Tips, Advise on Buying a House

[teachnlearn]

Grew up in a ranch house. Repaired it with my dad and also kept up on a 6 flat apartment in Chicago that my Grandfather owned. Now after living in apartments and Navy housing all my life we just got VA approval for a house in the Kansas City MO area. I've done a lot of mechanical and factory work but, this is our first house. Looking for a ranch 3-bedroom 2 bath with a 2 car garage and basement. Prefer basements to keep the hot water heater, furnace, able to look straight at the sewer, plumbing, electric without breaking floors or crawling in crawlspaces.,

I'm going to cram study on a few books. Any advice, tips for a first-time buyer, things you know now you wished you knew?  Finally a place to set up a small workshop without a landlord looking over my shoulder! RJF

[oldhudson]

I'm sure there will be loads of opinions here. I'll share a few: 1. In addition to the price, I always look at the price per square foot.  That let me really get an apples to apples dollar comparison of different properties. 2. Don't let previous owners decorating influence you. Wall paper comes off. Repainting is simple. Woodwork can be painted over etc. Your buying the 'bones'.  3. The old real estate adage of location, location, location is fairly true.  What is it you want to be close to? Schools, shopping, the Interstate highway,  the center of town or the edge of town. In my current house I wanted to be close to work. For a few years it worked out. Then I was forced into a new job and the last 10 years of my life I had an hour and half commute each way.  4. Make sure to check for water damage in the basement. Sump pumps and drain tile. 5. Everyone is different but I wanted city water and sewer. 6. Look at the property taxes and utility costs. 7. This is a business decision, don't let it become emotional.  8. Find a good agent you can work with.  And make sure you understand the market pricing where you are shopping.  9. Don't forget to do a formal housing inspection. Required in some communities but not all. There are certainly things I wished I'd know about the house I've lived in the last 30+ years.

Good luck!

[JimErn]

The key to any home mortgage is how much you can put down.

If the down payment is less than 20% of the purchase price they will require that your payment be a PITI (principal, interest, taxes, insurance) payment.  They way do that for taxes and insurance is they calculate 14 months of taxes, divide by 12, and that is your monthly payment, same for insurance.

If you can do more than 20% then you can insist on a PI mortgage only, and save the money for taxes and insurance yourself - taxes are paid once a year, and insurance can be monthly payments based on 12 months not 14.

30 year fixed is the only way to go, you can pay more each month, but at least you know the amount and can budget somewhat.  Paying more pays it off quicker.

Get your home owners insurance lined up ahead of time, USAA or whoever.  Like any insurance there is a deductible, usually a percent of the purchase price, 1%, 2% etc but some companies use a flat rate amount - regardless over time you need to put that amount back in a bank account so that when you need it you have it.  many contractors will not start work after the insurance okays it, until you pony up the deductible.

Find a realtor that is willing to negotiate his commission, there are some.  If you use a realtor and they find you a house listed by another broker, they split the commission - not a lot of wiggle room there.  Buyers contracts are a politically correct way of locking you into one realtor (IMO), not something I am good with.  I generally drive around looking at for sale signs, write down the realtor name and phone, and sit on the phone later.  though now much of that is online too

Try to get the seller to include a home warranty or whatever they call it good for one year - after that period I find it a waste of money myself.

Get a hold of the tax district and find out what exemptions you qualify for and how to apply, it is not automatic and can not be done before you own it.  Homestead in MO is 15K, meaning some of the property taxes are calculated at appraised value less that 15K.  Any other exemption you can get reduces taxes too

Good Luck.

 

 

[teachnlearn]

This is one time I copied both of your posts and pasted them into a WP. Thanks so much. I'm scrambling to learn real estate terms and mortgage. I'm buying under a VA Loan and have a Realator that supposedly does VA housing all the time. Under the VA loan, the interest changes, who pays what changes and I think there is a VA inspection which has to pass. I'm trying to figure that out too. We checked our credit scores through credit karma, then called USAA, which is our insurer. They looked at everything and preapproved a loan.

