Questions about buying a house

MTK · 05-23-2005, 01:06 AM

Hey guys, I'm looking to start the whole house buying process but I have no idea where to start. What do I do, contact an agent? Get pre-qualified? Any advice would be greatly appreciated.

That Guy · 05-23-2005, 02:06 AM

contact an agent
talk about price ranges and availability
go look at houses
get approved for a loan
haggle/write a contract
settle

if you need something more specific, let me know

FRPLG · 05-23-2005, 09:21 AM

I would change that order somewhat...
You need to get pre-qualified for a loan first to properly discuss price ranges and look at houses. You'll probably qualify for more than you realize. The key is to get your payment where you are comfortable. That will depend on how much you end up financing. Also...if at all possible always try to put 20% down. This gets you out of PMI which is completely wasted money that you have to pay if you don't put down 20%. Usually you can do what is called a "second trust". Basically you get two loans. One for 80% and one that combined with you money down equals the other 20%. This way you don't pay PMI on the bigger loan, just on the smaller loan. That will significantly lower your PMI. But avoid PMI if you can. The first thing to do though is get in touch with an agent. They can tell you what steps to take.

onlydarksets · 05-23-2005, 02:51 PM

If you are buying in a hot market (like NoVa) you need to be pre-APPROVED, not pre-qualified. It's a big difference - pre-approval means that the bank has looked at your records and will lend you $X if you find a house that passes all inspections and appraisals. Pre-qualification just means they will probably lend you $X, but you have to go through their underwriters first.

Here in NoVa, almost nobody gets a house if they are just pre-Q because there are multiple contracts and the pre-Q contracts are more risky (that is, higher probability the contract will fall through).

Also, in an 80/10/10 (the typical breakout for what FRPLG describes as an alternate to PMI), the second trust has a higher interest rate than the primary mortgage. Have your agent do the math - PMI may be cheaper than an 80/10/10. My uncle just bought a house and that was the case.

Finally, make sure you find out whether your agent is a buyer's agent. In some states, all agents represent the seller because the seller pays the fees. That means that if your agent is a seller's agent and you tell her in confidence that you would pay $25,000 over the asking price, she is bound by law to tell the seller that. Kinda kills your negotiation power.

FRPLG · 05-23-2005, 03:39 PM

Quote:

Originally Posted by onlydarksets

Also, in an 80/10/10 (the typical breakout for what FRPLG describes as an alternate to PMI), the second trust has a higher interest rate than the primary mortgage. Have your agent do the math - PMI may be cheaper than an 80/10/10. My uncle just bought a house and that was the case.

Very true. Also to be considered is that even with the higher interest it is all still deductible on your income taxes while PMI never is. So even if it somewhat more expensive than PMI it might end up being cheaper after taxes. onlydarksets is right...have a good agent run the numbers.

onlydarksets · 05-23-2005, 03:40 PM

Quote:

Originally Posted by FRPLG

So even if it somewhat more expensive than PMI it might end up being cheaper after taxes.

Good point! This is why we have professionals...

MTK · 05-23-2005, 03:04 PM

Thanks for the advice guys

firstdown · 05-24-2005, 06:38 PM

When you finaly find the home you want to buy or even before you find the home. Find your own home inspector NOT one the realtor recomends. Most Realtors are not going to refer you to a hard nose inspector that might bust their deal by finding all of the homes problems. I have seen this first hand in my line of work as an Insurance agent(hint, hint I write Homeowners in VA LOL). In our area people are even waving the inspections just to get the home. Good luck and if you have any Insurance questions I will be glad to answer them for you.

FRPLG · 05-24-2005, 11:32 PM

Unless it's a new home don't even consider not getting a home inspection. Sometimes agents will hard sell on a tight market and say that removing the home inspection contingency will get you the house. YOU DON'T WANT IT WITHOUT THE INSPECTION. Trust me on that. Be patient and decide now what parameters you have for a making a deal. If you decide now then you don't get overwhelmed by desire and make a bad decison once you find a house you like. There are lots of houses for sale. You'll find the right one with the right deal if you're patient.

