Very OT: First time homebuying advice
Apologies for the non-sports OT, but the board has been a bit dead of late and this could be helpful to more people than just myself:
I am in the process of buying a new home (first time for both myself and my wife). I've read up on how the process "should" go, but I'm curious about any problems that could arise or things to watch out for that might seem trivial/minor now but later becomes a headache.
Any advice the board can offer (general or specific) or stories/anecdotes of use are appreciated.
Thanks!
Pick the most anal-retentive inspection company available. I’ve bought 6 houses and have backed out of three others simply based upon the inspection. People are animals when it comes to hiding things, so be sure the inspector is thorough! Try to do all of the paperwork with Docusign or a similar service to save time. Take your time moving in so you can do things like painting and flooring before the house is full of stuff.
This is what I came to say. It is more than easy to fall in love with a place and be completely oblivious to its faults. Here it is very easy to rationalize the quality corners that have been cut...but soon become sources of angst, frustration and disgust. Pay attention to the inspection...pay very close attention to the inspection!!!
I guess I'm going against the grain here, but don't agree with most anal inspection company.
Most out here in CA write up way, WAY too much and buyers can get overloaded with info. Some of that info is absolutely useless and wrong.
I think it would be better to talk to the company prior to inspection and tell them what you want out of the inspection. Houses are not perfect. Most never will be.
I've had inspection clowns call some of the weirdest stuff. BARE ELECTRICAL WIRE ON GROUND. When it was an old tv antenna wire that was the neighbor junk laying on the ground. Old TV antenna wire is pretty recognizable. They won't pick up and check if its even attached. Just note it as a huge hazard.
With that said, be concerned about your foundation. Find out if electrical old knob and tube wiring or Romex and make sure breakers trip when faulted. Find out if plumbing is copper or galv. Make sure they check for window leaks. Attic, crawl space ventilation. Insulation as best they can. Roof. Roof inspection are separate out here and can come with 2 year guarantee just for inspection cost. HVAC system.
My suggestion is to focus on the big things and let your inspector know that, if that make sense to you. You don't want to lose a house that you really like cuz some anal inspector scared you off. If you request too much from sellers(in terms of fixing all the nitpicking stuff) they might tell you to pound sand and go to the next buyer.
Just an opposing point of view from most here.
Good luck and GO BLUE!
And once you pick the inspection company, actually show up and be present for the inspection. An extra set of eyes never hurts and why on earth would you leave someone alone with what may end up being the biggest purchase of your life?
The amount of paperwork is astronomical - if your realtor and lending agent isn't having you use DocuSign...might need to gently nudge them in the direction of the 21st century
March 20th, 2019 at 11:18 AM ^
I can't endorse this enough. There really is no substitute for walking the house up and down yourself, with someone who knows what he's looking for. Do not fail to be present for the inspection yourself. Not only will you have a much better idea of what needs repair, you'll learn about how things are supposed to look, how the pipes and vents are routed, and so on. It's invaluable even if everything is in perfect order.
Agree with the above people about inspection and being there like Chauncey Gardener. I will also say my wife and I didn’t spend nearly the amount of money on a home that they were willing to lend us; this has been huge for us. We have both had career changes/lost jobs during our home ownership. We are so happy that we were able to build a nice sized rainy day fund and put money towards retirement. We talk about eventually moving to a bigger house but both of us agree that we made the correct decision in spending less 15 years ago.
March 20th, 2019 at 12:41 PM ^
I have been a mortgage originator for 20 years and I would refuse to have a 1st time home buyer e-sign their documents. I don't want to get to closing and have a bunch of questions all of a sudden show up. If you have purchased other homes then by all means e-sign. But I want to make sure my clients totally understand the product they have chosen to purchase the home.
I would suggest focusing on the financing element first. Pair yourself with a great bank or mortgage originators because you will get better my throughly than a colonoscopy. A great bank and originator will go to bat for you.
During your inspection, have the contractor look at the plumbing and electrical. Especially, if it’s an older home. Why, cost of mechanical elements have increased and can be an unwanted surprise early on.
