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Post by bradmacmt on Jun 9, 2017 4:25:17 GMT -8
Buy a location rather than a house. "Less" house in the "right" location is better than "more" house in the wrong location.
Buy within your means, not your wants. Being a slave to a house payment is no way to live life, but not having the "forced savings" of a home is equally silly.
Home inspectors are all well and good, and if you don't know what you're looking at, it's important too have one. However, if you have a friend who's a builder, his eyes well tell you more.
Just a couple of thought's...
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zeke
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Post by zeke on Jun 9, 2017 4:51:36 GMT -8
I was told something similar. Buy the worst house in a great block, not the best house on a so-so block. Values will increase faster in good blocks.
I'd make sure any inspector was not also allowed to offer to make the repairs. Some locales allow this practice, others don't. I think it makes for shady inspectors.
Offers: This depends on the market at the time of your purchase. In some instances, you can offer 90% of asking price. In others, 105% is needed. Be sure to either require the owners to fix all repairs needed, or you negotiate the price down to include you hiring the repairs done. I have purchased 2 homes in Oregon in the last 25 years, and 1 in Fl. I have yet to pay asking price, but times are different with each purchase.
I would suggest using a Real Estate person you trust as your agent. Just working with the Sellers agent will also work, but sometimes I felt like things just weren't quite right. Pay close attention to any sewer line. I had to replace 2 in Oregon, and they run about $8K each. I'd recommend a camera inspection, which runs about $400. Your plumbing company will know how.
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Post by autumnmist on Jun 9, 2017 4:55:08 GMT -8
There's so much emphasis these days on appearance, on granite countertops and all that. Focus on the important systems. The electric team here can give better advice, but when I move I'll want to circuit breakers instead of fuses, age of the electrical wires and whether any have been upgraded (homeowner's insurance underwriters want to know this stuff), age of the roof, type of shingles, age of plumbing lines, whether any have been replaced (leaks from old lines are annoying), age of the hot water heater, etc.
If your potential new home is rural, check the attic, basement and exterior (including porch) for signs of critter invasion. Getting rid of squirrels is a difficult process; getting rid of mice is easier.
Don't buy a house near a freeway. I've learned that the big undesirable rodents have moved into areas surrounding the freeway in my area. Now we have to worry about rats. Also research to determine if there have been any floods recently. One of the pumping stations allegedly maintained by Michigan State failed and a flood occurred. Basements were flooded, more rodents were seen after that. Worrying about rats really destroys the pleasure of a new home.
Depending on the age of the house, you might want to consider testing for lead paint; use a hardware kit first before contacting a lead remeadiation company - they're very, very expensive and need to remediate "by the books", sometimes doing more than is necessary.
Some years ago I explored the idea of remediation for my garage as I wanted to grow vegetables next to it. The remediation was too costly, and wouldn't really have solved any problems in the soil. So I just grow ornamentals there.
Check with your insurance carrier to see if you can get information on whether surrounding areas will influence homeowner policy rates. I learned surreptitiously that in SE Michigan, some areas are still red lined (I think that's what it's called) and homeowners charged more b/c of proximity to Detroit. In my case that's also the situation for cars. I pay $1700 annually for a 2005 Ford Focus Sedan; if I were farther away from Detroit, the cost would be cheaper.
(Am I sorry I moved to this area decades ago? Yes!)
A peculiar situation occurred when I bought my house, so I keep this as a reminder for my next one. There are 2 lots for my property (and for my father's). When I read the title commitment, I could tell the legal description wasn't consistent with the size of the lot described by the seller's realtor and in the purchase agreement. My realtor was adamant that I was wrong (even though I had worked in commercial real estate) and angrily refused to address my concern. So I by passed her and went directly to the seller's realtor and the title company. I was right; there were two lots but the owners had only given the seller and title company a copy of the deed for one.
Had I closed on the deal, title for the back lot would still have been vested in the seller.
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Post by cweston on Jun 9, 2017 4:58:08 GMT -8
Just a couple of thought's... Good thoughts. I would add, don't be afraid of "fixer uppers." About the only way you can actually add value to a home (beyond what the market does over time) is through good-old sweat equity. (If you hire contractors to do everything, that's great but it's unlikely to add to your equity when you consider net outlay.) If there's work that must be done immediately, you can usually write the mortgage for more that what you need to close the purchase and use the extra funds to finance the initial work. Consider houses priced at, say 80-85% of what you can afford, with the idea that you could use the extra 15-20% to improve it to your taste. Just be careful not to fall into the trap bradmcmt alludes to: if you spend your last dime to buy the house, you wont have the money you need to improve it the way you want to. When we look at a house at the top of our budget (or beyond), the question I always ask my wife is, "would you be OK living for 5-10 years in this house changing absolutely nothing? (Since it would probably be that long before we could afford to change anything.)
