Buying a first home...

[Mantle2600]

So me and my wife are thinking of buying our first place, just not sure what the first steps we should take are.

Should you find a lender and get pre approved first? Get a real estate agent and then go through the loan process? Just not sure what the first step to take is.

Any help would be appreciated.

[cougarfreak]

I'd go through a lender and get pre approved first.

[Flasch186]

So me and my wife are thinking of buying our first place, just not sure what the first steps we should take are.

Should you find a lender and get pre approved first? Get a real estate agent and then go through the loan process? Just not sure what the first step to take is.

Any help would be appreciated.

Get preapproved first so you know what you can afford than shop realtors.

[Desnudo]

I would read mortages for dummies or home buying for dummies or something similar. If you want to go through the pre-approval process you should know what to look for in a lender first.

[JeeberDMack]

My city had a First Time Homebuyers class that they offered, my wife and I went and it helped us with a lot of questions we had about the process. You may want to see if anything like that is offered in your area...

[Marc Vaughan]

Get pre-approved - decide on what you want to spend (not the same as the maximum allowed ;) ) and then shop around, find a realtor who you can get on with and who doesn't constantly try and push houses above the amount you want to spend.

Everyones stance on these things varies - but I've always gone for fixed rate mortgages, depending on circumstances in the world it can work out more expensive .... but its worth it for removing any unpredictability from the finances imho, I don't need the stress of finding my mortgage payment changes every other month.

[Mizzou B-ball fan]

Ditto on Marc's suggestion about finding a buyer's agent. Make sure you stay in your price range. Your buyer's agent is there to make sure to find the problems in homes that you might not find. Best of all, the seller is the one that pays your agent.

[terpkristin]

I agree with what others here have said, but have a little more to suggest, too.

Getting pre-approved is good, but I strongly advocate getting a mortgage through a bank/group that you can meet the person face-to-face who will manage your loan. Do NOT use Lending Tree. I had a terrible experience with them (search on this forum from early 2010 to find my "fun"). After they completely dicked me over, I switched to a local guy through MetLife who was recommended by a friend. Got a better rate and had an infinitely better experience.

Get an agent you like, too. I hated my agent. Though I ended up buying my house through her, it was really just dumb luck. The house I ended up buying is the last house we planned to see on the last day I was going to go out looking with her.

When thinking of how much your house is going to cost, don't forget these things which are never really brought up until closing in some scenarios:
-closing costs
-mortgage insurance (if required)
-escrow (a monthly cost quote normally provided almost never includes this, at least in my experience)
-cost of utilities (usually a house is bigger than an apartment and correspondingly, utilities increase)
-homeowner's association fees (if applicable)

Also, some HoAs have really annoying rules (like you are forced to get the cable/internet that they provide). Make sure that the place you settle on has HoA rules you can tolerate.

If possible, take pictures of places you see and write down notes about what you like and what you don't like as soon as you can following seeing a house. When I went into the home buying process, I thought I wanted a certain type of house. As my agent brought me to houses, I realized that some of the things I thought I wanted weren't as important to me, and some of the things I thought I didn't need/want were. For example, I never thought I wanted a garage. But as I saw more houses (townhouses, mostly), I realized the parking situation in a lot of townhouse developments sucks and I ended up making a garage a requirement.

Good luck.
/tk

[Mizzou B-ball fan]

I agree with what others here have said, but have a little more to suggest, too.

Getting pre-approved is good, but I strongly advocate getting a mortgage through a bank/group that you can meet the person face-to-face who will manage your loan. Do NOT use Lending Tree. I had a terrible experience with them (search on this forum from early 2010 to find my "fun"). After they completely dicked me over, I switched to a local guy through MetLife who was recommended by a friend. Got a better rate and had an infinitely better experience.

Get an agent you like, too. I hated my agent. Though I ended up buying my house through her, it was really just dumb luck. The house I ended up buying is the last house we planned to see on the last day I was going to go out looking with her.

When thinking of how much your house is going to cost, don't forget these things which are never really brought up until closing in some scenarios:
-closing costs
-mortgage insurance (if required)
-escrow (a monthly cost quote normally provided almost never includes this, at least in my experience)
-cost of utilities (usually a house is bigger than an apartment and correspondingly, utilities increase)
-homeowner's association fees (if applicable)

Also, some HoAs have really annoying rules (like you are forced to get the cable/internet that they provide). Make sure that the place you settle on has HoA rules you can tolerate.

