We went to a few open houses yesterday.
Just to look, mind you! My mother got all excited when I told her about the open houses, but actually buying a house is at least a year in the future. We just want to get an idea of what a house in our price range looks like, so we know what is a good price, what is an amazing price, and what is not a good price at all. I want to know what to look for when we're there to buy a house for real.
Some observations:
In a new housing development we looked at, the houses were lovely, but the bedrooms were SMALL! We were looking at one master bedroom and could not figure out where we would put our dresser. The only place that it would work would not work, because it would have blocked the bathroom door. This was not an super inexpensive house- it was very odd. All the other houses we looked at were fine, just this one new development.
What is up with the white carpet? All of the newer houses we looked at had it. I don't even have children and I would never put down white carpet. It did look fabulous, but doesn't that get dirty really fast?
There was one where the family had decorated so beautifully. I was encouraged, because most of the things I liked were created using paint. Their kid's rooms were so cute, and I think I could do what they did with some paint. The boy's room had a sports theme, with different sports pennets painted on the wall in a cute pattern. The girl's room had a princess/diva theme, and they had painted a cute border around the simple frameless mirror they had up. As the kids grew, it could easily be repainted. Decorating is a big reason that I can't wait to have a house!
It was really fun.
Those of you who own houses- what advice would you give a first time homebuyer? What is something that you really wish you had known, but was not in all the homebuying books? We're not buying yet, just getting started with seriously thinking about buying, but any advice would be great!
Here's a tip from me: Take snacks and something to drink when you go out looking. Otherwise, you may end up buying pizza and soda on your way home because you're starving and thirsty. Not that I did that or anything. *shifty eyes*
7 comments:
Go borrow Freakonomics from the library and read the real estate chapter. As a buyer, you are in the better position no matter what. The best thing to do is continue learning.
I had a faboo home inspector who got us a new roof and termite treatment, and significant savings because the house had been a rental and had more wear than your average family home. Interview inspectors now if you can; ask to see the lists they go by to inspect things and how long it will take.
The longer you look before you get serious, the better options you will have, and the better you'll be able to spot a bargain. If you get a realtor in about 6 months and a pre-qualification from a lender, you can take your time shopping.
Also, I know you'll be careful about what you can afford, but shop much lower than your best price initially. Get in the lowest range you can tolerate and move up from there. We got a great deal overall, but we were looking at houses $10k less at first, and they weren't cutting it. If we hadn't had the time pressure, we might have scored a good house for the $10k less.
Not only did we have the standard inspection, we also had the furnace inspected and certified by a separate contractor. Very common in MN where we're from but not in KY where we moved to. Boy, are we glad we did! The furnace guy found a giant crack that the home inspector missed. The furnace had to be replaced and that would have been a moving day surprise if we hadn't insisted on that inspection.
You should expect some sort of moving day surprise. It may arrive several months later, but most people I know had some sort of expensive repair within months of moving in. You should also just budget in about $100 or more per month for home repairs and projects. Especially your first year. We jokingly call it the Home Depot bill.
As soon as you move in, get an energy audit from your local utility. The cost is cheap and you get a lot of things and advice for your money. I paid $15 and got 4 lightbulbs, aerators for the shower and sinks, a blanket for our waterheater, and our fireplace sealed. Tell the inspector you are a first-time home owner and they should explain everything. I asked mine to prioritize the list of recommendations by return on the dollar. Very helpful.
Architects should be required by law to live in the houses they design for at least 6 months! I've seen a lot of houses with odd features like back-to-back doors and front entries without closets. When you're doing a serious walk-through, pretend to carry 3 bags of heavy groceries from the car to the kitchen counter. Walk from the bath to the bedroom closet. Imagine the laundry room full of laundry after a week's vacation.
I'm a big fan of the "Not So Big House" series: http://www.notsobighouse.com/. Our house may be small but I love that we use every room, every day.
By the way, we found our house by just driving around the neighborhoods we liked. It was a FSBO and the sign had just been put out that morning.
