Topic: Give me some home buying tips....I think I'm ready...

[fendersrule]

I've been renting for about 6 years now. My last two rentals were actual houses. The good thing about this is I have learned how to perform repairs (patching wall holes, yard repairs, electricity, lighting, etc). This experience has also given me some great expectations about what to expect. I've had dishwashers go out, and I had a furnace go out on Thanksgiving morning. I've had a couple plumbing leaks that I know how to keep a good eye on with this stuff. With the current house I'm renting, I've made several improvements/additions (while being paid ofcourse) to the house and yard as well. Stuff like installing new vanities/lighting in the bathroom, recaulking things, repainting things, door repairs, etc.

I've learned how stupid it is to put hardware flooring in kitchens. My renting experience has actually really helped me out I feel.

My current house has been a "fixer". Basically, my landlord pays me to improve and repair it. After the first 3 months it got tiring, but that's about when I finished working on improvements and repairs. I know that my house that I purchase will have to be in much better shape than the one I'm living in currently because I want to spend my time with customization rather than "fixing."

So, I'm paying $1100 a month for rent (it's a large house). I've started to becoming very notable in my career as well, so I'm thinking it's time to buy. I have a good hunch that I will be in the same area for another 3 years, at the least. No plans to move.

I have $22,000 saved up and I'm going to be looking for a house in the $180,000 range. I hope to be moved into my new home in the fall. My credit rating is flawless and above average. With a 30 year loan and 11% down, it the monthly cost is estimated to be the same that I'm paying right now for rent, so that is why I'm thinking it's time!

My only "in debt" items is my student loan, which I've already paid up to about 50% on now (currently at $39,000 left to go). No other debts whatsoever.

So, any tips or advice?

I figure since I still have some time that I will wait to be pre-approved. I plan to work with my credit union on this.

My next step is to create a spreadsheet of "needs" and "wants" so I can track everything when I go out to look at places. I have a pretty good idea of what makes me happy, what I "NEED", and what I "want" through experiences of renting for many years before.

Needs:

* MUST have a 3 car-garage or bigger. Or a 2 car garage with large shop may work.
* Kitchen MUST be remodeled/roomy/nice. Tired of crummy kitchens with warped flooring and tight spaces.
* MUST be a single story. Tired of two story houses. I rarely ever want to go on the second floor to my music room, so I don't play music as much as I want to anymore.
* MUST have automatic sprinkler systems.
* MUST be in an area that isn't "ANAL" on the HOA bullcrap. I don't want to be notified if I have a garden rake against my house for a couple days.
* MUST have an actual laundry room. Tired of hallway laundry rooms.
* MUST be able to get to work within 12 minute travel.
* MUST have undergone thorough inspection.
* MUST have at least one large bedroom or enclosed space that isn't the master bedroom for a theater room. (8' x 15' or around).
* MUST be 1500-1700 square foot. Don't want anything too much over than that.
* MUST NOT have hardwood flooring in kitchen or laundry area.

Wants:

* Would be nice for the place to be in walking distance for groceries. The women loves being able to walk to places.
* Would be nice for the place to already have a garden area because I like to grow
* Would be nice for the landscaping to be "somewhat" mature instead of having nothing.
* Would be nice for a covered patio/deck. Can always add it later if not.
* Would be nice to have a garden shed. Could always add one in later.

[Duke McDukiedook]

Get to where you can put 20% down and you can save wasting money on PMI.
A lot of the other stuff depends on what type of house you are looking for.

[fendersrule]

The problem with saving 20% down is that would require me to rent for almost two more years, which means 2 year lost on equity. Basically, I loose $1,100 a month until I can come up with another $20,000 if the rent doesn't increase. Since I'm on month-to-month now, my landlord has mentioned a possible rent increase, so I expect that to happen in the near future which is another reason why I'm looking. PMI is an additional $150ish on top of the mortgage. Seems like the smarter thing to do is not wait for 20%. I learned that MOST buyers don't save that much money anyways. Most people I talked to do 5% (this seems low to me). I thought 11% was pretty good....

Right now with 11% down, my total cost (mortgage + tax + PMI + everything else) of ownership would be estimated at $1080. My rent right now is $1100, which of course is all lost money.

[flybox1]

Get to where you can put 20% down and you can save wasting money on PMI.

+1
you'll save thousands per year by doing this alone...but if you cant wait, you can look into a refi when you're close to or above 20%

Inspection & appraisal - absolutely necessary.  You'll pay for this out of your own pocket.  The results will help you decide if you really want the house, are willing to live with its shortcomings, and or dicker with the seller on the asking price if there are issues needing attention.  Pay attention to mold/water damage. 

Get a 1 year home warranty.  some lenders include or at least have this available.

Expect multiple offers on the same home.....at least that's the trend her in the Seattle area.  Having all your financing done/approved before you make an offer is a good thing.

Do a neighborhood search.  Talk to the PD about the area.  Know who your neighbors will be. 

good luck.  exciting times ahead.

[JeffSTL]

I would suggest renting unless you are considering marriage and family. Find a place with cheaper rent and tuck away the extra money. You never know when you might get the itch to move.

