Buying a house...Any advice??

[chaskell27]

So as the title says, my fiance and I are in the process of buying our first home. The pic is the house we're looking at.

It is a foreclosed house that will need a little bit of minor work (decks and front door, paint, carpets) that we are getting a pretty good deal on. Any advice from you members who have been through the home buying process before? To be honest, it's a little daunting for us at the moment.

 

[Smersh]

Congrats on buying a house!:rockon: There is nothing quite like the feeling of owning your own piece of land. Looks like a really nice house.
There are some really good opportunities out there with the foreclosed properties. I have a RE license here in CT and also deal with mortgages in my day job, here are my 2 cents:

1) Time of the transaction. Keep in mind that purchase of a foreclosed property may take longer than usual. Depending on the procedures in the state it can really stretch out. It's ironic, because the bank that owns the property is really interested in selling it asap, but there are multiple factors that come into play. If in "average" transaction there is one seller, now you have an organization on the other side, with inherent bureaucracy. I had a transaction where we had our offer accepted (so the seller's agent told us) only to find out that "there was a miscommunication" between the seller (the bank) and their agent, with bank counter offering much higher. :spank:The seller's agent sometimes doesn't even deal with one single person from the bank side - they get all communication through a computer system :stupidpc:

2) Condition. Make sure you find out as much as you can about the property. with foreclosures and short sales (the stage before the foreclosure), often times, there are no condition reports (termite damage, lead paint,asbestos), so it's important to make sure you are comfortable with the condition. Ask people around for a good property inspection service. Walk with the inspector and ask him a lot of questions. Fire codes etc are very important - you don't want to buy a property only to find out that your house is not compliant. I don't want to be judgmental, but in states like Maine, Alaska, New Hampshire, people tend to know their way around tools with some interesting results, sometimes, which your fire marshal may not be very happy about. Also seen: a foreclosed property with EVERYTHING removed when the previous owner moved out, including electrical, copper pipes, sheetrock, wood paneling. All because they can use it in the next place. But i digress.

3) Are you working with a real estate agent? If so, they should be able to explain to you the process and give you a feel for how long the process should take. They also can look up quite a bit of information. I understand that I am biased, since i'm an agent myself, but I really do believe I provide value to my clients.

4) Attorney. Get a good RE attorney for the closing. Never be afraid to bug both the agent and the attorney if you have a question. Usually an agent should be able to give you a ballpark figure of how much an attorney should charge you. Don't be afraid to shop around, but do not look for the lowest quote - look for the combination of value - ask them questions and get comfortable with the level of communication - they should be clear in their answers and you shouldn't have to "pull" information from out of them

5) Good timing with the financing :thumbup:

6) :needpics:


Good luck, and i'm very happy for you! Let me know if I can help with anything.

Cheers,

TS

PS: Looks like FZ and the Subie will have a nice place to stay warm. That's one big garage!!!!

 

[chaskell27]

First of all, thank you very much for the kind words. We are very excited but nervous at the same time.

1) The seller (Bank) has been a bit of a pain in the butt so far. My biggest complaint is that we made our offer with a certain closing date set. We gave them 3 business days to respond. We finally heard back in 3 weeks with a counter-offer for $700 more. We accepted and they sent the addendum. The addendum had the same closing date which is now probably not doable with my bank. In the fine print of the addendum they mention that if the closing date cannot be met, they will extend with a $150 per day fee :Flip: No big thing I guess. We'll find a way around it.

2) I am probably annoying my realtor at this point because I've been to the house around 4 times already with three more times scheduled this week. I have a radon test being set today, picked up on wed, and a building inspection on Thurs. Oh well, she's family and that's what she gets paid for right!!!

3) We are with a realtor who seems very knowledgeable on the subject. She is my fiance's aunt so I'm sure she wouldn't steer us in the wrong direction.

4) Ya we've just started talking about this. Our realtor has a few that she knows are reputable.

5) As far as financing is concerned I think you're right. We probably couldn't have timed it any better :thumbup:

6) See attached

And I am definitely liking the garage and basement. Should be plenty of room. Again thanks for the advice. It's good to hear from people who know what they are talking about. I feel like we've done our homework but being our first time, it's a little nerve wrecking.

 

[Smersh]

NIIICE. looks very spacious. I like that counter in the kitchen - plenty of space.

1) Agree - banks don't process things quickly - bureaucracy at its best. and most of them losing money on FC anyways, so it's not exactly priority (well, that's what they get for underwriting those loans). You should be able to avoid the $150/day stuff. As long as the purchase agreement states that it's subject to attorney review, you should be fine.

2) Exactly!

Looks like you guys are on the right path. Congrats! Very happy for you.

Cheers,

TS

 

[sxty8goats]

2) I am probably annoying my realtor at this point because I've been to the house around 4 times already with three more times scheduled this week. I have a radon test being set today, picked up on wed, and a building inspection on Thurs. Oh well, she's family and that's what she gets paid for right!!!

As you said, that is her job. She stands to make a pretty penny when you close and if she is any good, she will be jumping through hoops for you. I have a great realitor in IL that is now my property manager. I've been renting my house out since I moved to MA 3 years back.

Lots of good advice above. I'm going to keep mine simple. To be honest, I just skimmed the above post so I may be repeating a bit.

