Thinking of buying a house and extremely nervous

[godisney14]

You just have to make the best informed choice you can and hope for the best.
We JUMPED to buy our house in 1983 when mortgage rates PLUNGED from 16% to 12.25%. 37 years later, best decision we every made and two refinances dropped our interest rate to 9% then 6.25%. Funny thing is, our daughter is about to refinance to drop her 3.9% mortgage, and our son just refinanced at 2.5% !
We have a single story house between two two story houses, and the stairs have been one of the reasons the owners sold those houses over the years. Stairs get old real quick.

You can always adjust your mortgage interest lower, but you can’t do the same with mortgage principal (the purchase price).

Right now, real estate is doing incredibly well from all the cheap money (low interest rates) that government has created.

I thought a clause allowing an inspection contingency was pretty much normal in real estate sales.
HOWEVER, watching way too many HGTV home improvement shows, it seems way too many things get missed by inspectors.

When it’s a strong seller’s market as it is now, it’s not uncommon for winning bids to not have any contingencies.

 

[barkley]

these posts are reminding me of the housing market where we sold our last home-right before the housing bubble burst (and when i say burst-it was over the course of one week from blazing hot to no sales for months). at that point it had gotten so competitive among buyers that a house almost never got formally listed-agents would let it be known among their peers, sellers among friends and neighbors that a home was going to be for sale, a pre-sale date announced with a 24 hour window during which sealed bids would be accepted. no sales price mentioned so the buyers and their agents needed to know the market and how much to bid (WAY above in most cases). it was nutz. 13 years later-those buyers have homes they bought that are still at minimum 15% lower in current resale value than what they paid (and that market is in a strong/hot place right now).

lesson to be learned-if it's the right time and fit to buy a home-do so, if it's just b/c everyone else and all the 'experts' say it's right and you'll miss out-just wait, the market ebbs and flows.

 

[jerseygal]

I personally would never "jump" into a purchase. Due your diligence! If your state has a sellers disclosure requirement on the home, read the sellers disclosure carefullly. Do tons of research before you decide that this house is right for you, neighborhood, condition of other homes on the block, meaning curb appeal of their property too as it will ultimately affect yours, crime information, comps, schools, conveniences like grocery, pharmacies, etc try to do this before you present an offer which may be accepted. True, usually in many states you have 3 days to rescind the contract, but not always, especially If there is not attorney review clause in your contract. READ the contract very carefully, IF there is an HOA associated with the home, make sure that you READ the HOA covenants and restrictions, so you are fully aware of what you can and can't do. I am a very detailed person and even with a one year rental on a home, we go through the same diligence as if we were purchasing. We have owned quite a few homes in 37 years, and thankfully we have not regretted purchasing one of them because we were informed buyers. GOOD LUCK!

 

[Searc]

I'll just say the worst home buying decision we made was when we were in a hurry. I'd encourage you not to rush. Lots and lots of houses out there.

As far as "no returns," it would be hard for me to buy a pre-owned home without making it contingent on inspection by an inspector of your choice. That gives you a "return," in a way. And if the seller won't agree to that contingency, I wouldn't buy, but I'm very careful that way.

An inspection contingency is normal here, however, you don't get to say no thanks when things come back as issues. You have to tell the homeowner about the issues and ask them to fix it (aka notice of defects). If they agree to fix everything at their cost, the contract continues. If they don't agree to fix everything, the contract is canceled.

 

[Searc]

I personally would never "jump" into a purchase. Due your diligence! If your state has a sellers disclosure requirement on the home, read the sellers disclosure carefullly. Do tons of research before you decide that this house is right for you, neighborhood, condition of other homes on the block, meaning curb appeal of their property too as it will ultimately affect yours, crime information, comps, schools, conveniences like grocery, pharmacies, etc try to do this before you present an offer which may be accepted. True, usually in many states you have 3 days to rescind the contract, but not always, especially If there is not attorney review clause in your contract. READ the contract very carefully, IF there is an HOA associated with the home, make sure that you READ the HOA covenants and restrictions, so you are fully aware of what you can and can't do. I am a very detailed person and even with a one year rental on a home, we go through the same diligence as if we were purchasing. We have owned quite a few homes in 37 years, and thankfully we have not regretted purchasing one of them because we were informed buyers. GOOD LUCK!

