We're looking at a house today (to buy? help!)

[esrgirl]

So, does anyone have any advice? We've never bought a house, we're in our 20's. We noticed that a 15 year mortage on a house in this area is about 40$ less a month than we pay in rent. We're going to look at a house today, but otherwise we haven't done any preparation. Are you supposed to apply for credit at a bank first? Is the realtor a good resource for first time home buyers, or should be be prepared first? I heard about grant resources for first-time buyers- but most the information I've found says the lender will tell you about these programs.

I just bought a car, because mine stopped working- will that hurt my chances of getting a mortgage?

Should I call a realtor and just tell them we want to buy a house, or just contact the realtor representing houses we like? Is it better to have a realtor representing you? Are there any costs assocated with having a realtor or do they just take commissions off the sale?

Buying a house is darn confusing!!!!

 

[sammie5]

All the people I know who went house buying went and got a preapproved mortgage first. Then, they knew what they had to spend. And if they were making an offer in a competitive situation, their offer was more attractive, because the financing was more secure. You get a preapproved mortgage at a bank, or financial institution. And if you get turned down by one, just go to another. I know people who went to 4 or 5 banks before they were approved. (They were both self employed, and needed a loan officer who took their business plans seriously)

Your mortgage approval will depend on your current income, and current debt load as a percentage of that income. So, having car payments is a good thing, as far as credit ratings goes, but not a good thing if the car payments eat up too much of your income.

 

[babyharley]

That stuff is so confusing! We still rent but are on the look out for houses (we really want to build our own), but I really wish you the best of luck in finding a new home, keep us all posted on how things go!

 

[caprice]

Since I work for a real estate company, I know what you are going through. Yes, it is best if you are preapproved before you go out looking so you know what price range fits the loan and your income too. I know a lot of people get 30 year mortgages though, but it's up to you how you want to do that. Do you have a realtor? If not, I suggest getting one. They can help you the most to do all of this. Also, make sure to get inspections on the house when you put in your option period check. And remember...once you see it, you know that it's the one you want. Don't talk yourself into something you don't like too.

 

[george'smom]

Relax and take your time. . . It's ok to look at the house without feeling obligated to make an offer on it. People usually look at many houses before making their decision to purchase/make an offer). If you don't know any Realtor's, have a friend/family member recommend one to you, or call the agent that listed the house. The commission fee (for selling agent and listing agent) comes out of the price of the house (not added to it). The homeowner (seller) is the one who is technically responsible for the commission - unless you hire a "buyers agent" who is working for you specifically (to find you a home). If you make an offer (put a deposit on a home), then you could risk losing it if you decide not to buy the house. Laws vary from state to state, so ask the Realtor before you make an offer. As for financing, it is a good idea to talk to a lender to see what you qualify for - to give you a better idea of what you can afford and how to increase your credit score. You don't want to waste your time or other people's time looking at houses you can not afford, or perhaps you can afford something in a higher price range. There are many first time buyer's programs out there that require little (sometimes no) downpayment - and many allow you to finance the closing costs. I would borrow for the full 30 years - there are many other things to consider when buying a house - such as taxes, insurance, repairs, water/sewer, etc. When you pay rent, that's generally included in the rent $. I would also recommend having the home inspected - if something is structurally wrong (or something needs repair) you can negotiate the price or ask that the problem be fixed. If the house has a septic system, make sure that is checked as well! I bought my first home when I was 20. It was a very exciting time - good luck to you!

 

[sharky]

Originally Posted by caprice

Since I work for a real estate company, I know what you are going through. Yes, it is best if you are preapproved before you go out looking so you know what price range fits the loan and your income too. I know a lot of people get 30 year mortgages though, but it's up to you how you want to do that. Do you have a realtor? If not, I suggest getting one. They can help you the most to do all of this. Also, make sure to get inspections on the house when you put in your option period check. And remember...once you see it, you know that it's the one you want. Don't talk yourself into something you don't like too.

As the daughter of a realtor I can tell you the above is very good info...

