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1431
Joined
7/24/2012
Location
St. Paul-ish, MN, USA
Edited Date/Time
5/28/2016 8:16am
So my wife and I are getting ready to buy our first house, and I am torn on a couple things, looking for some random online peoples $0.02.
We are looking at a few houses this weekend, some that have a couple acres, but are 30mins from town, and some that are in suburbia, small yards, but close to everything.
I have already convinced my wife that a 3 car garage is mandatory for bikes and winter parking.
Anything else I should think about, consider or you wish you did or didn't do when buying a house?
We are looking at a few houses this weekend, some that have a couple acres, but are 30mins from town, and some that are in suburbia, small yards, but close to everything.
I have already convinced my wife that a 3 car garage is mandatory for bikes and winter parking.
Anything else I should think about, consider or you wish you did or didn't do when buying a house?
Good luck!
The neighbors thing, very important.
When you narrow it down, take the time on the weekend, knock on their door, and introduce yourself.
Most will really like that, and you will get the inside scoop on what's up in the area right away.
Take off one morning from work, go there real early, and take a test drive to your job when you will after you move in.
I lived in a place that had 2 bottlenecks every morning, 7am to 8.30, and 2 bottlenecks every evening, 4 to 6pm.
Sat in traffic almost 2 hrs a day.
See what the property taxes, and any community fees, if any, are.
Lastly, pay the place a visit when it's raining. Check the attic and basement and make sure they stay dry.
Everything looks good on a sunny, Sunday afternoon.
Good luck dude.
when i was house shopping my dad always told me, "no matter how much you like that house, take a good look at your neighbors, how they upkeep the yard, how many cars they always have parked, cleanliness, etc"
well, i should have listened to him. had the same low-life neighbors for 10 years. they park 7-8 cars up and down the road in front of my house almost every day. don't take care of their yard. have been parking on their lawn to save space. park on the road when the snow-plows come so my section doesn't get plowed. they've stolen my garbage cans from in front of my house. so many issues.
back to the original topic, i would put a value on the 30 minutes from everything and maybe take my chances of having to drive a bit more and have a nicer property and some land. living close to everything is nice, but so is being a bit more secluded.
The Shop
Luxon 4-Post Bar Mounts
$189.95 - $239.95
DeCal Works Huge Plastic Inventory of UFO and Polisport kits.
Check out google earth and get yourself a birds eye view of your neighborhood (you never know what some people keep in their back yard-yes google earth isn't 100% current) and even the surrounding neighborhoods (is there a gravel pit a couple streets over? A construction yard? those kinds of things). Drive around the neighborhood, all the streets, and do it at different times of the day.
I also think its a good idea to see how much traffic will be on your street...this is more important if you have kids...but usually there is 1 or 2 streets that feed into a neighborhood, if your home is on one of those streets, that means everyone living in your neighborhood will be driving past your house.
Get a home inspection.
Meet your immediate neighbors.
Shop for your mortgage with at least 3 different lenders (I can tell you the best way to do this if you are interested). Price (rate and fees) are important, but if you've got 3 quotes that are really close to each other, pick the loan officer that you like the best, that you think you'll get a long with the best, and that you think will do the best job (I can offer you some questions to ask them to help weed out the bottom feeders, again, if your interested). I always say that price is far more important at the beginning of the deal than at the end (at the end you just want to close on the loan so you can move in, and if that cheapest lender isn't calling you back, and you aren't meeting deadlines, and there is constant issues...saving $500 on closing costs doesn't matter as much any more).
Don't let a lender tell you how much you can afford...sit down with your wife, and figure out what payment amount will fit in your budget.
Don't let your agent talk you into looking at houses that won't fit in your budget.
Being house poor sucks.
Tell your wife she can pick the house...but you get to pick the garage. Saves a lot of, um, discussion.
If the home is occupied...see if you can get a look in the sellers vehicles...they will have the home clean as can be when you come to look at it...but if their cars are trashed and a disaster inside, then they likely treated the home the same way. Not necessarily a deal breaker, but its a red flag.
If you have easy access...have a look at the filter in the furnace/AC...if its clean they likely took care of the rest of the home...if it looks like its never been changed, then that's a red flag that the furnace/AC unit haven't been maintained (which may mean a shorter than expected life span).
If I think of any more, I'll post them up.
From an investment standpoint, you usually don't want to have the biggest, most grandiose house in your neighborhood. That home's value gets drug down by the others. The smaller houses get their value brought up by the larger ones.
Definitely go over any covenants/CCRs well. I know people who just signed everything in front of them then realized that they had to get permission to paint their own home.
Leveraging the entire appreciation of a property and only putting 5% of the value down is a tremendous advantage, and that's before itemizing interest deduction, avoiding capital gains taxes, etc. A home could appreciate at half the rate of the market over a 20yr. period and still net a far better return if you put 20% or less down payment into the place. Not to mention that in 20 years the mortgage payment is likely to be far below current rents if they started out similar.
Here's a graphic that shows 20% down from 1994 to 2014 in the Bay Area. The return would be much greater with a lower down payment.
1 - If you're moving outside of city limits, be prepared to have shit for internet and TV options. Most cable providers only serve densely populated areas and internet is usually radio tower line of sight service. They limit you're usage and throttle your service over a certain amount and the data usage is very low.
