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September 2011 Moms
Bumpies who have purchased houses....
Hey girls---
The last few weeks DH has been dealing with some crazy nesting issues of his own, and now wants to BUY A HOUSE! We've lived here for two years and have been renters for....god....12 years? Anyway, for real---we went to see two places today, and we are totally in love with one of them. It's AMAZING. Plus, god forbid and DH does NOT get tenure, this would be a very easy place to resell.
Anyway, we are total property virgins. What kind of tips do you have for us based on your own house purchasing experience? We are making ourselves look at a couple more places, then we'll go on vacation and make a decision when we come back. We might decide to pull the trigger, and we might decide that this is just not the right time.
Dude. And I was just about done setting up our nursery!
This discussion has been closed.
Re: Bumpies who have purchased houses....
I agree. Make sure that you've calculated how much this house will actually cost you per month and that you can still afford it. DH and I qualified for a 800K house. I dont know how they got to that number but it was wayyy wayyyy wayyyy beyond our means.
BFP #2 6/16/12 EDD 2/25/13 MC @ 10w
We looked for a home that we would be happy living in for awhile, but when we went to get pre-approved we told the mortgage lender we did NOT want to know what we could qualify for but what we wanted to qualify for. We knew we would get approved for more than we actually wanted to spend and we didn't want to tempt ourselves. We also put $25,000 down on our house. This is not always possible for everyone, but if you can put some down it is better, that way you have instant equity in your home. Where we live we are required to have the home you are purchasing inspected bc if it doesn't check out then the bank won't lend you the money.
DITTO.
And if you think you might not be in the house for long, think long and hard about buying. We purchased a home 3.5 years ago knowing that we'd only be in it short term, but we got caught up in the "ooooh, the house is so pretty!" mindset. And while we knew it'd be easy to sell (it was in a small military town, so turnover is pretty high), we did NOT anticipate the market crash.
Fast forward to now, 3.5 years later. We moved a few months ago and put our house up for sale -- for 20K LESS than what we bought it for. Was it easy to sell? Yep, we're currently under contract, set to close in a few weeks. But we're writing a check at closing for $15K. Not exactly a dream scenario by ANY means.
We will be renters for the foreseeable future, until we know we're not going to be moving again for a long, long time. The current market is just too volatile, unless you know for sure that you're buying for the long run.
absolutely this!! part of the reason we wanted a place we wouldnt outgrow. A decent amount of the houses we looked at 1.5 years ago are still on the market. Plan to be there a while.
yeah, our condo is worth less than 2/3 what we paid for it. something like $60k lost in a short amount of time. We have renters in it and we'll be renting ourselves for forever. at this point, I don't even plan on buying again until I know it's somewhere I will live until I die. And since we had three addresses in two states just last year, that's not happening anytime soon.
First, let me say that we haven't bought yet. We had an offer accepted back in 2008 but after the inspection we passed on it. Here's my advice:
1. Do some math and see what you can really afford per month. Be realistic about it. Don't forget stuff like maintenence, home insurance, property taxes, etc. Sometimes when you add up those extra costs, it's just not worth it.
2. Make sure you plan on staying a while. If your situation is that you can't guarantee you'll still be in the area in a minimum of 5 years, I would not buy right now. Depending on the house and area, that number might be more like a minimum of 10 years.
3. Try out this cool calculator from the NY Times. It helps determine when buying is better than renting.
Buying a house should not be an impulsive thing.
I think it is a great idea that you are both wanting to buy a new home, but unless you are sure of staying in a place for at least 5-7 years or more right now in this market, I would certainly not do it.
On a conventional loan, you put 20% or more down...do you have that? Putting that much down in this market is best, HOWEVER, if you went to sell, just realize you may be losing some of that.
On an FHA, it is 3.5%. Putting just that, may not be enough to not leave you negative in 5 years.
I work in the industry closing houses at a title company. It's a great time to buy, since interest rates are low, but you must be very sure this is what you want. A new home, through a builder would be a great idea since builders are hurting and practically giving away homes with their incentives/upgrades/etc.
Personally, I cannot imagine such a huge transition at this stage in my pregnancy.
