Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 08:17 AM   #1
Confused about dryer sheets
 
Join Date: Apr 2007
Posts: 6
3 things you NEVER or ALWAYS should do when purchasing a home

Given the EXCELLENT response to the last thread I started, thought I'd toss this one out to the board.

I'm looking to purchase this year and for some reason and falling in love with homes in the $300 - $400 M range. (income $102,000/yr)

Am I off the RE rocker?
What would be the best way to go about financing -- interest only, 30 yr, 40 yr, 50 yr?

Remember...I'm a newb!

This board is great!!!!!

__________________

__________________
Wealth Health is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 08:52 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,275
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

3 Nevers....

> Never tell the RE agent anything about what you are thinking. (ie. 'Lets offere X, but I am willing to go up an extra Y dollars because my wife MUST have that house'. in Texas, they work for the seller BY LAW and they go back and tell the seller whatever you told them)

> Never buy more house than you can afford. The general rule is 2.5X to 3.0X your salary. (looks like you are breaking this rule.... and it is a continuing cost.. utilities, upkeep etc...)

> Never get into a bidding war on a house.


3 Always...

> Go to the neighborhood at various times and various days to see what it is like 24 X 7. My friend found out that the neighbor has three big dogs that LOVE to bark all night long... but don't do much during the day...

> Get a professional to check out the house. The money spent might save you MANY times more in cost or headaches

> Always buy a house for a place to live, not an investment. If it goes up and you will sell when you retire... great... but a nice place to live is more important.
__________________

__________________
Texas Proud is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 10:56 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,720
Send a message via Skype™ to kcowan
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

TP has a good list and I will add some more:
Never
- Buy a house because of emotion. Make a list of must haves and nice to haves then go through the house and complete the checklist. Don't buy it if most of the must haves are not there.
- Buy based on finishing or decor because that is the easiest thing to change.
- Buy the most expensive house on the block - cheapest is good or in the middle.

Always
- Check out the status of the local schools even if you don't have kids. This will influence future market values.
- Buy what you expect you will need in 5 years so you are not forced to move too soon (moving can be very costly).
- Budget for 3% to 5% of the purchase price for unexpected expenses such as closing costs, title transfer costs, and ongoing maintenance costs like the weekly trip to home depot and other incidental enhancements - if you don't spend it in a given year, use it for a holiday or to pay down the mortgage.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 11:38 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,197
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Never use the home inspector recommended by your real estate agent.

Always remember the the agent is not your friend, even though he/she seems to be.

Quote:
What would be the best way to go about financing -- interest only, 30 yr, 40 yr, 50 yr?
15 year mortgage.
__________________
Al
TromboneAl is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 01:53 PM   #5
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 92
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

One thing to watch out for...check the area around your possible purchase to find out the status of any empty land that might be nearby. That vacant field behind your development might be nice and peaceful now, but it could end up as an industrial area or junkyard. I'm lucky...I've got a country club on two sides and an existing development on the other two.
__________________
FIREd on 12/31/2006
linkerbink is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 03:05 PM   #6
Recycles dryer sheets
Linney's Avatar
 
Join Date: Nov 2006
Posts: 262
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Good tips by others so far.

I'll add: make sure your mortgage loan does not come with a prepayment penalty.
__________________
Linney is online now   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 03:14 PM   #7
Recycles dryer sheets
 
Join Date: May 2005
Posts: 192
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Never . . . .

1. If this is your first house, do not buy the first house you look at. We just purchased our first, and we dragged "our" realtor around to 25+ houses, and we drove by 50+, over 4 months before making up our mind. Our realtor earned his pay, and we couldn't be happier with the house.

2. Never let your realtor suspect you like a house. As others have mentioned, their primary interest is in selling the house, even if you're in a state that has "buyer's realtor" who owe fiduciary duties to the buyer. At the end of the day, they don't get paid unless you buy a house. And the more you spend, the more they make. Of course, if you hire a fee-based realtor, they may be more honest with you.