We have been disabled and even now going to a VA hospital that rums more like a clinic than a hospital. We can function, but the disabilities are going to slow every project, or we have to modify our work hours. Been wanting to move one more time, but to a house to 'retire'. Somewhere to tinker, design, draw, scroll, carve and be able to park our car in a garage. In the past year, we have has to move our car to a shopping center a half mile away, while management clears for snow or sweeps the sand from the winter or repaints the parking lines. Had illegal parking stickers pasted to our car windows repeatedly, then after we tell them we live here they find it was a mistake. We then had to clean the sticker off which is more like a permanent bumper sticker. Between goo off and razor blades, we spend half an hour each time taking the sticker off.  Finally, decided its time for our own place rather than move to another apartment with who knows what problem. My family talks about selling their houses to get away from maintenance. Let the apartment owner repair it. Well after being in these things, it always doesn't get repaired or we get someone that has no idea what they are doing. I worked with my hands all my life, so it enjoyable for me. Just have to get a snow blower, cause my back isn't going to take a shovel. OR maybe a tractor, though this is the first time I've gotten a writeup from my MD I'm not allowed to drive or operate heavy machinery, so, for now, I can't bulldoze the backyard. RJF

Edited May 28, 2019 by teachnlearn

[jerry1939]

I retired from Real Estate.  The biggest mistake I saw was that because Lenders work on a commission, they push the biggest loan that you qualify for.  Buyers don't realize that they still have to pay property tax, insurance, replace worn out appliances, etc. etc.  Add to that, way too many Buyers bought the most expensive house they qualified for, had to have 2 brand new SUVs, new furniture, a TV the size of a Buick and the list goes on.  For a married couple the payments were so great that neither one dared to break a leg.

I could count on one hand the number of realtors that I would trust.  They are also on a commission.  For example, if you qualify for a $200,000 loan, look at houses in the $125 - 150 range.  Warren Buffett, one of Americas richest men, lives in a modest home that he owned for decades.  Far too many buyers want something elegant to show off to friends & family.

Ask your realtor for a list of people that they sold to a few years ago.  Visit with a few of them.  Ask if they would choose she or he a 2nd time.  That speaks volumes. (Be careful that you don't get a list of relatives). 

In the basement, new paint on the floor & walls is a red flag.  They might be trying to hide something.  Find wood that touches the floor. If it had gotten wet, it will have a dark stain on the bottom.  If it has a sump pump, look in the hole if there  are cobwebs. That would indicate that it doesn't fill with water and need to run.  Check around the foundation & make sure the ground slopes away. 

jerry

[teachnlearn]

49 minutes ago, jerry1939 said:

I retired from Real Estate.  The biggest mistake I saw was that because Lenders work on a commission, they push the biggest loan that you qualify for.  Buyers don't realize that they still have to pay property tax, insurance, replace worn out appliances, etc. etc.  Add to that, way too many Buyers bought the most expensive house they qualified for, had to have 2 brand new SUVs, new furniture, a TV the size of a Buick and the list goes on.  For a married couple the payments were so great that neither one dared to break a leg.

I could count on one hand the number of realtors that I would trust.  They are also on a commission.  For example, if you qualify for a $200,000 loan, look at houses in the $125 - 150 range.  Warren Buffett, one of Americas richest men, lives in a modest home that he owned for decades.  Far too many buyers want something elegant to show off to friends & family.

Ask your realtor for a list of people that they sold to a few years ago.  Visit with a few of them.  Ask if they would choose she or he a 2nd time.  That speaks volumes. (Be careful that you don't get a list of relatives). 

In the basement, new paint on the floor & walls is a red flag.  They might be trying to hide something.  Find wood that touches the floor. If it had gotten wet, it will have a dark stain on the bottom.  If it has a sump pump, look in the hole if there  are cobwebs. That would indicate that it doesn't fill with water and need to run.  Check around the foundation & make sure the ground slopes away. 

jerry 

Thank you Jerry. Added your post to my word list. My wife and I worked out way through college so we were always broke. Got a couch that was thrown out because the legs were broken. So we took some bricks and put them under the couch. We get one car and drive it 20 years with me and my son doing the oil changes. Sometimes we wonder how people pay for everything. A good part of the furniture nowadays is particle board covered over. Rather get grandmas.  couch at a yard sale and fix it up. The bones are still good. Use to watch Ho;lmes on Homes, which was a Canadian rehab show. I'm now leery of the handyman flip. Been investigating how to check for permits that the work was inspected rather than done by someone with no knowledge and covered up with drywall and paint. I read somewhere that the basement will smell musty and there may be a dehumidifier running or scented spray to cover up. I've wondered how long the moisture would stay in a basement if it's coming through the walls or floor. RJF

Edited May 28, 2019 by teachnlearn

[new2woodwrk]

I and my wife are licensed real estate agents in Florida.

My suggestion is get a GOOD real estate agent. Not just the first one, or one recommended by a relative, and definitely don't get a close relative - speak to a few, and select one you feel comfortable with, you feel is knowledgeable in working with new buyers and one that can recommend several mortgage companies for you to apply with.

