Your first time home buying mistakes?

[nickbits]

Not negotiating better on the price was my main mistake.

 

[HumblePie]

Can't say a realtor ever did that for me. Isn't that why you typically have a $600 title inspection as part of the closing cost on a loan?

Doesn't catch everything. Especially things like yearly ag receipts. In texas, to have Ag tax exemption on land, you have to prove through receipts that you've been using the land for agriculture for 5 out of 7 years stretches. If you don't have those receipts, Texas will revoke the exemption and backdate the taxes for the entire 7 year stretch. Or worse, they can go up to the last non Ag exemption date tax paid. Which could be further than 7 years. People have been screwed over that way.

My parents almost got screwed over when buying their house. The seller was his own builder and had some extra lien on the house that didn't show up under on the title. Not sure the circumstances, but the real estate agent caught it before my parents closed.

 

[HumblePie]

WHAT?

Where was this? I thought gutters were a code item? I can see the grass not being included and question the A/C a little as well depending on where the house was built.

A/C is coded here, but the other items aren't always. Gutters and lawn aren't included in the price always around here in Texas.

 

[soulcougher73]

If you live where it snows make sure driveway is not in shade all day lol. I'd have to shovel my driveway while guys across Street just let the sun melt it

 

[WiseUp216]

Good stuff so far, everyone. Thanks.

We've had an initial meeting with a realtor that we met in a first-time home buyer class a couple of week ago. So far so good, but I'm an extremely skeptical person by nature, so I'm always looking for ways that people will try to screw me. That mindset will probably help over the next couple of months.

I'm finishing our taxes and gathering documents for a meeting with a lender in the next week or so.

We're keeping our target very conservative, almost to the extent that I have to remind myself not to buy too little. I want something that we can pay off in 10-12 years and not get stuck in perpetual debt-hell.

Eventually, we want a sizable amount of land so this property will be our stepping stone to what we want down the road.

We've been renting a house in one of the most densely populated neighborhoods in the country for the last 6 years and it has really turned into a nightmare. City livin' doesn't appeal to us anymore.

 

[SpatiallyAware]

My biggest advice.......
Hang out at the bus stop when school is released. The behaviour of kids getting off the bus will tell you far FAR more about a neighborhood than anything else. If they're heathens, throwing rocks and kicking cars... Do not move there. Even $$$$$ neighborhoods can end up with these sorts of situations, so don't assume that just because it's nice that the kids are behaved.


You will NOT know what you want/need until you've lived a couple of places on your own.

I strongly suggest renting a couple of places before buying a home. It lets you figure out preferences regarding things like eat-in kitchens, closet sizes/orientation, bathroom requirements (one sink or two? big tub? walk-in shower?), 1 floor vs 2+, storage requirements, yard requirements, do you want garage facing the street?.. and on and on.

Big +1 on large garage and storage spaces.

Realtors are NOT trustworthy people. Read up on why they push you to buy immediately. They WILL try to talk you into specific properties at inflated prices. They get a % of the sale, it is in their best personal interest for you to overpay.

Listen to your parents. So many kids ignore their parents and buy some POS house and regret it in 5-10 years.

Assume you will have two kids. Worst case, you have bonus guest rooms. Do not buy some tiny 2 bedroom townhouse unless you're single OR want to be a landlord and/or underwater when wifey says she wants a 4 bedroom house in the burbs for the kiddos.



Finally.. It is FAR better to rent than buy a house that you will be unhappy with in a few years.

 

[NetWareHead]

Eventually, we want a sizable amount of land so this property will be our stepping stone to what we want down the road.

We've been renting a house in one of the most densely populated neighborhoods in the country for the last 6 years and it has really turned into a nightmare. City livin' doesn't appeal to us anymore.

make sure you understand what you are getting into as far as maintaining outdoor property e.g. mowing lawn, snow removal, landscaping etc... Anything you never had to take care of living in a rented house will now be your responsibility. Put together a list of machines (lawn mower) etc...) you will need for outdoor tasks and make sure you factor that plus fuel, maintenance of tools etc... into your calculations.

 

[mrrman]

Make sure that there are no big trees growing by the house, the roots go under the foundation and cracks it. Make sure that the perimiter of the house is not covered by trees, no sunlight equals alot of moss and rot.
This is how my now wifes house was before we sold it. It was an AS IS sale.

 

[Mermaidman]

When we closed on our new construction house, the developer paid its pro-rated portion of the estimated property tax for that year. We received our property tax bill many months later and found out that the tax was very under-estimated during closing. The estimated tax at closing was based on the previous year, which the county taxed as an unimproved lot, and the actual bill was based on the property's new value. I'm not sure if it was a sleazy move by the developer, or an honest mistake, or neither.

WHAT?

Where was this? I thought gutters were a code item? I can see the grass not being included and question the A/C a little as well depending on where the house was built.

We learned during our second house purchase that refrigerators are not typically included with the house! (Our previous house came with a fridge.) It just seemed so arbitrary that the stove and dishwasher are included, but not the fridge . . . Anyway, we got the builder to include one.

