First Time Homebuyer

Discussion in 'Totally Off-Topic' started by danidavid, Apr 17, 2017.

  1. danidavid

    danidavid

    Joined:
    Mar 6, 2017
    Location:
    Chicago, IL
    So my wife and I are looking at purchasing our first home and I'm trying to get as many different opinions as possible before we make the big leap. I figured there isn't a better place to get a wide array of opinions than TB.

    Looking for feedback on things that you wish you'd knew when you've purchased a house, or things you wish you would've looked at because they ended up being a pain in the ass to fix.

    Pretty much any suggestions and feedback on the home selection/buying process would be greatly appreciated.

    (Also for what it's worth we currently work in/around Chicago and are looking at moving to Northwest Indiana [taxes are absolutely stupid in Illinois for those of you that aren't from around here])
     
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  2. shadowane

    shadowane

    Joined:
    Sep 30, 2013
    Number one piece of advice I'd give is don't force it. This is a huge purchase and not one you want to regret. If there is something about a home that bothers you, consider it strongly as it will annoy you down the line. Also, don't buy more than you can afford. Probably a good idea to not look out of your price range because it will just upset you.
     
  3. Jnorton00

    Jnorton00

    Joined:
    Sep 29, 2013
    Location:
    Massachusetts
    I didn't think my steep driveway would be an issue and now every time it snows I want to kill myself because it's a huge pain in the ass to get up for my shitty little car.
     
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  4. lurchingbeast

    lurchingbeast

    Joined:
    Apr 11, 2013
    Remember your real estate agent works for you, not the other way around. "I can't take you to see those houses until monday" doesn't cut it.
     
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  5. evilc

    evilc

    Joined:
    Sep 27, 2013
    Location:
    San Diego
    My main piece of advice is whatever you buy - only buy it if you could live there long term. Don't get into the whole "oh we'll upgrade in 3 years, this is short term only". You never know if:

    1. You'll lose jobs, taking lower paying ones.
    2. The market will crash, leaving you the option of staying long term or walking away.

    I bought in 2005, thinking "omg San Diego will NEVER get cheaper, better buy now!" It took 9 years for my house to be worth what I paid for it after the crash in 2007.

    Don't forget to calculate your "new" net income based on the interest you are writing off when figuring affordability. You may be able to afford quite a bit more than you think if you are using your current net pay.

    The usual rules aside from that apply:

    1. Location, location, location, and 1 more LOCATION.
    2. Try and get the cheapest house in the nicest area. The smallest house in the neighborhood etc if you are looking for maximum return.
    3. Screw ARMs, get a fixed rate period. While higher cost, there is nothing like having a payment that can never change and you can write-off the higher cost away.
    4. Stick to the 28/36 rule. The mortgage payment should be no more than 28% of your gross monthly income, and total debt including it should be no more than 36%. This is very conservative but a traditional recommendation.
     
    Last edited: Apr 17, 2017
  6. evilc

    evilc

    Joined:
    Sep 27, 2013
    Location:
    San Diego
    Yeah, fired.

    Agents are making 10s of K. They don't get days off.
     
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  7. disGRUNTled

    disGRUNTled

    Joined:
    Jan 25, 2014
    Location:
    Florida
    I don't have any regrets but maybe some advice that might help. Like it has been mentioned it is a huge purchase so you want to make sure that you love the house, neighborhood, schools, ect. Check your credit and make sure it is on point and do not have your credit pulled by anyone unless it's the lender. Do not make any big purchase from now until after closing (the lenders will check for this prior to closing and it could cost you the loan). Have a good real estate agent that is looking out for your interest .Good luck purchasing a home to me anyways was a big part of my "American Dream".
     
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  8. boogercrack

    boogercrack

    Joined:
    Apr 10, 2013
    Location:
    TX
    I know I'm kind of nitpicky, but if you're buying a house someone has lived in for a while, look for the small maintenance items that would be easy to notice.

    IE, if they're not bothering to change out their A/C intake air filters regularly, they're probably not doing any other routine maintenance that would preserve the house and it's components.

    Oh, and a great inspector is worth their weight in platinum as a buyer. As a seller you want your buyer to have a shit inspector.
     
  9. nanobrew

    nanobrew

    Joined:
    Apr 22, 2013
    Location:
    San Diego, CA
    Congrats and sorry about the hunt. It is fun and stressful at the same time. I agree with a lot that has been said. Do not rush and stick to your goals. My wife and I passed a lot of places either because there were things we were not 100% happy with or because they came back asking for above our price. We ended finding the exact type of place we wanted.