Regarding docusign, ask for a draft version before you understand it. Realtors will push you to sign and say it’s “standard”. Rmebwr, you are signing a legally binding my agreement.. read it carefully.
Lastly, when you close, sneak a bottle of champagne for you and your wife to enjoy after you completed the walk through.
Inspector was #1 thing that came to mind for me too. I've purchased a few houses, and we had a shit inspector on the first one and you'll find that out the first month you live in the house when things start going wrong. We had an awesome inspector for my most recent one, and we have had 0 surprises upon moving into the house and he got us a lot off list price because of all the things he found (all were fairly minor, but the long list helped us renegotiate the price).
Our realtor recommended an inspection before we sold, which we did. This allowed us to address some issues before we put the house on the market (fortunately all minor stuff) and meant that we didn't run into any unpleasant surprises after we had an offer. In theory the buyer could also skip the inspection if they were in a hurry.
Not that I'd recommend relying on the owner's inspection in any way! Our inspector was pretty thorough and no bullshit, but a crooked inspector/realtor combo could certainly take advantage of this.
This. Be diligent in your inspections and don't skimp with inspectors. Condo I just bought had a water leak before I moved in. Sellers intentionally hid it from me (so the inspector didn't catch it), had to get the whole place gutted and cleaned for mold, now I'm caught in a lawsuit and still rebuilding (4-month process so far). Make sure your agent is thorough and gets responses from the sellers in writing if you have to ask about something they didn't disclose - I would be screwed if I didn't have the documents to prove they did wrong.
Yep, exactly this. Don’t pinch pennies on your inspector. Look up reviews, solicit opinions of friends and family, look up certifications and office holders in local inspector trade organizations, and find someone that will do the job WELL.
And like someone else said, be there for the inspection and pay very close attention. It can be tough to divine everything you need to from the inspector’s final report without firsthand knowledge of what he or she was talking about. Most inspectors will do this anyway, but make sure they rank each finding in terms of priority to help determine what you should ask for in contingencies. Code violations and clear safety issues are musts, things that could be expensive to take of but aren’t clear and present dangers could be asks or negotiating points, and then maybe pass on minor items depending on how the previous two went.
Good luck! It can be overwhelming but it’s FUN once you figure out how to get your arms around home ownership.
March 20th, 2019 at 10:17 AM ^
If you don’t know much about home remodeling, bring an experienced handyman friend/family worker to the inspection and have them shadow and GRILL the inspector as they do their job. Don’t let them rush or blow off any questions. An inspector that shows up w/o a ladder, flashlight, and some basic tools might as well bring blindfolds too.
You’d be surprised what quality inspectors miss. In my last inspection (condo where I moved my office last year) the inspector ASSUMED there was a collective heating/cooling system for the building. There wasn’t.
During the inspection I called building maintenance and they took us to the roof (it was hard to get to) and the two units were old, well past their projected life — saved me $16K on the final price.
Ask, ask, ask every questionable imaginable. The only bad question is the one not asked.
March 20th, 2019 at 12:00 PM ^
Pick the most anal-retentive inspection company available.
... then plan on them still missing a pile of things that you'll need to fix.
All previous homeowners suck.
Absolutely bring in your own inspector. The seller, your realtor, the bank, etc. all want the sale to happen, so they're more likely to pick an inspector who isn't as thorough. I personally have never bought a home but have a story from a coworker. Coworker was going to buy a home, and both the seller's inspector and the realtor's inspector approved the house. Coworker brought in an independent inspector who found a serious flaw in the house that the seller had tried to hide, and the house ended up being condemned.
Condemned, wow. What was the flaw?
March 20th, 2019 at 10:30 PM ^
Apparently large sections of the floor were rotting, and the seller just put down a new layer of flooring to cover it up. Not sure of the exact details but I think it was something to that effect.
Get pre-approved (HomeSure Lending) to know what you can afford vs. what you can qualify for.
