/2 bath house with a formal living room/dining room, family room, and partially finished basement.  The house is still original from the early 70s, so its dated, but we also know that we can put all of our finishing touches on it as we go.  It will also help us build equity in the house since we will be putting in the updates instead of buying a updated house.  We never thought we would be able to find what we found in our price range!

    I'm doing ~50k a year, so $150k sounds reasonable. We don't have much debt besides car payments and insurance, then eventually phone, but no student loans (my dad is paying that off as a gift for me, so lucky). It's hard to find a home in this area at that price without being a "rehab" home or in a bad area. 

    If I do, say ~50k, and Fi is about the same, is it smart to just stick with $150k homes and not look higher? He wants to stay relatively cheap, and him and his family have a lot of handymen to do work if something needs to be done, like flooring, but the homes I'm finding at that range are bank owned and foreclosures and in really bad shape. The apps don't show the foreclosures pictures, just an aerial view from Google maps. 

    Are foreclosures good to look at? It looked like they're being auctioned off, and I don't know anything about auction homes. 



    1. Absolutely. H and I bought a $175k home which was about double his annual income. We didn't even take mine in to account. We stuck with a cheaper home that we loved because we wanted to be able to afford the mortgage easily in case one of us had long-term unemployment (that wiped out emergency savings). Try to avoid basing your home buying decision based on your joint salaries for just this reason. I'm just not a risk-taker in this regard.

    2. Yes, sometimes. We looked at a TON of foreclosures because they were a great price and because it would've put us in to a home we might normally not be able to afford. However, many of them had major issues (both cosmetic and structural) that we just didn't want to deal with. Some homeowners are very unhappy when they get foreclosed on and will deliberately destroy a home (this was our experience anyway) when they leave - this included ripping wires out of walls, punching holes in, breaking windows, taking ALL appliances (including the oven). We ended up buying an older home that had been well-maintained and wasn't a foreclosure. We didn't have a huge amount of capital after making a downpayment to immediately put $20k in to a home just to make it livable so that was what worked for us. There was one short sale we seriously considered until we saw a basement window had been broken and there was black colored mold growing on the ceiling. H just didn't want to worry about whether that mold was in the duct work or not so we passed it up.

    Another thing I didn't like about the foreclosed homes we saw is that people hadn't been living in them for several months or more. When a home isn't lived in, things like rot, animal damage, and other problems seem to set in much more quickly for some reason. We just noticed a ton of issues that may not have been there if the house had still been used as an actual residence.



  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer

    MadHops21 said:

    My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area?

    The one rule of thumb I learned from it was that you should buy a house that is 3 times your yearly salary.  So you make $50k per year, you should try for a $150,000 house.  This should generally work, but you still need to look at your current debts, property taxes, and insurance to make sure it would be a comfortable price point for you. 

    For a realtor, I would ask around for recommendations first.  If you hear of someone who had a great experience with their realtor, then maybe add them to your list of realtors to interview.  I found my realtor from a co-worker.  It is his aunt and almost everyone in my department used her services and loves her.  She is a real advocate for her clients and doesn't just want to get a commission with any under handed shadiness.

    When H and I put my first home up for sale last year, we knew it was going to be a tough sale.  So we didn't go serious house hunting until we have a contract on our house.  But we did go to open houses of places in our targeted area and price range.  It really helped us learn what we could get for our money and what would happen if we stretched our budget by $10k to see the upgrade in properties. 

    It also helped us realize really quick how great a deal our current house is!  We have a 4 bed, 2 1/2 bath house with a formal living room/dining room, family room, and partially finished basement.  The house is still original from the early 70s, so its dated, but we also know that we can put all of our finishing touches on it as we go.  It will also help us build equity in the house since we will be putting in the updates instead of buying a updated house.  We never thought we would be able to find what we found in our price range!

    I'm doing ~50k a year, so $150k sounds reasonable. We don't have much debt besides car payments and insurance, then eventually phone, but no student loans (my dad is paying that off as a gift for me, so lucky). It's hard to find a home in this area at that price without being a "rehab" home or in a bad area. 

    If I do, say ~50k, and Fi is about the same, is it smart to just stick with $150k homes and not look higher? He wants to stay relatively cheap, and him and his family have a lot of handymen to do work if something needs to be done, like flooring, but the homes I'm finding at that range are bank owned and foreclosures and in really bad shape. The apps don't show the foreclosures pictures, just an aerial view from Google maps. 

    Are foreclosures good to look at? It looked like they're being auctioned off, and I don't know anything about auction homes. 



    I got my original account back now!

    I live in a higher cost of living area, so I had problems staying at the 3 times your income price range for the same reason you stated.  So I did go over the 3 times thing both times we have purchased.  But we didn't need to go over by that much to find something suitable in a good area.  It's really only a guideline to follow and if you feel comfortable going to something higher than 3 times your income, than go for it.

