The Home-ownership Thread

[Doohicksie]

Cool! Gotta be a relief when “as is” is accepted as “as is.” (what a weird sentence that was grammatically...)

 

Here’s to hoping you get a little money back for those remedies

 

This week I have been thinking about the first house my wife and I went into contract on. It was a week just like this one, with pretty much constant rain that ranged from drizzle to downpour. The day of the inspection was particularly miserable. But it played to our favor.. turns out the foundation was leakier than Robin Lehner in a shootout. Further investigation showed that the seller had covered up major water damage. The detached garage had roof issues as well.

 

We bought a condo built on a slab instead... no basement issued here :P

 

Maybe not but you can still have foundation issue.  Everything here in Texas has been built on slabs for years and they rock and roll with the soil.

[ubkev]

So, the buyer did their inspection on our current home today and this evening they accepted the property. So one way or the other we're moving.

 

We did some further inspections on the new house today and we're probably going to ask for a little relief on the price. There are some issues with the electrical system, a tree leaning against the eaves that has to come down, a few plumbing issues, etc. But even if there is no relief we'll be going forward.

Thumbs up!

[Sabres Fan in NS]

So, the buyer did their inspection on our current home today and this evening they accepted the property.  So one way or the other we're moving.

 

We did some further inspections on the new house today and we're probably going to ask for a little relief on the price.  There are some issues with the electrical system, a tree leaning against the eaves that has to come down, a few plumbing issues, etc.  But even if there is no relief we'll be going forward.

Congrats to you and your family.

[Doohicksie]

And.... the seller of our new home accepted our request for concession on some of the required repairs. 

 

 

WE HAVE A DEAL.

[darksabre]

And.... the seller of our new home accepted our request for concession on some of the required repairs. 

 

 

WE HAVE A DEAL.

:thumbsup:

[ubkev]

And.... the seller of our new home accepted our request for concession on some of the required repairs.

 

 

WE HAVE A DEAL.

Now wasn't that fun? Seriously. All of that was the fun part for me. It's the actual moving that sucks.

 

Congrats and good luck.

[Doohicksie]

No.  Stressful.  Not fun.

 

I would not recommend doing a contingency sale.  The permutations of what can go wrong can be scary, like what if the music stops on our current house and we don't have anywhere to sit down?  What if the buyer of the current home drops their offer after the inspection?  I've been playing all these scenarios in my head for weeks.  It might have been worth it to do a short-term rental, but I didn't want to move twice.

Now I'll have the stress of the upgrades we'll need to do on the new house- windows, electrical, etc.

[darksabre]

No.  Stressful.  Not fun.

 

I would not recommend doing a contingency sale.  The permutations of what can go wrong can be scary, like what if the music stops on our current house and we don't have anywhere to sit down?  What if the buyer of the current home drops their offer after the inspection?  I've been playing all these scenarios in my head for weeks.  It might have been worth it to do a short-term rental, but I didn't want to move twice.

Now I'll have the stress of the upgrades we'll need to do on the new house- windows, electrical, etc.

Kinda sounds similar to buying a house while renting. Don't have a new lease signed and the buy falls through or doesn't close in time? You're living in a month to month and putting all your non-essentials into storage until you close. 

 

Actually,when I was 5 my family had to do this. Our new house was behind on construction and our old house had sold, so we ended up living in an apartment for a few months. Luckily I think we moved in to the new place just in time for the school year to start (kindergarten for me). 

[LTS]

If you have a really cool seller on your contingency offer then it can be much better.

 

When we moved into my current house the seller had chosen us over 4 other offers because we had kids.  He really wanted our family to be in his house even though we were a contingency sale.  When my house didn't sell in the first 30 days (absolutely against the trend at the time) he reached out an extended our contingency without us having to ask.  That was awesome.

 

Our house sold in 35 days and everything went smooth.  My buyers were complete jerks but I did what was asked and then they immediately let the house go to hell.  So be it.  It all worked out.