There are also tons of unexpected expenses that come along with home ownership. Lots of things can and will go wrong. Also, here anyway, some utilities like water, trash, sewer, etc are included with rent. Just those things are a couple hundred bucks a month for me. I'm in need of a new roof currently. $6k estimate...might be able to do it myself for $2500.

You will also see when you get your amortization schedule and see your monthly statements that after you buy your house you'll still be loosing $1000 a month for a good decade. 

[demon78]

Location, has it flooded, is it subject to winds, fire department how quick to your location, noise, smell, electrical how old, plumbing how old, ground is it decent soil, critters, off the top of my head, inspections, inspection, for every thing, is it a standard house?
Bill the demon.

[JeffSTL]

There are also new rules regarding PMI. Even after you have achieved 20% equity banks can require you to carry it for 5 years minimum. I'm at 30% and my bank won't let me drop it until October which will satisfy the 5 year requirement.

If your PMI is $150/month you are looking at $9000 down the drain.

[edwardmorris]

+1 on the electrical and plumbing status check. I bought my first home two years ago and didn't have a clue. Moved in, and noticed that every time the furnace went off, all the lights and TV would dimm out for a second or two  Had an electrician check it out, and the PO did a DIY job and landed a boatload of outlets and lighting on one main backbone circuit going to the furnace--disastrous. Rewired that whole mess, ran a separate line dedicated to the furnace with its own breakers, and another dedicated line for my TV and other entertainment electronics. Two years later, I'm still nowhere near being done with rewiring the rest. Rusty plumbing destroys water pressure, especially if you have a bathroom on the second floor. Eventually I will repipe the whole place too, as time and budget allow.

[fendersrule]

Do inspectors usually do a thorough job on plumbing and electricals? Those require digging around in crawl spaces and taking some stuff apart I would imagine.

I know they can easily catch roofing and other issues.

My girlfriend provides half of the rent in my current situation. It's not a bad situation for sure. But after renting for nearly a decade, getting paid the big bucks for my career, and finally wanting to improve the situation a little, and after some TEDIOUS saving, I feel within my heart it's just time. The house marking is only going up from here, so it's also a prime time to buy. Waiting longer is also gambling.

The house will be in my sole ownership. I'll have a contract written. Girlfriend will move in and pay the utilities, bills, etc only since those are non-investment items. It's a win-win situation for the both of us.

[brooze72]

I have no idea about US bank mortgage rules, but you seem to know what you want and can afford.
Flybox & Demon have good suggestions, start looking at houses and don't necessarily pick the first one.
Also, ask around to see if anybody knows a GOOD real estate agent, they can save you a lot of time because they will know stuff like if a neighbourhood is any good, house is fairly priced for the area, what upcoming developments are planned for the area, etc.  Your own agent works for you, not the seller.

[JeffSTL]

As far as inspectors go, you are at their mercy. Do a lot of research, look for reviews, ask around for referrals. Some inspectors are very thorough and will go through everything, others might just breeze through. You are hiring them to do a job and make sure you are present while the inspector is doing it. They should compile a written report on the condition of every system in the house and all issues found. It might be a good idea to have the lateral sewer line inspected with a camera. My first house had an old clay sewer line which was compromised by tree roots. It backed up a couple months after moving in. $3000 repair.

[Duke McDukiedook]

Do inspectors usually do a thorough job on plumbing and electricals? Those require digging around in crawl spaces and taking some stuff apart I would imagine.

I know they can easily catch roofing and other issues.

My girlfriend provides half of the rent in my current situation. It's not a bad situation for sure. But after renting for nearly a decade, getting paid the big bucks for my career, and finally wanting to improve the situation a little, and after some TEDIOUS saving, I feel within my heart it's just time. The house marking is only going up from here, so it's also a prime time to buy. Waiting longer is also gambling.

The house will be in my sole ownership. I'll have a contract written. Girlfriend will move in and pay the utilities, bills, etc only since those are non-investment items. It's a win-win situation for the both of us.

Find out what common law marriage constitutes in your state. If you live in a common domicile for X amount of years and she decides to claim you could be out of money no matter what contract you wrote up states. That ought to be a fun discussion to have with her, let me know how that plays out. Probably about as well as a prenup discussion goes.

[JeffSTL]

Don't be afraid to fire a real estate agent, or two, or three. Most seem pretty useless. The first thing they will ask you is if you are pre-approved and if so for how much. They will then proceed to show you houses at or above that amount. I was approved for $180k and when I told my agent I didn't want to spend more than $135k he looked at me as if I had two heads. He then proceeded to show me $200k houses. Fired. Next agent, same thing. Fired. If the agent isn't receptive to your request and concerns, feel no obligation to keep their services. In the internet age you are likely to find the house you end up buying before an agent does.

[fendersrule]

Yep, I agree! Nice thing about an agent is that you're not paying them. So they're pretty easy to fire!

It looks like that common law is nothing to worry about in Idaho:
http://www.legallanguage.com/legal-articles/common-law-marriage-requirements/

Looks like it only applies before a certain date. Also, even if a state did do common-law, you can't "Automatically" be legally married. You have to meet several requirements, one of which is a consent for both partners.