Remember when selecting a mortgage company DO NOT let them run your credit - just get a pre-qual letter that you can send with your offer when you are ready to make one on a home.

Once you've made the offer, THEN you can select a mortgage company and they can run your credit.

Best of luck with your home search

Edited May 28, 2019 by new2woodwrk

[Jim McDonald]

The one thing I would stress is getting an independent, certified home inspector to go through (and over/under) the whole property.

Don't necessarily have to use the one suggested by realtor. It will be the best money you spend prior to closing.

Also, once you think you have found a place, drive through the neighborhood after a big rain event to how that lot drains and to see if there are street flooding issues.

Edited May 28, 2019 by Jim McDonald

[JimErn]

Had few more thoughts

I don't know the degree of mobility you have, but you or someone who owns a home and does things to keep it up, needs to be there with the home inspector.

Open the elect box and look at wire gauge per breaker, grounds, etc
under the sinks, smell test as well as looking for water stains
if there are planters outside against the house, look at that part of the floor for water damage inside
walk around the bathrooms, by the tub/shower especially. feeling for "spongy" floors
Fill each sink to the brim, then drain them all at the same time and flush all toilets too - drains should run fast
if the washer is included, run in on  an extra large load, and watch for drainage backing up on the spin cycle

I would pay for a mold check

Go sit in your car outside the house on a Fri or Sat night, when if there is a party it will be going on

call the cop shop and ask about that address, as well crime stats for that neighborhood, if the address per the cops had frequent calls, you might ask about having a drug dog walk through too.  I have done that before.

[spirithorse]

Good luck with your search.
You got a lot of good advice here. I will only add that I would speak to the inspector as much as
possible. I also used a VA loan and a lot of the concerns mentioned here about a good home inspection
were nullified for me because the VA inspector was extremely thorough and knowledgeable.

He could effectively tell the present owners of the home what items had to be fixed at their expense
or he would not allow the sale to the veteran. We had our home built new so, that wasn't much of a problem but,
the VA inspector was on top of every bit of the slope of the ground and drive way from the foundation, the foundation
specifications, the well, the septic tanks, and every step of the construction.

God Bless! Spirithorse

[teachnlearn]

Thanks, there's a lot of information I didn't know, been watching home shows for years and maybe saw it once, but it went to some dusty corner of my brain. I get around with a cane and a few feet without. When we go to any department store, large store, there is no way we can get through. Either a motorize care or our manual wheelchairs. In the VA hospital, too big, use wheelchairs. There are days i have done too much and have to use the wheelchair for the day. My lower back is shot. So we do everything a bit slower, but we get there. Thanks, RJF

[jerry1939]

Me again.  I would not sign anything stating that I could only work with 1 realtor!  We moved to our present location & sweet talked the Lady at the front desk and asked who she would recommend.  A realtor gets a bigger commission (as does the listing office) for in house sales.  Offices will show their own listings up until the last minute before it has to be reported to the Multiple Listing Service.  Often listings are signed on Friday evenings, to get extra days.  Work with 1 or more realtor from each office in your area.  That way, you get to see listings that are not turned in yet.

The city I worked at had an older area with block foundations & a high water table.  95% of the foundations were cracking from wet soil pressure.  The 1st cracks appear horizontally on the inside at or just below the outside ground height.  Some sellers try to hide it by caulking the open crack &  painting the walls.  Look for wide, horizontal mortar joints. Also, stand in a corner with your back to the wall & look for an inward bow.  If you see a real high piece of furniture against the center of a wall, buyer beware, but you can still see the bow from a corner.

jerry

[teachnlearn]

34 minutes ago, jerry1939 said:

Me again.  I would not sign anything stating that I could only work with 1 realtor!  We moved to our present location & sweet talked the Lady at the front desk and asked who she would recommend.  A realtor gets a bigger commission (as does the listing office) for in house sales.  Offices will show their own listings up until the last minute before it has to be reported to the Multiple Listing Service.  Often listings are signed on Friday evenings, to get extra days.  Work with 1 or more realtor from each office in your area.  That way, you get to see listings that are not turned in yet.

