Buying a house

[simba20]

So after debating whether or not to move to the city and rent we've decided that we will go ahead a buy a house.

I know this seems like a stupid question, but really I am so overwhelmed with information.......

Where do we begin?

Okay, I know go to the bank and find out what we can qualify for/get pre-approved, but as far as looking at houses, how do we find a realtor...just walk into XYZ Realty and say, "we want to buy a house.." LOL! Been browsing local realty sites and found a few houses I want to look at..

Also, realisticaly how many houses to look at in a day (say a Saturday). How many to look at with 2.5 year old in tow?

 

[dawson5]

start out with some open houses. It's a no pressure way to look at a house and possibly meet a realtor you want to deal with. Ask friends who have bought/sold homes about the realtor they used, did they like them or not. Why? Be selective with the realtor. We've bought 4 houses and sold 3. Out of those agents, only one I did not like. I should have followed my instincts on it. One other thing to consider is if you are near a county line, will the agent be able to show you homes in both counties? We had one that could and one that couldn't, the one that couldn't was the realtor I did not like. He never did tell us that he couldn't show us homes outside the county.

The preapproval is a great way to start. It gives you an idea of what you can afford. Just remember that they give you the max on that, it's not a realistic amount. This doesn't take into account that people like to eat and buy clothes.

Talk with the lender about what you need for a down payment. It used to be if you had less than 20%, they would charge you PMI. That can get to be quite expensive.

As for the looking and how many a day. I would start out small. It's not fun looking at houses with a baby in tow. We did it with three boys, one an infant. It's tiring taking them in to houses, in and out of a car, diapers, feeding, etc.

One thing we did that helped, we kept the listing paper. Usually your agent with give you a printout with the pertinent information on it. Square footage, bedrooms, baths, sizes of the rooms. We kept these in a folder and wrote on them as we were walking through, our impressions, if we liked/hated them and why. Questions that we needed answered. I would suggest taking a digital camera or a camcorder with you. If you go through a lot of houses, they all start to look alike. This will help you remember.

 

[v.t.]

Congrats! Buying a house is exciting, but can be overwhelming. I would ask friends, co-workers, or church members if for realtors. You can set up a meeting, try to interview a few before signing a contact. You can also use different mortgage companies. Shop around for those as well, there is not a standard rate in the industry, different companies offer different rates. Try to stay low on what you are willing to spend. No matter what your price range the realtor is always going to show you the max (or a little bit more) in your price range. If you can aim for 20% down to avoid PMI.
As for looking at houses, our record is 34 in one weekend. Of course we used to move every year and a half so we got good at shopping. Keep a folder, make notes about each place and then schedule second if not third return trip. It is also good to drive by the place at night, when it rains and the schools at pick up time. You can learn a lot about the neighborhood by seeing the kids/parents at the elementary school.
Good Luck!

 

[simba20]

start out with some open houses. It's a no pressure way to look at a house and possibly meet a realtor you want to deal with. Ask friends who have bought/sold homes about the realtor they used, did they like them or not. Why? Be selective with the realtor. We've bought 4 houses and sold 3. Out of those agents, only one I did not like. I should have followed my instincts on it. One other thing to consider is if you are near a county line, will the agent be able to show you homes in both counties? We had one that could and one that couldn't, the one that couldn't was the realtor I did not like. He never did tell us that he couldn't show us homes outside the county.

Last year we did some looking at new home communites in the county were are planning on buying in. I was just getting an idea of what was available in new homes at x price point. We met a few realtors, but how do you really know if they will be helpful? How do you know if you'll hit it off? What specifically should I look for and ask -- oh, not worries about the county thing, where we will be buying is all in the same county.

The preapproval is a great way to start. It gives you an idea of what you can afford. Just remember that they give you the max on that, it's not a realistic amount. This doesn't take into account that people like to eat and buy clothes.