    Auction homes can be tricky.  You are almost always buying "as-is", I think you need to bring a certain amount of money with you to the auction, sometimes you cannot even see inside the house before the sale, and if its a sheriff's auction - I think there is a time period after you agree to purchase it that the original home owner could pay off what they owe and get their house back.  I feel auctions can be very tricky and I personally would never buy a house at auction.

    If you have no hurry and really like a foreclosed house or a short sale, then I would take a chance on dealing with the bank to make the purchase.  But again, it is your personal preference.  We looked at a few bank owned or short sale houses, but they just weren't the house for us in the end.

    Also, there is a difference between being a rehab house and being dated.  This is why a good home inspector is key.  They can tell you whether your ugly and dated bathroom (mine our yellow and powdered blue!) is functional and usable or needs immediate replacement.  As I said above our house is dated, but all functional.  We did purchase a new stove immediately because the original 70s stove was scary to me!  We also replaced the yellow and blue toilets, but we knew a plumber to do it on the cheap and the original toilets held so much water, we saved money on our water bill replacing them. But we also probably could have lived with that stove and the toilets for a while, if needed.  I hope that makes sense.

    That does make sense. I was wondering who that other account was, I was so confused!

    Auction homes sound like too much of a risk for me. This would be our first home and we want to live there for years until our children get older, once we have them. So I want it to be a good enough home to live in, and still fix things ourselves to really make it our own. 

    Foreclosed homes and short sales take longer than regular for-sale homes? I'm finding that those are cheaper and still have what we want, but I didn't know the cons to those. I know bank owned are "as is", but it's hard to see what a foreclosed home looks like from just an aerial view. And there are a lot in the Chicago suburbs. 
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  • MadHops21MadHops21 Buried in blankets member
    Fifth Anniversary 500 Love Its 500 Comments First Answer
    labro said:

    MadHops21 said:

    My county offered a first time homebuyer grant.  If you stayed in the house 5 years, you did not need to pay it back.  If you sold before 5 years, then you paid it back at your closing.  With this program came a necessary financial course.  Basically it was Dave Ramsey's course.  It went through all sorts of things about general financial planning and home buying.  I found it to be very helpful.  Maybe they offer something like this in your area?

    The one rule of thumb I learned from it was that you should buy a house that is 3 times your yearly salary.  So you make $50k per year, you should try for a $150,000 house.  This should generally work, but you still need to look at your current debts, property taxes, and insurance to make sure it would be a comfortable price point for you. 

    For a realtor, I would ask around for recommendations first.  If you hear of someone who had a great experience with their realtor, then maybe add them to your list of realtors to interview.  I found my realtor from a co-worker.  It is his aunt and almost everyone in my department used her services and loves her.  She is a real advocate for her clients and doesn't just want to get a commission with any under handed shadiness.

    When H and I put my first home up for sale last year, we knew it was going to be a tough sale.  So we didn't go serious house hunting until we have a contract on our house.  But we did go to open houses of places in our targeted area and price range.  It really helped us learn what we could get for our money and what would happen if we stretched our budget by $10k to see the upgrade in properties. 

    It also helped us realize really quick how great a deal our current house is!  We have a 4 bed, 2 1/2 bath house with a formal living room/dining room, family room, and partially finished basement.  The house is still original from the early 70s, so its dated, but we also know that we can put all of our finishing touches on it as we go.  It will also help us build equity in the house since we will be putting in the updates instead of buying a updated house.  We never thought we would be able to find what we found in our price range!

    I'm doing ~50k a year, so $150k sounds reasonable. We don't have much debt besides car payments and insurance, then eventually phone, but no student loans (my dad is paying that off as a gift for me, so lucky). It's hard to find a home in this area at that price without being a "rehab" home or in a bad area. 

    If I do, say ~50k, and Fi is about the same, is it smart to just stick with $150k homes and not look higher? He wants to stay relatively cheap, and him and his family have a lot of handymen to do work if something needs to be done, like flooring, but the homes I'm finding at that range are bank owned and foreclosures and in really bad shape. The apps don't show the foreclosures pictures, just an aerial view from Google maps. 

    Are foreclosures good to look at? It looked like they're being auctioned off, and I don't know anything about auction homes. 



    1. Absolutely. H and I bought a $175k home which was about double his annual income. We didn't even take mine in to account. We stuck with a cheaper home that we loved because we wanted to be able to afford the mortgage easily in case one of us had long-term unemployment (that wiped out emergency savings). Try to avoid basing your home buying decision based on your joint salaries for just this reason. I'm just not a risk-taker in this regard.

