warpus
Sommerswerd asked me to change this
Have you had a bad experience with one?
Sure, the seller pays them, but if they do not satisfy the buyer then their reputation is affected and impacts their business in the future.
Buying a Home
- Thread starter Chazumi
- Start date
Have you had a bad experience with one?
Sure, the seller pays them, but if they do not satisfy the buyer then their reputation is affected and impacts their business in the future.
NAR is basically like a casino association telling gamblers only good things about gambling.
JerichoHill
Bedrock of Knowledge
The NAR is awful. There are good realtors out there. One is my neighbor. She's been a realtor for 20 years and laughs at the NAR and was telling folks in 05 they were better off renting. I have seen it happen twice that a former prospective buyer has come back to her house and thanked her for saving them from making a bad decision when other realtors were in BUY BUY BUY mode.
Basically, my advice is that buying a home right now is NOT a financially responsibly move. The market is NOT at its trough yet. We're not even through the inevitable resets coming in 08, which are more than the resets in 07.
skadistic
Caomhanach
Buy the last house you'll ever need. I made the mistake of buying the house I only needed at the time and now I'm regretting it with a need to buy again.
DragonHawk
Bored
No bad experience since I never use a seller agent. It was something I read when I was looking for my house. But as Igloo pointed out, it may be different from state to state.
Well, they will still satisfy the seller for getting the house sold, probably at optimum price. That is probably the more important thing a potential seller is looking for in an agent
DragonHawk
Bored
Heh, I wholly agree. I just wished I had paid closer attention to the housing market before buying my house..
I'd say there's a need for more information.
One thing that I would suggest off the top is don't stretch your limits based on income. My mortgage is less than 2x my income and 3x is probably ok if you see your income increasing in the immediate future. My payment is less than 20% of my after tax income. Most high risk borrowers were at 45% pre tax and about to see their interest rate adjust to 55% so there will be carnage at your end of the market. Be patient.
If the house is in Georgia, Florida, California, Michigan or Ohio be aware this is where half the defaults have occurred. There's carnage in these markets along with places like Nevada and parts of Arizona. Drive a hard bargain is the point.
Spread are widening even on jumbo rates where we're seeing around 1-1.5% over conventional loans. All of the high risk lenders have gone out of business. This article explains the story of the demise and why the states I mentioned earlier are in such bad shape.
Will you have 20% down to avoid PMI (personal mortgage insurance)?
Are you looking in a diverse job market?
Are you handy fixing things?
School district?
Transportation?
Do you have a credit union option to compare the VA option?
Buying agents are not necessary imo but a good attorney is.
On and on...I'll have more questions later.
One thing that I would suggest off the top is don't stretch your limits based on income. My mortgage is less than 2x my income and 3x is probably ok if you see your income increasing in the immediate future. My payment is less than 20% of my after tax income. Most high risk borrowers were at 45% pre tax and about to see their interest rate adjust to 55% so there will be carnage at your end of the market. Be patient.
If the house is in Georgia, Florida, California, Michigan or Ohio be aware this is where half the defaults have occurred. There's carnage in these markets along with places like Nevada and parts of Arizona. Drive a hard bargain is the point.
Spread are widening even on jumbo rates where we're seeing around 1-1.5% over conventional loans. All of the high risk lenders have gone out of business. This article explains the story of the demise and why the states I mentioned earlier are in such bad shape.
Spoiler :
Will you have 20% down to avoid PMI (personal mortgage insurance)?
Are you looking in a diverse job market?
Are you handy fixing things?
School district?
Transportation?
Do you have a credit union option to compare the VA option?
Buying agents are not necessary imo but a good attorney is.
On and on...I'll have more questions later.
Chazumi
Trained& Motivated Killer
- Joined
- Jan 24, 2006
- Messages
- 1,254
Thank you for all the responses!
More Info:
I think I am only going to be able to afford the 10% down. It seems that about every 1,000$ downpayment lowers the cost about 10$ a month, which goes a long way. I would like to put down as much as possible, but with my wife being unable to work for approx 6 months because of the kid and also time finding a new job, I want to keep a pretty decent chunk of change on top of my monthly income for emergencies and things that might be needed in the house (like blinds or carpet or some crap)
I will be buying this house in Colorado Springs/Fountain area. Lots of people just moved there (about 400,000 soldiers from what I understand...plus families maybe a million? This seems like a bad thing...) and I could be totally wrong.
Mostly Military and High Tech Industry in the Springs. I was only there for 2 months before deployment so I didn't notice anything besides those two as the "major" job makeup.
I am handy enough. I would probably need help installing a deck or something big like that but I can (and have at my last house I rented) painted/fixed doors etc. Most of the work it seems is "cleaning up" or just straigthening things out.