The city I worked at had an older area with block foundations & a high water table.  95% of the foundations were cracking from wet soil pressure.  The 1st cracks appear horizontally on the inside at or just below the outside ground height.  Some sellers try to hide it by caulking the open crack &  painting the walls.  Look for wide, horizontal mortar joints. Also, stand in a corner with your back to the wall & look for an inward bow.  If you see a real high piece of furniture against the center of a wall, buyer beware, but you can still see the bow from a corner.

jerry

Thank you, I didn't know of any of these. The largest purchase in our life and suppose to depend that the realtor, home inspectors will do their job right. Just finished copying and pasting everyone's comments for reference. RJF

Edited May 29, 2019 by teachnlearn

[Kepy]

I just purchased my home in Dec.  I was downsizing so is much smaller than where I was before.  I looked at those things that would be a major expense such as roof, heat/air, appliances, etc.  I was impressed with this one as it had a walk in shower which I needed.  If you have mobility issues, you may want to reconsider the basement although the area you are looking they are very common.  I live in the southern part of MO.

[MTCowpoke22]

My advice as a real estate lender is to get comfortable with your loan officer. And realize that real estate takes time. It's a lot of hurry up and wait. After you turn in your completed application and the underwriting is complete, they have to order the appraisal. Depending on where you are that can take anywhere from a week to a month. And there really isn't anything to do until that is back. The amount of the loan, and subsequently the amount of the down payment, hinges upon the appraised value. Once that comes back and we know the loan is a go, title insurance must be ordered. Again, this takes some time. Many realtors/sellers want to jump the gun and order that right away. But the amount of title insurance is dependent upon the actual sale value of the house, and the lender's policy that comes with is dependent upon the amount of the loan. If they order the title insurance early and the appraisal is lower than expected, the seller and you will end up paying for more than is necessary for title insurance. And your lender cannot move forward until the title insurance commitment comes back. They need to know if there are any outstanding liens on the property, and the legal description on your mortgage must match the title insurance exactly. I know a lot of areas that have more appraisers and title options are faster than I have it here, but it all still takes time. For me, it generally takes around 1 1/2 to 2 months to close on a mortgage, from start to finish. And that is only if we don't have any hiccups along the way.

[Scrappile]

Get everything you think you and the buyer and realtor agree to in writing.  Do not assume the realtors know what they are talking about....

[Sycamore67]

Do not trust your realtor as they are not your friend and just trying to get the largest commission possible.

Hire your own inspector and not one through the realtor.

EVERYTHING IN WRITING.

Do not trust anyone....cynical, I know, but everyone is trying to make a buck off of you.

[teachnlearn]

Glanced over these comments and I thank you all. Two weeks ago I thought I had something in my eye and couldn't get it out so I went into the VA Hospital. I found I have shingles in one eye making me temporarily blind. Heard of shingles, never heard of this. Its put a break on any trips to MO to look at any houses, while I keep going in for check-ups. Also makes reading and writing harder on one eye that strains and waters, so I've been off the computer a lot.

The basement has been on our list as a request from our son who has patiently driven and cared for us, like now since I can't drive. My wife and son have taken over looking at the listings but we have yet to look. I'm going to reread these and save them when my eye heals hopefully to full strength. Been a really weird year, basically, I'm one of those that doesn't get sick. RJF

 

[Sycamore67]

Hope you get better as Shingles can be extremely nasty.  I have had a shot to protect against Shingles and my doctor wants me to get a second one.

[teachnlearn]

The eye shingles is painful enough. RJF

[teachnlearn]

An update on our house buying. I want to thank everyone that added suggestions, ideas, information on how to buy our first house. We have been trying since the end of May. At this point we should probably be closing or moving.

Our first agent would not reply to any email or calls so the real estate company assigned a second agent. She didn't respond either, even when we sent a list of houses, that we would like to schedule to see. This week we suddenly got an email assigning a third agent. Contacted our loan provider by email, and told them what was going on. Asked about extensions for our pre approved loan and let them know we haven't been able to look at a house.

Got a call from them that night and they said we were getting a run around. They contacted another real estate company and the manager called to ask what criteria we needed for a house and we were first time buyers. She assigned us an agent that has been around. We got a call from here 9 at night. This was two days ago.

So here we go. Got to look over the new housing lists and find a house many have already been sold. For those that have no interest, its a sellers market and houses are selling in a day and last a week on the listings,

Last year our 20 year old car died, so family members on each side got money together to get us a new car that would handle us and two wheel chairs. Exciting to buy a first new car, the run around, lies and dealers were tiring. Getting promises a type car was on their lot and then getting a story and offered a different car. We ended up more relieved then excited when we finally bought our car.

So here we are getting our first house. We guessed there would be problems with this and that. Didn't know it would be a up hill battle to contact our agent. So back to square one. Would have like to have my old scroll saw setup in the new house, garage and see if I can keep the blade on a pattern line.  We just might move by Xmas at this rate. Thanks folks, RJF