How can I buy a house w/o feeling stupid?

[toofrugalformycat]

I've been ERed for seven years now, simple investment allocation, frugal lifestyle.
I have learned the hard way (years ago) that I absolutely never know what the stock market is going to do, or the housing market, and the one investment advisor and the one realtor I ever hired were both less than satisfactory, so I'm a happy self-educated asset allocator with my investments.
But it seems like buying a house is a huge market-timing bet and I don't see how I can do asset allocation with a house. We'd have to sell or rent out the one we own, and buy another, boom, once.
DH believes I am overly superstitious and negative about buying a house (and I'm sure that's his positive spin on his REAL thoughts). It's affecting my willingness to move. Renting is not an attractive option somehow. I'm a gardener and like to plant roots in many ways.
Sure, we'd move to the new location and rent for at least six months to learn the neighborhoods, and planned destruction of neighborhoods public works as best we could.
DH and I have only bought one house in my life, and built a cabin, and we still own both. They're both livable for where they are, but not brilliant investments, either one.
I'd be grateful for advice and suggestions.

[honobob]

Where's the new area? Can't give you much help if we don't know your market.

[toofrugalformycat]

Probably Hilo.
But we're not entirely set on that location. Heck, we have trouble deciding what to have for dinner!
I guess a real estate for dummies type book recommendation, as well as location specific information, would be helpful.

[W2R]

Think of it as a place to live, not as a purchase that must be perfectly timed. Then I think you will feel better about it.

You'll get a lot of enjoyment out of a new home where you can create the kind of garden you want. You might find that your new home has some aspects that you old home didn't, and that you really like.

Moving is an adventure! It can be a lot of fun.

[mh]

Quote:

Originally Posted by toofrugalformycat Probably Hilo. But we're not entirely set on that location. Heck, we have trouble deciding what to have for dinner! I guess a real estate for dummies type book recommendation, as well as location specific information, would be helpful.

interesting, that was one of the places i would pick other than staying
put when i'm at now (so. calif.)

[toofrugalformycat]

Quote:

Originally Posted by Want2retire Think of it as a place to live, not as a purchase that must be perfectly timed. Then I think you will feel better about it. You'll get a lot of enjoyment out of a new home where you can create the kind of garden you want. You might find that your new home has some aspects that you old home didn't, and that you really like. Moving is an adventure! It can be a lot of fun.

Thanks! That's a fresh perspective. I never thought of it that way. I like physical adventures like travel, it's the economic adventure (huge sum of money plunked down) that scares me.
I keep thinking I'll get some ugly surprise within a year of moving in. It's happened with both places I've moved to so far, one time that I might have found out with research, the other out of the blue.
But I have to live somewhere, and I suppose another ugly surprise could happen here as well as there.

[megacorp-firee]

I don't think you gave enough info to give you any solid advice. But W2R gave you some good advice that is worth repeating ... don't look at a house as an investment ... It is a place to live.

[GatorBuzz]

In the two houses where you found problems after moving in, did you hire a home inspector prior to purchasing? If you can find a good home inspector, they can very easily pay for themselves two, three...even ten fold. They find a problem, you notify the homeowner that it must be fixed or no deal. If your primary concern is finding a huge problem, you definitely need to hire a home inspector and request a home warranty from the seller. You may not get the latter, but it's worth trying, especially with a "motivated" seller.

What are your other concerns?

[toofrugalformycat]

Quote:

Originally Posted by GatorBuzz In the two houses where you found problems after moving in, did you hire a home inspector prior to purchasing? If you can find a good home inspector, they can very easily pay for themselves two, three...even ten fold. They find a problem, you notify the homeowner that it must be fixed or no deal. If your primary concern is finding a huge problem, you definitely need to hire a home inspector and request a home warranty from the seller. You may not get the latter, but it's worth trying, especially with a "motivated" seller. What are your other concerns?