Stick to a fixed mortgage so you will always know your budget. If you plan to stay long don’t be afraid to reach a bit higher than you think as long as you can handle the budget.
March 20th, 2019 at 10:09 AM ^
That's what I did, but I am going qualify that with this: if you know you're going to only stay in a house for a certain amount of time (3, 5, 7 years) an ARM can be a good way to go. You usually get a lower rate and you're planning to sell before it adjusts.
The caveat to that is you will want to make sure you sell otherwise that ARM is going to go up.
March 20th, 2019 at 10:20 AM ^
Sell or refinance, if the situation changes and you end up staying longer than anticipated.
This is great advice. Fixed mortgage unless you're 110% sure you're leaving before the rate would adjust. Particularly since, while rates have gone up over the last few years, they're still very good and you never know what they'll be in a few years.
I agree with the stretching your budget--while taxes, maintenance, etc. will go up--if you've got a fixed interest rate, the biggest piece of your monthly payment will be fixed.
That said, make sure you are deciding on your budget. Everyone else in the process gets paid by percentage of the house/loan price, which means the more you spend the better it is for them. Even when you have people who are great, your budget needs to work for you. Just because the bank will loan you more, or a rule-of-thumb says you could spend more, it might not make sense for you. In my experience, those almost always over-estimated what I could comfortably pay.
I can tell you my biggest issue was with the lender and them figuring out taxes. My house was a new build here in Houston area and we have to pay property tax and MUD tax. Since my area was new the MUD tax was hard for them to figure out so my first year I had a shortfall along with a bunch of my neighbors and my payment went up by $200 a month . Some owe way more . Also if you live in a state that offers Homestead exemption make sure you do that. Shop around for homeowners insurance big time as well. Usually the small guys are much cheaper than the big guys and you get the same coverage etc.
taxes aren't a lender issue, that's a county tax assessor deal. The lender simply passes on what they are given.
MUD tax usually go down with time. I stayed away from newer developments just so I pay a lower MUD tax.
My advice to OP will be to set a budget and refuse to see any property that is beyond your limit. If possible, see the houses on your final short-list at couple of different times of the day.
My wife and I went through this a few years ago. Granted she works for Quicken so it was easier for us, but my advice is to send in whatever they ask for on time and to the best of your ability. It'll help streamline the process.
and, if dealing directly with your bank, tell them to make the deal or your funds are moving elsewhere.
Be careful who you are buying from. We just bought a new house last year and the sellers went through a relocation company and they were a nightmare to deal with. They were constantly pushing back closing causing us to rush since we had already closed on the house we were selling and they were just generally difficult to deal with. There was no ounce of urgency on their end. Even our realtor was fed up with them.
When we bought our house back in 2003, we bought it from someone who basically bought and sold homes, which in downriver Wayne County is easy enough to do with vacancy rates being a smidgen elevated in some areas (like mine). He knew exactly zero about the house basically, but was kind enough to let us hire a very anal inspector whose findings helped us get a decent deal on the place after we worked out who would fix what (I did not take on much of the load in that negotiation).
Meet your new neighbors on both sides before signing. The house may be great but is it worth living next to weirdos/psychos/assholes for 20’years?
Funny and in most instances probably true. Might not work in established neighborhoods though. We bought our house from a lady who built it 40 years ago. The neighbors are the same age and probably won't be around for more than a few years.
Maybe the new buyers will want to meet us first and if they're weirdos I can scare them away before they buy.
March 20th, 2019 at 10:02 AM ^
ultimate irony: fauxmo posting about being wary of the neighbors.
March 20th, 2019 at 10:23 AM ^
Seriously, one time I had neighbors that always wanted to see "what I was up to" in my basement. No matter how often I told them the smell was normal and they were better off not knowing, they just bugged me and bugged me and bugged me. So annoying. Should have vetted them better...
March 20th, 2019 at 10:35 AM ^
our closest neighbors are mostly cattle. they sometimes want to see 'what's up' with our cattle. they will bellow and moo back and forth. convo over, they graze along their merry way....