 

[stampit3d]

I agree with everything that has been told to you on here too.
If you can swing a 15 year instead of a 30 year morgage it will save you TONS of money in the long run!!!
Think through what you are really wanting in a house...and what`s most improtant to you. That will also help your realtor to know what to show you and what not to show you ...and will save him/her and you from wasting a lot of extra time .There are a lot of homes for sale out there right now...so search til you find what you are looking for/ and can afford.
IMO buying is much better than renting if you can come up with a down payment....that way all those months and years of monthly payments, if you take care of and or upgrade the home , it`s like investing your $ . You never get any extra return on your rent $....where you can always resell your home and MAKE $. We`ve done it 3 times in our married life and it worked out very well for us! Good luck to you!!!

 

[tari]

I bought the "Home Buying for Dummies" book when we were getting ready to buy our house. It was enormously helpful and really helped me understand all the details involved!

 

[ugaimes]

Bradley and I are in the exact same boat!! No good advice, but I wish you two LUCK- this is TOUGH!

 

[mrsfishy]

Having been a Realtor for 11 years, specializing in working with 1st time homebuyer's, hopefully I can offer some useful information.

1st step: Get pre-approved! This way you'll know exactly what you can afford BEFORE you go look. It's VERY disheartening to look at homes and fall in love with one and THEN go to the bank and find out you can't get that large of a mortgage. Also, when you say you can get a 15 yr. mortgage for $40 less than your current rent, are you SURE? If you're using an online mortgage calculator, it may only be calculating the principal & interest....remeber, your actual payment will also include taxes, insurance, and private mortgage insurance (if you don't have a 20% down payment).

Also, tell the bank what you would not want your payment to exceed per month so they can tell you what price range you should stay within. The bank almost always thinks we can afford more than WE think we can afford! Most of my Buyers are approved for $20,000-30,000 MORE than what they can spend and still keep their payments within their comfort zone. Even I was approved for a $250,000 loan there was NO way I'd be able to afford that kind of payment....I kept my purchase under the $200k mark!

Step 2: Get a Buyer's Agent...preferably an "ABR" (Accredited Buyer's Representative). This won't typically cost you a dime! I have sold over 200 homes as a Buyer's Agent and have always gotten paid by the Seller or the Seller's Broker. A Buyer's Agent represents YOUR best interests in the transaction and helps you negotiate the best obtainable price and at the best terms. If you'd like me to help you find an ABR who is experienced and good at what they do, feel free to send me a PM and I'll be happy to help!

It helps me, too, as I usually will get a referral fee from whatever the Realtor you buy from gets paid and I then also donate $100 to the non-profit charity of your choice.

The last suggestion I would have is do not just call whatever Realtor has the house listed that you're interested in...they can typically ONLY represent the Seller's best interest and help THEM get the best price...they also can't tell you if it's a bad investment for resale value!

Let me know if you have more questions or need specific tips that I didn't cover. Happy home hunting!

 

[yosemite]

You have gotten some excellent advice here. The only thing I would add is make sure your real estate agent doesn't try to get you to buy a home you can't afford in order to make a higher commission.

When we bought our first detached house we had an agent recommended to us by a friend. I told her what price range we could afford and what we were looking for. I believe she showed us the 3 most horrible house in that range to coerce us into buying a bigger house so she would make more money. After looking at the 3 houses, I flat out told her that if those were the only thing we could afford that we would stay in our current home. We then were directed to another agent by another friend and within 48 hours he had 3 lovely homes in our price range to show us. When we drove up to the third one, before we even got out of the car we knew it was the one we would take - and we did.

This is probably the largest investment you will make in your lifetime - a house. Take your time and look at as many as possible before making your decision.

And definitely talk to your bank and get pre-approved. That way you will be able to get your agent to show you houses you can afford and still have a social life instead of being mortgage-poor and lessen any disappointment of seeing something you can't possibly afford.