Let me know if I'm not interpreting correctly here. It seems like it's not a concern, but I want to protect myself.

[flybox1]

Hey Fenders....where are you in ID?  Near Boise?  If so, check out Homeland Realty in Boise on State St.  When you're in need of an agent, call them and ask for Todd.  He's my cousin and the owner.  He'll treat you like family.
Rob

[fendersrule]

Yep, Boise for sure! Probably will be looking in Meridian for a house. Cheaper houses, bigger houses, and that whole, you know....three car garage thing is more plentiful!

I went to a coworker's house last week, and she had an OVERSIZED three car garage. Man, it was bigger than it sounded....plenty of room for a large collection too! Her garage you could park two vehicles, one behind another, and you still had space for a work bench and stuff. THAT would AWESOME.

I'll get in contact with Todd when I'm ready to start getting stressed.

I have a three car garage house now. 2 vehicles, 4 bikes. I have to park my car outside unless I cram everything to where I can't work on stuff. Would be nice to be able to park it all inside.

[ekpent]

A good solid marriage foundation would be a good start, especially if she is part of the overall economic scheme since you mentioned she pays half the bills now. Losing a house would be losing a lot of dollars.

[nccb]

+1 on what ekpent said.  Also, do not rush buying a house because you FEEL its a great house.  Make the home inspector check out EVERYTHING.  My wife and I rushed into buying our house because we were strapped with an oncoming baby and our apartment lease was about to expire.  Needless to say the lease expired and we ended up shelling 300 dollars more each month to keep it on a month to month basis.  Made it before the baby came though.  That is another thing, be prepared for the loan agents to take for #$%*ing ever and for all of your paperwork to have to be continually redone.

I love our house even though it is a piece of #$%*, but the process of buying a house was very painful.

[BobbyR]

I think you are on the right track if you do it right. Today you have Zillow which can allow you to do your initial research in the area you may be interested in.  If you find places that look interesting do a drive by, then call the broker if it looks good. Nothing worse than having some chatty salesperson drag you around to places you can see from the street are not for you. They wear you down.

If you are not in the subprime category you can avoid crappy Mortgage deals. You say you are making strides in your career, so any additional you are be paying with a lower down payment can be offset in the long run by making additional principal payments.

Good luck!
 

[fendersrule]

Yep. definitely making strides. I could actually afford a house that is MUCH higher than $180,000. There will be absolutely no problem with getting pre approved for that. A house payment of $1100 is 1/4 of NET monthly income.

It's just that personally, I like a simple but functional and satisfying house. More money to go towards other things....

Like motorcycles....

Marriage is not an option currently for unlisted reasons. Plus, I don't find it logical that in order to buy a house, I need to get married. NOT a good way to get into a marriage! That should be a whole, separate discussion and thread.

What's annoying for me when I browse websites to look for houses is this:

1) There STILL isn't a filter for garage size on any site! WHY? Is this not a big deal for home buyers?

2) Why the F*#@ do people put hardwood flooring in kitchens? I'm seeing this way too often. EVERYONE I know that has had hardwood floors in kitchens pay for it dearly down the road. It's a time bomb.

[Bailgang]

Do a neighborhood search.  Talk to the PD about the area.  Know who your neighbors will be. 

+1, that's more important than you might think. To make a long story short there was a local sewage project here that put all the homeowners who lived just outside the city limits in an outrage and one of those affected was a co-worker of mine. While ranting on the subject he made the comment that he could've bought any house in his neighborhood when he purchased his because almost all were for sale. I almost busted out laughing because that alone should've thrown a red flag that something was up and he should've been asking himself "why is everyone in this neighborhood wanting to move?"

[Retro Rocket]

Fenders, why are you b1tching about hardwood flooring, its very common here and just about out lasts anything else, plus its a great base for other types of flooring..? 

[fendersrule]

Fenders, why are you b1tching about hardwood flooring, its very common here and just about out lasts anything else, plus its a great base for other types of flooring..?

Until you get water on it. If you have hardwood flooring in the kitchen, you will pay for it later.

[Retro Rocket]

Fenders, why are you b1tching about hardwood flooring, its very common here and just about out lasts anything else, plus its a great base for other types of flooring..?

Until you get water on it. If you have hardwood flooring in the kitchen, you will pay for it later.

In a kitchen with wood floors we usually put a clear coat over it, lasts for years, looks great and water won't harm it at all....

[trueblue]

Fenders, why are you b1tching about hardwood flooring, its very common here and just about out lasts anything else, plus its a great base for other types of flooring..?

Until you get water on it. If you have hardwood flooring in the kitchen, you will pay for it later.

In a kitchen with wood floors we usually put a clear coat over it, lasts for years, looks great and water won't harm it at all....

+1,  every house I have lived in has had polished hardwood floors.  Only one hasn't had them in the kitchen, the one we are in now has tiles.  I hate tiles in the kitchen, I'm seriously thinking about ripping them up and hoping the timber under is in good condition.  You can't beat a good urethane clear coat on a hardwood floor in my opinion.