Men, What are some general rules to follow when buying a first home?

21 comments

1. Honestly, get yourself a good, local, realtor. They’ll be better suited to walk you through the whole process.

2. Absolutely get an inspector with references, and check to see if the area is in a flood zone, or prone to flooding.

3. The 20% advice is outdated. You’ll spend years saving up for that magic number, while housing prices continue to go up, which means you have to keep saving even more, all so you can avoid $50 in PMI.

4. Have someone you trust that knows about housing and finances attend the meetings with the owner/bank.

   Have someone inspect the house yourself compared to the reports the previous owner has listed.

5. Find a real estate agent that likes working with first time home buyers. I found an agent in my area and she was fantastic. Actually started working with us a good 6 months before we started looking for a house. She hooked us up with names of inspectors, mortgage companies, title and insurance. Made the process seemless and took a lot of the stresses away.

   Definitely figure out how much banks are willing to lend you and what your payments would be in a few different price ranges before you look for a house. You don’t want to be broke paying a mortgage on your dream house. Stick within your budget and remember you can always upgrade to a bigger house later on down the road.

6. man wtf u do to be buying a house at 21

7. be prepared to make a cash offer 10% over asking if you really want it

8. Depends a lot on where you live (country)

   Here in Canada, first time home buyers can get a mortgage with only 5% down. If you’re handy you can use this to your advantage, slap that 5% down on some house that needs a lot of work and fix it yourself to flip. If you live there for 2 years while making the repairs you don’t pay any taxes on the profit which is awesome.

   Everyone is crying about the price of houses but there is always something for sale with potential and below it’s value. In this market you can make $50k-100k/year tax free flipping houses and just save a chunk each time it happens. Eventually the market will correct so don’t overextend yourself.

   Important things to look for (in my area) solid foundation with no cracks. A furnace that isn’t on its last legs. Gas furnace/water tank are way better than electric. A roof without any leaks. Make sure the property itself doesn’t have any issues like the house being built on clay ect.

   Basically everything else is an easy diy if you can spend the time to learn.

9. You’re gonna need a lot of stuff, both repairs and making things the way you want or need. Plan at least $1000 of money being spent in a 2 month period.

10. Find a single good realtor and stick with them. They can even sell you houses listed under other realtors, so there’s no need to do all the legwork on your own.

    Find out from your lender what your limit is, so you know what you have to work with/offer (obviously, keep that info to yourself)

    Make sure that whatever home you’re interested in is in a good zone (nobody ever doesn’t regret a flood zone sooner or later), in a location you’ll be satisfied with long term (think schools, access to major commercial/entertainment areas, etc), has what you’re looking for (pool, enough rooms for a study, large enough kitchen, etc) , and passes inspection. Obviously, a few of these points are less negotiable than others.

    Give what you can that will make the lender comfortable with lending to you. 10% isn’t a bad number, but they each have their own rules. If they’re being arbitrarily stringent, move on to another.

    Do NOT rush the decision. Take the time to search and feel out if you really like it. If you happen to find your dream home that hits every checkbox, go ahead and put in an offer but don’t feel obligated to follow through until everything else lines up (passed inspection, property lines inspection, verifying any ordinances you may not know about, etc)

11. Find a good real estate agent, and don’t be afraid to do a quick meet with a few to see how the vibe is. You want someone who is experienced and will be helpful and help educate you. I usually don’t like the concept of working with a friend who is an agent (because it can get awkward if they don’t do a good job), but definitely see if they could refer you to someone who they consider to be a good agent. The buyer’s agent is typically paid out of the commission fee that the seller’s agent has with the seller. So, the buyer does not directly pay for their agent.

    A lot of real estate agents will also work with financing groups. A lot of times it’s super easy to use them and in my experience, they’re more incentivized to help you because they’re connected to the agent, but either them or someone local who is going to know of any special programs your state might offer. I worked with a big loan company and the financing group with our agency last time and the big loan company never offered the state programs that financing group pointed out and helped us get applied for.

    For inspectors, it’s the opposite of financing, I suggest finding your own versus one recommended by your agent because of potential conflicts of interest.

12. The shittiest home in a really nice area >>> the nicest home in a shitty area

    (As far as investing goes)

13. Buy a house because you intend to live there, you don’t see yourself moving any time soon and your job history doesn’t fluctuate a great deal. Investing in real estate is not as safe as people make it out to be, so don’t be a first time buyer who thinks “If this doesn’t work out, I can always rent it.” You hit a recession, where home prices plumment, you can’t unload it without a significant loss and your job goes bye bye – you’ll regret it.

