House Buying in Fu**ed Economy

Off Topic
41

[quote]Paste42 wrote:

[quote]Professor X wrote:

[quote]SteelyD wrote:
quote]
Houses here, to my knowledge to not have basements because of how close we are to sea level. I am sure you hit water if you dig too deep around a port city.

The foundation is laid which I hear means the house should go up quickly now within 2-3 months but nothing else.[/quote]

Oh check to see if your roof is wind resistant. I know that some standing seem metal roofs are Zone 3 Coastal rated…saves you a few bucks on insurance, is relatively cheap(if you get non-painted), and is energy efficient. Not to mention some companies offer double lifetime warranty.[/quote]

Good call. Metal roofs rock.

X, if that’s not a possibility or you prefer a typical asphalt tab roof, inquire as to the wind rating. From my understanding the difference in wind ratings for many shingles is simply the number of nails used per sheet to secure them. I had a roof replaced recently and asked them to bump it from 3 or 4 nails per (I think) to six. It increased its tolerance from 90 to 130 mph.

This is a simple upgrade that a builder should be willing to do at minimal cost.

42

I’ve also heard that now is the time to buy. SteelyD mentioned a big/cheaper house in GA, and that is so true. My aunt just bought a big ass house near Atlanta for next to nothing (compared to the house, you know what I mean).

43

Soo when’s first T-Nation house party gonna be?

44

Congrats on buying a house, Prof X

I am a Loan Officer, in case you didn’t know. Having a house built is a very different animal than buying one that is already standing. Make sure that the builder is giving you a home warranty. The standard warranty in the DC metro area is ~2 years. It may be different where you are.

How far along in the loan process are you? Have you gotten the loan and the contractor is taking draws? (as in a construction to perm loan) or is the builder carrying it and you close on the deal and sign the note (officially accept loan terms) when the construction is completed.

The biggest red flag to watch out for is if the builder and the lender are affiliated somehow. In those cases there are hidden fees to watch out for. They’ll probably say that they’ll give a certain percentage of the closing costs, if you go with that lender. That’s fine, but you need to make sure that the lender is not overcharging you. Is it a Broker or a Lender? The reason I ask is that under the new disclosure laws, Brokers are required to fully disclose the YSP (yield spread premium) which is the money made “on the back” of the loan which directly correlates to the interest rate charged, while the banks have what is called SRP (service release premium) which is NOT required to be disclosed on the GFE or TILA disclosures (because technically it is a separate transaction). So it may seem like a really good deal you are getting, but the bank may be making two or three points on your ass!

If you have locked the loan, tell me which date it was locked and tell me the interest rate you locked it at and when the lock expires and I will tell you if the lender is trying to fuck you. If you haven’t locked be careful for the “bait and switch”. It is unfortunate that real estate is such a dirty business. There is a LOT of money that is made on every transaction and there are many people that get a piece of it. The odds of all of them being straight forward and honest is virtually zero.

Also, feel free to PM me and get my contact info if you want me to look at the GFE and TILA disclosures to make sure everything is on the up and up. I’ve been reading your posts for years, Prof X, and have really learned a lot from you. It is the least I could do to help you out in any way that I can to make sure you are getting a good deal. Just let me know if I can help in any way.

45

If your CONTRACTOR is breathing, he is probably lying. Not sure how you have it set up, but under no circumstances pay in advance for work that is promised. Only pay it for work that is done - and done well. I have heard way too many horror stories and experienced a few myself of contractors taking money and disappearing, only to show up under the threat of a lawsuit. A good contractor is like a good mechanic or a lawyer - he is going to be busy as hell, will probably not be the cheapest and will come highly recommended.

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card. I also second the comment about drywallers usually doing shitty work.

I think your decision to not put a tub in the MBR is a mistake. Even if you do not use it, women will want one and no guy is going to buy your house if his wife does not like it. Easier to do it know than later. While showering with a chica is fun, baths are much better.

46

[quote]Totenkopf wrote:

[quote]Paste42 wrote:

[quote]Totenkopf wrote:

[quote]Professor X wrote:

[quote]Testy1 wrote:
Im thinking either Fairfield or Katy though. Ya know,the nice untouched areas. [/quote]

Doesn’t Katy have a bunch of natural gas wells? The reason I ask is I just can’t stand the smell. [/quote]
Hm,Your right. I was sorta leaning towards Fairfield because I can definitely see some great growth in that area. Plus,its so pretty. Where Id love to move when I get older (middle Age) is to New Braunfels,Texas.[/quote]

New Braunfels is very nice but it is very crowded IMO. Check right outside NB closer to San Marcos.