2 - Look at the electric bills for the house you're wanting to buy. You can usually contact the local electric company and get the usage of the home you're looking at. Electricity is a much larger expense than you've been paying in an apartment.
Home ownership is awesome but you also have to keep up with the maintenance or it will become one big headache at the least convenient time possible.
Have a roofing contractor inspect the roof from inside and outside. Dont rely on a general house inspector for everything, most know a little about a lot, big ticket items you want someone who knows a lot about a little.
Ask for a moisture meter to be run around bathroom walls, kitchen walls, and around windows and doors. Easiest way to see if flooding or prior water damage has been covered up. Potential for black mold if repairs are not done correctly is huge. Black mold can kill you.
I did a simple Google of homes as just an investment, let alone a "long term investment" and the only folk selling that a home is an investment usually have a job in the industry. I hate when real estate people or mortgage brokers without any degree but a license they earned, become economic advisors. I know you're an intelligent guy, but even that graph you posted is from a firm with an interest in real estate.
Below I posted the first link that came up on Google search of "home as an investment" , but check Harvard Biz Review, Barrons, Economist, junior college biz 101, etc. and no one would advise household homes as an investment. If you can raise the money and tie up funds for 5-10 years, and play monopoly, you could buy 50-100 properties in the and hope to clear 4-8% on each, depending on interest rates.
http://www.investopedia.com/articles/mortages-real-estate/11/the-truth-…
Pit Row
Nice chimney cap
Yes! An electrical panel in the shower stall!
Need another breaker? Naw man, just tap an existing one.
Home ownership doesn't have that exciting thrill that you get through a stock trade that hits a home run, that's for sure. But it doesn't have to. Generally detractors fail to mention or completely overlook two very important things when considering it as an investment, leverage and rent equivalency.
Leveraging the value of a home for 1/20th of the price is huge. If you put 5% down on a $300K home, it sells for $330K later, you've made a 200% profit! Of course that needs to be laid over time so your likely annualized return would be less.
The argument then turns to your monthly payments and whether they should be counted as part of your investment into the home. That's a fair question, obviously, but the answer can only be "sort of". Anything more than what you'd likely pay in rent could possibly be considered, but using the whole mortgage figure wouldn't be correct in a real world scenario.
The tax advantages are also often overlooked but is recognized more than the others.
The Bay area was the last area to dive and fastest to come back.
He is also correct on 1930-2003 but I would extend to 2006.
In fact, it lost so little that when things were the worst, the was a time when 3 surrounding counties had ZERO properties for less than 500K of any kind.
Long term for houses now are 5-10 years. Few buy a house and live there 30 years or more anymore. Kids dont marry at 18 and buy local and die local.
15 year loans are impossible for most to affford. Look at cars...6-10 year loans now.
If there were only 18-24 month still....could you afford a 3,000 dollar car payment?
New home builders are leasing..."For sale or lease"
Why sell and make a profit once? Lease it and its all profit.
Deciding to sell your home after a short period of time is certainly a decision that many make. It can be a positive or a negative, financially, depending on market conditions at the time.
I'm not sure the reference to 15 year mortgages. A 15 year mortgage might very well be a negative if you are looking at putting the least input into your investment. Same with making a very large down payment. But that's where emotions usually take over and the idea of having a paid off deed appeals to many.
By "raise the money", it's important to understand that it doesn't need to be a lot of money. You can control a $400K investment for as little as $12K or so, as opposed to having to deposit the whole $400K into investment accounts. If you make 4% on that home, that's $16K. Pretty decent return on a $12K investment. If you double that return in your investment accounts, say 8%, you make $32K. But you had to put up $400K to do that. Not to mention that that money is now fully taxable, while profit from selling your primary home is largely considered as non-taxable income.
Ideally your total investment "portfolio" contains many instruments, not just one. The idea that you are going to have to pay to live somewhere (unless you live with parents forever I guess) makes home ownership a great investment for many/most.
Your results may vary.
Buy a house you can afford, get a short term Mortgage and get it paid off. Money is power the less you owe and the more you have the less power anyone will ever have over you.
You are correct, money is power, and getting to money quickly can multiply that power. A paid off mortgage isn't liquid, and negates a lot of leverage.
But I will admit that I, along with many others, aspire to pay off my own home. I'm just not in a big rush to do it right away. And I know it's mostly an emotional thing.
it's simple to say but hard to do.
Pay off credit card and any debts , save up emergency money , hammer out the mortgage while continuing to build saving / investments.
Absolutely do not pay off a mortgage and be at zero , a person with 100K in savings probably has it figured out unless they did not earn that money themselves to begin with.
I disagree that a paid for home is emotional, that is the over priced car, motorcycle and boat that people have when they really can't afford it.
That breaker box in the pic on the bottom doesn't even meet code any longer. My father in law has that same brand in his mobile home. I've been doing some work over there and it's the jankiest thing I've ever worked on. I'm not doing electrical, but I've had to do some work on a couple of walls that I had to cut the power for and I don't have all that much confidence not getting electrocuted even with the breaker off. . .
Ha, Federal Pacific Stab Loc breakers.
Could not pass UL and NEC back in I think the 60s, maybe the seventies.
Caught altering test data to get approved, outlawed here in the States, but only after a ton of them were put in.
Some say you can run an electric welder on them and they won't pop.
As said, a good home inspector is a must. Try to be there when he inspects, he can also teach you a lot about the place.
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