We just bought a house last year. My first piece of advice is to find yourself a copy of "Home Buying for Dummies." It was the reference we turned to most often; there's a lot of good advice in it. (I found ours at a yard sale for a quarter! But most libraries have it too.)
Hire a home inspector -- actually, we were required by contract to do this, although you should do it anyway -- and don't be afraid to ask the sellers to make repairs on any identified problems before making the final purchase. Our sellers made approximately $2000 of repairs to this house based on the home inspection report.
If you love a house in every way except for the decorating scheme, go for it anyway. Paint, as you pointed out, can be very easily changed, as can carpets and wallpaper, etc. Room layout and size is obviously a lot more difficult to modify.
That's pretty much all I got. Go get that book, is my best advice!
Thanks everybody! Buying a house does kind of freak me out, just because it seems so big. I'll have to get the books.
Jilly, the fix it yourself but get a discount is a great point- I'd never thought of it that way!
We already have a fund for repairs, etc. We've heard a lot of horror stories about that.
Great advice everybody. I really appriciate it.
Regarding repairs: If you have the current homeowner do it, it's done and paid for. If you ask for a discount, you now need to save the money to do the repair yourself. It will not be part of the mortgage, remember! A $2000 repair might not seem like much, but I'm sure it will take a while to save that much when you also have moving expenses, minor repairs, appliances, etc. (Speaking of appliances, we lived w/o a stove and with an old fridge in the basement for about 2 months while saving up a bit for new ones!)
When you begin to look seriously, get a contract with a buyer's agent. The difference is that a buyer's agent is YOUR agent while the agent selling the house is the owner's agent. For example, let's say you tell your agent you have $100,000 to spend. You find a house that's selling for $105 and you offer $95 instead. If you use a buyer's agent, the seller has no idea you actually have $100,000 to spend. If you are using the regular agent, they have every right to tell the seller "Counter offer for $100,000, that's what they can spend and think it's actually worth." Our contract worked that our agent split the commission with the seller's agent; this is typical. The caveat was that if that agent refused (rare) or we found a FSBO, we'd have to pay the commission ourselves. [Our buyer's agent was a regular real estate agent. We just signed a different kind of contract with him.]
When going to open houses, cut out all the ads and tape them to a sheet of paper in the order you'll visit. Leave room to write comments. Particularly useful when you get really into it--you'll be able to tell which houses you saw last week and don't need to go to again by mistake! I wish we had also tracked the ones our agent took us too. We missed that part (didnt' have ads to clip!) and I went to at least one one my own that my husband had already turned down!
I agree on the sizing in new homes. We have a king bed, and I didn't see any bedrooms it would fit in (and have any other room). They were also at least 1/3rd smaller for the same price! We went for a 100-year-old house close to work with a large yard instead. Older homes have their quirks, however. We didn't discover until it was ours that two of the 3 bedrooms have no heating/cooling vents. (Luckily, one is a guest room and we've gotten use to chilly nights in the master bedroom.)
We re-inspected the house after the seller's repairs were done, to avoid the "it's done but done crappily" scenario. We also had a VA loan, and the VA appraiser did his own re-inspection to verify that his requested repairs (most of which overlapped with our requested repairs) were done competently.
Completely agree re finding a buyer's agent, by the way. Any agent you find should tell you up front whether they are a buyer's or seller's agent. Ours actually had paperwork for us to sign indicating that she had disclosed her status to us (she was a buyer's agent only).
I would spend some time at the Searchlight Crusade website reading through all his posts on the financial side of buying a house. I highly, *highly recommend doing this. It is a wealth of information -- possibly too much information -- on every aspect of the transaction.
Also, use a buyer's agent, but I would not sign an exclusive contract with them. There's no real good reason to do so these days, especially since it's becoming more and more of a buyer's market.
My first home purchase and sale was a more or less disaster only narrowly averted [I got lucky. It could have been much, much worse], so my greatest recommendation comes back to the first paragraph: arm yourself with as much knowledge as humanly possible.
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