School district #11 seems to be the most popular one. I don't know which one that is and it shouldn't be a concern for me because I've got quite a few years until school would be an issue for my daughter. but resell I should consider it.
Mostly personal vehicles. I have 1 car paid off, my wife has a car half paid off. Not really major mass transportation in the springs that I am aware of.
I have no idea about credit options yet. I have only been told about the VA loan in that they can gaurantee me a fixed rate at a decent rate. I go home on leave tonight (yay!!
) so I was going to discuss it with both sets of parents and good friends of the family's husband (who is a realtor for 20+years).All of this is a big help and again I appreciate further input.
This is a pretty good interactive site for understanding the city better (IE homes for sale and where).
http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0816000.html
My biggest concern would be whether you're biting off more than you can handle at 10% down payment. PMI is a stupid added cost and really should be avoided at all cost.
For a home in the $200,000 range I'd want to have income in the $65,000+/year range at minimum. Life gets very complex and expensive especially with a little one on the way and you should ancipate major expenses coming in at that point. Most people who create great wealth tend to live way below their means. Housing should not dominate your savings.
Don't feel you need to rush into anything and talk to people in the neighborhood (nothing worse than living on Hysteria Lane). It's most definitely a buyer's market and there's nothing better than finding a desperate seller (IE bought another house or job moved them out of town). Be willing to negotiate down. Look for the best school districts because this will help the property value.
Asking family, friends and an honest opinion from someone in the industry will be helpful.
http://money.cnn.com/magazines/moneymag/bplive/2007/snapshots/PL0816000.html
My biggest concern would be whether you're biting off more than you can handle at 10% down payment. PMI is a stupid added cost and really should be avoided at all cost.
For a home in the $200,000 range I'd want to have income in the $65,000+/year range at minimum. Life gets very complex and expensive especially with a little one on the way and you should ancipate major expenses coming in at that point. Most people who create great wealth tend to live way below their means. Housing should not dominate your savings.
Don't feel you need to rush into anything and talk to people in the neighborhood (nothing worse than living on Hysteria Lane). It's most definitely a buyer's market and there's nothing better than finding a desperate seller (IE bought another house or job moved them out of town). Be willing to negotiate down. Look for the best school districts because this will help the property value.
Asking family, friends and an honest opinion from someone in the industry will be helpful.
My understanding is that part of the benefit of a VA-guaranteed loan is no PMI. I could be wrong on that, though, it's been 10 years since I played that game.
Ditto most emphatically Whomp's point about checking out the neighborhood. Depending on your own vanilla-ness it might or might not be much of an issue, but personally I just can't tolerate heavy-handed homeowner associations telling me what I can have in my driveway, what color I can paint my house, and how many inches tall my grass can grow. This is aside from neighbors that will dial 911 if they hear your dog barking, your baby crying, or your television playing.
It is my guess that you and your wife will both need to have steady full-time jobs before you'll even qualify for a mortgage (I'm not clear on whether you're getting out of the service or just getting stationed in Colorado). It's a royal pain, but I've done much better when living in a rental for a year before settling down and buying a place - things like neighborhood attitudes, commute routes, weather will become obvious, plus you'll both have close to a year in new jobs. Bonus points in this circumstance for being able to use Jericho's advice of waiting for the market to bottom out.
You might be able to get your mortgage through your credit union (this last time I did), if they have a website online they'll probably post rates and information about their mortgage offerings (including VA-guaranteed ones).
Ditto most emphatically Whomp's point about checking out the neighborhood. Depending on your own vanilla-ness it might or might not be much of an issue, but personally I just can't tolerate heavy-handed homeowner associations telling me what I can have in my driveway, what color I can paint my house, and how many inches tall my grass can grow. This is aside from neighbors that will dial 911 if they hear your dog barking, your baby crying, or your television playing.
It is my guess that you and your wife will both need to have steady full-time jobs before you'll even qualify for a mortgage (I'm not clear on whether you're getting out of the service or just getting stationed in Colorado). It's a royal pain, but I've done much better when living in a rental for a year before settling down and buying a place - things like neighborhood attitudes, commute routes, weather will become obvious, plus you'll both have close to a year in new jobs. Bonus points in this circumstance for being able to use Jericho's advice of waiting for the market to bottom out.
You might be able to get your mortgage through your credit union (this last time I did), if they have a website online they'll probably post rates and information about their mortgage offerings (including VA-guaranteed ones).
I just bought my first house and I get the keys today. YAY!!!!!
Don't really have much advice. I used a realtor and she did just about all of the work for me. Don't believe everything or anything you read about properties you're going to see. They're never as nice as they sound.
I put 5% cash down. Got one mortgage for 15% and another for 80% all fixed. The 15% loan in addition to the 5% cash down equals 20% down. When you put 20% down through combination of cash and loans you can avoid PMI insurance (Private Mortgage Insurance) which is expensive and a waste of money imo.