 

[gscone]

Buying my 1st home around the corner. Did you ask to get the garage insulated? 2nd or 3rd heating/ cool zones?

 

[Midwayman]

Upgrades are something you will probably never finish if you move in first.

Make sure you know the taxes, if the tax is special rate (senior etc), any HOA fees- especially special assessments coming up. Talk with the neighbors especially if in a HOA to get the feel for how it is run. Also good to know if the neighbors are friendly or crazy first.

Check out the parking situation at night when everyone is home. I was shown my first place during the day and parking ended being much worse than I anticipated.

Remember that realtors want to close the deal. They care zero about you or the seller. They will push you to accept a poor deal to ensure they get their commission. Don't trust them.

Hire a lawyer to review your contract. Some states amazingly don't require this.

 

[NoCreativity]

When we closed on our new construction house, the developer paid its pro-rated portion of the estimated property tax for that year. We received our property tax bill many months later and found out that the tax was very under-estimated during closing. The estimated tax at closing was based on the previous year, which the county taxed as an unimproved lot, and the actual bill was based on the property's new value. I'm not sure if it was a sleazy move by the developer, or an honest mistake, or neither.

It would have been nice of them to tell you but that's more of a "you should have known" thing. Another good tip for OP though, make sure to research the property tax you will pay so you don't get a surprise.

 

[vi edit]

All I can say is that the grass isn't always greener with home ownership. Ever increasing property taxes, maintenance, upkeep, cost/stress of reselling should you need to relocate or want to upsize.

Sit down with your S/O and really talk through your plans for the next 3-5 years. If there's a hint that you might be living in a different area or having a major life change...then keep renting. Between closing costs, "moving in costs" making the place your own, and eventual realtor fees to sell it at some point it can be a huge financial burden to get out of that home if you need to shortly after settling in.

If both of your jobs are steady, you have lots of friends/family in the area and plan to stay there then the choice is probably easier. I've just made that mistake myself of buying when I should have rented. I know several others that did the same as well. Buying isn't foolproof. Especially if it's your first place and you may not have a lot of equity in it.

 

[SpatiallyAware]

Also look for shallow dips in the yard, particularly if the house was built 1970's-late 90's. If it's buried construction trash it is a MAJOR pita to deal with.

 

[vi edit]

When we closed on our new construction house, the developer paid its pro-rated portion of the estimated property tax for that year. We received our property tax bill many months later and found out that the tax was very under-estimated during closing.

New construction almost always have super low rates the first year. The builder only pays taxes on the raw lot. It takes a year'ish for the full tax assessment to be due.

While the builder may have owed $400 for the year, once they hand it over to you it might be now $4000. That's just how new construction works.

 

[13Gigatons]

The Check List:

Don't buy an old home. They have lead, asbestos, mold, old furnace, old air conditioning, old plumbing, old electric. etc.

Don't buy in a Flood Zone. Besides the high cost of flood insurance, the chances are going up that heavy rain will flood you out.

Don't buy a home with a basement. They sound great but the downside can be horrible. They are naturally flood prone. If you do make sure the home has overhead plumbing and at least 2 sump pumps that are new and working. Test them regularly and replace them often. Also have at least one that runs off a battery.

Don't buy a meth house. Seriously do not.

Large garage is ideal whether attached or not.

New homes are usually better but also have pit falls. Know the builder, research him, the internet may not provide you with all the details about the builder and any complaints. You may have to dig deep.

Talk to your neighbors before buying. Ask them questions about the area. They will give you the pro's and con's of living there. Plus you will need too get along with them so you need to have some idea of the kind of people they are.

 

[SpatiallyAware]

Do not buy old homes..... What???


It is very difficult to find new construction at the quality we had in the 60's-early 80's. VERY difficult. And if you do, you will pay $$$+$.


There is nothing wrong with old homes. Get it properly inspected and tested.

And talk to the neighbors... ROFL.... Trust me, every neighbor will tell you the neighborhood is WONDERFUL and nothing wrong at all. Just buy the house please and keep our property values up!

 

[NoCreativity]

New construction almost always have super low rates the first year. The builder only pays taxes on the raw lot. It takes a year'ish for the full tax assessment to be due.

While the builder may have owed $400 for the year, once they hand it over to you it might be now $4000. That's just how new construction works.

Nice quoting skills

If you build new, research the builder. I would also speak to the city inspectors who do the new builds. They may be able to provide some insight about the various builders.

 

[vi edit]

Don't buy an old home. They have lead, asbestos, mold, old furnace, old air conditioning, old plumbing, old electric. etc. Don't buy in a Flood Zone. Besides the high cost of flood insurance, the chances are going up that heavy rain will flood you out. Don't buy a home with a basement. They sound great but the downside can be horrible. They are naturally flood prone. If you do make sure the home has overhead plumbing and at least 2 sump pumps that are new and working. Test them regularly and replace them often. Also have at least one that runs off a battery.

All of this is entirely subjective to geographic areas, attention to building and what you define as "old".