If possible, take pictures of places you see and write down notes about what you like and what you don't like as soon as you can following seeing a house. When I went into the home buying process, I thought I wanted a certain type of house. As my agent brought me to houses, I realized that some of the things I thought I wanted weren't as important to me, and some of the things I thought I didn't need/want were. For example, I never thought I wanted a garage. But as I saw more houses (townhouses, mostly), I realized the parking situation in a lot of townhouse developments sucks and I ended up making a garage a requirement.

Good luck.
/tk

FWIW......a good buyer's agent should be able to address all this information. Terp is definitely right that you want to select a good agent. Check with co-workers, family, and friends to get some good suggestions.

[tarcone]

Make sure you get an inspection.

Have fun. I love buying houses. Or at least being in the market to buy. Sometimes I want to go to open houses, just to look. Ive thought of calling the realtor to get into a house I would like to see.

:)

[Mantle2600]

Awesome, thanks for the responses. When in doubt, turn to FOFC.

[Flasch186]

FWIW......a good buyer's agent should be able to address all this information. Terp is definitely right that you want to select a good agent. Check with co-workers, family, and friends to get some good suggestions.

if in North florida....pick me! :)

[Marc Vaughan]

Also, some HoAs have really annoying rules (like you are forced to get the cable/internet that they provide). Make sure that the place you settle on has HoA rules you can tolerate.

Should have mentioned never ever ever ever buy a place with an HoA, I've no idea why people in America tolerate the concept to be honest, if you own a house you should be able to do what you like with it imho .... if I want a pink door with a tartan drive then its my blooming house thank you very much.

Sorry but my experience of SoA's consists of them preventing people from cutting the lawn and doing maintenance on abandoned properties as its outside of their regulations all the while sending letters harassing people who are paying their fees for such heinous crimes as 'putting their garbage out early'*.

I now live in a nice redneck area without an HoA and am far happier for it, so are our goats and pig ;)

*And thats really the tip of the iceberg tbh.

[tarcone]

Yeah I got a letter threatening a $20 fine because you could see my trash can from the street.
HoA are made for the people on the boards. They can do what they want as long as you do what they want.

[JPhillips]

Don't forget property taxes as an added expense.

[gstelmack]

Should have mentioned never ever ever ever buy a place with an HoA, I've no idea why people in America tolerate the concept to be honest, if you own a house you should be able to do what you like with it imho .... if I want a pink door with a tartan drive then its my blooming house thank you very much.

Sorry but my experience of SoA's consists of them preventing people from cutting the lawn and doing maintenance on abandoned properties as its outside of their regulations all the while sending letters harassing people who are paying their fees for such heinous crimes as 'putting their garbage out early'*.

It really depends on the HoA. On the one hand, when houses are close together it's nice to have some minimal standards to keep everyone maintaining their property. On the other hand, things like the garbage can, etc are absurd.

I'm in an HoA right now with minimal dues (mostly for mowing and maintaining common areas) and with minimal oversight of homes in the neighborhood. When they decided to go full-bore and changed management companies to one run by the former treasurer, who charged double what the old one did and spent all his time riding around the neighborhood on his bicycle writing people up, the neighborhood mutineed and put a much more reasonable board in charge :D

[wade moore]

It really depends on the HoA. On the one hand, when houses are close together it's nice to have some minimal standards to keep everyone maintaining their property. On the other hand, things like the garbage can, etc are absurd.

I'm in an HoA right now with minimal dues (mostly for mowing and maintaining common areas) and with minimal oversight of homes in the neighborhood. When they decided to go full-bore and changed management companies to one run by the former treasurer, who charged double what the old one did and spent all his time riding around the neighborhood on his bicycle writing people up, the neighborhood mutineed and put a much more reasonable board in charge :D

We've had this fight on here before and I'm with Greg. The RIGHT HoA can be a very positive thing depending on what you want in your living experience. I personally want some standards in my neighborhood because I've seen what happens when they don't exist.

[Mizzou B-ball fan]

We've had this fight on here before and I'm with Greg. The RIGHT HoA can be a very positive thing depending on what you want in your living experience. I personally want some standards in my neighborhood because I've seen what happens when they don't exist.

+2

[BrianD]

One other tip...never trust a lender's pre-approval amount. You will get pre-approved for a loan that you can't even come close to being able to afford. Figure out what you are willing to spend each month and then don't let the lender change your mind.

