first time home buying - tips?

[Guest nysos]

I have been shopping for a home and found one that I am ready to make an offer on. I am confident in the house and know what I am getting into in that standpoint - what I would like to know is do you all have any tips or things I need to look for in all the paperwork so that I don't get a surprise down the road. Anything you wish you would have written in as a contingent on your initial offer, but didn't?

The mortgage I will be getting is a 30 year fixed, current rate is 4.375% but not locked. According to my lender I will most likely get the same rate, if not better when it comes time to lock it in.

The main points on the contingent are going to be pending on home inspection, HVAC & utilities working, etc.

I am kind of nervous because I feel like I am being rushed to make an offer on this house (but it IS a really good deal, so if I want it, I have to get in on it now). I just don't want to end up getting locked into something that I regret.

Thanks all.

[dlm37015]

offer 25 % less than there asking price they might take it if not you can always give the asking price because right now its a buyers market

[Guest nysos]

offer 25 % less than there asking price they might take it if not you can always give the asking price because right now its a buyers market

I have been mainly looking at foreclosures and my realtor has been doing the research to see how much the bank has invested in the property to give us an idea of what to offer. The particular home I am interested in is already worth $25,000 more than what they are asking. They are just looking to offload it quick and get the money out of it they have invested.

I actually just got a message actually from my realtor - this house in question went on the market Friday afternoon, we looked at it Monday and again yesterday. Someone already made an offer on it sometime Tuesday, and they accepted it sometime that evening.

[Guest db99wj]

Offering less is sometimes tricky. It doesn't hurt of course, but some folks, who are emotionally involved, will be "offended" and not accept an offer. Just be careful. Also, find out how long the house has been on the market, not this particular listing or with this particular agent, it could have been on the market with another agent previously but never sold. That way you can gauge on how motivated the seller is and make an offer based upon that. Remember, this is business, not personal.

Do you have an agent? I'm all for having an agent that is familiar with local contracts. Look for any exclusions on certain mechanical items. Probably won't be any, but look for anything. Like them throwing in a clause about them not ever being responsible for the asbestos ceiling tiles in the back room or 45 year old furnace, etc.

Also remember, price isn't everything. If they negotiate back toward the listing price can mean a lot of different things. Could be that they are not motivated and willing to hold on to it until the price they want is met, could mean they owe a certain amount and they MUST sell it at or above that price to pay off their loans, or they might have to have that amount in order to buy the house they are wanting to buy. Also, you can offer a little more and get more, new carpet, new roof, etc.

You are getting a home inspection, good. Find a home inspector or ask your home inspector about a home warranty, negotiate out that the seller buys it for you. These cover mechanical items like HVAC, dishwasher, stove, and even the fridge, washer and dryer depending on the contract. AHS has, or use to anyway, a good contract.

Again, if you don't do this very often or have never done this, get an agent. The commission is usually set in the listing contract with their agent, they get X%. If a buyers agent comes in, they will share that %. Agents expect half the commission amount, the selling agent is waiting on another agent to bring a deal, they know this, this is how the industry works, they CO-OP with each other. If they get the whole commission, that is like a bonus (no other agent involved), but remember, the selling agent has a contract with the seller, the sellers interest is their best interest, not yours. You agent has YOUR interest in mind. There will be some haters of Real estate agents coming along, but unless you do it for a living, you need an expert. I was a realtor from 1996 to 2003, I probably still would use an agent today if I were buying.

Go to Chase . com , realtor.com or zillow.com, or many others and do a search for the house you are looking at and look at other recent sales. I would suggest look for sales this year only. Being in Knoxville, you should be good. Also, don't look at a sale and think, that's what I should offer, look at the ownership deeds on those comparable houses. You might see some really low prices on houses, but they are foreclosures and are bank or other entity owned (bought at auction). Those are not a good example of what the market price is. A market price is what a willing buyer and willing seller agree upon. A foreclosure usually deals with unwilling buyers and sellers.

[Guest db99wj]

I have been mainly looking at foreclosures and my realtor has been doing the research to see how much the bank has invested in the property to give us an idea of what to offer. The particular home I am interested in is already worth $25,000 more than what they are asking. They are just looking to offload it quick and get the money out of it they have invested.

I actually just got a message actually from my realtor - this house in question went on the market Friday afternoon, we looked at it Monday and again yesterday. Someone already made an offer on it sometime Tuesday, and they accepted it sometime that evening.