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Post by cuzimthedad on Jun 9, 2017 5:03:35 GMT -8
Most lenders require a pest inspection. A licensed reputable pest control company will go through the house looking for signs of termites, meely bugs, wood borers, and the like...usually at the sellers expense. Make sure you get a copy of the report and understand it. That is where a builder friend will come in handy.
Use a reputable tried and true lender in the business of writing home loans. Get the best rate with no hidden costs or back loaded payments.
I always hear location location location. And it's true. I grew up in the country but when I bought...now 39 years ago...I bought an old house on ten acres only 1.5 miles from the town square. And over the years an old 3 acre orchard became an oak grove which has more wildlife in it now than you may see in the wild itself! We love it here and that's how you should feel about where you eventually land.
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Post by Deleted on Jun 9, 2017 5:10:24 GMT -8
I've only owned one house; been in it >20 years.
I bought the land first, and then built a couple years later.
I paid an architect to draw up plans, and bid it out to several builders that I first had looked at homes they were actively building, and got to meet some of their framers, masons, painters, etc. It's not a super fancy place, contrary to what you might expect, not all custom homes are super high end. The advantage is that you can allocate funds to things that are important to you (mine has the exterior walls framed with 2x6's instead of 2x4's; unusual in Texas). Also, a real fire brick fireplace instead of a metal one.
My experience with custom building was very positive, but I've also heard of people that did it once and would never do it again.
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Post by autumnmist on Jun 9, 2017 5:14:27 GMT -8
Another thought on budgeting - don't forget to factor in property taxes. Michigan is subject to statutory prohibition on increases in taxes, but when property is sold, my local community jacks up the taxes. This is especially true for foreclosed properties (I won't even go there - that's a whole different story and potentially different set of problems).
A house on my street was foreclosed twice. It eventually sold for about $67K; would probably sell for around $100K now. Taxes when it sold for $67 were over $4K. That's more than taxes for the house my sister had in a more upscale community in Western Oakland County, a well run community with a much higher class of people, well kept home, good support from the City, and to my knowledge, no rats.
The longer term effect of municipal exploitation of higher taxes on foreclosed homes has been that individuals can't afford to purchase them. Enter the carpetbaggers and would be landlords, some of which are business oriented and good, but some are just a couple of people who've watched too much HGTV and think they're flippers or landlords. One house on my street has had a change of tenants either annually or sometimes after a few months.
Some tenants are good; some are not. Garbage has become a problem in some of these places; some have never lived in communities and don't know how to interact with homeowners.
The national flipping company that bought the house next to me (abandoned and vacant since 2011) hired few companies and mostly young guys to do the remodeling and remediation work. One day I found 2 bats of fiberglass insulation that had blown onto my lawn. One was faced, one was unfaced.
A few days earlier I had seen one of the young workers packing fiberglass insulation into a small trailer, presumably for a trip to a dump (hopefully to a haz mat sight though). He wasn't wearing gloves or a mask. I couldn't help thinking and wondering how the insulation was installed in the house and if this guy was just as casual about it as he was about handling it for disposal. That's a house I would NEVER consider buying.
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foxalo
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Post by foxalo on Jun 9, 2017 5:16:29 GMT -8
We've bought 8 houses over the years. We currently own three (renting two). Unless you are handyman kind of guy, stay away from fixer-uppers. They take a lot of time, money, and energy.
Always get an inspection no matter how new or old the house.
Take into consideration how close shopping, hospitals, etc are. I know that matters to some as they get older.
How much outdoor maintenance do you want to do? Lots of land requires lots of it. A small house in the city won't. Think about exterior. Wood requires paint regularly.
Also, does the neighborhood have an HOA? If you don't mind people telling you that you have a weed in your yard or that your trash can was out 6 hours longer than they think it should be out, then by all means, move in. There are benefits to HOAs, such as the neighborhood looks nice all the time vs having that one neighbor that treats his property as a junkyard.
If you are thinking about moving into a neighborhood vs a single house in the middle of nowhere, go by at several times throughout the day. If you want a quiet place, you need to see who is around. Some places are very quiet during the day but crazy in the evening when kids get home from school and such. Not everyone wants that.