My grandfather always told me to live 10% below your means. It's how I am able to be a SAHM, in grad school on a teacher's salary (it so puzzles my neighbors). The flat screen HDTV, I promised to the hubster with some of our tax return money, may have to wait until "Operation Buy A Home" passes and we do whatever touch-ups, changes to the new/old hoem we buy. Anyway, I'm not going for my dream home, just a good, decent, more space than we have now, reliable first home for us. I am practical.

 

[Darcy03231]

When we were getting ready to buy a house we went over our budget and figured out the maximum amount we were comfortable paying each month for a mortgage payment (and also added in estimated taxes and insurance ). Once we knew what we were comfortable spending each month we were able to figure out how much we wanted to borrow and we looked at houses in that range (adding in our downpayment). Our realtor was convinced we could be preapproved for more than what we wanted to spend, but we didn't want to be house poor. We only looked at houses in the range we were comfortable spending.

 

[dawson5]

Last year we did some looking at new home communites in the county were are planning on buying in. I was just getting an idea of what was available in new homes at x price point. We met a few realtors, but how do you really know if they will be helpful? How do you know if you'll hit it off? What specifically should I look for and ask -- oh, not worries about the county thing, where we will be buying is all in the same county.

As far as the realtor goes, it's you and your judgment. You don't have to sign a contract with them to buy a home, different story if you are selling. They tell you up front that they are working for the seller, that is where their money comes from. One of the open houses we went to had a lady there, while we were standing in the kitchen talking with her (it was our third look at this house, we were torn between two) the recessed lighting fell out of the ceiling. She looked at it, didn't really acknowledge it and proceeded to tell us about how much money they spent on finishing the basement . She is someone I would never consider for a realtor if we ever move again. Nothing like ignoring that the house is falling apart (had a leak in the bathroom, needed a new roof but boy they spent a lot on the basement. It was pretty. They would not budge on the price at all. If we had bought that house, we would never have seen the money if we had to sell.)

Trust your instincts.

 

[seashoreCM]

Before signing any papers related to buying a house, get yourself an attorney who knows (does some specializing in) real estate.

 

[tinker&belle]

I definitely agree with the poster who said to spend less then the max you are approved for. We spent well under that. After a few years I decided to quit my job to stay home with my one DD at the time, at that time DH's income was about the same as our combined incomes when we purchased our home. This was doable, but very tight and we were relieved we didn't take the extra 20K or so on.

We refinanced this year and with mortgage, taxes and insurance (we were able to get out of PMI) our mortgage is under 25% of DH's take home. It is much more comfortable, and we are moving more toward our financial goals.

I would really think about your plans for the future, where you want to be with work and other priorities you want to have when setting a price point you are willing to spend on a home. I know people who have bought beautiful homes but can't do anything else or furnish them because the mortgage is so much of their take-home pay.

Best of luck OP.

 

[Liberty Belle]

Well, first, it couldn't hurt to go online and find calculators of how much certain mortgage payments would be and approximately how much you can afford to spend (and how much people would be willing to loan you).

Then, yes, you go to your bank, credit union, or mortgage company and get a pre-approval.

Or, you can do what we did - go to an open house, end up liking the realtor, going to a mortgage company he usually worked with (and our broker ended up being an old school mate of mine), and going from there.

When we first met with the mortgage broker he asked us how much we were wanting to borrow. He never did give us a range that they were willing to lend us. I'm sure we could have got much more than we did, but we told him what we were comfortable borrowing.

Good luck!

Another helpful thing is to go online and look at available homes, even if you're not quite ready. It gives you an idea of what's out there, what's in your price range, and what's important to you in a home.

At first we were going to build or buy a new (or relatively new) existing home, but after seeing many, we decided that yard space, room size, and location were more important to us than we thought. We ended up buying a home built in 1979. The outside is dated, but the inside is very nice and the rooms are way way bigger than any in newer homes we were in (that weren't $100,000 over our price range!).

