Warpath  

Home | Forums | Salary Cap Info | Shop | Donate | Stay Connected




Go Back   Warpath > Off-Topic Discussion > Parking Lot


Real Estate Advice

Parking Lot


Reply
 
LinkBack Thread Tools Display Modes
Old 04-19-2007, 11:49 PM   #1
Franchise Player
 
Sheriff Gonna Getcha's Avatar
 
Join Date: Feb 2004
Age: 35
Posts: 8,317
Real Estate Advice

So I'm buying my first home within the next few weeks. I've done a TON of research into the housing market (particularly mine), financing options, etc. But I've still got a few questions and, given the number of highly intelligent and successful people on this site, I'm looking for advice from some of my warpath brothers.

First, is there any sort of generalized formula for determining whether a house is a "good buy" based the home's assessed value?

Second, to what extent are buyer's agents useful? I know that buyer's agents owe fiduciary duties to their principals, but do such duties actually compel the agent to do what is in the principal's best interests given that their commission is based on the home's purchase price?

Third, how many home inspectors do people typically retain? Is there any way to determine if a home inspector is qualified, other than asking friends? For example, do they have certifications that might indicate that certain inspectors are more qualified than others?

Fourth, what is a good percentage of your gross income to spend on mortgage payments (including escrow)? I know this percentage will vary based on the individual and his outstanding debt, but is there a range for the "conservative" buyer and the less risk-averse buyer?

Finally, what kind of "hidden costs" can I expect to incur? Obviously there is the down payment, loan origination fee, and inspection fees, but what other fees can I expect to pay?
Sheriff Gonna Getcha is offline   Reply With Quote

Advertisements
Old 04-20-2007, 12:03 AM   #2
Inactive
 
KLHJ2's Avatar
 
Join Date: Jan 2005
Location: DC Metro Area
Age: 36
Posts: 5,829
Re: Real Estate Advice

I dont know alot of the stuff that you are asking, but I have read up on the best type of houses to buy. In the Article it stated that you do not want to buy a newer home and have the market dictate to you how much you should pay. It said "instead, purchase a home that is a little bit of a fixer upper", that way you can make improvements on the home and dramatically increase the value of it. The article was in Maxim a few months ago. The person making these statements was some Real Estate Tycoon.
KLHJ2 is offline   Reply With Quote
Old 04-20-2007, 12:26 AM   #3
Playmaker
 
Redskins8588's Avatar
 
Join Date: Feb 2004
Location: Ridgway, PA
Age: 35
Posts: 2,519
Re: Real Estate Advice

Quote:
Originally Posted by Sheriff Gonna Getcha View Post
So I'm buying my first home within the next few weeks. I've done a TON of research into the housing market (particularly mine), financing options, etc. But I've still got a few questions and, given the number of highly intelligent and successful people on this site, I'm looking for advice from some of my warpath brothers.

First, is there any sort of generalized formula for determining whether a house is a "good buy" based the home's assessed value?

Second, to what extent are buyer's agents useful? I know that buyer's agents owe fiduciary duties to their principals, but do such duties actually compel the agent to do what is in the principal's best interests given that their commission is based on the home's purchase price?

Third, how many home inspectors do people typically retain? Is there any way to determine if a home inspector is qualified, other than asking friends? For example, do they have certifications that might indicate that certain inspectors are more qualified than others?

Fourth, what is a good percentage of your gross income to spend on mortgage payments (including escrow)? I know this percentage will vary based on the individual and his outstanding debt, but is there a range for the "conservative" buyer and the less risk-averse buyer?

Finally, what kind of "hidden costs" can I expect to incur? Obviously there is the down payment, loan origination fee, and inspection fees, but what other fees can I expect to pay?
I am not sure on the first 2 questions, but on the third question, when I bought my home 4 years ago, I needed to have it inpected by atleast 2 inspectors. One was a pest inspector, he just checked for termites mainly. The second inspector was a contractor. He basicly looked over my wireing, plumbing, and the foundation of the house. Unless the bank wants a certian type of inspection (e.g. pest controll) a contractor is pretty much all you need. As for being able to tell if one inspector is more quillified than another, I am sure that they may have certificates, but I am sure the certificates are pretty much the same no matter who has them. I would look to see which inspector has the most experinece or a fair amount of experinece.