14. Make sure you have enough allocated for closing costs. Not sure your area but in mine closing costs can be a good 6% of the purchase price or more. Then allocate another few grand on top. My closing costs went up by $10k the day before closing on my current house

15. Don’t skip the inspection. Pay extra for testing if you are in an area prone to any specific hazards (i.e. radon). Required down payments are usually 3-7%, depending on the type of loan. Pay as much as you can from there until you reach 20% to avoid continuing to pay the extra “mortgage insurance”. Pay attention to the neighborhood. You don’t want the best or worst house in the area. Neighborhoods with good school districts tend to hold or increase in value more.

16. Based on my experiences in the US.

    * **Do not do an Adjustable Rate Mortgage (ARM)… period…. end of story. If you can’t afford the rate without it, you don’t need to buy a home at the moment**
    * Get references on realtors from friends and coworkers, don’t just grab the first one you see from a roadside sign. Follow their advise from the get-go. Not doing so is like getting an attorney and ignoring their counsel.
    * Get pre-approved at a locked in rate. Understand that your mortgage originator will most likely sell your loan to another bank shortly after it closes. For me, it’s not critical who I originate with as long as their rates match my needs
    * Do a 15 year mortgage, not 30
    * There are bond based loans that are sometimes available to first time buyers that lock you into the mortgage for 10 years. These are not a scam, it’s simply a way for the people who back the bond(s) to ensure they get their investment and interest back
    * at 21, get a starter home that you can easily turn into a rental property (2 br + 2 bath + close to an elementary or middle school K-8 + small yard) since you’ll most likely move within 10 years. That will generate income for you and save you the pain of trying to sell it while upside down if you take a 30 year mortgage
    * Any tax refunds you get need to go into a savings account for major repairs on your home and to replace appliances
    * Be prepared for seasonal upkeep on your home. If you don’t do the maintenance work seasonally at a small cost, you will have to do the repair work eventually at a high cost. Attend the workshops at Home Depot and Lowes, watch Youtube vids, etc… The more you can do on your own, the cheaper it will cost you to live in your home
    * Shop around for homeowners insurance.
    * **The following opinion is based on my** **amateur** **knowledge of the housing market in the US and could be completely off base**… in today’s economy, increasing interest rates, and pending housing glut, I’d not be in a rush to buy a home. Save what you can for as long as you can to apply those funds to the down payment and any immediate work and appliances you need when you do finally buy.

17. I bought my first house a year ago. I went with a local realtor, recommended by a friend. The realtor gets a commission from the sale, so the split with the sellers commission, and I paid them nothing. They were also able to recommend a local mortgage broker for me, who was able to walk me through all the steps, lock in my rates and everything very easily. I paid 3% down because the extra $40/month PMI isn’t a big deal. Have money set aside for inspections, closing costs, and projects to do right away before you’re totally moved in. PAY EXTRA ON YOUR LOAN TOWARDS PRINCIPLE IF YOU CAN. An extra $100/month cuts over 5 years off my 30-year mortgage, plus the sooner you get to 20% principle paid, the sooner your PMI goes away.

18. Thank you for a question that doesn’t appear here regularly. Take my upvote.

19. If you buy a fixer-upper, don’t underestimate the amount of time and effort it takes to do even simple things correctly. For example: to paint and make it look good, you need to clean the walls, scrape any bumps down, fill in depressions with mud, sand it down, and THEN you paint, and it will almost certainly require two coats. And painting properly requires liberal use of painter’s tape at trim and ceilings to keep lines looking nice. And then you have to clean everything because it’s all coated in drywall dust.

    And that’s just painting. If you look at a job and you think it will take 2 hours, it will actually take 10 hours.

20. Start by working your budget and finding a monthly mortgage number you are comfortable with. Look at first time home buyer programs and incentives in your state (some allow lower rates with much less of a down payment). Talk to a lender (who will likely approve you for way more than you should be comfortable spending, so ignore that number) tell them “my monthly budget for a mortgage payment after PITI is included is $X. What loan amount would get me around that goal?”. Then hunt till you find a house that need some work in a nicer area.

21. Check phone signal when you go to view the place, check it in all rooms (including the toilet).

    Check all windows open and close properly (this could save your life in a fire) and preferably that they lock and all have keys.

    Turn all the taps on and off to make sure they work.

    Have a sneaky look at the neighbours if you can or their gardens, can give you an idea what they are like.

    Edit: obviously get a fully qualified surveyor to write a report on the place, although this is generally part of the mortgage process. Get the full report, it’s a little more expensive but worth the peace of mind.