    Our realtor was amazing. He was a friend (more of a casual friend than close one) and we thought maybe he would give us a discount (yes we were greedy), he didn't and we thought about going to other agents that advertise reduced rates or % back. I am glad we didn't He knew his shit and amazing to work with.

    Inspectors are equally important. One thing to double check is plumbing. Run water for a long time and lots at a time. Something may drain fine for 30sec, but start backing up after 2 minutes, or if laundry and shower are being used at the same time. This could indicate big issues with drain pipes.

    One thing that surprised me and my wife were the closing cost. We always assumed the buyer just pays the house cost, the seller pays the realtors, and that is all. Nope, expect an extra 2-3% in closing cost. While not much and it can get tacked on to the mortgage, it is still something to be aware of.

    Also, keep in mind the taxes and fees you will have to pay annually. Unless you are good about allocating money around, I find it super easy to just have the mortgage company handle an escrow account for these fees. This means your monthly payment will be slightly higher, but only because they are adding on a little to cover the taxes. This should be done at no cost and you get money back if they over estimate.

    Lastly, not sure on what you have for down payment, but if less than the 20%, I suggest looking at FHA. Typically good rates and less down payment needed. This will allow you to allocate money to renovations, moving cost, etc. There is PMI which adds $$, but you can refinance down the line once you own 20% of the home (this is even calculated due to rise in value). Though I would recommend only refinancing what you owe on the house, the bank will try to get you to take out more but that is because that is how they make money.
     
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  10. Roger85

    Roger85

    Joined:
    Jul 9, 2013
    Location:
    Illinois
    Make sure you know ages of major stuff in the house (heating/AC/Roof/etc). Don't want to be surprised by having to spend 10K on a roof a year after you buy it.
     
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  11. screwyouguys

    screwyouguys

    Joined:
    Apr 10, 2013
    are you looking to buy:

    new construction home
    rehabbed home
    house that had a prior owner living

    this can clear up a lot of questions but also raise many issues depending on which is your choice
     
  12. evilc

    evilc

    Joined:
    Sep 27, 2013
    Location:
    San Diego
    [​IMG]
     
  13. MarcatGSB

    MarcatGSB

    Joined:
    Feb 1, 2014
    Location:
    Keweenaw, MI
    Was just about to mention finding a really highly regarded inspector!
     
  14. danidavid

    danidavid

    Joined:
    Mar 6, 2017
    Location:
    Chicago, IL
    Wow I definitely didn't expect this much feedback so fast. Thank you everyone for the awesome words of advice and encouragement.

    At this point we've basically narrowed it down to a house that had a prior owner living in it. We don't want to mess with a new construction at this point in our lives (our friends have had bad problems with new construction town homes), and don't think I have enough knowledge to completely renovate a home.

    Thanks again for all of the awesome replies gang!
     
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  15. screwyouguys

    screwyouguys

    Joined:
    Apr 10, 2013
    I meant a home that was rehabbed by a contractor and now on the market

    Prior owner living.
    As stated def run a lot of water through drains. To ensure no back up
    Try and determine how old sewer connection is.
    Have heater and a/c inspected.

    Just try and ensure everything is has up to date has possible.
     
  16. evilc

    evilc

    Joined:
    Sep 27, 2013
    Location:
    San Diego
    Fuck buying a flip. OMGERD no thanks.
     
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  17. t sizzle

    t sizzle

    Joined:
    Jul 13, 2014
    Location:
    Santee
    If you have a friend in the construction trades, see if they'll take a look at the property. Having someone who has your back is important. I'd also recommend choosing your own inspector. Don't let your realtor tell you "they got a guy". My wife and I almost got screwed on a property that had undisclosed slab damage. Our realtor's inspector missed what turned out to be very obvious signs of damage which we didn't discover until my FIL's home builder friend walked the property with us. Thankfully we got out of the deal.
     
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  18. screwyouguys

    screwyouguys

    Joined:
    Apr 10, 2013
     
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  19. t sizzle

    t sizzle

    Joined:
    Jul 13, 2014
    Location:
    Santee
    yup x 1,000,000. Don't do it.
     
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  20. gregkoko

    gregkoko

    Joined:
    May 1, 2013
    Location:
    NJ/NYC
    In a similar boat. My wife and I have just started looking at places. The market here is insane. Same day offers when houses go on the market. Hoping to find a place/put an offer in by mid July at the latest
     
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