Your first time home buying mistakes?

[MrDudeMan]

And the sellers agent thanked you because they got all 6% instead of just 3%.

Not if the sellers structured their contract correctly. I already wrote an example of this situation in this thread. You're right in some cases, but it's not guaranteed to go that way.

 

[Wreckem]

Not if the sellers structured their contract correctly. I already wrote an example of this situation in this thread. You're right in some cases, but it's not guaranteed to go that way.

Not all cases, but most cases...(because most people don't know what they are doing).

 

[Blackjack200]

We have a huge lawn, and it would have been $3000 to install while the house was being put in. Now it'll be $6500 and never get done. Our lawn gets nice and crispy in the summer due to the lack of trees as a result.

Oh, lawn sprinklers. Duhh.

 

[MrDudeMan]

Not all cases, but most cases...

You made an absolute statement, which I refuted, and now you're refuting my statement that allowed for an appropriate amount of wiggle room on either side. :sneaky:

re: your edit - agreed

 

[halik]

And the sellers agent thanked you because they got all 6% instead of just 3%.

I bought it from an investment group, self represented (ie I was negotiating with the principal). Even if that wasn't the case, unless you do dual agency, the listing agent will generally not get the other 3%. Most people structure the deal in a way to get the house sold; ie drop the price the 3%.

 

[alkemyst]

Some things even inspectors miss / don't do:

1) run water around every window in the house for a few minutes at least. Check for caulking as well inside and out. I have seen rooms fill with water from down by the baseboards even.

2) check every door yourself to make sure the hinges are good and the locks work right. Especially if the homeowner always insists on getting one door themselves. Especially French doors and other fancy ones.

3) check all fans in bathrooms. make sure air registers are 'real'. I have seen someone install a fake fan (vented nowhere) and fake a/c vents (just a box in the ceiling). Don't know why someone would go through the hassle of it, but I have seen it.

4) check all cable jacks for signal that you care about as well as other structure wiring. I have seen TV's hooked up and there really isn't live cable in the room.

5) check sprinklers. Try to verify it's definitely running off your well/water supply. I have seen sprinklers that don't work. My own house was connected to the school's water supply behind it in three places.

6) make sure all windows open and have working latches. I have seen windows literally fall out of place when you try and move them, latches that are present by don't line up, worse.


7) if a security system is present, make sure all sensors are monitored / working. Easy to place a lot of cheap sensors around.

8) Verify all hurricane shutters are present and that every window/opening has provisions for them that match the shutters you have. This is a big one down here in S. Florida. They will usually show you a stack of shutters / panels in a garage and then the windows have mounting points. I have seen the old homeowner just buy some salvage shutters and install sidewalk bolts around the windows that don't even match yet alone having the true right size/count shutters. The fucked up thing is it makes drilling the proper holes sometimes impossible without rebuilding the surrounding wall again.

9) check internet speeds. This can be upsetting for places out in the boondocks.

10) Try to check behind any furniture directly against an outside wall for moisture/mold issues. Tap the actual wall.

11) get a contract with pictures of anything that is staying behind. I have seen bars, fountains, large pots/chandeliers, hot tubs, other decorations that were promised be removed. If it's not in writing expect to be upset at times.

12) I'd go around with a metal detector too. Had to help someone with the 'new grass' installed at move in plus the re-sodding always dying. Their was engine blocks, oil containers, etc buried.

13) Last thing would be check the records the county has with any improvements on the property currently. This usually isn't verified. Some nice new additions that weren't done with inspections and the like could be a mess for you later on especially for new roofs and workshop/patio/pool type things.

 

[alkemyst]

Also based on some other discussion above. There is no law saying 6% must go to an agent (whether 3%+3%, or any other division).

This is negotiable. I paid a total of 3% to both agents on my last house which I think was fair at the time of hugely inflated housing prices.

In return, the seller's agent (a relative of the seller) gutted the house of some fixtures and got into a pissing match they never existed.

 

[jaedaliu]

Also based on some other discussion above. There is no law saying 6% must go to an agent (whether 3%+3%, or any other division).