    2. Yes, sometimes. We looked at a TON of foreclosures because they were a great price and because it would've put us in to a home we might normally not be able to afford. However, many of them had major issues (both cosmetic and structural) that we just didn't want to deal with. Some homeowners are very unhappy when they get foreclosed on and will deliberately destroy a home (this was our experience anyway) when they leave - this included ripping wires out of walls, punching holes in, breaking windows, taking ALL appliances (including the oven). We ended up buying an older home that had been well-maintained and wasn't a foreclosure. We didn't have a huge amount of capital after making a downpayment to immediately put $20k in to a home just to make it livable so that was what worked for us. There was one short sale we seriously considered until we saw a basement window had been broken and there was black colored mold growing on the ceiling. H just didn't want to worry about whether that mold was in the duct work or not so we passed it up.

    Another thing I didn't like about the foreclosed homes we saw is that people hadn't been living in them for several months or more. When a home isn't lived in, things like rot, animal damage, and other problems seem to set in much more quickly for some reason. We just noticed a ton of issues that may not have been there if the house had still been used as an actual residence.

    That's disappointing with foreclosures. Is it normal for foreclosures to have open house time? I'm starting to get disappointed with the homes in my area at $150k not having everything in our need list, and foreclosures are just cheaper for the same house than someone just selling it. 
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  • labrolabro Hotlanta member
    5000 Comments Sixth Anniversary 500 Love Its 5 Answers
    edited March 2015
    @MadHops21 I can't say it's the same with all foreclosures. It was just our experience. As far as I know, foreclosed homes never have open houses, you'd need to get set up with a realtor to actually look at them. Foreclosed homes are cheaper because the bank is trying to get their money back on the loan they foreclosed on - which means they may just be selling the home for whatever the remainder of the loan amount happened to be. You're in a good position now where you aren't having to rush in to this, so don't get disappointed just because you aren't seeing the homes on the market that you want to see. It wouldn't hurt anything to get a pre-approval letter from a bank (so you can come up with a realistic home budget), engage with a realtor, and do some looking around. If you don't see anything you aren't 100% happy with, stop looking, take a break, and go back to it later. Your realtor should be most interested in selling you a house that you love and are absolutely happy with, not just with making their commission as quickly as possible. We started looking a year before we actually bought, stopped because we just weren't sure we were ready to buy, and then a year later started talking to our realtor again and found the perfect house for us within a month.



  • dcbride86dcbride86 Washington, DC member
    500 Love Its 500 Comments Second Anniversary First Answer

    I would talk to some people in your area who have bought homes.  Every area is so different.  FI and I put in 1 of 2 bids above the asking price, but we got it because ours was slightly higher after closing costs.  In some areas, though, you NEVER offer above asking.

    Speaking of closing costs, they are a pain in the ass and ridiculously expensive.  I don't even know what they are.  I asked my mom, and her exact response was "they're bullshit."  And that they are.

    Try not to get too excited until after the inspection.  Ours turned out okay, but we did ask for about $5,000 after the inspection because of little things that the inspector found.  Speaking of which - inspectors WILL find things wrong with the house.  that is literally their job.  Things will be wrong, but that's okay.  Hopefully they'll all be small things.

     

    Good luck!

    labroMadHops21
  • labrolabro Hotlanta member
    5000 Comments Sixth Anniversary 500 Love Its 5 Answers
    dcbride86 said:

    I would talk to some people in your area who have bought homes.  Every area is so different.  FI and I put in 1 of 2 bids above the asking price, but we got it because ours was slightly higher after closing costs.  In some areas, though, you NEVER offer above asking.

    Speaking of closing costs, they are a pain in the ass and ridiculously expensive.  I don't even know what they are.  I asked my mom, and her exact response was "they're bullshit."  And that they are.

    Try not to get too excited until after the inspection.  Ours turned out okay, but we did ask for about $5,000 after the inspection because of little things that the inspector found.  Speaking of which - inspectors WILL find things wrong with the house.  that is literally their job.  Things will be wrong, but that's okay.  Hopefully they'll all be small things.

     

    Good luck!

    All of this! Especially about the home inspection! I LOVED our home inspector. We got back a detailed description of all the problems he discovered, along with pictures, and a "rating" on the severity level of the issue. Most "issues" he marked as green or yellow, mostly meaning maybe something wasn't 100% up to code (like no GFCI outlets in the bathrooms)  or wasn't major (like additional insulation) and could be fixed easily and cheaply on our own and shouldn't affect our decision making. He marked one red issue - the siding, because it was in poor shape and needed to be replaced. He also gave us options on what we could do to temporarily prolong the life. The home inspection is super useful for identifying major problems, but also for showing you the minor issues that you may want to consider fixing after you've moved in, or having the seller repair if it's a big deal to you.



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