As for the inside of the house, only you can decide what's important to you. I'm all about the kitchen and yard, and having a fireplace (I just wish mine was wood-burning). I like trees on my property.
Good luck!
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Post by autumnmist on Jun 9, 2017 5:18:09 GMT -8
Every time I read another post I think of something else - I need to leave before I end up spending all morning on this on thread!
On pests: I've noticed that ants appear on one side of the house every time my neighbor cuts down branches and piles them on the property line, about 6 feet from my house. When code enforcement makes her clean up the branches, I don't see ants inside until she starts another pile.
If you can find a way, check for leaks about windows. My sugar ants move from their home somewhere beneath the casement window to my kitchen counter when there's a rainstorm.
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Post by cweston on Jun 9, 2017 7:05:00 GMT -8
Another couple thoughts about location...
1. Yes, location is critical. But know that if you buy in the "it" location, you will pay absolute top dollar per square foot, and it likely won't be the "it" neighborhood anymore by the time you sell the property.
2. Tell your agent about the kind of people you'd like to have as neighbors--and be honest. We're casually looking to move at the moment. We ended up making an offer (we were outbid) on a house in a neighborhood we'd have never really considered. But our agent described the nature of the neighborhood and we realized it was much more "our people" than we realized. (We were worried that it was a too suburban, "competitive lawn mowing" type neighborhood.)
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Post by bradmacmt on Jun 9, 2017 7:38:00 GMT -8
Regarding building vs. buying (I know, no one asked ) As a custom home builder, I can without hesitation say the VAST majority of people are better off buying an existing home rather than building a custom home. The reasons are myriad, including being an arduous process, but mostly it comes down to not knowing how to say "no" to what you want vs. what you can actually afford, and additionally the vagaries of materials and labor costs. A custom home ALWAYS costs more. And I can tell you it doesn't matter if it's a 400K house or a 10MIL house... I've done both.
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Post by Deleted on Jun 9, 2017 7:56:01 GMT -8
Offers: This depends on the market at the time of your purchase. In some instances, you can offer 90% of asking price. In others, 105% is needed. In the SF Bay area, expect to pay at least 20% above the asking price every time. The realtors play a game in such extremely hot areas. The purposely set the asking price low because it gets more people to look. More people to look means a larger bidding war. That's what sets the real price. In the SF Bay Area, all houses for sale might as well have a sign on them that says "For Sale- only ten cents". The asking price there has little to do with the expected sale price. They NEVER go at the asking price. Most other area are the opposite and go a bit below the asking price, such as here in Reno. BTW, these days, when you buy a house, expect to be bombarded with paperwork, Mainly because of the Patriot Act. You have to show where every cent came from to buy a house these days. And they will not let you use your own money to buy a house if they do not like where it came from. -Don- Reno, NV
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Post by Deleted on Jun 9, 2017 8:26:13 GMT -8
As a custom home builder, I can without hesitation say the VAST majority of people are better off buying an existing home rather than building a custom home. I'm curious (since I did it and actually enjoyed the process), who would you say should build a custom house? I've only bought one house, and had it built custom. I still don't think I could have bought a comparable existing place "off the shelf" for the amount I paid for the land+architect+builder (although this was in 1994-1996 that I did it). Most people want to move in asap so aren't really candidates for the 1 yr+ process building usually involves.
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Post by JRinGeorgia on Jun 9, 2017 9:13:00 GMT -8
On inspectors, hire your own and negotiate upfront that he will write two different reports, a worst-case and a best-case. Keep in mind you want both to be truthful. First you want a report that finds everything possible that's wrong or soon to go wrong with the house, this is a great tool for negotiating with the seller. But, if you actually buy the house this becomes a terrible inspection report to submit to you homeowner's insurance company so for that you want a report with little detail that indicates that the structure is sound, the roof is good, no super-major problems.
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jazzmom
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Post by jazzmom on Jun 9, 2017 11:45:29 GMT -8
Do the math. Don't let the real estate agent or the mortgage company/bank tell you the price range you should be looking based on what you qualify for. If you're paying rent now and your budget works, stick to that number. Don't forget to account for real estate taxes, homeowner's insurance. Understand what mortgage insurance or PMI means. Don't fall for the "but you're building equity" or the "you can afford more because of tax savings" games. Just because you own a home doesn't mean you no longer need to save money. And whatever you save in taxes, you will put back in maintenance, repairs and improvements. It's a great milestone. Congratulations and good luck!
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