This is negotiable. I paid a total of 3% to both agents on my last house which I think was fair at the time of hugely inflated housing prices.

In return, the seller's agent (a relative of the seller) gutted the house of some fixtures and got into a pissing match they never existed.

o.0?

Isn't the seller typically the one that pays the commission?

 

[velillen]

o.0?

Isn't the seller typically the one that pays the commission?

Id say generally but definitely look over counter offers and the such. I put an offer in and they came back saying i would pay the 6% commission. They also wouldnt pay closing costs and came down a whole 1k off list price. I didnt even respond to their counter offer (though my agent was a nice guy and least called their agent basically telling him what a crappy deal it was). House has been on and off the market a couple times now. Seems they do 6 month leases and rent it out then try to sell it before renting it again

 

[highland145]

May have already been mentioned but has the ACA sales tax kicked in yet?

 

[WiseUp216]

Thanks again, everyone, for the replies. I've gathered a lot of good notes from your posts.

It is nice to get input from people who are not in the real estate industry.

 

[gorcorps]

This may not be an issue in your area, but it's a big issue in my neighbourhood (which is mostly 50-60 year-old homes).

We all had to get new water meters installed, and I was surprised by what the water meter installer told me when he saw my main water supply pipe.

He said in my area, most people still had 1/2" water supply pipes, with some more having 5/8", and even a few with 3/8". That's basically the equivalent of a small garden hose supplying a whole house. Only some homes in the area had people had 3/4" (which is actually a minimum code requirement now), presumably the new ones, and mine was the only one in recent memory that had 1". (The previous owner had put in a huge in-ground sprinkler system, so the city approved the 1" supply.)

To upsize the existing 1/2" pipe from the city to the house costs something like $1200 here. However, that doesn't include any costs for fixing the landscaping or pavement or whatever that may have been overlying the pipe. It also doesn't change anything inside the house so if the main pipe after the water meter is still 1/2", there still may be significant flow issues, esp. if they're really old pipes that are partially clogged.

P.S. The new water meters have wireless transmitters so they no longer have to send water meter readers to the house. To my surprise the power is supplied by an integrated battery, with a supposed 20-year operating life.

Wish I had a 3/4" line instead of 1" line. I have no idea why it's done this way in my city, but water rates are scaled based on water line size. From everything I can tell we're still be charged by amount of water used, but I get charged more for the same amount from a 1" than a neighbor does from a 3/4" line.

 

[Eug]

Wish I had a 3/4" line instead of 1" line. I have no idea why it's done this way in my city, but water rates are scaled based on water line size. From everything I can tell we're still be charged by amount of water used, but I get charged more for the same amount from a 1" than a neighbor does from a 3/4" line.

Weird. That makes no sense at all.

 

[Blackjack200]

1" pipe has almost twice the flow capacity of 3/4". I wonder if they charge more because they have to provide more pressure to satisfy those bigger lines?

 

[highland145]

1" pipe has almost twice the flow capacity of 3/4". I wonder if they charge more because they have to provide more pressure to satisfy those bigger lines?

I wouldn't think so. What size line/pressure is the curb supplying the whole community? 4"

 

[Blackjack200]

Maybe somebody just had an idea about how the municipality could make some more money...

 

[highland145]

Maybe somebody just had an idea about how the municipality could make some more money...

:whiste:

 

[monkeydelmagico]

letting your girlfriend talk you out of the house you really wanted and then she dumps you a couple of years latter and your stuck with one you grow to hate.

Hey at least you got to keep your house! My first house was awesome. Cheap fixer-upper that I worked hard for 5 years to make nice. The big mistake was having a wife. Bye bye house.... and I still get to pay for it....

Other thoughts:

Avoid FHA/VA. What a waste of paper and time. Conventional loan was way simpler.

Go to city/township office and have the history on the property pulled. Check for yourself last assessment and tax values. Don't take the listing word for it.

Get your own lawyer and inspector, avoid the real estate person's cronies.

Spend time in the neighborhood prior to pruchase. Check the local crime and school stats.