And the only other hidden cost, or expected cost would be for a lawyer to research the deed to make sure that their is no lein or debts against the house. And depending on where you are buying(e.g. out in the woods or a place with alot of land) as the buyer you may need to pay to have it re-survayed.
__________________
"I am the best at what I do, and what I do isn't very nice" - Sean Taylor
Redskins8588 is offline   Reply With Quote
Old 04-20-2007, 12:43 AM   #4
Franchise Player
 
Sheriff Gonna Getcha's Avatar
 
Join Date: Feb 2004
Age: 35
Posts: 8,317
Re: Real Estate Advice

Thanks guys for the advice. I appreciate it.
Sheriff Gonna Getcha is offline   Reply With Quote
Old 04-20-2007, 01:17 AM   #5
Special Teams
 
SkinEmAll's Avatar
 
Join Date: Mar 2006
Location: BillysBurg, Va.
Posts: 489
Re: Real Estate Advice

Hey, congrats on your first home purchase!
With the line of work im in, termite and pest control, i deal with alot of real estate agents and do alot of termite and moisture inspections for real estate transactions. and being a homeowner myself, i can tell you its a great feeling being a homeowner.

Having said that there is no 'set' formula for determining a good buy based on assesment value. it all depends on the appraised value and comps in the surrounding area for similar homes. and remember its a buyers market right now.

Secondly, agents are a trying to get the sale done, and the good ones will do what ever they need too to look after your best interest. Yes they work on commision, but the difference between the asking price and the accepted offer/selling price is only going to be a few hundred dollars in or out of their pocket.

Third, YES!! get a certified home inspector. We have a couple around here who are highly regarded because they are very though. most of the stuff on a home inspecton reports are minor cosmetic things, but a good inspector might reveal something that needs to be addressed before you move in. check with several different agents and see who they would use if they were buying a house, but wouldnt want coming in if they were selling their house . as far as the termite and moisture inspection, its required in most states and the fee is on the sellers side, and by the way when you get your termite report findings and you have any questions, let me know, ill be more than happy to help anyway i can.

Fourth, the percentage that lenders are looking at has narrowed alot recently, do to it being a buyers market and all the forclosers, sorry but i dont know what that percentage range is right at the moment. but my motto is dont bite off more than you can chew comfortably right now. lots and lots of people get more house than they can afford with these 2,3,5 year arms or interest only loans and when that 2,3 or 5 years comes up they cant afford the payment. get what you can afford comfortably right now, and if you make more money 2-3 years later you can sell and get more house, or add a nice pool or addition or whatever.

Lastly, your closing attorney or title/mortagage company can give you every fee your gonna pay, itemized. this is something you need to really shop around on. alot of these companys charge alot of bogus fees. get total itemized quotes from several companies and compare. hope that was somewhat helpfull, and again congrats on your purchase. oh yeah, unless its a new or newer house get a home warranty, about 200-300 for a year to cover major repairs of appliances, hvac, electrical and so on. sometimes the sellers offer it or will if it means they have a deal or not. good luck.

Last edited by SmootSmack; 04-20-2007 at 01:30 AM. Reason: separated into paragraphs-easier to read
SkinEmAll is offline   Reply With Quote
Old 04-20-2007, 02:34 AM   #6
Franchise Player
 
jsarno's Avatar
 
Join Date: Mar 2004
Location: 31 Spooner St.
Age: 39
Posts: 9,534
Re: Real Estate Advice

Quote:
Originally Posted by SkinEmAll View Post

Secondly, agents are a trying to get the sale done, and the good ones will do what ever they need too to look after your best interest. Yes they work on commision, but the difference between the asking price and the accepted offer/selling price is only going to be a few hundred dollars in or out of their pocket.
I've been a home owner since I was 22, I will tell you, agents are just sales people out for THEIR best interest. They will act like you are their best interest...don't be fooled. Go in confident, and offer low. Meaning...let's say the house is on the market for 200k, offer 180k. You never know who is desperate to get out. If they don't like it, they will make a counteroffer, or you make a counteroffer. My first house was a HUD repo, and they wanted 79k for it...I offered 53k and they took it without negotiating. I fixed up every room and redid the kitchen myself and I sold it for 110k 7 years later.