Good point. No home inspectors involved.
The first place was is a remote log cabin DH and I built to live in, and six months after carrying all our worldly goods the 1.5 miles from the train flagstop up the steep moose trail to our place, we come to town and find out they're planning to build an electrical intertie from Anchorage to Fairbanks, directly (DIRECTLY) over our cabin. Luckily the intertie went over other peoples cabins, and everyone carried at least a pistol on their hip at that time, so at the public meeting when the suits from town came to explain the plan, they were convinced to move it farther back in where it wouldn't interfere with us. Someone explained to them that they could build it, but the wires would be shot out regularly and they'd never keep it working. It was another era. But in the meantime I nearly had a cow, because of all the time and effort we'd put into building a REMOTE cabin that would no longer be remote. We still have the place and feel lucky to get away once in awhile.

The second place, where we live now, was in Anchorage. Back in the early 80's it was the end of the pipeline boom, prices were shooting up, and we needed a place to live. House inspections were not required, in fact I didn't know there was such a thing. I was just grateful we found a single family I liked that we could squeak into, having just had a j*b three months. Did I mention I was naive? The inspection would have saved us bucks on repairs, but wouldn't have helped with the 4-lane road we found they were buildling behind us. Again we found out about 6 months after we moved in. They tore out an entire row of houses behind us. This was an older established neighborhood. Who wudda guessed - not me. Unfortunately there was no stopping the road, maybe because I didn't carry a gun to the public hearings (a different culture in Anchorage), but I did get help from a state senator when they screwed up the design of the highway fence behind us, and they fixed it so I have a little bit of sound buffer and I don't have to see the road, but it wasn't the quiet neighborhood I'd bought into anymore.
And I didn't enjoy the stress, anxiety, loss of sleep during construction all summer, all the time I was working at a new stressful job that required lots of mental concentration.

Wow, that's a comforting thought. At least this time when I move I shouldn't have to deal with a stressful job too. being ERed!

This is helping, thanks.
What am I concerned about? I'm concerned about the thing coming around the corner (intertie, road construction, rock-n-roll band [didn't tell that story], crack house, but probably something else) that I don't anticipate.
In Hilo, it may be a volcano, but somehow that wouldn't be so bad. Acts of nature I don't take personally.

[W2R]

Quote:

Originally Posted by toofrugalformycat In Hilo, it may be a volcano, but somehow that wouldn't be so bad. Acts of nature I don't take personally.

Lava is more likely to invade certain neighborhoods in the outskirts of Hilo than others. There are some areas where you wouldn't want to buy, so talk to your realtor about it! Also, do a little research on what neighborhoods are more likely to be affected than others. This sort of thing is due diligence, and needs to be done before buying a home anywhere.

At least, personally that is how I approach such things. I already have a poster-sized map of sinkhole locations in Springfield (which is subject to sinkholes), and have read a lot about sinkholes and the karst topography in the region, even though ER is still 2 years away for me. I am also learning about anything related to home selection that would help me to deal with natural effects such as tornados and cold climates. This is part of my due diligence, in a sense.

It's still an adventure! I know I will miss some things about my present home, but I am really looking forward to having a two car garage (I have none, right now). I am going to put up shelving and pegboard and a workbench at one end of it, and with only one car, I will have plenty of storage room as well. I also want to set up a large room as my home gym, with its own TV and maybe its own supplemental A/C unit. It will be great to have more closet space! Every house, even mine which I dearly love, has its disadvantages and moving is a good time to find a place that doesn't have the same issues.

DO get at least one home inspection. I had two when I moved into this house, one general and one plumbing (due to the fact that houses here are built in a sinking, subsiding former swamp and plumbing is often a problem).

[cute fuzzy bunny]

Check with the county offices for a general plan or anyone with information on major changes like roadways, shopping malls, etc. Those things dont just happen overnight and almost always require significant advance planning through a county office. I imagine some states might centralize it rather than distributing it to each county, but dig into some of the applicable web sites and go from there. The california counties I've lived in have always had some kind of "general plan" going out a couple of decades with planned future roadways, parks, etc. I discovered from the last one I looked at that the cool bike path not far from my house was in the plan to be converted to a four lane road to alleviate traffic sometime around 2015-2018.

As far as the home, it can be a nice place to live AND a good investment. Whats important is usually being able to look past cosmetics and light duty repairs. Most people cant, so houses with lime green walls and shag carpeting from the 60's go unsold. While its a good idea to steer clear of homes with rot/mold/structural issues, a house with funny color paint, an old dirty carpet and in need of some kitchen/bath updating might languish a long time on the market while similar homes that are done up a little sell right away for a higher price than it'll cost you to do a little work, most of which can be done over time.