 

[alkemyst]

o.0?

Isn't the seller typically the one that pays the commission?

It all affects the pricing bottom line. This is where buyers mistake things.

 

[HumblePie]

Hey at least you got to keep your house! My first house was awesome. Cheap fixer-upper that I worked hard for 5 years to make nice. The big mistake was having a wife. Bye bye house.... and I still get to pay for it....

Other thoughts:

Avoid FHA/VA. What a waste of paper and time. Conventional loan was way simpler.

Go to city/township office and have the history on the property pulled. Check for yourself last assessment and tax values. Don't take the listing word for it.

Get your own lawyer and inspector, avoid the real estate person's cronies.

Spend time in the neighborhood prior to pruchase. Check the local crime and school stats.

I have a VA loan with zero problems. VA loan was quite a bit cheaper than a conventional one. Not everyone can get a VA loan though.

VA loans are easier to get too (if you qualify for a VA loan). You only need the bare minimum credit score to get the loan which I think is 600? Anyhow, a person with a 600 credit score vs an 800 credit score is going to get the same rate on the loan from the VA. Unlike conventional loans. Where higher credit scores = better APR rates and higher loan caps. The VA also loans out the same amount of money they underwrite to everyone. It's like $487K right now I think? Basically if you are approved for a VA loan you can borrow anything up to the max cap of $487K. VA loans don't have a PMI and only an upfront fee that can be waived if you are a disabled vet with 10% or higher disability. The APR financing is always cheaper than conventional rates. Not by much, but usually a tenth of a percent. Also, a VA loan will prevent the buyer from paying certain bogus "fees" that tend to show up in housing transaction deals. Especially with new home buyers that don't know that they don't need to pay some stupid made up fee. You don't have to put a dime down if you don't want to either. Which means if you don't have 20% to put down on the loan, you won't be screwed over like you would with a conventional loan.

There are restrictions on the VA loan though. You have to buy a move-in ready house. They won't add in anything to the loan to do a fixer-upper at all. It has to be a loan for a primary residence only and the person who gets the loan must maintain residency for 6 months in the home. There are some other even more minor restrictions that won't matter to a first time home buyer purchasing their primary residence.

 

[Svnla]

Subcribe to this thread because I am thinking about getting a house.

 

[Vdubchaos]

Thankfully I didn't have to learn the lesson the hard way, but I've seen people that have.....it's not pretty.

There is a couple of general "DO NOT ATTEMPT" things I would recommend.

a) DO NOT let the bank/realtor or ANYONE other then you to define your Budget or tell you what you can afford. Remember YOU are the only one that knows if you are ready or not. Banks/Realtors just want to sell you stuff, just because you CAN, doesn't mean you should. If Bank tells you, here have 300k and you can only afford 200k......ignore the bank.

b) DO NOT buy a house as an investment. Houses are places to live in and all too many think of it as an investment. Although some have been successful (key words: some)

c) Be ready financially. This means, you have 6-9month emergency fund, mortgage doesn't reach more than 30% of your income (post taxes) and you have 20% down payment. I know many here will argue about 20% down, but I think it's a good pre requisite as it teaches people to save money and get into good financial habits. It's not a must, but it's GOOD to have extra equity in your home.

d) lay off HGTV and do not buy houses for others. Open concepts....entertaining etc is all BS. You need to define what it is that you want, not what others like. Entertaining makes up 1% or less of the time you actually live there. HGTV will also make you upgrade EVERYTHING in your house for no reason.

That's all for now.....

 

[HumblePie]

Vdubchaos,

Your C point is going to be different on the area people live. I live in a state with property tax, but no state income tax. If I lived in a state with no property tax, that 30% of your take home pay per month for a mortgage payment would be spot on. With property taxes, that is a bit different. My mortgage payment per month is right at 30%, but my property taxes are then on top of that. So I had to do a summation for total out of pocket I wanted to spend. If I did taxes + mortgage at 30% of my income. and decided to try a buy a house in San Antonio city proper (which has highest income taxes around here), then I'd be living in some pretty crappy house in the not in best of neighborhoods either. Which would more than likely be an older home, with horrible efficiency and maintenance costs. Which would have pushed my over all living bill way up.