Don't really have much advice. I used a realtor and she did just about all of the work for me. Don't believe everything or anything you read about properties you're going to see. They're never as nice as they sound.
I put 5% cash down. Got one mortgage for 15% and another for 80% all fixed. The 15% loan in addition to the 5% cash down equals 20% down. When you put 20% down through combination of cash and loans you can avoid PMI insurance (Private Mortgage Insurance) which is expensive and a waste of money imo.
JerichoHill
Bedrock of Knowledge
...
Please put 20% down. If your wife cant work then you dont need to be buying a home until you both are ready and on your feet together.
Please put 20% down. If your wife cant work then you dont need to be buying a home until you both are ready and on your feet together.
If the VA allows 10% down then that helps. I'd still be inclined to tread lightly. There's a lot happening over the next 9 months and you have time to explore. One option is finding a place you love with a desperate seller and do a lease to own arrangement.
Fishlore make sure you pay down that HELOC fast. I'd be shocked if you received a fixed rate 2nd and if you did you're paying through the nose to have it. Since they're ordinarily variable rate loans that can add a lot of pain if they're not paid off.
Fishlore make sure you pay down that HELOC fast. I'd be shocked if you received a fixed rate 2nd and if you did you're paying through the nose to have it. Since they're ordinarily variable rate loans that can add a lot of pain if they're not paid off.
JerichoHill
Bedrock of Knowledge
Good point WHomp, we dont know what rate he got
I think VA-guaranteed loans tend to be zero-down (what would be a downpayment, you just either pay early or apply against the price at closing).
I need to review VA certificates, I suppose.
I need to review VA certificates, I suppose.
GenMarshall
High Elven ISB Capt & Ghost Agent
Keep careful eye on the Mortages, thats all I have to say since they are recently unstable.
The VA loan is exponentially more advantageous if you are a whining wuss claim disability (especially 30% or more). Seems like you're still in the service, so this probably doesn't apply, though.
But if I were you, I'd be inclined to rethink the whole approach to personal finance. My strategy has been to rent, living well beneath my means, while maintaining as high a savings rate as possible, and taking that money and investing it aggressively (and sometimes actively, though I don't propagate that here). Even without the leverage of using debt (except intra-day on occasion), I feel I've more than outperformed any would-be real estate investment over any given time frame in the past several years.
Give me enough time, and I'll be a millionaire - all liquid. Cold hard cash. Then I'll take a bit of that bank and flat-out buy a stinkin' piece of property, when it won't bother me too much to take a relatively small % of the net worth, and tie it up, bound and gagged. I find it disturbing that so many people actually over-leverage themselves to do this (real estate), taking on a debt many times greater than their own net worth. To me that's crazy. You're basically saying, "here I am... put the financial shackles on me!" But, the difference between me and (seemingly) everyone else, is that I'm a totally mobile, portable, on-the-go bachelor, that's got the world by the balls. See, that's planning. I'll have a wife and kids - when I'm rich and old. I'll pay someone to watch the kids, while I take the hot babe that's a fraction of my age out onour my yacht. I say, you guys are doing it all the hard way. Putting so much in, getting minimal return. Good luck with the house, though.
But if I were you, I'd be inclined to rethink the whole approach to personal finance. My strategy has been to rent, living well beneath my means, while maintaining as high a savings rate as possible, and taking that money and investing it aggressively (and sometimes actively, though I don't propagate that here). Even without the leverage of using debt (except intra-day on occasion), I feel I've more than outperformed any would-be real estate investment over any given time frame in the past several years.
Give me enough time, and I'll be a millionaire - all liquid. Cold hard cash. Then I'll take a bit of that bank and flat-out buy a stinkin' piece of property, when it won't bother me too much to take a relatively small % of the net worth, and tie it up, bound and gagged. I find it disturbing that so many people actually over-leverage themselves to do this (real estate), taking on a debt many times greater than their own net worth. To me that's crazy. You're basically saying, "here I am... put the financial shackles on me!" But, the difference between me and (seemingly) everyone else, is that I'm a totally mobile, portable, on-the-go bachelor, that's got the world by the balls. See, that's planning. I'll have a wife and kids - when I'm rich and old. I'll pay someone to watch the kids, while I take the hot babe that's a fraction of my age out on
Lotus--though I agree with you that overleveraging and not saving for portable and liquid assets is a mistake I think you're missing the inherent advantages you're given for owning a home.
By generating a lot of short term gains on equities you're paying taxes at ordinary income tax rates. It doesn't take much for a married couple to pay at the 25+% marginal rate. Even if you're at the long term rates your gains are taxed at 15%.