Look at new construction costs and the cost to buy a similar lot to build on. You mentioned you'd move to and live in the area for six months. Take that time to watch the housing market through sites like zillow and realtor.com...see whats selling for what and whats listed for what in each neighborhood you're interested in. Eventually you'll get a feel for whats priced right, what wont sell and the reasonable value levels. The closer you can get to land+construction cost, minus a little bit for depreciation and updating...the better your bargain.

Never, ever, ever buy a house without a whole house inspection. Find someone who does construction or is semi-retired from the construction business and is a general contractor. It'll cost between $350 and $500 depending on the size of the house and the detail of the inspection.

Theres a good show on HGTV called "house detective" that shows real home inspections, the problems found, and how to fix them. If you get the channel, check out a couple of episodes to get an idea of how the process works.
House Detective - Wikipedia, the free encyclopedia

Even brand new homes should get inspected by a professional. I've had three new or nearly new homes inspected and the inspector dug up dozens of improper code issues and construction flaws, some of them serious and safety related.

[W2R]

Quote:

Originally Posted by cute fuzzy bunny Even brand new homes should get inspected by a professional. I've had three new or nearly new homes inspected and the inspector dug up dozens of improper code issues and construction flaws, some of them serious and safety related.

Besides, home inspections can be used as a negotiating tool. They sometimes come up with problems you don't really care about, but didn't know about, and which can be used thus:

Buyer's Agent: "My client wants a contract for $4,500 less than what was agreed on, to pay for the (fill in the blank - - silly little problem) to be fixed. The contract was contingent on the house inspection and we didn't know about the problem before the house inspection, so either fix the problem, or sign a new contract for $4500 less, or we're outta here!"

Seller's Agent: "Gosh. My seller has already moved to Afghanistan, and doesn't want to deal with getting it fixed. She has to sell the house NOW since it is vacant and the landscaping people and mortgage are costing her a fortune. Show us where she needs to sign on the dotted line!"

[cute fuzzy bunny]

It does add a bit to the negotiations, and you can run into some emotional issues "well, I lived with that the whole time I was here and..."

What gets really interesting is when the inspector finds all the stuff the seller didnt disclose.

My first run inspection on the house I do myself, and write the seller a list of deficiencies I found, their relative costs to remediate, and my offer based on that stack of problems. Some sellers agents get a little wiggly when you show up for your 3rd or 4th look at the house with a tool bag and a ladder, but thats another story...

Then the inspector comes in during the closing cycle, and on the house we're in now he picked up a bunch of stuff. I valued it all at around $4000, we settled on a $3k credit from the previously agreed price. $3k for $495 is a good ROI.

I fixed most of the stuff myself in a couple of days with a few bucks in parts.

[Moemg]

Sometimes it goes the opposite way . The people who were buying my last house started nickel and diming me over little things .All that did was aggravate me . I not only threatened to cancel the sale I took two cases of matching tile that I had with me ( good luck when there's a craked tile since most of the house was tiled and stil settling ).So it's okay to do in a slow market but in a hot market I 'd only ask for reasonable repairs .

[toofrugalformycat]

Quote:

Originally Posted by Want2retire Lava is more likely to invade certain neighborhoods in the outskirts of Hilo than others. There are some areas where you wouldn't want to buy, so talk to your realtor about it!

I can and will research lava, watch House Detective, check county plans for future destruction construction projects, and get a house inspection or three if I get up the nerve to make an offer.
Thanks everybody for all the tips.
But how can I find a realtor that won't just lie to me? How do I know they're working for me and not the seller? Do I try to make friends with locals and get a referral that way? Making friends immediately in a new place is a tough assignment for me.
Another issue I'm not familiar with is catchment water. Ideally I'd have a huge lot near downtown so I can walk or bicycle everywhere, but because of cost issues I think it'll have to be a large lot aways out (with catchment water), or something in town with a small lot and hope the rock-n-roll band doesn't move in next door.
Does anyone know how much of a hassle/danger/expense catchment water (and a septic tank) is? I guess I'd better check with the local extension service or something. I just picture all the critters growing in that water tank.
I haven't really thought about how I might actually like a different house, I've just thought about everything that could go wrong. I feel like I need a slap in the face or something.