A "home warranty' is typically pretty cheep. It covers appliances (stoves / washers) and utilities (Heater / AC). Well worth getting if it isn't already included with the sale. The first year in the house, you don't want any financial surprises. After you have been in for a year, you will better know the condition of the mechanical bits and be better able to plan for replacement if needed.

Get the home inspected. A good home inspector will go over the whole house, appliances and utilities and then give you a report on the condition of the house. This should be done before closing. It is a foreclosure so you probably won't be able to get the bank to fix/replace anything but you may be able to use it as a negotiating tool. And if you ever have a problem that you want to claim to the home warranty folk, you have a report to back up the fact that the issue was good before you moved in. I had a furnace go bad @ 5 months after I moved in. Because I had an inspection report, the home warranty folk replaced it. A $1500 job cost me $50*. *deduction.

If you are handy with basic tools, 90% of the work that needs to be done can be done by you. Especially if you have friends that can help and have done the plumbing / electrical / painting / spackling before. And you will know your house better if you do the work yourself. Before I owned a house I had a little exp plumbing from building machinery, a little exp painting as a side business in my youth. I've completely stripped and rebuilt my bathroom, to the studs, and I've completely renovated my kitchen. All appliances in both, including the bathtub, have been replaced. Doing those myself saved me @ $16,000.00 from the estimates I had to have the jobs done.

 

[LERecords]

looks like a great place.. enough good advise is here, but make sure your not over extending yourself on finances... $h!t comes up like needing new this or new that.. make sure you have some savings as a just in case.. otherwise congrats!!! :thumbup:

 

[sniff6]

Looks massive,The garage looks big enough to convert into a bungalow and rent it out. It'll pay your morgage!! Good luck :thumbup:

 

[oso2k]

Something a lot of people don't do: tell your boss/supervisor/manager/etc. Make sure they know you're getting into this big purchase. Neither of you wants to get a surprise layoff or something. It also sets up the the guidelines for taking time off to do paperwork, signings, etc.

 

[Nelly]

Congrats on the imminent purchase,

The previous posts all make sense as they are very specific to your region.
The only thing I can add (which I am sure you have done) ensure that you haven't over stretched yourselves and have something in reserve in case of emergencies.
Good luck to you both.

Nelly

PS I would love to hear the first responding posters thoughts on DIY enthusiasts expanded:spank:

 

[Smersh]

PS I would love to hear the first responding posters thoughts on DIY enthusiasts expanded:spank:

not much there, Nelly - just telling what i've seen. Things like upgraded water heater, with the wiring that is hot, because the "enthusiast" didn't upgrade the wiring to match the more powerful unit; open connection boxes with wires almost touching, lack of insulation; Oh yeah, my favorite - the old breaker panels with screw-in type fuses that were "fixed" and will not perform as intended in case of a short.

Nothing against the DIY, btw - I do a lot of work myself at my place. My concern here was the possible violations of fire code "inherited" from the previous owner that would cost the new owner.

 

[Nelly]

not much there, Nelly - just telling what i've seen. Things like upgraded water heater, with the wiring that is hot, because the "enthusiast" didn't upgrade the wiring to match the more powerful unit; open connection boxes with wires almost touching, lack of insulation; Oh yeah, my favorite - the old breaker panels with screw-in type fuses that were "fixed" and will not perform as intended in case of a short.

Nothing against the DIY, btw - I do a lot of work myself at my place. My concern here was the possible violations of fire code "inherited" from the previous owner that would cost the new owner.

Thanks for that, I was just wondering why specific regions were mentioned?

Nelly

 

[chaskell27]

Thanks for all the replies guys :thumbup:. I have a radon test ongoing in the basement right now, a building inspection on Thursday, and a huge headache from dealing with banks I guess it's all part of the fun right? The big things for me were making sure that:
1) we could put down roughly 20% and still have at least 6 months of expenses saved up.
2) One of our salaries could pay ALL or most of our bills so that if something were to happen to one of our jobs, we could cut back a little and safely make all our payments.
3) I get the house at a price that leaves enough meat on the bone for me not to get hurt if we had to sell quickly.

We are pretty much getting the house for at least $40,000 less than it will sell for once I'm done cleaning it up (cosmetics mostly)

I think I've done my homework but there is always that little voice in the back of my head that keeps doubting me.

I'm anxious for the inspection. We'll find out at that point whether or not it's worth going forward.

 

[Smersh]

Those are some of the ones I've seen with the phenomena, especially "cleaning out" the house. There are more, of course - tends to happen in the sparsely populated areas.

As far as code violations of DIY are concerned, - they are all over the place, including the most populated areas. My theory about this is: with the real estate rush, people bought up stuff as "fixer-uppers", rentals, and plain "flippers", but, even if initially planned to hire a contractor, ran out of money half way and did a lot of things themselves trying to save on everything. Again, nothing wrong with that, as long as it meets the code.

We keep our stats one level above and most of the time don't break down into particular reasons why given area has higher severity of losses (the ratio of principal lost to balance) - but these were some of the reasons when we did some research.

 

[slymjym350]

Make sure its not in a flood zone.

I purchased a home 2 years ago that was in a flood zone and the flood insurance on it is crazy!