• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Anyone here have experience buying a house?

P

PaperclipGod

Banned
So, I've been house hunting for a little while now, and I found a place that looks fantastic. It's a foreclosure and the asking price is just $109K. However, it's an exceptionally well maintained house built around 1900. It has new electrical, a recently repaired slate roof, and almost all of the original wood detail on the interior (e.g., carved solid wood front door, original bannister/staircases, stained glass, even old gas fixtures in some walls). It has new radiators installed, and even the attic has been finished.

On the downside, it's in a rather bad area. No gang-warfare bad, but it's somewhat run-down. There are houses here and there that have had genuine care put into them by the owners, but they're outnumbered by the decaying structures.

So, now that I've got the "gushing" out of the way -- what do I need to be careful of? Are there any common mistakes a first-time home buyer tends to make? How do I value the house, considering the current market? Prices seem to be all over the place. Are banks generally willing to negotiate on foreclosure homes? Many of the pipes in the basement are covered in asbestos insulation, but it's in good condition. One small area is beginning to disintegrate, but the real estate agent said that wasn't a problem (but her goal is to sell the house, so...?). I don't see any signs of an underground oil tank, and I think I'm pretty safe in that regard since the house appeared to originally use gas heat. It's since been converted to oil, and the tank is above-ground in the basement.

I know it's nearly impossible for anyone to get an idea of what a house is worth or what potential problems might be without even seeing it, but I'm just hoping for some general advice from folks who have gone through this before.
 
Make sure the house is not haunted....oh btw, I have a new cabin house for sale in SC, let me know if you are interested. I'll give you half a million discount.
 
The best advice I could give you is: get yourself a nice buyer agent. A buyer agent costs you nothing (they are paid by the seller, even if it's in foreclosure and the seller is the bank). They represent you in the buying process, not the seller or anyone else, and they can provide you with all sorts of good information/advice. They can walk through the property with you, make suggestions, tell you what to look for, provide you reference cost information, check out similar sales in the area.

In general, a buyer agent is a really good thing, I'm really really glad we used one when we bought our house and even when we did a newbuild.
 
Originally posted by: PokerGuy
The best advice I could give you is: get yourself a nice buyer agent. A buyer agent costs you nothing (they are paid by the seller, even if it's in foreclosure and the seller is the bank). They represent you in the buying process, not the seller or anyone else, and they can provide you with all sorts of good information/advice. They can walk through the property with you, make suggestions, tell you what to look for, provide you reference cost information, check out similar sales in the area.

In general, a buyer agent is a really good thing, I'm really really glad we used one when we bought our house and even when we did a newbuild.
Click to expand...

I bought my first house last year, and I am very glad that I used a buyer's agent. I filled in gaps in my knowledge and had peace of mind. For my next purchase, I may not use one, since I think I now know everything I need to. If you do use a buyer's agent, make sure s/he has experience with the area and type of house you are looking for (e.g. new house vs. fixer-upper)

Technically, the buyer's agent is usually paid by the seller. But who's paying the seller? The buyer. The buyer's agent commission is usually built into the sale price.

You can negotiate with a buyer's agent to lower their share of the commission, thereby lowering your total cost. Remember that a buyer's agent usually doesn't get paid unless a sale is actually made. In other words, question everything that even YOUR agent tells you.

Reading "Home Buying for Dummies" is a good start. This is likely to be the largest purchase of your life, until your next house. Do the research.

Is the neighborhood on the way back up, or is it still going down? That should be a huge factor in your decision.

Don't get an ARM. Lock in a low fixed rate, and refinance later if rates go even lower. Put down 20% to avoid PMI. If you can't afford 20%, maybe you're not ready for homeownership yet. I know it sucks, but if you do the math, you'll probably come out better financially by waiting until you can afford 20%.

There's lots of information on the web about buying a foreclosure. Good luck!
 
Originally posted by: tk149

I bought my first house last year, and I am very glad that I used a buyer's agent. I filled in gaps in my knowledge and had peace of mind. For my next purchase, I may not use one, since I think I now know everything I need to. If you do use a buyer's agent, make sure s/he has experience with the area and type of house you are looking for (e.g. new house vs. fixer-upper)

Technically, the buyer's agent is usually paid by the seller. But who's paying the seller? The buyer. The buyer's agent commission is usually built into the sale price.

You can negotiate with a buyer's agent to lower their share of the commission, thereby lowering your total cost. Remember that a buyer's agent usually doesn't get paid unless a sale is actually made. In other words, question everything that even YOUR agent tells you.

Reading "Home Buying for Dummies" is a good start. This is likely to be the largest purchase of your life, until your next house. Do the research.

Is the neighborhood on the way back up, or is it still going down? That should be a huge factor in your decision.

Don't get an ARM. Lock in a low fixed rate, and refinance later if rates go even lower. Put down 20% to avoid PMI. If you can't afford 20%, maybe you're not ready for homeownership yet. I know it sucks, but if you do the math, you'll probably come out better financially by waiting until you can afford 20%.

There's lots of information on the web about buying a foreclosure. Good luck!
Click to expand...

Yep, I've got a buyer's agent, but I don't really see how they're on my side... I mean, they still get paid via commission, so the more I pay for a house the better off they are.

Neighborhood isn't really going anywhere. It's a fairly nice neighborhood, but it's been in this sort of purgatory for at least a couple decades, now. You'll have a nice Victorian, then a dumpy 2-family, then another well-maintained house, and then another slum. Honestly, though, the neighborhood isn't that important to me (well, as long as it's not like Compton). The house itself is gorgeous, and I kinda have a "thing" for old architecture.