Bleh. I didn't see your last post! I was typing my essay above!

[Guest GunTroll]

Bummer. You'll find another. Plenty out there.

I'll re-hit an important point db99wj somewhat made above as well as what I learned after my first home buying purchase (2009). The home inspection is nice but I'd really get two opinions or do the inspecting yourself or with a person who stands to gain nothing from helping you...like a friend in the construction trade or something. Home inspecting is a joke! They have a check list and stick to it. They have no incentive to go beyond it unless they can be held accountable for a miss, which I'm not sure if they can be. Look into that. A warranty is nice indeed. I'll be taking that lesson to the next purchase!!!!!

Good luck buying a mortgage!

[Guest nysos]

This particular listing was a fannie mae home, so how it was written is sold as is. Buyer has the option to home inspection, regardless of whether a home inspection is required or not - I plan to have my own home inspector come through, and not one paid by the bank. I also will not make an offer on the house until my dad takes a look at it. He is not a construction person by trade, but very do-it yourself around the house with repairs and whatnot. He also would be the first person to call me an idiot and say not to go after a certain house, even more so than if it was just a friend looking at it.

[Wingshooter]

I agree with the points made above about a home inspection and warranty. We have always used AHS for the warranty and has been worth it.

If the house is currently occupied, make sure there is good language about when you take occupancy. If it is AT CLOSING, do a walk through inspection just prior to closing. That's the only issue I have ran into. Occupancy was supposed to be at closing but the previous owners still had a lot of moving out to do when we closed, and we didn't know it. We technicality had occupancy but couldn't move in for a few days.

[Guest 6.8 AR]

Take your good, sweet, time. It's a big investment and you might oughta think about

how it will affect you after you bought it. Home ownership is great, but make sure you

are going to be happy and job is stable.

[Guest GunTroll]

Take your good, sweet, time. It's a big investment and you might oughta think about

how it will affect you after you bought it. Home ownership is great, but make sure you

are going to be happy and job is stable.

.....and you want to have them roots planted, I'd add. I'm a bit of a roamer at heart. Not sure I like the whole roots thing. Added that lesson to the ever growing list of life learned lessons. The scroll is getting long. Curse you hindsight for not helping the foresight!

[peejman]

Easy come, easy go. As stated, it's a buyer's market which my neighbor who just sold his house at a $20k loss will attest to.

Prior thread on this topic... http://www.tngunowners.com/forums/general-off-topic/59034-homebuying-tips.html

[Guest db99wj]

OH, might be obvious, but I've run into this a lot. There is a difference in an appraiser and a home inspector. The Home Inspector is for looking at the structure, mechanical, etc of a house to determine repair/maintenance issues. <(deleted education part, I was not correct, see post a fee down for their education)> An appraiser is there to value the house at a market value. A licensed residential appraiser has to go through 150 classroom hours that are set out by the states and the Appraisal Institute. The class's are at a level similar to undergraduate and graduate schools. If they are a Certified Residential Appraiser they have completed 210 hours of class time. The Licensed guy has to have 2,000 real world experience hours and the Certified guy has t o have 2,500 hours.

The appraiser is an independent person that values the property at market values. If they are in "the pockets" of the bank, they won't be long. Many of those guys are not appraisers anymore due to licensing being taken away, owing thousands of dollars in fines, and a some might still be in jail. The appraiser doesn't care about the loan amount, they don't know the loan terms typically anyway, beyond being an FHA, or conventional loan. The appraiser, with FHA loans, have to do somewhat of a "home inspection" in order to satisfy FHA appraisal guidelines and check off certain items. Other appraisals will take into consideration the overall condition, leaks, roof condition, and other visiable items. They won't be checking toilets to flush, or wiring, etc. They might check or not check other things, but I don't remember. Are there bad ones still out there, sure, but most are true professionals and the bad ones seem to not last long. You will pay for the appraisal typically, sometimes the buyer will (depending on negotiations), but the appraiser is hired by the bank/lending institution. FHA appraisers are approved by FHA, VA are approved by VA. If you buy your own appraisal to be done, the bank will not use it. Their regulators will not allow it. Also, the appraiser can not discuss the value with you, even if you paid for it, due to contract confidentiality agreements.

