Buying a House in a New City

[inquisitive]

I am moving to a new city and after much reading and thinking I've decided that it makes better financial sense to purchase instead of renting, since I will be building equity instead of losing rent payments, and in a few years I can recoup the extra money I would spend on a house by renting it out, selling it, or waiting for prices to get better and then sell it. Now seems like an ideal time to buy because of the terrible housing market. Plus I will be able to use the tax deductions from my mortgage payments and I'll have more space than renting.

My question is, should I try to get prequalified from a mortgage banker/broker here before I go to this new place looking for houses and when/how do I find a real estate agent? My timeline is:

I am off from 5/3/08-5/15/08 and 5/20-6/12, and I start my new employment on 6/13/08, so I'd like to be moved in somewhere by then.

I already booked tickets to fly there on May 6, I'll be there the 7th and 8th, and then flying back 8th night. I booked these tickets on a special when I thought I would be renting, so I figured 2 days would be enough to see places.

Anyone have any advice on how I should go about this? I am going to look at houses online on realtor.com and some other websites. Do I need to start making calls to these people? Should I read up about the local housing market and how? Thanks for any information.

 

[DallasGuy]

It sounds like you've already decided to buy right away. I agree that it's probably a good decision to buy a house. But have you considered renting something in your new city for 6 months to a year so that you can get a better feel for the neighborhoods and housing market there? I did that when I moved to Dallas and it wasn't as stressful being able to take my time in making my home purchase....just a thought for you to consider. The downside is that you'd have to move twice.

 

[sarahsays]

I would set up some interviews with realtors at the big agencies in the city. Find out how long they've been in the business, what areas of the city they focus on (might be good to find a realtor who specializes in the area of the city you want to live) and how much they charge. You can also look for things on your own, but a realtor will be able to get you back into the places that you like.

You'll probably need to make at least a second trip to look as well.

 

[Walt34]

I'd take DallasGuy's suggestion and rent for a while to get the feel of the area and perhaps avoid some oncoming "gotcha's" that the real estate agents might forget to tell you. Like the impending approval of the empty field two blocks away for a fat rendering plant or something.

If nothing else subscribe to the local newspapers.

 

[W2R]

I would agree that renting for a few months would be a good idea, if it is at all feasible. Sometimes the neighborhood that seems appealing on first glance, isn't where you really want to live for a variety of reasons. The first neighborhood that appealed to me (on the basis of convenience and well kept yards) when I moved here was one in which there is considerable subsidence, causing cracking foundations and much worse. I rented for a couple of years and bought in another neighborhood with better geologic attributes.

When I started looking for my house, I told my realtor that I wanted to get pre-qualified. He put me in contact with a good mortgage broker (or maybe two? I don't recall), and it seems to me that it only took a day or two after calling the mortgage broker to get that done. It took less time than to find a house I wanted to make an offer on, anyway.

 

[RunningBum]

I'd try to find a realtor to work with. If you can find a good one--and I'm not sure how to do that remotely, maybe your new employer can help--they can help a lot by understanding which houses are priced fairly, what neighborhoods meet your requirements, and so on. Maybe you can contact a few and narrow it down to a couple that you talk to in person the first day you arrive.

The last time I bought a house, I was renting in town. As has been suggested, it's a good way to get to know the area before committing to buying. Even though you can sell, there's the 6% real estate commission, which is pretty steep. Anyway, I went to a few open houses and chatted with realtors. I had a couple questions that I kind of knew the answers to but also knew I had some to learn. This way I could find out if they knew anything about factors that were important to me, and I could not only see if they had answers, but also have an idea if they were right.

 

[RunningBum]

Oh, and if you're coming to Austin, forget about all that and just PM me! My house just went on the market!

 

[W2R]

Oh, and if you're coming to Austin, forget about all that and just PM me! My house just went on the market!

Or New Orleans? I have a nice, unflooded house for you that isn't even on the market yet (but I could be persuaded).

 

[inquisitive]

Thanks for all the great suggestions. It does make sense to spend some time renting before purchasing a place. I've decided that when I fly there in May I will meet with a few realtors and then look at finding temporary housing for the month of June. Since I am off basically the entire first 2 weeks of June that should be ample time to look at many houses, get a good feel of the neighborhoods, determine how long it takes to get places by the T, etc., and then I have the last 2 weeks of June while I am working to finalize any details and close on the house. I'd rather not spend time looking after I start work because it's an 80 hour or more per week schedule.