Quote:
Fourth, the percentage that lenders are looking at has narrowed alot recently, do to it being a buyers market and all the forclosers, sorry but i dont know what that percentage range is right at the moment. but my motto is dont bite off more than you can chew comfortably right now. lots and lots of people get more house than they can afford with these 2,3,5 year arms or interest only loans and when that 2,3 or 5 years comes up they cant afford the payment. get what you can afford comfortably right now, and if you make more money 2-3 years later you can sell and get more house, or add a nice pool or addition or whatever.
That is great advice. Beware of ARM loans...I hate them, and never recommend them. Take the fixed rate, and if the market offers a great interest rate in the future, refinance. I went from 9.25% to 5.99% after I refinanced. ARM loans will kill you if you aren't paying attention and preparing for a hike.
A $400,000 loan at 7.5% interest over 30 years is $2,796.86 a month.
A $400,000 loan at 8.0% interest over 30 years will add $138.20 a month to your mortgage. Don't think that .5% matters? Think again.

Quote:
Lastly, your closing attorney or title/mortagage company can give you every fee your gonna pay, itemized. this is something you need to really shop around on. alot of these companys charge alot of bogus fees. get total itemized quotes from several companies and compare. hope that was somewhat helpfull, and again congrats on your purchase. oh yeah, unless its a new or newer house get a home warranty, about 200-300 for a year to cover major repairs of appliances, hvac, electrical and so on. sometimes the sellers offer it or will if it means they have a deal or not. good luck.
One thing you need to look out for is PMI insurance. AKA Mortgage Insurance. I never have gotten a straight answer for what this is really all about...but it's the companies way of getting as much money from you as possible before you can't afford the payment anymore. (assuming they will need to foreclose on you) You can avoid PMI insurance by putting a down payment down that will make your loan to value under 80%. PMI insurance can cost you anywhere from $50 to $200 a month extra, and it's calculated right into the mortgage so you forget it's there. It's a scam if you ask me, but most everyone does it, so it's impossible to avoid it.

Congrats on the new home...I assume you are already approved for a certain amount at this point? If not, you need to find a lender that will give you a figure of how much they will lend you with how much you make. They have specific calculators that will calculate your debt to income ratio and then figure how much you can afford from there.
Nothing sucks more than looking at a house that you KNOW you want, then the financing takes MONTHS and then they tell you you don't make enough, or whatever. Get approved first!
__________________
Zoltan is ZESTY! - courtesy of joeredskin
jsarno is offline   Reply With Quote
Old 04-20-2007, 03:29 AM   #7
Eternally Legendary
 
saden1's Avatar
 
Join Date: Feb 2004
Location: Seattle
Age: 34
Posts: 9,859
Re: Real Estate Advice

1. A house is a good buy if a) you can afford it, b) it has what you are looking for in a house, c) it has no problems, d) in a decent neighborhood, e) you don't anticipate moving in the next 5 years. Basically, if it meets your standards and all your questions have been resolved.

2. Agents are completely useless POS when it comes to everything except helping you do the paperwork. Here in Seattle area the seller pays the cost of both agents so I hire one and I didn't have to pay her. There are good ones out there though who know of homes not listed on MLS. If you already have home in mind then you have room to negotiate with an agent. If you have to pay them then negotiate a discount. If your cost is 3% of the home value tell them you'll pay them 1.5%.