I was planning on doing a fixed rate mortgage, a local bank is offering 4.5% fixed for 30 years. My credit rating is uber, so I should be able to get it no prob.

What is "PMI"? I was actually planning on putting very little down, as 4.5% is so cheap I think I'd be better off just investing the cash on my own instead of trying to pay off the mortgage as fast as possible.
 
It can't be overstated how important the neighborhood is. It can go uphill, or it can go downhill... fast. In my old neighborhood, the neighbors on one side owned their own business - a dance school. Both were professionals in addition to that "hobby." The other neighbors owned their own restaurant. Across the street, a little old lady in a huge house, a lawyer and his wife, and a guidance counselor & his wife (nurse.) A couple of doors up, the head secretary at a major insurance company in the area, and since the house was a huge duplex, the tenant she rented to. She was very picky about who she rented to.

A couple years later, the house 4 doors down from us became a huge problem - drugs, etc. While we were out chatting with the guidance counselor and his wife - kids were playing together, a girl walked up onto the porch. In ghetto-speak, the guy said something to the effect of "I don't care what you did for him. <a few possibilities tossed in> I want to know how much he paid you." - prostitution! :Q That was the final straw for that family - they moved out. After a neighborhood meeting, and me suggesting that we simply take pictures, record what's said, copy the police reports about that property, etc., and send all the factual information (no embellishing, no editorializing) to the "slumlord's" neighbors & business associates, suddenly everyone in that place was evicted. The owner was a lawyer & I'm sure that the suggestion quickly made its way back to him. He didn't give a shit about our neighborhood & who he rented to, but I'm sure he'd care what all his high society friends thought of him.

Anyway, the neighborhood rebounded for a year or so. Then that place was sold & we had some new problems with tenants. Some people up the street moved out & their place was rented to some seriously poor excuses for humans - people drinking beer (not the problem) out front of their house, blaring music, and tossing the empty beer bottles into the road (the big problem.) Eventually, the landlord of that place had enough & burned the place to the ground. He didn't end up in jail since the fire was intentional, but he didn't mean for it to get out of control - the tenants left bags of garbage & he was "burning the garbage in the basement, and it got out of control when he went to get a plumbing fixture." A week prior, he commented to a neighbor that he wasn't sinking another penny into the place. 3 or 4 doors up from us, while the kids and I were playing ball in the street, we watched at least a dozen drug deals take place. That place had been the location of a couple of police raids during drug sweeps. But from the time people complained until they "finished their investigation" was many months - more than a year. That was the last straw for us; we got the hell out of that neighborhood.

Currently, there are 3 addresses on that block that the police frequently visit. Those three places destroyed the neighborhood. There's another neighborhood in that city whose character was destroyed essentially by just one house. Or rather, for 5 or 6 years, that neighborhood absolutely sucked.

Be very aware of potential problems in the neighborhood you're looking at. The problems we faced went well beyond unmowed lawns, unpainted houses, etc.
 
As with most things rules and circumstances vary from state to state. Here are some details from my experience.

I'll just chime in on the buyers agent a bit for you as it does not work the way described previously in all locations. In my area nearly all houses that are sold under MLS(multiple listing service) have a cut of the sellers commission that go to the buyers agent. The numbers are not the same in every case but figure if the seller is paying their agent 10% to sell the house, the sellers's agent can offer out 1/3 of that to outside agents who come thru with a successful purchase. Meaning nothing comes out of the buyers pocket to pay their agent. If the house you are looking at is not listed that way, then your agent will indeed need to be compensated.

A better option in my opinion would be to hire an attorney to go over all of the documents prior to closing.

Also as mentioned, for traditional mortgages. If you have lower than 20% down you will be required to take out mortgage insurance. This is paid out till you pay down the mortgage below the 80% mark. Then you can petition to have the PMI removed from the mortgage.

For my payment right now I have a 1100 payment 800 in loan 250 in taxes for escow and 50 in pmi.
 
Originally posted by: Capt Caveman
OP - what town is this house in?
Click to expand...

Holyoke, MA.

In the 19th and early 20th century it was super-wealthy from all of the paper mills and other factories along the river, but once they closed up the city never really recovered.
 
Make sure you visit the property at various times of the day/night week/weekend. This can lead to some more insights about the area. Also, if you see someone outside - talk to them! Ask them what its like since they probably know better than anyone.

Always always always have a well recommended house inspector inspect the house.

Try to figure out what businesses in the area are employing the residents and how likely they are to prosper/fail.

We also read Home buying for Dummies. Its a bit of a read but well worth it
 
Originally posted by: WarhammerUC
Originally posted by: Aberforth
Make sure the house is not haunted.....
Click to expand...

tell me more !!!! 🙂
Click to expand...


Funny you guys mention that, actually... the basement has this bizarre lead/concrete bunker/furnace/safe kinda thing that no one can figure out the purpose of. Personally I think it's an old body incinerator for a crematorium. O_O
 
Originally posted by: PaperclipGod
Originally posted by: WarhammerUC
Originally posted by: Aberforth
Make sure the house is not haunted.....
Click to expand...

tell me more !!!! 🙂
Click to expand...


Funny you guys mention that, actually... the basement has this bizarre lead/concrete bunker/furnace/safe kinda thing that no one can figure out the purpose of. Personally I think it's an old body incinerator for a crematorium. O_O
Click to expand...

Make sure to read Stambovsky v. Ackley for a good overview of the legal definition of "haunted" just in case.
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top