 

[Lily & Giny's Mom]

A realtor is worse than a used car salesman BEWARE. I have never been lied to so much , more than any other pro. When going to a open house they will always ask you to sign in, there is a sign up sheet ,tell them no. This is so if you sign in you have to have them be your agent. A realtor will try to take advantage of you, just remember you are the boss and let them know that.L&G's Dad.

 

[Bren's Mom]

First, signing in to an open house does NOT automatically mean you are required to let the selling agent represent you. That's hogwash. They ask for a sign in for several reasons; one to let the sellers see how many people came through, another is to be able to follow up and get feedback from your or your agent about the home they're selling. You can be represented by a buyer's agent and still tour open houses on your own.

For choosing a buyer's agent, I agree that going to open houses is a good way to start. I went to lots of open houses that I wasn't necessarily interested in when we first started looking, just to meet the realtors. Did they offer cookies or a snack, did they have good materials? Were they helpful but not overly pushy? Did I have a good first impression of them? Did they seem bored? Was the person there the actual listing agent of the house? These things will give you an idea of what the agent is like.

And then if you find someone you are interested in having represent you, invite them over for an interview. How long have they been selling? How many homes listed/sold/buyer's represented in the past year? Is this their full-time job? (If it's not, beware. Will they have time to take you to showings when YOU need to go?)

I would also not plan on more than 2 homes a day with a toddler in tow. If you can, make arrangements for family/friend to watch your toddler and on a Saturday you could reasonably do 5 or 6 at a time.

 

[mandylo]

how do we find a realtor...just walk into XYZ Realty and say, "we want to buy a house.." LOL! Been browsing local realty sites and found a few houses I want to look at..

That is exactly how we found our realtor! She was even able to show us houses listed with another real estate company. She was great and we still get a Christmas card from her every year, even 10 years later.

Good Luck! Im sure you will find a great house!

 

[Liberty Belle]

A realtor is worse than a used car salesman BEWARE. I have never been lied to so much , more than any other pro. When going to a open house they will always ask you to sign in, there is a sign up sheet ,tell them no. This is so if you sign in you have to have them be your agent. A realtor will try to take advantage of you, just remember you are the boss and let them know that.L&G's Dad.

I'm not sure where you are and if this varies from country to country or state to state, but it's not true here in Kentucky, USA.

 

[ekatiel]

ITA agree about not getting in over your head and becoming "house poor". Also, be sure to look CLOSELY into tax rates for each home you look at. Here in Texas, property tax rates vary even in the same neighborhood and can range from 2% to over 4%-- that makes HUGE difference in your payment. Ie-- You might be able to afford a house in neighborhood X that costs $20,000 MORE, just b/c the tax rate is lower, or you might have to spend $20,000 LESS in neighborhood Y b/c the tax rate is so high. I know property taxes are notoriously high here (b/c we don't have a state income tax), but I'm sure that rates do vary in other parts of the country, too. It's something to definitely be aware of. --Katie

 

[Cheshire Figment]

I was very lucky when I purchased my first house. The agent happened to have been a tax client of mine for several years. He and his wife were both agents, but she tended to do high-end properties.

What he did was very unusual, but showed great professionalism. First he interviewed me without my (soon to be) wife, to find out what I was looking for and also what I thought Judy was looking for. Then he interviewed Judy alone, to find out what she was looking for and what she thought I was looking for.

Then he took us to several open houses that he knew were above our price range, not because he thought we would buy any of them but he wanted us to see what features they had and see how we reacted to these features.

Then he took us to houses in our range. Before he took us to any house he had personally checked it before to get an idea of if it even worth it for us to look at. The second house he actually showed us was the one we bought, and lived in it for 15 years before retiring and moving to Florida.

 

[RachaelA]

We bought our house in August (my first and DH's second). We started looking in February. What we did was go to a bunch of open houses in one day and made appointments at a few other houses with the realtor of the house. I think we went to 7 houses in one day (it was a long day!).