 

MOVING... now that sucks.  If you ever wanted the incentive to NOT be a hoarder.. just move.  It blows... especially as you get to the deadline.  I recall just throwing crap into the PODS I had to move remaining items that were not going in the moving truck.  Holy crap....

 

Congratulations on everything getting done.  Hope the rest of the ride is smooth.

[North Buffalo]

Or getting ready for retirement... what will my kids really want to keep. The rest goes on ebay or in the trash.

[Sabres Fan in NS]

No.  Stressful.  Not fun.

 

I would not recommend doing a contingency sale.  The permutations of what can go wrong can be scary, like what if the music stops on our current house and we don't have anywhere to sit down?  What if the buyer of the current home drops their offer after the inspection?  I've been playing all these scenarios in my head for weeks.  It might have been worth it to do a short-term rental, but I didn't want to move twice.

Now I'll have the stress of the upgrades we'll need to do on the new house- windows, electrical, etc.

 

Congrats.

 

The whole process is very stressful.

[Doohicksie]

The window guy came out to the house Friday.  I made some back of the envelope computations and came within a hundred dollars of the window company estimate.  I took a guess at price per window and that was just about spot on.  All the windows are the same size except for the bathroom and kitchen windows.

 

There's a tree leaning against the eave of the roof; I figured it would take about $2000 to cut it down.... more like $3000.  Shoot.

 

I also met the son of the owners today.  He grew up in the house and is about my age.  He stopped by the house to check for mail.  He said the detached garage was built by his father (and he helped).

Edited February 24, 2018 by Anordning

[Winston]

Homes with longtime family stories like that are cool.

 

My parents’ house has a rich history. The original house was built in the late 1800s. It was later inherited by someone that didn’t like the layout. So they tore it down and rebuilt on the same foundation in the 1930s. Then in the ‘80s, it was inherited again. This time they liked the house, but not the location... so they moved it about a half mile across the street on tractor trailers.

 

So if I’m in the basement, my surrounding are 40 years old. On my way upstairs to 1930s farmhouse charm, I pass over wooden beams from the 19th century.

 

My parents are the first owners outside that original family. The folks they bought it from moved into an RV full time and travel the US visiting their kids.

[North Buffalo]

Homes with longtime family stories like that are cool.

My parents’ house has a rich history. The original house was built in the late 1800s. It was later inherited by someone that didn’t like the layout. So they tore it down and rebuilt on the same foundation in the 1930s. Then in the ‘80s, it was inherited again. This time they liked the house, but not the location... so they moved it about a half mile across the street on tractor trailers.

So if I’m in the basement, my surrounding are 40 years old. On my way upstairs to 1930s farmhouse charm, I pass over wooden beams from the 19th century.

My parents are the first owners outside that original family. The folks they bought it from moved into an RV full time and travel the US visiting their kids.

Speaking of RV living does anyone have any experience, insight or advice. Wife and I are strongly considering in next ten years?

[darksabre]

People who have bought houses, how much did you have saved up when you decided to start seriously looking?

 

I'm my game plan is to be trying to close by April or so next year. I'm thinking I should have enough cash on hand to cover a 3-5% downpayment and I'm assuming closing costs at about 5% of the sale price. Does that seem right?

 

Obviously there will be costs like appliances or up-front improvements, but I'm mostly worried about cash on hand.

[Sabres Fan in NS]

People who have bought houses, how much did you have saved up when you decided to start seriously looking?

 

I'm my game plan is to be trying to close by April or so next year. I'm thinking I should have enough cash on hand to cover a 3-5% downpayment and I'm assuming closing costs at about 5% of the sale price. Does that seem right?

 

Obviously there will be costs like appliances or up-front improvements, but I'm mostly worried about cash on hand.

 

As much as possible.  This will really dictate how much you will be able to spend and where.

[darksabre]

As much as possible. This will really dictate how much you will be able to spend and where.