3. You are entitled to ask an inspector for reference. Also, when they are inspecting the home make sure you are there. Don't use an inspector referred to you by your agent. They will tag team your ass. Look for one yourself. I bough a new house so I hired one inspector. She was a nice old lady who crawled into every little possible places. Your inspector should do the same. Also ask them questions about the area they are looking at. Ask them the impact of weather when inspecting the exterior. Ask them about the ventilation of the house, heater, and air-conditioner. These guys get paid no matter what so if they are experienced one is probably good enough but then again it doesn't hurt to have another set of eyes look at the house.

4. Lenders see anyone whose debt to income ratio is lower than 30% as less likely to default. Ideally, you don't want to be living paycheck to paycheck after you purchase a home. If you do all the math you should be able to figure out what works for you. If you are pouring all your income into the house and have no savings left or money for fun activities it is time to rethink the purchase. In any case, it would be wise to take care of your debt before purchasing a house.

5. Avoid anyone that's talking to you about closing costs and other bullshit. I paid no closing costs. And the only fees I paid was $500 to an intermediary (can't remember what they are called) company to hold my down payment and facilitate the purchase transaction and about $200 in misc stuff such as paper work. Also, make sure to get your financing taken care of before shopping. I would recommend going to Bank of America and see what they offer. They are really straight up and they don't have hidden costs. Whatever you do go through a reputable bank.

ps. ARM is not all bad it is just that it allows stupid people who can't afford a home to purchase the said home. From an investment stand point you can't beat an ARM's interest rates. Also, if you intend to sell your house within 5 years, an ARM is a lot less costly than a fixed mortgage.
__________________
"The Redskins have always suffered from chronic organizational deformities under Snyder."

-Jenkins
saden1 is offline   Reply With Quote
Old 04-20-2007, 09:33 AM   #8
Franchise Player
 
Sheriff Gonna Getcha's Avatar
 
Join Date: Feb 2004
Age: 35
Posts: 8,317
Re: Real Estate Advice

You guys are friggin awesome.
Sheriff Gonna Getcha is offline   Reply With Quote
Old 04-20-2007, 09:40 AM   #9
Quietly Dominating the East
 
Hog1's Avatar
 
Join Date: Mar 2005
Location: Naples, Florida
Posts: 9,008
Re: Real Estate Advice

There is world of difference in INSPECTORS. Interview more than 1, or perhaps pay for more than one to be done?
You want the biggest, pickiest asshole in the state. They will want and suggest "their guy" who will the slimiest, loser that can be be bought.
That is how it was with my first house and I fought problems for several years after that should have been caught.
valuable lesson learned
__________________
Goodbye Sean..........Vaya Con Dios
thankyou Joe.......
Win! Always win!
By fair means or foul, by soft words and hard deeds...
by treachery, by cunning, by malpractice...
but always win--Edward Teach
Hog1 is offline   Reply With Quote
Old 04-20-2007, 09:48 AM   #10
Registered User
 
firstdown's Avatar
 
Join Date: Oct 2004
Location: chesapeake, va
Age: 50
Posts: 15,818
Re: Real Estate Advice

Do not allow your agent (if you have one ) line up for the home inspector. The reason I'm saying this is because the Realtor wants to close on the home and if they use a picky inspector it will only delay or void the deal. Find one of your own that is working for your interest and not the realtors. I'm in the insurance business and I have seen too many times when the inspector from the realtor let way too much stuff slide. Insurance Co. may do a quick inspection of a home and I have had several policies rejected due to roofs, siding, and other stuff that the inspector did not list. One that comes to mind is a closing that my inspector rejected due to an old roof with curled shingles. The buyer said that could not be the case as the inspector listed that the roof was only around five years old. I went to check out the roof and it was in bad shape with a few shingles broken off lying in the gutters. Now there was about a 10x10 section that was about five years old but the rest of the home's shingles had no life left. I think that the termite inspection is manditory for most loans but are only around $150.00.
firstdown is offline   Reply With Quote
Old 04-20-2007, 09:51 AM   #11
Registered User
 
firstdown's Avatar
 
Join Date: Oct 2004
Location: chesapeake, va
Age: 50
Posts: 15,818
Re: Real Estate Advice