We end up hitting it off with one of the realtors at one of the non-open houses we went too. It turns out she knew a bunch of people that my mother knew, etc.

You need to find someone you are comfortable with and that you are completely honest with. We ended up looking for houses every weekend with our realtor for almost 5 months.

To find out what we could afford one used one of the mortage calculators online to see how much a certain priced house would cost payment wise. Then we added in insurance and property taxes for our area. We put 20% down so we didn't have to worry about PMI. I think that's a good way to do it because banks are always going to approve you for more than you should probably buy for.

 

[marydmjj]

When going to a open house they will always ask you to sign in, there is a sign up sheet ,tell them no. This is so if you sign in you have to have them be your agent. A realtor will try to take advantage of you, just remember you are the boss and let them know that.L&G's Dad.

That is a load of bull. Sounds like you worked with a bad agent. Signing in at an open house does a few things: 1) it shows the seller how many people have come through the open house; 2) it allows the agent to follow up with the potential buyer to get feedback for the seller; 3) it is a great way to get contacts and possible clients; and 4) it's a safety thing to have a name written down if anything should happen to me, as the agent, or something stolen from the house. When a person signs anything binding, such as an exclusive agreement to work with a specific agent, it is a legal document and the person signing such document would need to read it, understand it and receive a copy of it. And, to say across the board that a realtor will try to take advantage of you is offensive. I'm not in the business to take advantage of anyone. I am in it to help people buy and sell homes, period. I am professional and treat my clients with the same care and respect that I would treat my family and friends.

OP - start out visiting open houses and talking to different agents. You will click with one and it will be a great experience. Realtors have a duty to their clients to provide good service. If the one you are working with is not doing that, talk to their broker or manager or find another agent. Good agents will do a great job for you because return business and referrals keep us going.

Feel free to ask me any questions about the process.

 

[TxRabbit]

Okay, I know go to the bank and find out what we can qualify for/get pre-approved,

You said that you are good with living below your means. The most complicated part of your house buying process will be the monthly cost of house.

You don't need to go to a bank to know what you are comfortable spending. Each month you will need to account for principle & interest (mortgage), property taxes, homeowner's association (if applicable), homeowner's insurance, and potentially flood insurance. This will cover the monthly expense.

How much you can qualify for will also depend on how much cash on hand you have to bring to closing. You will need to pay the down payment, title company fees, and any bank-related fees. Depending on whether or not you plan to do your own escrow account, and depending on when taxes are due in your area, you will be required to contribute a certain number of months worth of tax payments (keep in mind that the seller will likely contribute to this as well, but depending on how conservative the bank is, they will want a certain amount of money to ALWAYS be in the escrow account).

So your money available to pay at closing and what you can pay each month will determine what you can afford. Considering your earlier statements, it is likely that you will be picking a price point that is within guidelines. These are all things that you can research and figure out without having to talk to a mortgage person. The mortgage person will generally also want to check your credit, because their interest rates will partly be determined by your credit score.

It doesn't sound like you have put too much time into researching the money end of the deal which is why I have tried to detail it here. My mother was a real estate and then mortgage broker for years and years. I used to work with her when she did mortgages. She was a very helpful mortgage broker, she worked so that people would not get hurt as a result of working with her. If you really get into it, and have more questions about the mortgage end of the deal, I'd be happy to answer and help as I can. There is a whole pricing structure to the way that mortgages are offered and how people who broker mortgages make their money that can be helpful to understand when you are trying to qualify for your first home and make a sound financial decision.

As to the real estate end of the deal. There are all types of Realtors out there. Especially with a Toddler in tow, the best Realtor you could find is someone that has either worked a neighborhood for so long that they are familiar with floor plans and features of the homes in the area, or they are willing to preview the houses for you. You would need to be clear on your requirements for a home and take full advantage of the Realtor's service to show you homes that ONLY meet your criteria. Not all Realtor's are willing to preview, it can take a lot of time to do this, so this could be a deciding factor for you.