3. Never get emotionally attached to the house. Unless you live in Ord Nebraska, or someplace smaller, there will ALWAYS be another house that you like. Just wait.

ALWAYS . . . .

1. Spend a lot of time in the house before making an offer. Preferably do more than one walk through. Turn on water, heater, lights. Open doors, windows, turn locks. If the appliances are included, test em.

2. Drive around the neighborhood. Is there a fire station 250 feet down the road? That might get annoying. If you prefer to walk places, can you do so, or will you have to drive 20 minutes to get anywhere?

3. Always hire a home inspector. Be there with him, even if he doesn't want you there. If he won't let you, hire another. Ask questions about everything he does.
__________________

Niko is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 05:10 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Jun 2004
Location: No. California
Posts: 1,600
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

I second the home inspector.
__________________
KB is online now   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 08:34 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,951
Re: 3 things you NEVER or ALWAYS should do when purchasing a home


I like these two from Texas Proud...............

Quote:
Originally Posted by Texas Proud

3 Always...

> Go to the neighborhood at various times and various days to see what it is like 24 X 7. My friend found out that the neighbor has three big dogs that LOVE to bark all night long... but don't do much during the day...

> Get a professional to check out the house. The money spent might save you MANY times more in cost or headaches
I would add going to the house and thru the neighborhood during rush hour to assess traffic problems and right after a big storm to assess potential water drainage problems.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 09:01 PM   #10
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 322
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Real estate is a local issue . So saying the house your looking at is 300k could mean your looking at a mansion. In texas or a slum in California.

Hmm are there rules?
I would go one further with the inspector. Ask for referals for the guy thats really going to dig.
__________________
spideyrdpd is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 09:04 PM   #11
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

"Practice" making estimated PITI payments on whatever size/type of mortgage you are looking at to finance a home costing $400,000 (hopefully, the term is no longer than 30 years). Make monthly payments now to your savings account (minus your current housing costs) to see if you really want to be locked into that size of an obligation.

I can't imagine purchasing a $400,000 home only making $102,000 per year unless you are going to be making one heck of a down payment.
__________________
Buckeye is online now   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 09:23 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Oct 2005
Posts: 4,898
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

I'd like to add that, if you have a real estate agent you like and trust, hire him/her as your buyer's agent.

Also, after you do buy a house, and you do the "walk though" on closing day, make sure you do a thorough walk through, carefully looking at those items that were slated for repair/replacement in the contract but also making sure all the appliances work.
__________________
Zoocat is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-22-2007, 10:40 PM   #13
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 329
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Quote:
Originally Posted by TromboneAl
Never use the home inspector recommended by your real estate agent.

Always remember the the agent is not your friend, even though he/she seems to be.

15 year mortgage.
Agree 100% on point one. Our RE agent's recommended inspector ended up costing me thousands of dollars over the first two years because he didn't catch the problems with the AC.

However, I disagree very much with the 15 year mortgage. You never know when your job might go away. Get a 30 year mortgage and if you want to pay on a 15 year schedule, do it. But only after you've built up a nice emergency fund! If you fall on hard times, you still have the lesser payment each month to help you get through it.
__________________
NinjaPigeon is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-23-2007, 07:36 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,643
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Quote:
Originally Posted by Texas Proud

3 Always...

> Go to the neighborhood at various times and various days to see what it is like 24 X 7. My friend found out that the neighbor has three big dogs that LOVE to bark all night long... but don't do much during the day...
Absolutely -- know thy neighborhood. I would add and know thy neighbors but that can change. When we got our weekend place 15 years ago DW and I were checking out carious locations on the Potomac River. On a weekday, we saw a nice development with a pretty, quiet beach that would have been perfect for windsurfing (one of my requirements). I noticed a security system with lights on one of the houses and thought that seemed extreme for the area. We came back on a Saturday and discovered that was the beach all the local boaters anchored off. There must have been 25 boats parked right off shore, drunks splashing around; it was a zoo.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-23-2007, 11:32 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,720
Send a message via Skype™ to kcowan
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Never believe what the realtors says if you considering buying a place next to open land. Once his answer was Greenbelt. We checked and it was hydro right-of-way. Two years later the trees were all removed and a huge tower was right behind the subject property. Even worse, a few years later a new toll highway was built beside the hydro lands in the "greenbelt".