That's really not the best way to approach things. Best way is to take your net monthly income and decide how much you want of it to go to ALL bills. Do a budget of what you know such as food, phones, tv, student loans, car, insurance, or whatever. Add up everything you pay now minus your rent. Most people pay from 50% to 75% of their net monthly income to monthly bills total. So then look for a house within that range of your budget. I wouldn't recommend ever going over 75% of your income towards bills. You won't be able to save nor splurge very easily.

Here's how I looked at things when I went shopping for a house. I had a budget in mind that I didn't want to spend over $2800 in total a month for all my bills. I did up my budget and played around with what I know and what would be unknown.

Unknown because those factors would all be based on where and what I buy for a house. Older homes tend to be less energy efficient, have higher warranty costs, and have maintenance costs. I have to figure in tax rates for where I moved. I figured in HOA costs, school costs, and even gas for how far I would typically have to drive to these following common places: work, schools (when I have kids), and grocery store.

Take a friend of mine for example where I work. He makes about the same amount as me, but bought his house a long time ago. We compared our "budgets" together because he thought I over bought out of my budget based on my house.

His house is older, built in the 70s, smaller, has outdated amenities, and was cheap. The house is a 150K house. He lives in SA proper. His taxes are like 4%. I am going to assume the same 4.5% APR for both of us, although I was a bit lower on mine at 4.3%. His monthly mortgage + tax cost for his home was $1350 or so if I remember right. I have a 250K house, but 2% tax rate and no PMI. My Mortgage + tax cost is $1800.

Then we looked at energy bills. My average electric bill so far has been $150. His is $400. He has to drive 20 miles more into work than me. His mileage for gas is higher and pays an extra $200 on top of my costs despite being closer to a grocery store than me. I have a new built home and warranty for it was cheap. His not so much and he has maintenance costs I don't have to worry about for 10 years. He spends on average $3K per year after looking over his purchases on doing stuff for his home that I won't have to. Which is another $250 a month. Gas stations around me are cheaper at $2.96 on average per gallon compared with his $3.20. Cost of living and groceries are cheaper.

Sure the house I bought has a higher mortgage rate, but he pays way more overall for all his living expense bills compared to me. That's the crux of it. That 30% for monthly mortgage payment is not really that good of a hard-fast rule to follow. A person needs to sit down and do a proper budget. Look at ALL costs and decide how to buy. Sometimes you can buy more house if it lowers your bills in other areas based on location of the purchase.

 

[Blackjack200]

I think that's an odd way of looking at it. I budget all my money and don't understand why you would differentiate between items that are "billed" vs. items that are paid for upfront.

Property taxes should absolutely factor into your housing cost calculation, as should any wage taxes a municipality might impose (these are unusual, but I'm moving to Philly soon and will have to pay a wage tax)

In any case, your housing cost for a home you own with a mortgage is generally "PITI" or Principal, Interest, Taxes, and Insurance. This is the number that should be compared to the cost of renting. Utility bills are highly variable, and you should be aware of what they can run whether you're renting or buying.

 

[Special K]

Using a real estate agent was a huge mistake every time I've ever done it. When I went through the process on my own, it was WAY smoother and WAY less costly. Regardless of the bullshit anyone tries to feed you, you and the seller are both paying for the agents.

Is it true that real estate agents have access to listings that non-realtors don't, or gain access to listings faster than non-realtors?

I've never bought a home before, but have done some casual searching and have found websites that overlay MLS listings on top of a map. Are these websites up to date?

Some non-realtor friends of mine told me that going with a realtor is good because they get new listings much sooner than these websites pick them up. They also said that if houses are selling quickly, then you may never even see a lot of what comes on the market if you don't use a realtor because the houses aren't for sale long enough to be picked up by the aggregator websites.

Also is it true that the MLS database used to only be accessible by realtors under any circumstances?