One other thing if you have any questions about home insurance I'd be more than happy to answere any questions you may have. If your buying the home in Virginia I be glade to give you a quote on a homeowners policy.
firstdown is offline   Reply With Quote
Old 04-20-2007, 09:51 AM   #12
Franchise Player
 
mredskins's Avatar
 
Join Date: Aug 2005
Posts: 8,634
Re: Real Estate Advice

My suggestion would be for home inspectors. Is find one that is willing to come back and go through the final walk through with you. I learned this kind of the hard way. During my final inspection they were racing me through the house trying to cover stuff up with jargon and quick lips. I put on the brakes right there and asked to reschedule. It actually screwed up my closing date, but I didn't care. At the time I was a first time home buyer so basically I just chilled in my apartment another week. My sellers on the other hand got all screwed up the change. Oh well that is what you get for being sneaky!

When we went back for the second walkthrough come to find out they put in the wrong sprinkler heads, cost them another $1k to fix it. I am glad I didn't let them bully me.

ENJOY BEING A FIRST TIME HOMEOWNER! It is a great place to be. Next time you will be both seller and buyer that is when the fun really starts!
mredskins is offline   Reply With Quote
Old 04-20-2007, 09:57 AM   #13
RG Glee
 
Schneed10's Avatar
 
Join Date: Feb 2005
Location: Newtown Square, PA
Age: 35
Posts: 8,288
Re: Real Estate Advice

I can hit you with the financial advice piece, that falls into my area of expertise. Experts generally say your mortgage payment (including escrow for taxes and insurance) shouldn't go higher than 35% of your NET income. My wife and I got married when we were 24 and bought a house right afterwards. At the time, the payment represented 34% of our income. At that level, we were able to save for retirement, pay bills and student loans comfortably, and take the occasional trip. We didn't have children at the time, which should be taken into account. (But I don't think you have kids yet, do you, SGG?) After 3 years, our income has risen, so now we're supporting a young'n and are comfortable with the size of the mortgage payment.

We had a buyer's agent, all she really did was keep an eye out for properties coming fresh onto the market. She also provided info about the whole process, which was good for us as first time buyers not knowing squat. Buyers' agents only make like 1% commission from the sale, so their incentive is to not spend too much time with you, because they could be putting their efforts into selling a house which gets them 5 or 6% commission. So they'll tend to urge you to bid higher on a house you like, just to increase the chances of pushing a deal through. The key for you is to set a price YOU are comfortable paying for the house, and offer that amount, regardless of what your buyer agent says. If the sellers don't like the offer, so be it, but at least you didn't pay more than you were comfortable.

It's generally a good idea not to go with the home inspector that comes recommended by the agents (either buying or selling). Those inspectors have relationships with the agents. All agents want to do is push transactions through quickly; if the inspector is willing to downplay problems with the house, it increases the chances that the transaction will go through. And if the inspector does this for the agent, the agent will feed the inspector more business. This is not always the case, some of these inspectors are reputable. But it's best to find a guy who comes well recommended from friends to do the inspection, and tell your agent to go to hell with whoever they're suggesting.

A few things when you're looking at a house:

- If the house has smells of dampness/must anywhere, DO NOT BUY under any circumstances. Where there is a damp/musty smell, there is ALWAYS mold damage. At age 24, I made this mistake. Last year we discovered rampant mold damage and had to replace all the plywood and 2x4 framing around the side of the house.

- Try to look for houses that are landscaped in such a way to grade water away from the side of the house. It reduces the chances of a flooded basement. Have your inspector look hard for evidence of previous basement flooding. Having a wet basement is a major inconvenience.

- While you're looking for the house, don't be afraid to turn on all the faucets, showers, lightswitches, and flush the toilets. You are familiar with your own pet peeves regarding a house; those little things may not seem like a big deal during the buying process, but over time they'll bother you big time. If you really hate weak flushing toilets for example, or low water pressure in your shower, check for it.