 

[zak&rocky]

I just bought a house. We contacted a realtor who had a house we found online. Additionally they had a lot of houses in the area we were looking. Luckily for us he was really good. I would say to either go w/ a reccomendation and your got. If you get a bad feeling, switch! He was very patient and we ended up buying a house from another broker's listing, but of course he made money from the deal anyway. The listing broker came to one of the showings of the house we bought. He was a different sort. He tried to tell us the windows were brand new (um, no they definitley weren't) We pretty much ignored him. It's okay to start looking now but you definitley want to get approved ASAP so you can make an offer when you do find the house. Otherwise it could be sold before you are ready to do so. The other advice I have is to be patient. New stuff goes on the market a lot. Additionally, if you find something on line that your realtor didn't- show him and have him show you it!

 

[mrsfishy]

Originally Posted by zak&rocky

Additionally, if you find something on line that your realtor didn't- show him and have him show you it!

That is excellent advice! It may even be something you drove by and saw a sign in the yard but your Realtor didn't mention it. This can happen very frequently because of inaccurate data having been put in the listing that excluded it from your Realtor's search. For example, I sold one house that my Buyer called me on and said they wanted to go see this house they drove past and wondered why I hadn't called them about it. It turned out that we were searching for 3 or more bedrooms but in the listing, the numbers got transposed and it said it had 2 bedrooms and 4 BATHROOMS! UGH! I also found a home today that works great for a Buyer I'm working with and I was glad I stumbled across it because it was listed as being in a different area than it really is and that could have caused me to miss it altogether.

As far as having a Realtor trying to sell you a home more expensive than you can afford, that is actually very uncommon. Most Realtors want you to be happy so you'll spread their name to your friends and co-workers after the sale. Also, selling someone a home for $10,000 more than what they said they want to spend really only results in my making about an extra $80....certainly not enough to try to get someone to spend a lot more than what they want to. Unfortunately, it sounds like Yosemite got one of the rotten ones that make all of us sound like money grubbing crooks! There's always going to be a couple of unethical scoundrels out there in any profession.

 

[esrgirl]

Thank you everyone for your advice. Captiva and MrsFishy, I'm sure I'll be contacting you soon with some questions.

We looked at the house and it was really cute- perfect size, nice sized yard, etc.- but I smelled mold! My husband said he didn't notice it, but I noticed a musty odor in one of the rooms (a rec room in the back of the house) and it even made my asthma act up. My mom told me that it would cost a pretty hefty sum to have something like that cleaned up. The realtor representing the house was very friendly though.

I do think that we are going to go ahead and wait to buy a house until the summer. That way I can get our credit cleared up, save some money for a downpayment, and figure out what township we want to live in. There are three townships located within about 10 minutes of my apartment and we really love this side of town.

We did figure home owners insurance and taxes into our estimation of costs and it actually is about the same amount we'd be paying monthly for rent. Our rent is pretty high and housing in Indiana is pretty cheap. We had underestimated the homeowners insurance, so it looks like it would cost us the same. The realtor did suggest a 30 year mortgage- which makes sense. I suppose we could always apply for to the principle if we wanted to. That's what we do with my car.

Thank you again everyone for your help!

Oh, and I have one of those "Dummies" books and I love it. I will have to buy the one on home buying!!

 

[talon]

My realtor did show me houses that were slightly out of my price range - only if she was pretty sure that they could be talked down to my price range. My current house was on the market for 8 months - before we asked the reduced it and she got the to reduce it a bit more. Viola - in our price range.

 

[momofmany]

If you are really interested in a house and want to put a bid on it, put a clause in the contract that the sale is pending inspection by a certified engineer. Unless one of you is in the trades where you can look at a house and find it's faults, don't buy a house cause it appeals to you visually. Get an engineer to look it over thoroughly before you sign the final contract. It will cost you more, but could avoid having to live with a house where the repair bills are higher than your mortgage.

You said the first house you looked at smelled moldy. If that is in the walls, you might need to tear them all out and rebuild them to make it livable. An inspector would find these things.