This is my industry, but I'm not a residential guy. I do only commercial, and have never done a residential home. I have to have 300 classroom hours and 3,000 experience hours. I've had 225 hours and have well over the 3,000. I will be taking 60 hours by year end, taking a 15 hour statistics course first of the year and getting my Certified General Appraiser license shortly after that, got a pass a huge test. The Certified General is the top level of licensing because it allows you to appraise both commercial and residential. I would feel way more comfortable with the appraiser as far as doing the right thing compared to the loan officer you are dealing with. An appraiser is paid a set fee, for a home it might be $350 (I don't know the going rates of a residential appraiser), whether the value meets the agreed upon price or not. The bank will not hire a home inspector, that is up to you.

Edited October 6, 2011 by db99wj

[Will Carry]

Have you driven around the area? A co-worker of mine bought this huge house for dirt cheap. I asked him where it was. When he told me I was shocked. It was right down the street from the Hells Angles compound and on the other side was da Hood. He was from out of town and had not bothered to drive around the area. He sold the house 6 months later at a loss.

[sigmtnman]

Much to everyones chagrin, there appears to be more housing/ asset deflation on the horizon. Be patient. Just wait till the backlog of foreclosures start unwinding.

[oldogy]

Make certain you fully understand all zoning and covenants. Homeowner's association? Rules! Can you live with them? And as mentioned above, neighborhood and surroundings.

oldogy

[lock n' load]

I am in the process of closing on a home that I found. I am now waiting for the final approval from the underwriter at them moment. The house is 15 years old. Most of the homes in the city I plan on living in are 40-50 years old, so I wanted something that wasn't so old that it needed major renovation. I also like where it is because it is close to work. I had the home inspection done a few weeks ago. The lady who lives there had the house built in '96. It appeared that she has taken care of the home, but I had a home inspection done on the home just to be on the safe side. I met with the inspector and she showed me what she had found and how to repair them. The major systems were in good shape according to her inspection. The roof still had a half-life to it. The AC system was in good shape. The crawlspace under the house was clean (plastic covering the ground, plumbing was secured and insulated). After meeting with her, she emailed me a detailed report with photos of the things she found and how to correct them. All of the defects were considered DIY repairs. I did not however, buy a home warranty (dunno if that will bite me in the butt later...). I didn't have the traditional 20% down payment to make when I started looking. I did however, get the seller to pay the remaining closing costs on the home. I applied for a first time homebuyer's program and was approved. It covered the down payment and a portion of the closing costs. My current mortgage payment will be roughly $60 more per month than what I pay for rent now. I will have my truck paid off this time next year and that will be roughly $500/month I will save. I plan on applying an additional $100 per month to the mortgage payment. I have been told by others that this extra money will go directly on the principal and will cut the loan life by about 6-7 years. The neighborhood is on a dead end street so not much traffic. The neighbors that live around there seem to be older people so I hopefully won't have to worry about hell raisers all the time. I am really pumped about buying my own home and not having to pay on something I will never own. There are pros and cons to renting vs. buying, but I think the pros outweigh the cons. I would definitely go with a home inspection prior to buying a home.

[Guest jmac]

Location, location, location! How are the zoned schools? In my personal experience, when we bought our house five years ago, wife and I focused more on the home and not the schools. Now with a depressed housing market and a 2 year old, we will be paying private school "tax" for the error of our ways.

[mav]

Much to everyones chagrin, there appears to be more housing/ asset deflation on the horizon. Be patient. Just wait till the backlog of foreclosures start unwinding.

I hope you are correct. That is what I am waiting on. I have yet to buy my first home, and I am sitting on a lot of cash.

I am a little bit leery of jumping into the housing market right now because so many people are saying this is the best time to buy. I heard that same thing several years ago during the bubble period. Everyone was telling me to buy a house due to the low interest rates. They told me I had to jump in quick because of the exponentially increasing property values. My response then was houses were overvalued and they will eventually bust. I was told that I was nuts because housing prices never go down. Well... everyone knows how that turned out. Now, it seems like I am hearing the same thing. Housing prices and interest rates are low, you have got to buy in now.

I know very little about real estate, but it seems to me that housing prices haven't been allowed to fully correct. I could be wrong, but I think there has been a lot of propping-up and manipulation of the housing market by the federal government. The economy isn't improving, employment sucks, and when the government manipulation (subsidies, tax credits, mortgage relief, etc...) ends, I can only see one way for housing prices to go, down.

As I said, I know very little about real estate, and perhaps I am missing a wonderful buying opportunity, but I have such an aversion towards herd mentality. I really don't know what to do.

Anybody have any comments regarding financing a house versus buying it out right?