A basement is almost a requirement to me. Just 3 months ago I watched half a town be literally destroyed by a tornado. All that was left was subfloors. All that kept people alive were their basements. A slab home would have been a sure death in that situation.

Water can be very specific to region and the water table to that area/lot. And it can also be largely mitigated with proper attention to elevation, backfilling, and drainage. So many homes with "wet basements" can be fixed by having cleaner gutters and better places to get rid of water.

Basements are cheap storage and additional living spaces. It is also one of the warmest places in the winter in a home and the coolest in the summer. They are very comfortable. It's hard to beat the cost per sq/ft to add extra living space if you have an unfinished & dry basement.

As far as your other concerns, it's just all relative to region.

 

[HumblePie]

When we closed on our new construction house, the developer paid its pro-rated portion of the estimated property tax for that year. We received our property tax bill many months later and found out that the tax was very under-estimated during closing. The estimated tax at closing was based on the previous year, which the county taxed as an unimproved lot, and the actual bill was based on the property's new value. I'm not sure if it was a sleazy move by the developer, or an honest mistake, or neither.

In property tax states, that is how it normally works.

I bought my house in August. The tax is assessed and appraised yearly. So at the beginning of 2013, the land was just a lot of undeveloped land. Until a house is put on there, it is taxed as undeveloped land for the entire year.

So my taxes for this year were like $400 since August. However, my next year tax are going to be much higher than normal. This is because my house will be appraised this year and it will include taxes from when the house was sold. So that means I'll have to eventually pay the taxes from when I bought the house, on August 2013, until the end of December 2014. Minus the $400 already paid of course. Which is about a months worth of taxes for me. Since my month taxes are going to be about $400ish... I'll be paying for 16 months of taxes come December. My county has tax due date on December 31st, unlike most other counties around here having it on January 31st. So I'll owe about $6400 in property taxes. Which means I'm putting about $530 into escrow every month now to be on the safe side. Since I'm setup to have the bank pay my taxes through escrow. Kind of sucks, because you have to pay that stupid escrow management fee. Next year I'll drop the escrow and do it myself. The only reason I didn't is because I have a VA loan and it's a requirement to use escrow for a year on the loan.

 

[HumblePie]

Do not buy old homes..... What???


It is very difficult to find new construction at the quality we had in the 60's-early 80's. VERY difficult. And if you do, you will pay $$$+$.


There is nothing wrong with old homes. Get it properly inspected and tested.

And talk to the neighbors... ROFL.... Trust me, every neighbor will tell you the neighborhood is WONDERFUL and nothing wrong at all. Just buy the house please and keep our property values up!

The bolded depends on the area and codes being enforced. My area is really heavy with coding structures on energy efficiency for new home. Modern PEX for plumbing, 90 degree gates, A/C zoning,massive amounts of insulation, argon filled double pane windows, and other things make newer houses here really attractive. But they can be a bit pricier than older homes that don't have a strict codes enforced on them as a newly built one.

 

[SandEagle]

when I bought my home, I wasn't thrilled with how the carpet looked in the bedrooms. I asked the agent to go back to seller and see if they would replace the carpet. They agreed to meet me half way on the replacement price and knocked an additional 2K off of what we had agreed on. Go in with the mentality that everything is negotiable. The market is in your favor.

 

[Scarpozzi]

I didn't make this mistake, but you need to assess where you want to buy. Location is almost more important than what you purchase.

I was able to buy a home less than a mile from a country club, a US Senator's house, an organic grocery, a few bars, a CVS, and 2 miles from the downtown streets of a decent-sized city for under $100k. I sold it 4 years later when the market was down (was moving out of the area).....I sold it in a few weeks and turned a decent profit. The house wasn't much... I had 3 family members move within that same time frame (in Atlanta and other cities). All sold their homes were sold at a loss.

Try to find neighborhoods that have upward movement and never buy the nicest house in the neighborhood.

 

[iRONic]

My biggest advice.......
Hang out at the bus stop when school is released.

 

[13Gigatons]

All of this is entirely subjective to geographic areas, attention to building and what you define as "old".

A basement is almost a requirement to me. Just 3 months ago I watched half a town be literally destroyed by a tornado. All that was left was subfloors. All that kept people alive were their basements. A slab home would have been a sure death in that situation.

Water can be very specific to region and the water table to that area/lot. And it can also be largely mitigated with proper attention to elevation, backfilling, and drainage. So many homes with "wet basements" can be fixed by having cleaner gutters and better places to get rid of water.

Basements are cheap storage and additional living spaces. It is also one of the warmest places in the winter in a home and the coolest in the summer. They are very comfortable. It's hard to beat the cost per sq/ft to add extra living space if you have an unfinished & dry basement.

As far as your other concerns, it's just all relative to region.

Storm shelters seems like a no brain-er if you live in Tornado Alley but it isn't actually required by code for even schools or public buildings in areas that were just hit by HUGE twisters recently. They decided it was just too expensive to enforce...again.

Older homes can't be elevated. Clean gutters is obvious. However with stronger storms brewing the sewer systems backup more then they use too. A friend recently lost thousands from the basement flooding. It's just a mess too clean up as well.