That Guy · 05-25-2005, 01:07 AM

not waving the inspection right now lands you a good chance of losing the house simply due to demand right now... definately a good thing to have, but insisting on it might lose you the house too. honestly, they're AREN'T enough houses for sale right now... in the last year the price of the place i'm at has gone up over 20% and when we got it we paid more than the value to make sure it didn't get away... prices just don't climb like that if there isn't high demand.

FRPLG · 05-25-2005, 10:48 AM

Yeah the demand is definitly higher than supply right now but houses for sale aren't scarce. You don't want a house without an inspection plan and simple. It isn't worth the risk. Especially if you are going to be near the line on what you're willing to pay. You don't want to turn around and find out the place needs a new roof in two months.

FRPLG · 05-25-2005, 10:50 AM

Also...on the subject of home warranties. They are usually worthless. Get a good inspection and pass on the home warranty in most cases. There's a reason they only cost a couple hundred bucks when the supposedly cover high expense items. They are hard to redeem and cover less than you think.

firstdown · 05-25-2005, 11:59 AM

I agree that a home inspection is important but if the market is like the one we were in last year you may find that others will wave the inspection and will get the home you wanted. If you have a friend in construction that knows what to look for take them with you. Thats what we had to do because of the market we were in. Like I said earlier if your going to have an inspection do not use one a realtor recomends.

BrudLee · 05-25-2005, 12:39 PM

The realtor is not always the enemy. I know probably twenty of them (living in a resort, there are plenty of agencies). Most of them I would trust and intend to represent theeir clients as best they can. If they have roots in the area, it's in their best interest to make sure you are happy (and not complaining about their services).

firstdown · 05-26-2005, 01:41 PM

Quote:

Originally Posted by BrudLee

The realtor is not always the enemy. I know probably twenty of them (living in a resort, there are plenty of agencies). Most of them I would trust and intend to represent theeir clients as best they can. If they have roots in the area, it's in their best interest to make sure you are happy (and not complaining about their services).

I did not intend to bash Realtors I just feel that if you want an inspection just hire one on your own.That inspector will be just working for you and not the person who provided the referal. That will take any chance of them letting stuff slide so they don't blow the closing. I'm not saying the realtor knows this is happening but it does go on so the realtor will keep sending them business.

05-23-2005, 01:06 AM	#1
MTK \m/ Join Date: Feb 2004 Location: NY Age: 51 Posts: 99,416	Questions about buying a house Hey guys, I'm looking to start the whole house buying process but I have no idea where to start. What do I do, contact an agent? Get pre-qualified? Any advice would be greatly appreciated. __________________ Support The Warpath! \| Warpath Shop

05-23-2005, 02:06 AM	#2
That Guy Living Legend Join Date: Jun 2004 Location: VA Age: 41 Posts: 17,553	Re: Questions about buying a house contact an agent talk about price ranges and availability go look at houses get approved for a loan haggle/write a contract settle if you need something more specific, let me know

05-23-2005, 09:21 AM	#3
FRPLG MVP Join Date: May 2004 Age: 46 Posts: 10,164	Re: Questions about buying a house I would change that order somewhat... You need to get pre-qualified for a loan first to properly discuss price ranges and look at houses. You'll probably qualify for more than you realize. The key is to get your payment where you are comfortable. That will depend on how much you end up financing. Also...if at all possible always try to put 20% down. This gets you out of PMI which is completely wasted money that you have to pay if you don't put down 20%. Usually you can do what is called a "second trust". Basically you get two loans. One for 80% and one that combined with you money down equals the other 20%. This way you don't pay PMI on the bigger loan, just on the smaller loan. That will significantly lower your PMI. But avoid PMI if you can. The first thing to do though is get in touch with an agent. They can tell you what steps to take.

05-23-2005, 02:51 PM	#4
onlydarksets Playmaker Join Date: Nov 2004 Location: all up in your business Posts: 2,693	Re: Questions about buying a house If you are buying in a hot market (like NoVa) you need to be pre-APPROVED, not pre-qualified. It's a big difference - pre-approval means that the bank has looked at your records and will lend you $X if you find a house that passes all inspections and appraisals. Pre-qualification just means they will probably lend you $X, but you have to go through their underwriters first. Here in NoVa, almost nobody gets a house if they are just pre-Q because there are multiple contracts and the pre-Q contracts are more risky (that is, higher probability the contract will fall through). Also, in an 80/10/10 (the typical breakout for what FRPLG describes as an alternate to PMI), the second trust has a higher interest rate than the primary mortgage. Have your agent do the math - PMI may be cheaper than an 80/10/10. My uncle just bought a house and that was the case. Finally, make sure you find out whether your agent is a buyer's agent. In some states, all agents represent the seller because the seller pays the fees. That means that if your agent is a seller's agent and you tell her in confidence that you would pay $25,000 over the asking price, she is bound by law to tell the seller that. Kinda kills your negotiation power.

