Advice and tips for first time home buyers

In My Humble Opinion
1

We bought our first home a couple of months ago. (Yes, we’re awfully old for that, but there it is.) Since so many Dopers are young and might buy their first homes soon, I thought it might be a good idea to have a thread giving them some guidance. Since our experience is fresh AND we’ve enough time for it all to sink it, I thought I’d share it before it fades away.

Save as much as you can for the down payment: It really is amazing how much difference this makes in the long-term interest rate — far more difference than a credit rating. Our rating was in the high 700s, but we got a great rate by paying 20% down.

Don’t be shy when you look at a property: Open and close the windows. Turn the dimmer switches. Carry a small lamp and plug it into outdoor receptacles. Flush the toilet and run the water in every bathroom. Gas logs? See if they work. Whirpool bath? Fill it up an run it. Don’t just walk through like you’re on a tour. You’re going to spend a dizzying amount of money on this. Take your time, and do due diligence on the property.

Get a buyer-oriented realtor: Some specialize in servicing buyers, and some specialize in servicing sellers. Whatever you do, don’t use the same one as the one who is selling the house. If they insist you sign onto them exclusively, drop them. If they don’t return your calls in five minutes, drop them. (They have cell phones.) Once you get to closing and your realtor doesn’t even show up, it’s too late.

Talk to a mortgage lender before looking: It’s nice to know the ball park of what you can afford and what you can’t. Don’t let a realtor drag you into the highest end of the spectrum only, which they’ll tend to do. Insist on looking at a variety of prices in your range. If it begins to appear that the realtor is purposely showing you nice homes in the highest range and dumps in the lowest range, drop them. There are bargains to be found, and your realtor should know about them.

Read the sellers promises VERY carefully: If it says “Warranty Available”, make sure that you actually include the warranty in your offer. Otherwise, you won’t get it.

Do a final walk-through on your way to closing: Make certain that movers haven’t left a yard full of tire divots, broken screen doors, or scuffed floors and torn carpets. You have the right to take the property in the condition you found it when you made your offer.

Anyone else have tips?

2

I wouldn’t do all this myself. I would, however, hire a home inspector - a GOOD one - to go through the house before you buy it. Yes, you’ll spend $300-$400 depending on where you live. But a good inspector will check out everything in the house and give you a written report. It’s an essential part of home buying IMO.

3

Liberal, we just signed a contract on a house, and everything you say is true. I wish I’d know it two months ago.

Let’s put it this way - I am seriously bitter at my father-in-law right now, who was our realtor. I’ve found out a lot of things he SHOULD have done for us, but didn’t. And being first-time home buyers, we didn’t know any better and trusted that he would tell us these things. It’s going to take me a long time to get over my anger at him, if I ever do.

I love our house, and I can’t wait to move in, but if I could do it again, I would say screw the family connections and get a different realtor.

Congrats on your new house, too!

E.

4

I’m with you, check, check and check. Ask for invoices if they claim roof was just done; take a flashlight, look in the basement in all the dark corners; check the walls in the cold to see about insulation; this may sound weird, but if you are going to look at the house, try to schedule it when its raining - guaranteed way to spot a leak (which could be in the attic - you are going to look there, right?).

We looked at about 10 houses before we bought ours…coincidentally it was pouring rain every time we went, initially I thought it was a bad thing but you would be absolutely amazed at how much shows up when it rains! Also, one house we went to look at smelled VERY STRONGLY like room freshener - so much so you could hardly breath - sure enough, behind an old freezer in the basement was one hell of a hole in the basement wall and boy, when you got close, the water was a little stale and smelled not good.

5

Never – NEVER – find your lender or home inspector or lawyer or anything else through the realtor. Find them on your own. It’s not that hard.

Never completely trust anything the agent (seller’s or buyer’s) has to say. They have a vested interest in selling you the house because that’s how they make money. It’s very hard for people to be 100% objective when their paycheck is on the line.

Once the offer is signed, you are under a contract to buy a house. It’s a serious legal obligation. You can’t get out of easily. Don’t think that you can. A lot more than the deposit is at stake – the sellers can and should sue you to recover however much money you have cost them, which is often much more than just the deposit.

Do your own research. Don’t expect anyone to tell you all the things you need to know. There are tons of information out there on buying a home - take advantage of it.

6

Big tall beautiful old oak trees in the yard? Walk all around them looking everywhere on them. If part of the bark is missing down one side of a tree, it was likely hit by lightning and needs to be cut down. That’ll cost you about $500 around here.

7

Or, avoid all this by building your own. It costs about the same, and you get the paint and cabinets and flooring and everything else that you want.

We’ve bought one house and built one house. I will never buy again.

8

Take a video camera or a digital camera along when you are househunting and capture the stuff you are interested in on film. A friend of mine did that and it really helped out after the neverending series of houses seen began to blur together and they wanted to compare.