In my area right now, if you plan on wasting all that time, you'll never buy a decent house. Houses are under contract within days of being listed. It has been that way since January. Covid has had no impact on the housing market here. As sellers, it's awesome. As a buyer fighting everyone else for nice houses, not so much.

 

[Donald13]

Nothing is ever “final sale” you can sell and move. It’s not a 1,2,3 thing but it can be done. We have been in our house for 13 years and have refinanced twice. The last time was about a month ago.

 

[wildride]

Hire Holmes on Homes, ok unrealistic. Just have every nook & cranny inspected. Also make sure the inspector you hire is very very legit.

 

[jerseygal]

In my area right now, if you plan on wasting all that time, you'll never buy a decent house. Houses are under contract within days of being listed. It has been that way since January. Covid has had no impact on the housing market here. As sellers, it's awesome. As a buyer fighting everyone else for nice houses, not so much.

Due diligence is never a waste of time, buyer BEWARE! Look before you leap, it’s a big investment!

 

[StephMK]

Can you write the offer with a sales contingency? A friend just got an offer rejected because their house wasn't on the market yet.

We recently downsized from a 2 story with basement and large garage to a ranch. I love it! It was a good transition time to get rid of a ton of stuff. We are in our early 50s and unless we move to the beach or something unexpected changes, this is our last house.

Good luck!

 

[Searc]

Due diligence is never a waste of time, buyer BEWARE! Look before you leap, it’s a big investment!

You need to know all that info before you start looking, in this market. We bought a house two days ago and we got swooped on three before we could even see them.

 

[Colleen27]

In my area right now, if you plan on wasting all that time, you'll never buy a decent house. Houses are under contract within days of being listed. It has been that way since January. Covid has had no impact on the housing market here. As sellers, it's awesome. As a buyer fighting everyone else for nice houses, not so much.

Same. And we're not even looking at "nice" houses, in the usual sense - my son is looking to buy in an improving part of Detroit, but it is still an urban neighborhood in a city with terrible public schools and a rough overall reputation. The timing frankly isn't great for buyers, but since none of us get to pick when we become adults and rents are really out of control (50 to 100% more expensive than buying), I think he's on the right track with trying to buy since he has no intention of leaving our area in the foreseeable future.

 

[clh2]

As far as “hot markets” our area has been in one for at least 6 years. A house 3 doors down from us got listed on a Thursday, and had an offer before the For Sale sign got placed on Friday morning.

when our Daughter and son-in-law were looking at houses 2 years ago, it was the same, good houses went fast, fast, fast. My daughter/SIL invited us to every house they looked at; so that there would be an extra set of eyes on the condition of the house. We did not offer any opinions on the floor plan, unless they asked us.

 

[KBoopaloo]

In my area right now, if you plan on wasting all that time, you'll never buy a decent house. Houses are under contract within days of being listed. It has been that way since January. Covid has had no impact on the housing market here. As sellers, it's awesome. As a buyer fighting everyone else for nice houses, not so much.

Same here. My parents are considering moving if they can find something that will suit them better as they age (all one floor living, laundry not in the basement, bathroom with a walk in shower, etc) so they’ve seen a couple of houses. Looked at one two Sundays ago at 1:00 and had to have an offer in by noon the next day. They knew by 6:00 pm that night that they did not get it. Their offer was $31,000 over the listing price.

My mom and I went to an Open House yesterday and while we were waiting in our socially distanced line outside there was a big delay as a couple inside was trying to get the broker to take their offer on the spot before they left the property. I think they were hoping she’d cancel the rest of the showings and just take their offer if they went high enough.