47

[quote]VanderLaan wrote:

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card.
[/quote]
X2. Critique their work like you have done it yourself. Don’t let someone half-ass something and get away with it, you’re paying for a quality job so that’s what you should expect. After what I went through, I’d get some family members to give a second opinion on finished work since they’ll be honest about what they see.

48

[quote]Paste42 wrote:

[quote]VanderLaan wrote:

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card.
[/quote]
X2. Critique their work like you have done it yourself. Don’t let someone half-ass something and get away with it, you’re paying for a quality job so that’s what you should expect. After what I went through, I’d get some family members to give a second opinion on finished work since they’ll be honest about what they see. [/quote]

It is not uncommon for some of this stuff to show up months after closing. It should all be covered under warranty but it is sometimes difficult to get the contractor back six months down the road.

49

[quote]VanderLaan wrote:
If your CONTRACTOR is breathing, he is probably lying. Not sure how you have it set up, but under no circumstances pay in advance for work that is promised. Only pay it for work that is done - and done well. I have heard way too many horror stories and experienced a few myself of contractors taking money and disappearing, only to show up under the threat of a lawsuit. A good contractor is like a good mechanic or a lawyer - he is going to be busy as hell, will probably not be the cheapest and will come highly recommended.

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card. I also second the comment about drywallers usually doing shitty work.

I think your decision to not put a tub in the MBR is a mistake. Even if you do not use it, women will want one and no guy is going to buy your house if his wife does not like it. Easier to do it know than later. While showering with a chica is fun, baths are much better.

[/quote]
Point taken.

My frat brothers said the same thing. They haven’t built that room yet so I can still change it but I really didn’t want to deep down.

Consider, there is still a bathtub on the same floor just not in that room.

50

If you plan on building your home you might want to try a manufactured home like clayton homes.

51

[quote]haas wrote:

[quote]Paste42 wrote:

[quote]VanderLaan wrote:

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card.
[/quote]
X2. Critique their work like you have done it yourself. Don’t let someone half-ass something and get away with it, you’re paying for a quality job so that’s what you should expect. After what I went through, I’d get some family members to give a second opinion on finished work since they’ll be honest about what they see. [/quote]

It is not uncommon for some of this stuff to show up months after closing. It should all be covered under warranty but it is sometimes difficult to get the contractor back six months down the road.[/quote]

True. However, he will have a walk-through to make a sign-off list before he makes his final payment to the contractor. It is a lot easier to have them fix it right then - when they are wanting his coin, than six months later - after he has paid them the money and they are working on another job.

PX- with regards to the shower, consider a walk-in shower with a glass door, multiple showerheads and a bench. My neighbor just built their house and they have one made out of a slate tile that looks absolutely tits. With regards to the tub, I would suggest you be sure to put it in the MBA. A MBA without a tub is liability when you go to sell it later. Given your “weirdness” about being in one place, you will likely be moving again at some point. That said, consider a 6’ soaking tub - not a whirlpool. Supposedly, soaking tubs are the next big thing (WPs are expensive and a PITA to keep clean). I am 6’6" tall and my tub is 6’ long, about 36" wide and over 24" deep (guesstimates). Me and the GF can easily fit in the tub without having to lay on top of each other.

Building a house is fun and a pain in the ass. Try to make sure that it is mostly fun.

52

On a new construction it is important to make sure that the walls are plumb and straight and that the corners of the structure are square.

Put a 4 ft. level on all of the walls and make sure that the plumb bubble is dead on between the lines. Do a 3-4-5 foot (pythagorean) triangle at the corners to make sure that they are square. Put a laser down all of the walls to make sure that they are straight.

Make sure that the walls are properly secured to the floor and ceiling. I kid you not. Framers will pop in a couple of nails (and sometimes none) to tie a wall into a floor and move on. My brother and I have run into this numerous times in new construction.

Make sure that there is good fall on all horizontal drain pipes. Put a torpedo level on the pipe (longways) and make sure that it falls away from the drain and toward the next vertical. (If the house is more than one story)

Make sure that pipe shields are used to protect the water lines. These are thin sheet metal mesh like U brackets that are tapped onto the studs over the pipes. Otherwise a drywaller with a screw gun may (quite likely) put a screw into a water line. This isn’t bad until about 6-12 mos. down the line when the screw and pipe have corroded and you suddenly have a massive spraying leak inside the wall. Best way to do this is to be there while the drywall is being hung. If the pipe shields are laying around, they have been removed.

Make sure tha a vapr barrier is used under the slab. Concrete will crack over time. It just about always does. The vapor barrier will prevent quite a lot and keep moisture from creeping in and the place from getting a terminally musty environment.