Of course, such footage or photos might also be useful if you need to document your claim that they busted the place up some while moving out.

If you want to set up a home gym, be wary of ceiling height – in all likelihood, a tall fellow won’t be able to run on a treadmill in a basement with 7’ ceilings. Likewise, a tall fellow won’t be able to lift weights over his head in a room with 8’ ceilings.

9

Great advice Liberal. Buying that first home is a major undertaking. Sounds like you and the Mrs. found a good one. Talking to a mortgage lender and pre-qualifying is definitely the best piece of advise, IMHO. Athena also gives great advice about paying for an inspection. It’s worth every penny.

If the house is older and you have the option to take out warranty insurance on the major appliances (stove, water heater, furnace, HVAC, etc.) it’s worth it. My first house was an older home. I paid $250 for warranty insurance on all that stuff for the first year because I knew stuff was old. It has a $100 deductible for anything it covered and it paid off. The furnace and the stove needed replacing within the first year and it cost me a grand total of $450 to replace em both. Of course, they may not wear out that first year but the price of the insurance is still worth it I think.

ivylass, I dunno so much about that. I built my current house and it drove me crazy! Countless hours of looking at door hinges, door knobs, drawer pulls, wallpaper, carpet, tile and linoleum samples. An entire day of looking at bricks and mortar. Constantly checking on the progress of the building. Being called out almost daily by the contractor to discuss problems and decide on solutions. Laying sod and spending endless hours watering and fertilizing the damn stuff to get it esablished. And, lest we forget, the great debate over where to put the septic tank! Finally getting in the house and still going :smack: because of things I wish I had done. I think if I ever do move again, I’m going with something already there.

10

See, that was the fun part for us.

We never had that problem.

We didn’t have to lay sod, but we did paint inside and out to save money. Won’t be doing that again.

Out front, underneath the really green grass. :smiley:

11

Pre-qualifying is great, but make sure it’s based on what you want to spend per month not on what you qualify for. Banks may qualify you for a mortgage that comes out to more than 30% of your income going to the mortgage payment. (That’s not worded well, but what I mean is they’re willing to let you borrow so much that you’d have to spend >30% of your monthly income on your payment.) I don’t know about the rest of you, but I can’t spend that much every month just on my house. Do your budget *first *and then go to the bank and tell them the maximum you want to spend per month. Ask them how much you can afford based on that, not on your total income. This is really important because many of the online calculators will tell you how much you can afford based on the price of the house alone. But you’ve also got to take into account the cost of taxes and insurance which get paid to the bank every month as part of the monthly mortgage payment. I don’t live in a terribly expensive area but even here the taxes can add on $300/month for a small house. That’s enough to send me scurrying back to my (rented) apartment.

Also, look for programs for first-time homebuyers. Ask your realtor about them. Ask the bank. I was surprised to find out that I qualify for many of the programs. The income levels are pretty generous so don’t think that you don’t qualify without checking. It could save you a *lot *in interest. Plus you can get a lower down payment in many cases with these programs. And don’t be afraid to shop around at different banks. They do have different rates and different programs. The bank you choose and the program you end up in can make a BIG difference in the end. It is as important to find the right loan as it is to find the right house.

12

If the county you’re buying a home in has a web site, look it up. It will probably have a section that lists the value of the property you’re interested in and the values of adjacent properties. You can look up the prices of what other houses sold for in that area and tell this to the realtor to make him sweat.

If there’s no web site available, call up the county commissioner. He can probably point you in the right direction to get that kind of data, if he doesn’t have it himself. While you’re on the phone with him, check to see if there’s any future developments planned for that area. Does the city plan to install water/sewage lines? Is there going to be a shopping center built nearby? If so, will this make property values go up resulting in more homeowner taxes? Your realty agent will probably tell you in advance, but it doesn’t hurt to cover his tracks, and you’ll be getting your info from a source who’s not going to sugar coat it for you.

If that doesn’t pan out, introduce yourself to your future neighbors. Chances are they know something that’s about to happen.

Definitely hire a home inspector. The $3-400 you spend on him can result in thousands being knocked off the asking price. I found out when my roof got reshingled, they put a new layer on top of the old one instead of replacing it. This enabled me to bargain the sellers down another $3000.

13

Absolutely. But even before you make an offer, I’d go back. The first time through, you’re looking at your overall impression. You are guaranteed to miss stuff like poorly hung doors that are not safety issues but which might be indicators of other problems. If you are buying a house with a basement, go back when it is raining. I did this once, to find that the owner had expensive electronics equipment on the floor. I decided that this was a good sign which it was - the basement had a sump pump, but it came on twice in 15 years.

Flush the toilets, try the water, look under the sink for the dishwasher and disposal hookups. You can spend a lot more time with a house on your short list, and the realtor should be willing to spend it with you.