Right, but I'm trying to figure out what my minimum is where I can start shopping and not just be a tire kicking jerk who can't make an offer :lol:

[Sabel79]

Right, but I'm trying to figure out what my minimum is where I can start shopping and not just be a tire kicking jerk who can't make an offer :lol:

If you're looking at an FHA loan, figure 5% down. In my personal experience, we burned through a further $20k in updates, furniture, odds and ends. Depends on what you don't have and need immediately.

 

Also, do your best to coordinate closing with lease termination. Managed to close a month before the lease on our short term apartment ended, so the first mortgage payment was basically a month later, didn't burn the budget. Also, gave us the opportunity to have the house empty for a few weeks while we cleaned, painted, etc.

[Doohicksie]

We're in our 50s and selling one home to buy another, so our situation is a little different.

 

For someone buying a first house though, you have the prospects of realistically taking out a 30-year loan, projecting increasing income over that time, and as long as they're not safety issues, taking more time to do repairs and upgrades.  The important thing is to get in ASAP because economists are predicting rising interest rates going forward.  But... bear in mind that if you're only putting 3-5% down, you'll be stuck in the house for a while because you won't have enough equity to cover commissions to sell the house.  I don't say that to discourage you, but you have to look at both sides.  Personally I would get a home as soon as I could if the opportunity is there.

 

I get the general impression that the Buffalo housing market, like here in Fort Worth, has reasonably affordable housing but prices are rising at a pretty good clip.  If you wait a year, fewer homes will be available to you based on your income since prices are going up faster than pay.  The price point we've been looking at is about $200k.  This is sad because the same homes (or homes in the same neighborhoods) that are in that price range today, were going for $150k a few years ago.  The moral of the story is, get in a soon as you can so that you can ride the wave of rising home values instead of just watching prices go up.

 

One bit of advice:  Invest the money and hire a good home inspector.  We spent about $1200 on home inspections for two houses and it was some of the best money we spent in the process.  It helped us get out of a very good looking house that had major problems hidden just under the surface, and helped us understand what needs to be done on the house we did decide to buy.

 

One other bit of advice:  A loan officer will probably tell you that you can afford something crazy, like $500k for a house.  Don't fall for that temptation.  Instead, look at something like a monthly mortgage payment (PITI) of 1.5 times your current rent payment.  That will be tough to pay in the beginning, but you'll be able to write off mortgage interest on your taxes.  (Disclaimer:  I don't know what your rent payment is, but the general idea is to not reach for the most expensive home you can buy, but rather one you can realistically afford.)

If you're looking at an FHA loan, figure 5% down. In my personal experience, we burned through a further $20k in updates, furniture, odds and ends. Depends on what you don't have and need immediately.

Also, do your best to coordinate closing with lease termination. Managed to close a month before the lease on our short term apartment ended, so the first mortgage payment was basically a month later, didn't burn the budget. Also, gave us the opportunity to have the house empty for a few weeks while we cleaned, painted, etc.

 

We're looking at the same prospect in terms of repairs/upgrades to the house's wiring, windows, etc.

If you can save 5-7% for a down payment, but can get away with only putting 3% down, that extra money will be welcome when you encounter your first home repair.  Think of it as adding the first home improvement or two to your mortgage.

[darksabre]

We're in our 50s and selling one home to buy another, so our situation is a little different.

 

For someone buying a first house though, you have the prospects of realistically taking out a 30-year loan, projecting increasing income over that time, and as long as they're not safety issues, taking more time to do repairs and upgrades.  The important thing is to get in ASAP because economists are predicting rising interest rates going forward.  But... bear in mind that if you're only putting 3-5% down, you'll be stuck in the house for a while because you won't have enough equity to cover commissions to sell the house.  I don't say that to discourage you, but you have to look at both sides.  Personally I would get a home as soon as I could if the opportunity is there.