Another time the realtor extolled the benefits of a school just 1/2 block away. The school board informed us that they were closing that school at the end of the current school year. All remaining student would be bussed 5 miles because the closer schools were already full.

Do your homework and never accept anything at face value. The stakes are too high for the realtors.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-23-2007, 11:53 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 2,423
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

When we were shopping for our first, and only, house my Dad pointed out the advantages of a 2 car garage. Our neighborhood was built in the 50's and many of the homes have only a 1 car garage. We have the 2 car garage and also 2 lanes from the street to the garage. This is especially important now that we have 4 people with 4 cars on 4 schedules.

We can also park on the street unless we have a snow ban. I've noticed some residential streets in our town have no on-street-parking. That makes for a lot of car shuffling.
__________________
Married, both 62. DH retired June, 2010. I have a pleasant little part time job.
Sue J is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-24-2007, 11:00 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,720
Send a message via Skype™ to kcowan
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Quote:
Originally Posted by Sue J
We can also park on the street unless we have a snow ban. I've noticed some residential streets in our town have no on-street-parking. That makes for a lot of car shuffling.
That reminds me of the blond who responded to the notice from the city: park on the north side on even dates and the south side on odd dates to facilitate snow clearing. After dutifully moving the car each night to the appropriate side of the street, a friend finally asked her why she didn't just leave it in the garage!
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-24-2007, 11:19 AM   #18
Thinks s/he gets paid by the post
Milton's Avatar
 
Join Date: Apr 2007
Posts: 2,077
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

1. Never fall in love with a prospective purchase. No matter how desirable a house may seem, there is always another train, and you don't want to pay more than whatever limit you have carefully established.

2. Never buy a house without a professional home inspection. I second the advice about being physically present when the inspection takes place. Typically, a good inspector will provide lots of useful verbal advice and will be happy to answer specific questions that you may have.

3. Never buy a house located next to a rendering plant, jet engine test facility, reform school, or outlaw biker club. Who needs the hassles?
__________________
"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)
Milton is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-24-2007, 11:19 AM   #19
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

HIRE A PLUMBER TO INSPECT A HOUSE BEFORE BUYING IT!!!!!!!!! (sorry for yelling)

Unless your home inspector was a plumber first I woud spend the $2-300 and hire a plumber before closing to inspect the house.

We bought a house in December and DID NOT hire a plumber to inspect the pipes. We had faulty copper in the basement, a bad sewer pipe, and tree roots growing into the drain. In addition, a faulty toilet flooded our house several times in the first week we owned it. Thankfully we had a home warranty which so far has paid in excess of $6,000 in plumbing repairs.

2. Never tell your realtor your real budget (give them a 10-20% lowball)

3. Save money for furniture, man is it friggin expensive!
__________________
saluki9 is offline   Reply With Quote
Re: 3 things you NEVER or ALWAYS should do when purchasing a home
Old 04-24-2007, 06:02 PM   #20
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,015
Re: 3 things you NEVER or ALWAYS should do when purchasing a home

Check with the city/community planning department to find out about proposed developments, road projects, flood plains, etc. We nearly bought a home that had a lovely open space behind it -- until we found out it was the designated flood plain.
__________________

__________________
Achiever51 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Happiness and why we do the things we do ferco Life after FIRE 34 01-15-2007 07:39 PM
Things to do before I hit the road CheapSinceBirth Young Dreamers 5 01-03-2007 04:02 PM
what's ahead for home values? califdreamer FIRE and Money 47 01-19-2006 06:45 PM
Home Warranties - Worth it? BristolBane Other topics 11 07-09-2005 05:28 PM
Trailer Home with Land or Small House...You Decide daystar Young Dreamers 18 12-04-2004 11:20 AM

 

 
All times are GMT -6. The time now is 06:56 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.