14

I just want to repeat this one. I think it’s one of those most important things. Get it inspected!
In some states, it might be required by your lender or even by law. I’m in Maryland, and a home inspection was required by our bank. We bought a real fixer-upper, but we knew exactly what we were getting outselves into before we bought it.
But yes, there’s nothing wrong with flushing the toilet and opening and closing doors and really giving it the once-over yourself on your first walk-though.

You are allowed to put one new layer over an existing layer if there are no major leaks, but that’s it. When we bought our house, the inspector pointed out to us the fact that it already had two layers of shingles on it and when we re-shingled it at some future point, both layers would have to be removed and whole new roof (including the sheathing) put down.
YMMV, of course, depending on the building codes where you live.

15

Buy this book.

**100 Questions Every First-Time Home Buyer Should Ask : With Answers from Top Brokers from Around the Country (100 Questions Every First-Time Home Buyer Should Ask)
**

16

Great advice, this. And don’t go for the cheapest home inspector or lawyer either. You tend to get what you pay for. You’re hiring them to look out for your interests in what is probably the biggest transaction you’ll ever be involved in. Saving $200 is not your largest concern here.

I love my house, but my home inspector sucked. He missed dozens of issues.

Also, be prepared to walk away. If your inspector or lawyer identifies a problem, and the seller balks at fixing it, or giving you an appropriate credit, the smart thing may be to move on. If you can’t have this mindset, at least hide your attitude. Never, never, never let the brokers or the seller know that you are thrilled with the house. You’ll end up paying more if you do.

(Oh, and great post, Liberal.)

17

A couple extra things: Never trust anyone who says “It’s just a standard contract. Sign here.”

Read the damn thing. Better yet, have your lawyer read it BEFORE you sign it. (Yes, I know about attorney approval riders. They’re better than nothing, but some are of limited value. The problem is, you probably won’t know if yours is one of the bad ones.)

If you’re buying a condo, the legal issues are even more critical.

I’m amazed by the number of people who sign contracts without reading them. If you sign a contract, you’re bound. Not knowing what’s in the document does not get you off the hook.

18

Most of the important stuff has already been said. The most important:

Get a good home inspector, and go through the house with him. Ask questions. If he doesn’t check every faucet, and every circuit breaker, and every lightswitch he isn’t doing his job.

Prequalify for a mortgage (when I bought my house, there were three offers, all above asking price; they chose mine not because it was highest but because I was prequalified). It doesn’t matter how much you qualify for; you can always set your own limit. I set a personal limit that was lower than what the bank said I could afford. That came in very handy when I lost my job.

Talk to the neighbors; that’s how I found out that water pressure was low (the house had a booster pump) but they were building a new water tank. Two years later I don’t need the booster.

Talk to the homeowners if possible. We found that ours had to move suddenly and the house would be standing empty. They ended up preferring someone with a quick closing date and who was willing to take additional cash in order for doing small repairs herself (myself).

Visit at least twice. If possible, bring different people each time.

Drive by many times, especially at rush hour. Check out the noise level. (I don’t really notice noise when I’m distracted but I had a great Realtor who pointed out that some places were so noisy I wouldn’t be able to sleep. Check out rush hour traffic.

Sign up online with a free service to get the listings. Your Realtor will be screening them for you but you can look at other areas or price ranges to see what is available and get a better overall view.

19

Don’t buy anything within 1 mile of anyone/anything else. They will turn out to be trash and piss you off.

Drill a well. Screw the “local utility”. Use all the damn water you want. Its yours, after all.

You can never have too many trees.

Dry lake-beds will some day become actual lake beds again. Consider this. I didn’t.

If its on a map, don’t buy it. They can find you then.

No matter how big the house is when you look at it, its not big enough. Neither is the garage. Get something with 3 more bedrooms and 4 more cars.

The view will not last. Get used to that idea right now.

The sad part of this post is that I’m only partially kidding. Most of this is dead serious.

20

Related to this, drive by at different times to get a better feel for the neighborhood.

Does the place seem nice by day, but somewhere you’d be afraid to be out alone at night?

Does rush hour traffic make access to the house interesting? (To put it that way.) Would have you have to turn left across heavy traffic to get to the house?

Do neighbors have highly annoying lights in their yards? Or is there a street light that shines on the house?

Are there new developments being put in nearby? What kind? Are the existing nearby developments kept up, or are they showing signs of decay?

Are there a lot of ‘for sale’/‘for rent’/‘for lease’ places nearby? If so, try to find out why. Sometimes the reason can be good, sometimes neutral, sometimes bad.

And while you’re at it: where are the bus stops in your area? (Both for public transportation and school.) Having a bus stop in your front yard sucks.

Additionally: know ahead of time what items are complete dealbreakers for you. Don’t waste your time on houses that you know posess these dealbreakers, and don’t let your real estate agent (if you are working with one) waste your time on them either.

<< A cat at rest will tend to stay at rest unless acted upon by an outside food. >>