 

I get the general impression that the Buffalo housing market, like here in Fort Worth, has reasonably affordable housing but prices are rising at a pretty good clip.  If you wait a year, fewer homes will be available to you based on your income since prices are going up faster than pay.  The price point we've been looking at is about $200k.  This is sad because the same homes (or homes in the same neighborhoods) that are in that price range today, were going for $150k a few years ago.  The moral of the story is, get in a soon as you can so that you can ride the wave of rising home values instead of just watching prices go up.

 

One bit of advice:  Invest the money and hire a good home inspector.  We spent about $1200 on home inspections for two houses and it was some of the best money we spent in the process.  It helped us get out of a very good looking house that had major problems hidden just under the surface, and helped us understand what needs to be done on the house we did decide to buy.

 

One other bit of advice:  A loan officer will probably tell you that you can afford something crazy, like $500k for a house.  Don't fall for that temptation.  Instead, look at something like a monthly mortgage payment (PITI) of 1.5 times your current rent payment.  That will be tough to pay in the beginning, but you'll be able to write off mortgage interest on your taxes.  (Disclaimer:  I don't know what your rent payment is, but the general idea is to not reach for the most expensive home you can buy, but rather one you can realistically afford.)

 

We're looking at the same prospect in terms of repairs/upgrades to the house's wiring, windows, etc.

If you can save 5-7% for a down payment, but can get away with only putting 3% down, that extra money will be welcome when you encounter your first home repair.  Think of it as adding the first home improvement or two to your mortgage.

This squares pretty good with my understanding of the process. Basically where I'm at is that I could do one of those first time homebuyer programs where I'm stuck in a house for 5 years to meet the terms of the grant, or I buy a house without the grant and end up there for the same amount of time anyway waiting for the equity to square so I can sell. *shrug*

 

Either way, I'm ready to be done renting. I'm 100% ready to be done. 

 

 

I hope I can find a good inspector. I have no idea how I'm supposed to track something like that down. How do I know I'm getting a good inspector? 

 

As to the bolded, this will never happen, because I have student loans which loan officers say should basically disqualify me from buying a home at all. "Student loans? Ah, we can qualify you for this 1992 Chevrolet Tiara Conversion Van".   :P 

 

I'm thinking I can get qualified for around 100k, which is just about where I want to be anyway. Ideally I can get something I like for under 90k based on what I'm seeing for the location I like. 

[Doohicksie]

I hope I can find a good inspector. I have no idea how I'm supposed to track something like that down. How do I know I'm getting a good inspector?

 

Talk to people you know who have bought houses.  Ask for Recommendations from your friends on FB.  Look on Yelp.  Check HomeAdvisor (but be careful about giving them your contact info- my experience is the contractors will pester you... I put in my phone number for a tile repair just before going to bed, and contractors started texting me overnight, and started calling me at 7 am).

Edited March 1, 2018 by Anordning

[Drunkard]

People who have bought houses, how much did you have saved up when you decided to start seriously looking?

 

I'm my game plan is to be trying to close by April or so next year. I'm thinking I should have enough cash on hand to cover a 3-5% downpayment and I'm assuming closing costs at about 5% of the sale price. Does that seem right?

 

Obviously there will be costs like appliances or up-front improvements, but I'm mostly worried about cash on hand.

 

Go to your bank/credit union and talk to the loan officer (or do it online). They should be able to get you pre-approved for a mortgage and walk you through the different options with regards to down payment requirements, monthly payment estimates, etc, depending on the type/size of the loan and all that.

 

Doohickie is right that interest rates are going to continue to go up, along with housing prices, so you're better off locking yourself in sooner rather than waiting and giving more money to whomever you eventually buy from for a similar place.

Edited March 1, 2018 by Alkoholist

[darksabre]

If you're looking at an FHA loan, figure 5% down. In my personal experience, we burned through a further $20k in updates, furniture, odds and ends. Depends on what you don't have and need immediately.

 

Also, do your best to coordinate closing with lease termination. Managed to close a month before the lease on our short term apartment ended, so the first mortgage payment was basically a month later, didn't burn the budget. Also, gave us the opportunity to have the house empty for a few weeks while we cleaned, painted, etc.

