Alright, I've been racking my brain trying to think of something I could contribute to this knowledge sharing fest. I don't consider myself a woman of any special talents, and I don't have an impressive knowledge of any really interesting topic. However, since purchasing our first home two years ago, I have gained quite a bit of knowledge on THAT whole process. Since we are all in that stage in our lives where we have recently bought or will soon buy our first or second home, I thought I'd share. We are starting to casually look for our next home, as our first house is very much a starter home and really doesn't have room for more than one child! I feel like I have learned more recently that I wish I would have known the first time. Here's a few examples:
Foreclosures: Something like 1 in 10 houses right now are in foreclosure. This is sad for the people who have lost their homes, but great for someone looking for one! I really wish we would have looked at foreclosures and preforeclosures more the first time. You can get an amazing bargain. One of the myths is that foreclosures = dump. This is sometimes the case, but other times it's a new, nice house, that someone thought they could afford and then lost a job, or whatever. When it is a bank owned property, the bank is desperate to stop losing money, and they will settle for the minimum they need to "not lose money." Usually the price you see is already lower than a typical house in that range, and my realtor just informed me that the bank will usually accept an offer 10-15% below THAT. Bad news...they go fast when they are such a good deal, so you have to be on top of things. More bad news...the bank won't even consider an offer on a foreclosure if you have a house to sell first. That's the bummer we just realized, because we had been looking at a lot of foreclosures. But if you're looking for your first house, I think this is definitely something to look into.
Get a Realtor! When we first started looking at houses, I though "I'm not that serious, if there's a house I'm interested in, I'll just call the number and ask to see it." That's not the best way to do it though. The realtor trying to sell the house wants to make money, so they're not necessarily going to do what's in your best interest. But if you get your own realtor, you sit down with them, tell them what you're looking for (you can be as picky as you want) and they will go to work for you! With the internet these days, they can set you up with a search that will automatically email you new listings that come up within your range. You can literally shop for houses from home, and when there's something you want to see in person, you have your realtor take you. Best part is, you shouldn't have to pay them anything. They get paid by the person selling the house when you buy it.
Choose Your Lender Carefully: My mom is a banker, and she warned me often about all the mortgage companies that are out there. As a general rule, a bank is usually a safer option. But some of the mortgage companies are ok, just do your research and check out their credibility. Also, know about the different kinds of interest rates, and definitely watch out for adjustable rates. This is how a lot of people end up in foreclosure! Overall, just know the options available to you. For instance, in MI you can qualify for a MCHDA loan if you are a first time home owner and get a way lower interest rate. So do your homework!
Don't Settle! I was so anxious to get into a house, that I almost signed a purchase agreement twice before we found our actual home. Luckily I had a great realtor who could tell I wasn't really in love, and he didn't let me settle! Every house we looked at seemed better than the last. This is an area that you should let yourself be picky about. You are going to spend a lot of time in your house, and pay a lot of money for it. You should love it! Overall, I'm happy in our home. But sometimes I wonder if I would have found something I was really crazy about if we had kept looking. I'm trying not to settle for a second one until I love something so much I'm afraid to go to sleep for fear of someone else getting it before us!
Other random tips:
Consider resale value: the neighborhood, how old the house is, etc. You realtor will have good tips about it
Consider other costs besides just the purchase price: what kind of work it needs, how old the furnace is, roof, etc.
A big one: find out what taxes are in the area. This could add several hundred dollars a month to your mortgage if it's a high tax area!
Hope this didn't put you to sleep and that you found something useful in it!
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7 comments:
Thank you! We are hoping to buy our first home sometime in the next year, so your information was great.
What a great post, Steph! We kind of learned all of that too as we were going through the process. We happened to luck out with an awesome real estate agent and she fought to get us into the house we loved! There's no way we would have been able to do it on our own, we'd probably still be living in a townhouse!
Great tips! I won't be looking for a home for another year or so, but this is great knowledge that will help tremendously.
I loved the don't settle advice! Our realtor was great at that-always assuring us that we would find something better!
Thanks Steph!!
The first ever house my beloved and I bought about 25 yrs ago in Elyria, OH was a VA repossessed home. At the time we were poor as churchmice and could not have afforded the transition from renters to owners any other way.
Since that time we've bought and sold three or four other houses, but I have so many fond memories of that first wreck of a house. We worked on it for several years to reclaim from it's many years of neglect. We stripped off a dozen coats of paint from solid oak baseboards and window casings, papered the walls, re-did the plumbing and so much more. We lived there about four years - made friends with your parents, and I got bitten on the toe one day by your infant brother (OUCH!) during a Sunday School class. I looked at the child in outrage only to be met by your mother's unflappable comment given without missing a beat: "He must have thought it was a hot dog!"
(Truth be known I do have long toes, but that taught me not to wear open toed sandals to church without hose even on the hottest of summer days!)
ANYWAY....enjoyed your blog - some good stuff here.
Buying/selling of real estate can be a complicated process. I think it is great that you are demystifying the process somewhat.
Blessings...
(LyndaB.)
Hey Belladonna - You lived in Elyria, Ohio???? I am originally from Sheffield Lake! - Jocelyn
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