53

When you meet with your subcontractors try not to forget about anything special you need roughed in especially in the kitchen. Appliances may need special wiring or plumbing for example, actually many things to think about here. Once the rough in process starts anything you need or want to change results in a change order which contractors love because they are charged out at full labor and full markup on materials. Also no basement makes it difficult and expensive to add things after the house is sheetrocked.

54

[quote]kothreat wrote:

[quote]Professor X wrote:
I was surprised as well. You can probably find a brand new house right now in this city with 4-5 bedrooms for under $150,000. Foreclosures seem to be all over as well even though people seem to try to destroy the house before they leave it.[/quote]

that’s ridiculous. wanna see what $150 000 will buy where I live…

http://www.realtor.ca/propertyDetails.aspx?propertyId=9106860[/quote]

Rest easy, these prices aren’t going to last long.

56

[quote]VanderLaan wrote:
If your CONTRACTOR is breathing, he is probably lying. Not sure how you have it set up, but under no circumstances pay in advance for work that is promised. Only pay it for work that is done - and done well. I have heard way too many horror stories and experienced a few myself of contractors taking money and disappearing, only to show up under the threat of a lawsuit. A good contractor is like a good mechanic or a lawyer - he is going to be busy as hell, will probably not be the cheapest and will come highly recommended.

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card. I also second the comment about drywallers usually doing shitty work.

I think your decision to not put a tub in the MBR is a mistake. Even if you do not use it, women will want one and no guy is going to buy your house if his wife does not like it. Easier to do it know than later. While showering with a chica is fun, baths are much better.

[/quote]

A lot of good points here. Look for quality finish work. When you are looking at options / upgrades for a new construction, dont just take into consideration your personal options, but think about what would help you bring a higher resale value down the road.

57

[quote]SteelyD wrote:

[quote]Professor X wrote:

[quote]Testy1 wrote:
It’s not for everyone, lot’s more upkeep than most non homeowners expect. From watching some of those home buying shows it seems there are a lot of great deals in Texas, I was surprised at how much you could get for your money.[/quote]

I was surprised as well. You can probably find a brand new house right now in this city with 4-5 bedrooms for under $150,000. Foreclosures seem to be all over as well even though people seem to try to destroy the house before they leave it.[/quote]

This is true in a lot of places. I’ve been considering a move from Maine to Georgia. I can literally get twice the house and lot for what I’m in now at the same price. You can get just short of a mansion for under 200k in some areas- houses that are less than 5 years old.

The kicker is that I’d have to unload this house in a bottomed out market.

It’s indeed a ‘buyers market’. If I had the capital, I’d be buying up left and right. It’s not a matter of “if” the economy and housing market will pick up, it’s “when”. This is a great time to have some cash to invest (in a house).[/quote]

Whats going to make it come back? Everyone thinks things are just going to bounce back to what they were when values of everything were artificially inflated. Hell, they’re trying to artificially inflate the market again with tax breaks. People aren’t going to get loans like they used to, and not as many people have the means to even attempt to purchase a home. I think it will be a very long time before we see house values the same as they were in the late 90’s early 00’s.

58

I have nothing important to contribute to this thread but I am a general contractor and I am in a bit of a pickle as well. I was broke a little while ago, so could’nd afford to pay the house I am in. 2 stories, 4 bedrooms, 3 bathrooms, pool, etc… for around $400k. The bank was suppose to reposes it, but my lawyer found some loop holes so he has been helping me live here for free for a little over a year or so. But my court date is due soon and I have no idea if I want to buy this house, or look for other houses with the economy as it is.

I could built my own house, but finding a decent location, a community, etc… is more of a pain then anything else. Luckily Prof X has his being built to his specifics. I am hoping to make an offer to the bank to pay it cash to buy this house. If they don’t accept my offer, then I am gonna need a place to live.

Anyone need a roommate? haha :wink:

59

[quote]VanderLaan wrote:

[quote]haas wrote:

[quote]Paste42 wrote:

[quote]VanderLaan wrote:

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card.
[/quote]
X2. Critique their work like you have done it yourself. Don’t let someone half-ass something and get away with it, you’re paying for a quality job so that’s what you should expect. After what I went through, I’d get some family members to give a second opinion on finished work since they’ll be honest about what they see. [/quote]

It is not uncommon for some of this stuff to show up months after closing. It should all be covered under warranty but it is sometimes difficult to get the contractor back six months down the road.[/quote]

True. However, he will have a walk-through to make a sign-off list before he makes his final payment to the contractor. It is a lot easier to have them fix it right then - when they are wanting his coin, than six months later - after he has paid them the money and they are working on another job.