[lighthousekeeper]

when you meet the prospective buyer's agent in person, look them in the eye and ask if they steer buyers away from houses that pay less than a 3%commission to the buyer's agent. they will answer 'no' of course, but their reaction may be revealing.

later, if there are any houses that the realtor is bringing to your attention (as opposed to you finding initially), ask what commission the buyer's agent is due. this subtly reminds the agent that you are aware of their own motivations and how they may not always 100% coincide with your own.

[wade moore]

One other tip...never trust a lender's pre-approval amount. You will get pre-approved for a loan that you can't even come close to being able to afford. Figure out what you are willing to spend each month and then don't let the lender change your mind.


100% agreed with this as well.

[Rizon]

Research, research, research ... on your own.

[JAG]

Make sure you get an inspection.
:)

Not only that, make sure the inspector is one selected by you. I believe there's some independent home inspector licensing you can use as a start.

Anyway, that's way down the line in the home buying process, but a critically important one.

[tarcone]

Not only that, make sure the inspector is one selected by you. I believe there's some independent home inspector licensing you can use as a start.

Anyway, that's way down the line in the home buying process, but a critically important one.

And dont shy away from the cost. It is expensive to buy a house. Make sure you have money laying around for this type of expense.

Trust me, get an independent inspector. Make sure he looks for stuff you might find important, i.e. insulation in outer walls.

\Things like that will be more expensive in the long run.

[Marc Vaughan]

Oh other first time buyer tips, some of them depend on the location/region as to whether they're valid:

Always view a house during different hours (or at least look out locally for the following items) including:
* During school run hours (you want to see if it turns into gridlock because of a local school)
* After pub/bar kick out time, does everyone use your area as a short-cut home (walking or driving)
* Sunday service hours (about mid-day here abouts) - do the Christian horde speed through your neighborhood having done their weekly devotionals?, is there a mega church hidden around the corner leading to all car parking spaces disappearing?

PS - If in Europe substitute soccer stadium in for mega-church, they're pretty much exchangable in the cultures ;)

[King of New York]

Definitely do some research before you choose a home inspector--a good home inspector is worth his or her weight in gold. Ask folks who have had house inspections done recently for their recommendations. Make certain that the home inspector works for you, not for the seller and not for an agent.

Like MV, I'm a big fan of fixed-rate mortgages. ARMs are a form of gambling: you might win, but you might lose, and if you lose, you might lose big. Any payment that I can afford now, I can probably afford later.

[bhlloy]

Check the sewer if it's an older house. We found 10 grand worth of damage to it that we would have been liable for in about a years time, and plumbing is something you don't want to mess with. Best $300 we spent was for a plumber to put a camera down there all the way to the street.

Other than that, find an agent that you like and will fight for you and if you find a place that you fall in love with, go in aggressively and don't screw about. Good luck... we hopefully close on ours by the end of this week.

[AnalBumCover]

When thinking of how much your house is going to cost, don't forget these things which are never really brought up until closing in some scenarios:
-closing costs
-mortgage insurance (if required)
-escrow (a monthly cost quote normally provided almost never includes this, at least in my experience)
-cost of utilities (usually a house is bigger than an apartment and correspondingly, utilities increase)
-homeowner's association fees (if applicable)


My wife and I were very diligent with these when figuring out our monthly expense and the maximum we can afford - to the point we created an Excel spreadsheet calculating all these factors when comparing each property. It also helped us determine a maximum offer/counter-offer we could make on a house.

As a result, our decision-making became a little more grounded rather than based on emotion.

[stevew]

Do the deals and pricing get more flexibile if you wait until later in the year to buy? Especially up north with our distinct seasons of think people would freak out about potentially having to carry over through the winter?

[Marc Vaughan]

It also helped us determine a maximum offer/counter-offer we could make on a house.
Also be PATIENT when making an offer - is someone says no don't just counter offer straight away even if you can afford it ... it might be worth sitting a month or two and then re-offering.

Remember:
* Its a buyers market at the moment
* That isn't the only nice house out there
* If they're looking to sell they're probably just as impatient as you are to buy ... possibly more so as they're paying a mortgage on the place

Twice now I've offered an amount, been turned down - then offered the same again a couple of months later and had it accepted (once in the UK 5+ years ago, once over here when purchasing my current house) ... now obviously you run the risk of someone else snapping up the property, but imho its worth it - especially if your offer is 10%+ below the advertised price (which imho your offer should always be in the current climate).