Long post, sorry. Good luck.
Schneed10 is offline   Reply With Quote
Old 04-20-2007, 10:08 AM   #14
Contains football related knowledge
 
JoeRedskin's Avatar
 
Join Date: Mar 2004
Location: Second Star On The Right
Age: 51
Posts: 8,530
Re: Real Estate Advice

In terms of costs for closing, generally, you can expect to pay an additional 6 - 10% of the homes cost in closing fees including transfer taxes and recording fees.

Also, as to PMI, if you are forced to purchase it (and you won't if you are making 20% downpayment) - be sure to get the Tax-Advantage PMI which rolls the PMI into the mortgage loan and allows you to deduct the PMI payments as mortgage interest on your taxes. It costs roughly the same and, in all ways, is similar to the PMI.

How much you can afford is truly up to you. Here is a site with various mortgage calculators that helps you see just what you pay on various types of loans: Mortgage calculators and loan calculators

Your escrow is going to include your real estate taxes and, generally, your homeowner's insurance. The taxes can be found on various places on the web. As for the insurance, you simply need to talk to an agent and ask for a rough quote (get the absolute highest deductibles you can - homeowner's insurance is not to replace the busted front gate, it's to replace the house after it burns down). Once you find the totals, simply divide by 12 and get the monthly addition to your mortgage and interest payment.

Also, once you have a perspective house in mind, you can ask the seller to provide you a copy of the utility bills for the last year. He/she doesn't have to give them to you or may not have them, but, as they are interested in making a sale, they may provide them to you. That way you can get a rough estimate as to what your monthly utility expenses will be and budget accordingly.

Saden, you said you paid NO closing costs? I would love to see the HUD1 on that one.

BTW - if you are looking for a house in Baltimore, I have one going up for sale this week. Lovely neighborhood with a Skins fan right across the street. Act now and I won't have to engage an agent and will discount the price.
__________________
You aren't worth the water in my spit but, maybe, just maybe, you're worth the lead in my shotgun.
JoeRedskin is offline   Reply With Quote
Old 04-20-2007, 10:09 AM   #15
Playmaker
 
BDBohnzie's Avatar
 
Join Date: Feb 2004
Location: Frederick, MD
Age: 35
Posts: 4,465
Re: Real Estate Advice

I bought my 2nd house last October, and naturally, these guys are dead on.

Look at what houses are selling for in the areas you are looking to buy in, use mortgage calculators to see what it will cost, and compare it to how much you can afford each month. When I bought my townhouse, my mortgage almost tripled over what I was paying on my condo, however from the sale of the condo, I was able to pay off a lot of debt and my expenses now are basically the same as they were before.

I am fortunate to know several agents, and happen to use a very close friend of the family that sincerely had my best interest in hand. She made sure that every angle was covered in terms of Comps, what we could afford, etc. and was not pushy at all. Just be aware of what you want in a house, and only make compromises for your sake, not theirs.

Call a few Home Inspectors and ask for their references. The guy we had inspect the townhouse was very thorough, and explained to me every single detail about various things in the house, from how to adjust the temperature on my gas stove to how to change from the gas furnace to the AC unit to whether my type of sprinkler heads were on recall. If you have questions, do not hesitate to ask.

Definitely shop around for the best rates, and be wary of the fees and such that lenders have to obtain those rates. If you can, get a fixed rate with no points. However, if you the ARM rates are low enough, go for it, but be ready to refinance down the road. But be aware that your rate could very well be higher when you Refi. I refinanced my condo to pay off some debt and use some of that money to fix up the condo in order to put it on the market. My rate went from 5.125 to 6.75! However, I moved several months later and it really didn't affect me because mortgage payment didn't go much much.

There are also many first time buyer programs that you can take advantage of. Look into these as well.
__________________
Bad Things man, I mean bad things...

“WE TOOK HIM IN THE SIXTH ROUND SO WE'RE NOT SMART EITHER.” - Shanny on what the Skins saw in Alfred Morris
BDBohnzie is offline   Reply With Quote
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -4. The time now is 12:35 AM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
This site is not officially affiliated with the Washington Redskins or the NFL.
Page generated in 0.62269 seconds with 9 queries

Search Engine Friendly URLs by vBSEO 3.2.0 RC5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25