PX- with regards to the shower, consider a walk-in shower with a glass door, multiple showerheads and a bench. My neighbor just built their house and they have one made out of a slate tile that looks absolutely tits. With regards to the tub, I would suggest you be sure to put it in the MBA. A MBA without a tub is liability when you go to sell it later. Given your “weirdness” about being in one place, you will likely be moving again at some point. That said, consider a 6’ soaking tub - not a whirlpool. Supposedly, soaking tubs are the next big thing (WPs are expensive and a PITA to keep clean). I am 6’6" tall and my tub is 6’ long, about 36" wide and over 24" deep (guesstimates). Me and the GF can easily fit in the tub without having to lay on top of each other.

Building a house is fun and a pain in the ass. Try to make sure that it is mostly fun.

[/quote]

Let me ask, how much would it be to remodel a bathroom after the fact? If they expand the shower, there is no room for a bathtub. That means I have to deal with the tiny shower and space saver bath tub that was originally there.

60

[quote]Professor X wrote:

[quote]LankyMofo wrote:
IMO, now is the time to buy. It will be a long time before we see a combination of 5% interest rates, low prices (relative to the high prices) and 8k from the government.

I just bought my first place in December. I only had to put 3.5% down. I’m getting about that much back from the 8k tax credit.

And before this gets into a debate about federal programs, the 8k tax credit, etc., let me just state that I do not agree with them, but I’m already paying for them so fuck it, I’m going to exploit the programs available.[/quote]

Cool.

I am having one built now that I had the opportunity to design myself (as far as interiors). Is there anything you think I should look out for?[/quote]

I’m not really an expert on what people look for when buying houses. However I have noticed that one thing that hurts a home’s value in regards to the interior is a very modern look, since it will eventually be a very dated look. Maybe you’ll never sell the house you plan on buying, but it’s always good to keep an eye toward the possibility that you’ll sell eventually. Timeless looks are preferred. What exactly that entails is beyond me, but I’m sure you can figure that out.

Oh yeah, one other thing. When you decide to pick plumbing fixtures for your kitchen, bathroom and so on, go with recognized brand names like Price Pfister, Kohler, Grohe or Delta. I used to work for a plumbing supply company and I can’t tell you how many times I saw people bring in some busted part from a faucet like a stem or cartridge and be forced to buy a whole new fixture rather than a cheap repair part because they bought some showroom floor fixture that came from a company that only made fixtures and no replacement parts.

Stay away from Moen or Friedrich Grohe, which is an offshoot of Grohe. Moen just sucks and Friedrich Grohe stuff looks great, but it’s really expensive to repair and very hard to find parts.

Delta is a good brand, albeit a little bit cheaply made. But they are probably the easiest to repair. American Standard is pretty good stuff, but sometimes it can be hard to find parts for their stuff.

PF and Kohler work well and parts are usually readily available. The same can be said about Grohe, but their stuff tends to be a lot more expensive, although it is usually pretty high quality stuff and also fairly easy to find replacement parts.

For toilets, Toto makes some really nice pressure-assisted models and I’m pretty sure Kohler and American Standard has some decent stuff along these lines as well. Toto’s tend to be a little more expensive, but not significantly more.

For bathtubs, I’ve noticed that clawfoot tubs are all the rage these days, but they also retain that “timeless” quality I was speaking of earlier. However, the fixtures/shower heads for these things can be pretty steep. Probably worth the investment when it comes time to sell, though.

61

[quote]SteelyD wrote:

[quote]Professor X wrote:

[quote]Testy1 wrote:
It’s not for everyone, lot’s more upkeep than most non homeowners expect. From watching some of those home buying shows it seems there are a lot of great deals in Texas, I was surprised at how much you could get for your money.[/quote]

I was surprised as well. You can probably find a brand new house right now in this city with 4-5 bedrooms for under $150,000. Foreclosures seem to be all over as well even though people seem to try to destroy the house before they leave it.[/quote]

This is true in a lot of places. I’ve been considering a move from Maine to Georgia. I can literally get twice the house and lot for what I’m in now at the same price. You can get just short of a mansion for under 200k in some areas- houses that are less than 5 years old.

The kicker is that I’d have to unload this house in a bottomed out market.

It’s indeed a ‘buyers market’. If I had the capital, I’d be buying up left and right. It’s not a matter of “if” the economy and housing market will pick up, it’s “when”. This is a great time to have some cash to invest (in a house).[/quote]

There is still a lot of people looking to rent, so I would see (especially if you live around a college town) if you could rent it out until the mortgage is paid off and collect the dividends.