It is super stressful to have to make decisions that fast but that is how things are right now especially in what would be considered a mid level price range here ($400,000-$600,000).

 

[Searc]

Same here. My parents are considering moving if they can find something that will suit them better as they age (all one floor living, laundry not in the basement, bathroom with a walk in shower, etc) so they’ve seen a couple of houses. Looked at one two Sundays ago at 1:00 and had to have an offer in by noon the next day. They knew by 6:00 pm that night that they did not get it. Their offer was $31,000 over the listing price.

My mom and I went to an Open House yesterday and while we were waiting in our socially distanced line outside there was a big delay as a couple inside was trying to get the broker to take their offer on the spot before they left the property. I think they were hoping she’d cancel the rest of the showings and just take their offer if they went high enough.

It is super stressful to have to make decisions that fast but that is how things are right now especially in what would be considered a mid level price range here ($400,000-$600,000).

The house we bought was in that range and the problem with people paying so far above asking price is financing. If you're getting a mortgage, most banks won't appraise a property $30,000+ above asking price, so buyers will either have to come up with the additional in cash or cancel the sale. We were not willing to go above asking price because of that problem.

We are upsizing and only plan on being in this house for the next 10-15 years, so we know it won't be our forever home.

 

[tvguy]

When it’s a strong seller’s market as it is now, it’s not uncommon for winning bids to not have any contingencies.

This didn't sound right to me, so I shot a message to a Realtor friend and she says if you are paying cash, making an offer with out contingencies is possible.
But she says she isn't aware of any lender that will fund a mortgage if the sale doesn't have an inspection contingency. But she does admit, one third of all sales currently here ARE cash.

 

[spiders]

Many mortgage companies will allow you to waive an appraisal if your down payment is at least 20%.

You can make an offer based on your existing house selling but I know if I were selling, I would immediately look at other offers without a sales contingency if one was available. When we were moving, we listed our house about 3 months before we intended to buy. I wanted to make sure we had enough time to get all of our money out of it. We ended up selling after just a few days which presented a new set of challenges. We got a short term apartment but to me, it was worth it to be able to present a better offer on the new house and not deal with the related stress of a contingency.

 

[Searc]

Many mortgage companies will allow you to waive an appraisal if your down payment is at least 20%.

You can make an offer based on your existing house selling but I know if I were selling, I would immediately look at other offers without a sales contingency if one was available. When we were moving, we listed our house about 3 months before we intended to buy. I wanted to make sure we had enough time to get all of our money out of it. We ended up selling after just a few days which presented a new set of challenges. We got a short term apartment but to me, it was worth it to be able to present a better offer on the new house and not deal with the related stress of a contingency.

Our down payment is 42%. Opting out of an appraisal is not an option for us.

We did not have to sell our current home before we could purchase a new one. Having a pre-qual makes all the difference.

 

[KBoopaloo]

This didn't sound right to me, so I shot a message to a Realtor friend and she says if you are paying cash, making an offer with out contingencies is possible.
But she says she isn't aware of any lender that will fund a mortgage if the sale doesn't have an inspection contingency. But she does admit, one third of all sales currently here ARE cash.

I bought a place in 2016 with no inspection and financing from the bank (a large national bank).

ETA: I see another poster mentioned that lenders are more likely to allow this if you have at least a 20% down payment so maybe that is why I was able to do it. It never came up as an issue with the bank. They still had to do an appraisal but I did not have an inspection.

 

[Breezy_Carol]

@Shelly F - Ohio, how was the house? Did you make an offer? I am curious.

 

[spiders]

Our down payment is 42%. Opting out of an appraisal is not an option for us.

We did not have to sell our current home before we could purchase a new one. Having a pre-qual makes all the difference.

We bought our first house with 20% and did an appraisal. We put down about 25% on our second house (2018) and got it waived. We refinanced this year and also got the appraisal waived.