Looking at my spreadsheet of projected costs I can't imagine spending even close to $20k for those kinds of things, but I understand how one could. I think I'm at about $7k tops, and that's if I'm buying nice new appliances. 

 

I'm also pretty handy, so a lot of the updates are things I would plan to do, like paint or cabinetry or whatever. I could see paying someone to do carpets or vinyl flooring. That'll be a couple grand. 

 

But I don't plan to buy something that desperately needs a roof or foundation work or anything. That'd be a deal breaker for me probably. 

Talk to people you know who have bought houses.  Ask for Recommendations from your friends on FB.  Look on Yelp.  Check HomeAdvisor (but be careful about giving them your contact info- my experience is the contractors will pester you... I put in my phone number for a tile repair just before going to bed, and contractors started texting me overnight, and started calling me at 7 am).

Yelp might work. I don't have a ton of friends who have bought older houses, but I know at least one should have a good inspector to recommend given the house they bought. 

Go to your bank/credit union and talk to the loan officer (or do it online). They should be able to get you pre-approved for a mortgage and walk you through the different options with regards to down payment requirements, monthly payment estimates, etc, depending on the type/size of the loan and all that.

 

Doohickie is right that interest rates are going to continue to go up, along with housing prices, so you're better off locking yourself in sooner rather than waiting and giving more money to whomever you eventually buy from.

I did that about a year ago so I've got an okay idea, but my finances have changed so I'm expecting a better result this time around.

 

My cousin had great luck with a mortgage broker here, so I'm probably going to work with that broker at least initially. 

[Samson's Flow]

This squares pretty good with my understanding of the process. Basically where I'm at is that I could do one of those first time homebuyer programs where I'm stuck in a house for 5 years to meet the terms of the grant, or I buy a house without the grant and end up there for the same amount of time anyway waiting for the equity to square so I can sell. *shrug*

 

Either way, I'm ready to be done renting. I'm 100% ready to be done. 

 

 

I hope I can find a good inspector. I have no idea how I'm supposed to track something like that down. How do I know I'm getting a good inspector? 

As to the bolded, this will never happen, because I have student loans which loan officers say should basically disqualify me from buying a home at all. "Student loans? Ah, we can qualify you for this 1992 Chevrolet Tiara Conversion Van".   :P 

 

I'm thinking I can get qualified for around 100k, which is just about where I want to be anyway. Ideally I can get something I like for under 90k based on what I'm seeing for the location I like. 

Since I *know* you IRL, I'm reasonably comfortable sharing that I bought my house back in the fall of 2012 in Kenmore for $86k. It was the worst house on a nicer block at a time when the interest rates were 2.5%-3% and the prices were really depressed. It was definitely a fixer upper and I did a lot of grunt work myself over the last 5 (!) years to make it nice. Now the neighborhood comps are all in the $150k-$200k+ for the same houses that are nearly a decade old, all because the neighborhood has improved, Hertel/N. Buffalo has become more trendy, and the housing market has rebounded a bit.

 

In terms of what I did for saving before buying, it was pretty minimal and I really scraped by on the down payment. I didn't save up much and used the low rates and FHA loan terms to only have a 2-3% down payment. I had a great credit rating (my job had me travel a lot and charge $5-10k/week on my credit card) so I was easily approved for way more than I could afford, and I am really glad I stayed in line with my rent payment at the time. I will say that the FHA low down payment sounds great, but the PMI (Personal Mortgage Insurance) premium they tack on for the first few years was a bitch that I didn't consider when I was buying - try to get rid of that asap.

 

I personally love being a home owner, as I can work on my house and reap the equity rather than having things break in a rental, but ultimately it was mostly luck that I ended up picking the right area and timing the market right in terms of home values.

 

I can pm you more info if you want it - or ask me about it at the meetup!

[Doohicksie]

There you go, D4rk!  You now have a home buying spirit guide!  ;)