05-23-2005, 03:04 PM	#7
MTK \m/ Join Date: Feb 2004 Location: NY Age: 51 Posts: 99,416	Re: Questions about buying a house Thanks for the advice guys __________________ Support The Warpath! \| Warpath Shop

05-24-2005, 06:38 PM	#8
firstdown Living Legend Join Date: Oct 2004 Location: chesapeake, va Age: 60 Posts: 15,817	Re: Questions about buying a house When you finaly find the home you want to buy or even before you find the home. Find your own home inspector NOT one the realtor recomends. Most Realtors are not going to refer you to a hard nose inspector that might bust their deal by finding all of the homes problems. I have seen this first hand in my line of work as an Insurance agent(hint, hint I write Homeowners in VA LOL). In our area people are even waving the inspections just to get the home. Good luck and if you have any Insurance questions I will be glad to answer them for you.

05-24-2005, 11:32 PM	#9
FRPLG MVP Join Date: May 2004 Age: 46 Posts: 10,164	Re: Questions about buying a house Unless it's a new home don't even consider not getting a home inspection. Sometimes agents will hard sell on a tight market and say that removing the home inspection contingency will get you the house. YOU DON'T WANT IT WITHOUT THE INSPECTION. Trust me on that. Be patient and decide now what parameters you have for a making a deal. If you decide now then you don't get overwhelmed by desire and make a bad decison once you find a house you like. There are lots of houses for sale. You'll find the right one with the right deal if you're patient.

05-25-2005, 01:07 AM	#10
That Guy Living Legend Join Date: Jun 2004 Location: VA Age: 41 Posts: 17,553	Re: Questions about buying a house not waving the inspection right now lands you a good chance of losing the house simply due to demand right now... definately a good thing to have, but insisting on it might lose you the house too. honestly, they're AREN'T enough houses for sale right now... in the last year the price of the place i'm at has gone up over 20% and when we got it we paid more than the value to make sure it didn't get away... prices just don't climb like that if there isn't high demand.

05-25-2005, 10:48 AM	#11
FRPLG MVP Join Date: May 2004 Age: 46 Posts: 10,164	Re: Questions about buying a house Yeah the demand is definitly higher than supply right now but houses for sale aren't scarce. You don't want a house without an inspection plan and simple. It isn't worth the risk. Especially if you are going to be near the line on what you're willing to pay. You don't want to turn around and find out the place needs a new roof in two months.

05-25-2005, 10:50 AM	#12
FRPLG MVP Join Date: May 2004 Age: 46 Posts: 10,164	Re: Questions about buying a house Also...on the subject of home warranties. They are usually worthless. Get a good inspection and pass on the home warranty in most cases. There's a reason they only cost a couple hundred bucks when the supposedly cover high expense items. They are hard to redeem and cover less than you think.

05-25-2005, 11:59 AM	#13
firstdown Living Legend Join Date: Oct 2004 Location: chesapeake, va Age: 60 Posts: 15,817	Re: Questions about buying a house I agree that a home inspection is important but if the market is like the one we were in last year you may find that others will wave the inspection and will get the home you wanted. If you have a friend in construction that knows what to look for take them with you. Thats what we had to do because of the market we were in. Like I said earlier if your going to have an inspection do not use one a realtor recomends.

05-25-2005, 12:39 PM	#14
BrudLee Playmaker Join Date: Feb 2004 Location: Rehoboth Beach, DE Posts: 3,494	Re: Questions about buying a house The realtor is not always the enemy. I know probably twenty of them (living in a resort, there are plenty of agencies). Most of them I would trust and intend to represent theeir clients as best they can. If they have roots in the area, it's in their best interest to make sure you are happy (and not complaining about their services). __________________ There's nowhere to go but up. Or down. I guess we could stay where we are, too.

Questions about buying a house

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