[Dad03]

All of the above is good advice. A home inspector is a joke. Have a licensed electrician, roofer, HVAC, etc come out and inspect the systems. A home inspector has a flash light, a receptical test light and a clip board.

[Guest TresOsos]

A lot of great advice expressed here, the only thing I would add is buy it as a place to live and enjoy, not as an investment.

It will be a long long time before housing recovers.

[Guest justluck]

If there are neighbors, go talk with them during the looking phase. You'd be surprised what you can learn about the house and the neighborhood.

[Randy W]

Trying not to take it personal but.... I am a HOME INSPECTOR and what we do is not a joke..... We have to be licensed by the State had to go to school, continue going to school to renew license every 2 years. Take and pass exams to keep license. Now that rant is over. A home inspector looks at 5 major parts of the home. Electrical, Plumbing, Roofing, HVAC, and Sturcture and Foundation. Every thing else is mostly cosmetic on the house. Now not all inspectors are the same and there are questions you should ask. You should be at the inspection. Does the inspector climb on the roof if safe to do so? State only requires looking from ground with binoculers. Mold certified? A good inspector will take the time to walk you thru the house top to bottom and explain his inspection and answer any questions you have that come up.

[Guest db99wj]

Trying not to take it personal but.... I am a HOME INSPECTOR and what we do is not a joke..... We have to be licensed by the State had to go to school, continue going to school to renew license every 2 years. Take and pass exams to keep license. Now that rant is over. A home inspector looks at 5 major parts of the home. Electrical, Plumbing, Roofing, HVAC, and Sturcture and Foundation. Every thing else is mostly cosmetic on the house. Now not all inspectors are the same and there are questions you should ask. You should be at the inspection. Does the inspector climb on the roof if safe to do so? State only requires looking from ground with binoculers. Mold certified? A good inspector will take the time to walk you thru the house top to bottom and explain his inspection and answer any questions you have that come up.

I stand corrected on the education part of my earlier post. Glad to see the training and licensing is better. When I sold real estate, I always suggested and referred them to a qualified inspector. I saw a lot of bad ones though.

[peejman]

I plan on applying an additional $100 per month to the mortgage payment. I have been told by others that this extra money will go directly on the principal and will cut the loan life by about 6-7 years.

A very good idea, but you must specifically designate the additional payment to go solely against the principal. There's usually a check box or note field where you denote this. If you don't designate it, the bank can choose where it goes and they won't choose principal.

Trying not to take it personal but.... I am a HOME INSPECTOR and what we do is not a joke..... We have to be licensed by the State had to go to school, continue going to school to renew license every 2 years. Take and pass exams to keep license. Now that rant is over. A home inspector looks at 5 major parts of the home. Electrical, Plumbing, Roofing, HVAC, and Sturcture and Foundation. Every thing else is mostly cosmetic on the house. Now not all inspectors are the same and there are questions you should ask. You should be at the inspection. Does the inspector climb on the roof if safe to do so? State only requires looking from ground with binoculers. Mold certified? A good inspector will take the time to walk you thru the house top to bottom and explain his inspection and answer any questions you have that come up.

A licensed, experienced home inspector is a worthwhile investment. I also strongly encourage the prospective buyer to be present during the inspection. Follow the inspector around and ask lots of questions. Find out who built the house and their reputation. Both the realtor and home inspector should know. Be very suspicious of "owner renovated" houses in areas were permits/inspections are not required.

[Guest nysos]

Ok, a little update on my adventure. House in question came back up on the market, which gave me plenty of time to review paperwork. Now that I know what I am getting into I feel very comfortable. My realtor and I wrote up an offer and it got accepted. On Monday I am meeting with my realtor to schedule a home inspector to where I can be there. If the home inspection doesn't turn up anything drastic that we already didn't know about, I will be following through with the purchase. The one thing that was reassuring about this home, is that it needed work - but it didn't have any work done to cover up the original problem. All the problems were there to see. A previous house I looked at, the owner had done a lot of work (which as far as the wall treatment, and renovation of the bathrooms - it was all really nicely done!), but some of the work done we aren't sure if they were just doing it to make it look better, or to cover up a bigger problem.

Thanks all for the tips, it has helped out a lot, and also helped reinforce some of what I already sort of knew, but was just unsure of. I plan on doing some research on some home inspectors today, but if anyone knows one in the Knoxville area that they recommend, please let me know.

Thanks again.