On the other hand, owning a home allows for considerable deductions and captial gains exclusion. Tax rules on gains from a home are significantly more favorable than any other asset class and also have the benefit of 4-5x leverage which is financial suicide in equities. I have a friend who just excluded $500k of $600k on the sale of his home a couple years ago. That was an enormous amount of capital he was able to deploy in the portable and liquid equity markets along with acquiring another home recently where he can start that clock over again.
By generating a lot of short term gains on equities you're paying taxes at ordinary income tax rates. It doesn't take much for a married couple to pay at the 25+% marginal rate. Even if you're at the long term rates your gains are taxed at 15%.
On the other hand, owning a home allows for considerable deductions and captial gains exclusion. Tax rules on gains from a home are significantly more favorable than any other asset class and also have the benefit of 4-5x leverage which is financial suicide in equities. I have a friend who just excluded $500k of $600k on the sale of his home a couple years ago. That was an enormous amount of capital he was able to deploy in the portable and liquid equity markets along with acquiring another home recently where he can start that clock over again.
Spoiler :
Whomp, in an ideal world -sure- I'd like to own instead of rent, and build up equity. But, it would have to be practical, i.e. at the right price. And frankly, I don't see much out there that I can justify paying those kinds of prices... just to have a place for little old me to live in. If I wanted to buy a half decent house around here, the mortgage payment would be about 90% of my monthly salary (and I make about 70-75k). Or, instead of just treading water, eating Ramen noodles every meal and riding a bicycle to work, just so I can 'own a little piece of America and live the dream', I find it much more practical to actually BUILD my wealth, in the way I am doing.
So, who would be getting more bang for their buck, the Lotus49 that bought a house, or the one that has followed the current path? Granted I lived in Georgia from '01 to '05, and never bought a house because I had no plans on being there that long (and in hindsight, could have made a killing with the price appreciations), but overall - it just doesn't make sense for me, and me alone, to buy a house, pay the insurance, pay the upkeep, cut the stinkin' grass, pay the realtor when I sell, etc., especially when I'm on the go, as far as my career goes... PLUS right now, the market being as over-priced as it is.
Heck I just moved across the country last month. I may do so again later next year. I ain't settlin' down. So meanwhile, I take my money and invest aggressively, long-term. Short-term market winnings are just a little hobby that I hope to get better at. But I own dozens of mutual funds, a lot of which are up well into the triple digits %-wise, in just about 2 1/2 years. I ain't doin' too bad for myself. And frankly, I have no idea what I'm doing yet (well, that's probably going too far). All I know is, at the rate I'm going, buying real estate (and I do mean BUYING) is not really going to be much of a concern. And it's only in the past couple of years that I broke out of the 30k salary range. I've been able to take a little, and do a lot with it... and as you know, money makes money...I'm now starting to gain momentum.
Soon enough I can see the whole project is going to eclipse anything real estate would offer. Though I'm sure Trump would disagree. Whatever, I'm just not into hard assets. Not my thing. Even if I was a billionaire, I would hate the process/ordeal of actually having to buy a place to live. Real estate does not fascinate me, whatsoever. Maybe I have just spent too many years living in barracks / apartments, and doing even notice it anymore. Plus I'm a terrible housekeeper. God only knows how bad I would be at taking care of a house, based on what my apartments look like.
So, who would be getting more bang for their buck, the Lotus49 that bought a house, or the one that has followed the current path? Granted I lived in Georgia from '01 to '05, and never bought a house because I had no plans on being there that long (and in hindsight, could have made a killing with the price appreciations), but overall - it just doesn't make sense for me, and me alone, to buy a house, pay the insurance, pay the upkeep, cut the stinkin' grass, pay the realtor when I sell, etc., especially when I'm on the go, as far as my career goes... PLUS right now, the market being as over-priced as it is.
Heck I just moved across the country last month. I may do so again later next year. I ain't settlin' down. So meanwhile, I take my money and invest aggressively, long-term. Short-term market winnings are just a little hobby that I hope to get better at. But I own dozens of mutual funds, a lot of which are up well into the triple digits %-wise, in just about 2 1/2 years. I ain't doin' too bad for myself. And frankly, I have no idea what I'm doing yet (well, that's probably going too far). All I know is, at the rate I'm going, buying real estate (and I do mean BUYING) is not really going to be much of a concern. And it's only in the past couple of years that I broke out of the 30k salary range. I've been able to take a little, and do a lot with it... and as you know, money makes money...I'm now starting to gain momentum.
Soon enough I can see the whole project is going to eclipse anything real estate would offer. Though I'm sure Trump would disagree. Whatever, I'm just not into hard assets. Not my thing. Even if I was a billionaire, I would hate the process/ordeal of actually having to buy a place to live. Real estate does not fascinate me, whatsoever. Maybe I have just spent too many years living in barracks / apartments, and doing even notice it anymore. Plus I'm a terrible housekeeper. God only knows how bad I would be at taking care of a house, based on what my apartments look like.