March 20th, 2019 at 10:39 AM ^
Ah, so you slaughter, butcher, cook and eat your neighbors too, eh? :-D
March 20th, 2019 at 11:02 AM ^
just trying to keep up with you, fm. and lamb. and deer. and chickens. my kids have seen more blood than a mash hospital.
March 20th, 2019 at 10:31 AM ^
All FauxMo's neighbors float
March 20th, 2019 at 12:16 PM ^
Pretty sure he was writing from the point of view of his potential neighbors.
If you see any scarlet and grey, abort!!!
My advice: don't move into a house that you wouldn't feel comfortable living in as-is for five years. We moved into a house thinking we HAD to redo the kitchen, and weren't able to (because life stuff) before we sold it.
Biggest mistake that we made was not thinking about the investment potential of a first house. If I did it over again, I would have bought a duplex in a nice part of town, lived in it for a few years and rented the second unit. Then used the income to save up for the second house so that I could have kept the duplex as a permanent rental upon moving out to a second home. I really wish we had done that in Ann Arbor in 2006 when we bought our first place.
Exactly what I'm doing now but I bought in 2015
This is what I've been thinking of doing. Have you ran into any unforeseen issues I should be on the look out for?
We just bought a house after renting for over a decade (we move a lot). If you're planning to buy a place and renovate make sure you plan for at least a month longer than you think and/or your contractor estimates.
We bought at the beginning of Jan and were planning to be able to move in by the end of March but there were delays of course and now it's looking like mid to late April. Our current lease lasts until July so no biggie but we would have been screwed if our lease ended in March.
If it's new construction, remember that the seller works for the construction company/GC - they are NOT your friend. Don't let them talk you out of what you want, and don't let them cut corners.
Also, be mindful about budgets. What you can afford in a house cannot be based on utilities you paid for an apartment/condo, or even a much smaller rental home. You may be moving from a 1-zone HVAC unit to a 2-zone home, and you're electric/gas bill will significantly go up. Also consider other utility costs - garbage pickup, water, HOA fees, landscape care (do you need to buy a lawnmower?)... Ancillary costs challenged me when I moved from a small ranch style home to a much larger house, they took me by surprise because I put no thought into them.
March 20th, 2019 at 10:25 AM ^
Great call about budgets.
Ancillary costs related to increased utilities, maintenance, etc. I hadn't even considered the cost and maintenance, especially, associated with well/septic. And then there is the snowplow service for our super-long driveway which is an absolute BEAR to clear, even with a 2-stage snowblower.
Upgrades/renovations were also mentioned above, but don't underestimate the costs of just getting the house to a livable state (e.g., carpets, paint, duct cleaning, etc.) and especially the costs of any renovations you are planning (redoing the kitchen, bathrooms, etc.). Make sure you have ample budget for it or are willing to live with some unrenovated areas for a while.
Make sure the AC and furnace both work and ask for the sellers to pay for a home warranty. It's cheap enough that they'll always do it and it can save you a monstrous amount of money if you're unfortunate enough to have something expensive kick the bucket.
And also make sure you read the home warranty to make sure major appliances are covered to an acceptable level.
Sconded. I paid $7000 to replace the furnace and AC condenser about 9 months after I moved in. They definitely needed to be replaced, but I wish I didn't have to pay for it all.
I also replaced all the kitchen appliances, but that was mostly for cosmetic reasons.
Beware of flips. I would rather have a more original home than either a flip or one with lots of additions. In Ann Arbor you can review permits to see what was done from a permit standpoint. Inspectors are good but not the be all. If you have friends that are extremely knowledgeable ask the to walk through the house as well.
Research known problems of preowned homes of the era you are looking at. Knob and tube wiring, ungrounded electrical, asbestos, orange burg waste pipes, galvanized plumbing.
The house I bought was 1962 so I had two prong plugs and thought much of the wiring was ungrounded but the ground wire was simply grounded to the box.
For me structural issues are more important than cosmetic issues.