This is my 2nd home. I bought it in 2007 for $164,000 and the property has depreciated in this market and I could not sell it for $150,000 and I owe over that anyways, so I am upside down.
DH and I just bought our first home in May! It was an adventure for sure - stressful at some points, but fun nonetheless. And we are so happy in this house - we love it.
Decide ahead of time what would be a comfortable monthly mortgage payment for you - should probably be similar to what you're paying in rent now. Tell your banker this amount and request that they qualify you for a mortgage at that level only. If they won't, find another lender.
Hoard your cash. Have more on hand than you plan to need for your down payment or whatever. We had an experience in which 1 week before close we got a call asking us to document almost $6K in additional assets. The only reason we were able to show it was because of an IRA that we hadn't thought of before when applying for the mortgage.
When your realtor suggests recommended attorneys, LISTEN. We didn't, and instead worked with someone from our church who turned out to not really specialize in real estate transactions. It caused a lot of headache and heartache. It all worked out...but it wasn't pretty at points.
I'll say it again - hoard your cash. So many little expenses add up quickly. Moving itself gets expensive of course, and as soon as you move in you're guaranteed to start noticing all kinds of little things that you want or need to fix or change.
Be sure you're going into it for the right reasons and not just out of a nesting urge, too. It's a big commitment. And in this economy, nothing is easy to sell. Seriously.
We didn't buy when i was 36 weeks pregnant but we did move so it is possible:) Good luck!
I noticed you are in the Berkshires, so check out Redfin.com. There is a ton of information on it in terms of helping make an offer, including comps/etc. Redfin is only in certain areas of the country and it was really helpful to us.
Interest rates are amazing right now, so if you are financially able to swing it, go for it!!! Good luck.
I've bought two houses in the past and luckily sold them back in 2007 before I moved to Colombia so I didn't lose what everyone else lost. One was a new construction and the other was an old fixer-upper. Although it is wonderful when you get the keys, the process can be extremely stressful, wondering if you will close on time and etc. I wouldn't recommend doing it this late in your pregnancy unless the house is to die for and you are scared it will sell before you get a chance. You can also get better deals in the fall/winter since less people want to relocate while schools are in session.
I found the house buying forum on thenest to be very helpful when going through the process but that was yeas ago so not sure how it is now. Bankrate.com has some great articles about mortgages to look at.
Like others said, make sure you get a home inspection and be willing to walk away if something major is found and the sellers won't fix it. You have to try to keep your emotions separate until you are in the clear. Also, make sure to use a buyers agent. Normally you don't pay this fee but rather the sellers do (in most states).
Good luck! Owning a house is wonderful but I never lost money on owning a house either so maybe if I still had mine, I would feel differently if I was way under water like so many seem to be now.
Ditto pretty much what everyone else has said, especially:
20% down, 20% down, 20% down
Find a GOOD Realtor and trust them. They will steer you to good contractors and advisers such as home inspector, title attorney, etc.
Make sure you can afford monthly mortgage, insurance, taxes, *and* increased utility costs PLUS a buffer for unexpected repairs and maintenance. (although remember that you will get some nice tax benefits that will offset some of those costs)
Don't buy a house without room to grow.
If you're not going to be there 3-5 years (better 5+) you shouldn't buy
Don't plan on selling easily in this market (but you *can* look at the rental market to see if you could cover expenses or make money renting). Any house that you can "easily" sell will not be on the market anymore when you get back from vacation (we saw some that were foreclosures or short sales that truly would be easy to resell but they all got snatched up within 48 hours). Everyone I've talked to says that "this market" will likely continue for at least 5 years.
I would seriously worry about starting the house hunting process at this point in my pregnancy (due 9/11). It usually take about a month (maybe longer) to get to closing and then you have to move and get settled. We just bought our first joint house (husband's first, my second) in late May and are still feeling extremely unsettled in the new place. I already feel behind everyone else in terms of having our nursery ready and our finances settled and in order (note, I follow my own rules above, but there are a lot of one time expenses related to moving that I want done and our bank account settled before LO arrives). I can't imagine starting now.