Never ever think of paying an extra $25k for a house as 'just another $100/month we can afford that' on the mortgage payment or whatever .. think of it as REAL MONEY which you're paying out. Thats how it'll feel if you move on from that house and have to pay off that mortgage before getting another place ...

Finally never ever remortgage a place just for 'spending money' or 'fund a holiday' or similar - if you do that then you'll end up caught in a cycle where you're never paying off the mortgage and worse liable to find yourself in negative equity if the market tanks (in which case you're stuck there basically).

[Desnudo]

Research, research, research ... on your own.

Totally agree. I have had every single agent, buyer or seller, try and convince me to buy now because the market will never get better. Interest rates at an all time low! Demand rising! Supply shrinking! Fear factor selling.

I'm like, have you seen the interest rate history in Japan (near 0) and all I see are continuing price drops and a massive amount of inventory. Zillow, eAppraisal, Sawbuck, and Realtor.com are great for getting a true understanding of market conditions. You can then compare that against the sales pitch you get from your own agent.

[gstelmack]

Finally never ever remortgage a place just for 'spending money' or 'fund a holiday' or similar - if you do that then you'll end up caught in a cycle where you're never paying off the mortgage and worse liable to find yourself in negative equity if the market tanks (in which case you're stuck there basically).

The key rule is your mortgage is for your house, period. Home Equity loans, refinance to get cash, etc are only to be used on your house, for repairs or improvements. You never want something like a nice new TV to turn out to be the reason you lost your house if you ever get into financial difficulties.

[Toddzilla]

Also, some HoAs have really annoying rules (like you are forced to get the cable/internet that they provide). Make sure that the place you settle on has HoA rules you can tolerate.FWIW that is breaking federal law. As a homeowner you are allowed to get any television, cable, internet, or satellite provider you want regardless of what the HOA says, and they are not allowed by law to impose any kind of fine. Also, the HOA cannot tell you how or where you must hang your dish.

[AgustusM]

I know for me looking back we never fully budgeted adequately for property taxes and home owners insurance. We overshot a little on our our house payment and then were shocked when it was $700 more a month to cover those two items. Had to make some serious adjustments to pull that off.

[Pyser]

I just wanted to thank everyone for responding in this old thread. It's been helpful.

[Poli]

My wife and I are looking at going with a builder in a new subdivision. Is there any advantage to having a buyer's agent in this case?

[MacroGuru]

My wife and I are looking at going with a builder in a new subdivision. Is there any advantage to having a buyer's agent in this case?

Ping Flasch....he can provide some great advice...

[Flasch186]

My wife and I are looking at going with a builder in a new subdivision. Is there any advantage to having a buyer's agent in this case?

YES YES YES

So when you have the home under construction if you have to go out there every single day, its possible that in some cases your superintendant can get annoyed, especially if you start pointing out errors. This can create a toxic environment that will carry through sometimes to the end and beyond into warranty. By having a 3rd party 'professional' walking the property that isnt necessarily the buyer it can allow you to 'stay above the fray' when needing attention paid to things.

The buyer's agent should be able to show up at all walks and get a copy of any documents because again, if an error is made, there is a ' 3rd party' there (although theyre on your side) to say, "No John, at the Design Center we ordered hideous brass hardware." Here's the document... And you dont have to stomp your feet again possibly bruising the super's ego. You get to stay the good 'folk'.

When you do your final walk throughs if you get on the ground and start looking at things commonly missed like, did they stain the shoe moulding, or wood putty the nail holes, a Super can start down a path of explaining things away as 'industry standards' while a Realtor 'is going above and beyond'... "Wow, he's a good Realtor" the super might say where if you do it you're being picky.

By you having an experienced buyer's agent on your side, if the builder starts to try and screw you or treat you poorly, theyre in essence, treating you poorly, the Realtor poorly, all the Realtor's associates, all of his/her customers, the associate's customers, so you are way more levered to have the home be right....

whew, did I get all of that out fast enough to keep you from going on without one?!

If youre in north Florida I can help (Ive got 10 years of exactly that kind of experience so Im no longer intimidated by bubba the builder like some newer Realtors who dont know new construction might be. I can also help you find a good one in your area if its not north Florida.