[cute fuzzy bunny]

Quote:

Originally Posted by toofrugalformycat How do I know they're working for me and not the seller?

Easy. In most states they're paid by the seller, and therefore always are working for the seller. Sometimes you get a good one that gives a hoot about their buyer. Sometimes someone will refer one of those to you.

Otherwise realize (with the vast array of foreclosure problems as an example) that everyone works to get the commission and doing the right thing is secondary to many.

[W2R]

Quote:

Originally Posted by toofrugalformycat I can and will research lava, watch House Detective, check county plans for future destruction construction projects, and get a house inspection or three if I get up the nerve to make an offer. Thanks everybody for all the tips. But how can I find a realtor that won't just lie to me? How do I know they're working for me and not the seller? Do I try to make friends with locals and get a referral that way? Making friends immediately in a new place is a tough assignment for me.

Well, actually the sentence you cut off at the end of my quote might help. What I actually said was:

Quote:

Originally Posted by Want2retire Lava is more likely to invade certain neighborhoods in the outskirts of Hilo than others. There are some areas where you wouldn't want to buy, so talk to your realtor about it! Also, do a little research on what neighborhoods are more likely to be affected than others. This sort of thing is due diligence, and needs to be done before buying a home anywhere.

As you have probably already figured out, you don't want to just pick a realtor out of the phone book, believe every word he/she says, and take no responsibility yourself. Part of the fun of moving is finding out about your new community and neighborhood. You can start that now, as you do some of this research yourself. If you still don't feel like you know anything about the area, or you just don't want to know anything about the area, you can always rent for a few months first. Then when you are ready, having a rental to stay in for as long as you need to stay, will give you more time to look for just the right home, too.

I don't know why, but I get the idea that you don't want to move for other, more fundamental reasons than any problems in buying a house. Have you thought about that? If you could just magically be there, with all the house buying problems behind you, do you think you would be happier or not?

[toofrugalformycat]

Quote:

Originally Posted by Want2retire I don't know why, but I get the idea that you don't want to move for other, more fundamental reasons than any problems in buying a house. Have you thought about that? If you could just magically be there, with all the house buying problems behind you, do you think you would be happier or not?

Darn, you're too insightful. This is a compromise on my part. Our aging joints take a lot of the fun out of winter sports. Lots of older people live here, but they learned to skate and ski as children so they can just dance across the icy parking lots, or maybe they're just made of sterner stuff. I don't have enough Norwegian in me, I think. DH wants to relocate more than I do (he's older and even less Norwegian), but now I finally acknowledge the need.
If I could wave a magic wand and have the house in/near Hilo purchased, I'd do that in a heartbeat. But what tears me up is leaving here.
So I do need the real estate advice, believe me. But I need to make the decision to give this place up, too.
It doesn't help that it's really common for people to move from Alaska to Hawaii (or elsewhere, but often Hawaii), and then come back in a few years. Alaska gets in your blood. So really I think I'm facing TWO moves.
If I had a crystal ball and knew whether we will want to stay, then I'd know for sure if it was prudent to buy.
I like the idea of "due diligence". I feel like I'm capable of researching investments, at least the conservative ones. So maybe I can manage the real estate research too.
And I'll just accept that any realtor is lying. No offense to realtors intended, that's just the way it is. I hate being lied to and can usually avoid it in the life I have now.
Sorry for the whining. I feel better anyway. I hope you all don't feel worse. I do appreciate the advice. It helps to write about it to get my ideas straight.
Bleeah.

[W2R]

I don't think you're whining! I think you are dealing with a lot of inner conflict in the best way you or anyone can.

I know what it's like to want to leave, and yet not want to leave. We both need to do a lot of soul searching or thinking on these issues. In my case, I love New Orleans (at least the New Orleans that was) and sometimes I feel torn between leaving and staying. I think that leaving is the emotionally and physically healthy choice for me, though. I love my house here, but I know I will love a new house just as much once I get in it and "make it mine", so to speak.