Thinking about Buying my First Home

Off Topic
21

[quote]MaximusB wrote:
Be advised about the HOA, and what it covers. Also understand it will go up over time.

Consider what amenities there are and if it’s worth the money you will be paying. My HOA is $540/month and all I have are some pools and tennis courts (which I have not used even once).

Think about the stuff you like to do (cooking, entertaining, barbequing in a back patio area, etc) and how this property fits those needs. For example, If you like to cook, and the kitchen is cramped or sucks, it might not be the best fit for you. If you have lots of people over and the living room area is small, again could be a problem.

Noise concerns can be address with spray foam, Quiet Rock, or both. Or just not give a flying shit about the noise. [/quote]

Dude, is that a type? $540/month!? I live in 1 of the richest counties in the nation and mine is $86/month and is a brand new community with pretty excellent landscaping, pool/clubhouse, tennis courts, and a bunch of parks.

This is obviously rhetorical b/c you aren’t supposed to leave that other thread.

22

What does the area look like? If a lot of residences are coming up for sale find out why.
Are local businesses closing?
Are local large employers closing or moving?
Call the police to find out about local crimes like burglary, B&E, car thefts & break ins, drug sales or labs. Drive around the area and take a close look especially after dark.
Are there issues with the local water or sewer lines being old or substandard?
Are there drainage issues or a know history of flooding from local streams?
Find out if there are any residents having construction, foundation, or mold issues.
Have you done the marble test?

23

[quote]beachguy498 wrote:
Yeah, the HOA fees can be steep. But for $89k with a decent down payment you can have some instant equity in the place. Take a short term look at it, buy it, fix up the cosmetics and get appliances. Look to get out in 3-5 years. By then you’ll have more equity in the place especially if it can be sold at the current market value. The potential to walk away with some real cash to get the place you really want is attractive. [/quote]

This was along the lines I was thinking, except I don’t think I’d wait 3-5 years, maybe 1-2. The hoa on the property is $205 per month.
As far as the down payment all I can swing on my own is 5k. If I had to borrow from a family member I’d be able to, but then I’d owe them money as well as the mortgage.

24

[quote]silverblood wrote:
What does the area look like? If a lot of residences are coming up for sale find out why.
Are local businesses closing?
Are local large employers closing or moving?
Call the police to find out about local crimes like burglary, B&E, car thefts & break ins, drug sales or labs. Drive around the area and take a close look especially after dark.
Are there issues with the local water or sewer lines being old or substandard?
Are there drainage issues or a know history of flooding from local streams?
Find out if there are any residents having construction, foundation, or mold issues.
Have you done the marble test?[/quote]

What’s the marble test?

25

[quote]Derek542 wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
If the house was appraised at 156k in 2013, assuming the market stays similar I don’t see how I’d be losing money.
[/quote]

Ignore the appraisal, it’s meaningless.

If the place is on the market for $89k, then it’s worth something less than $89k. That is the current market value and the only number you should be paying attention to.

The only equity you will have in it the day you close is whatever you put down.
[/quote]
Who the fuck wants to buy an apartment? [/quote]

Not sure where this is coming from but it’s a townhouse, not an apartment

26

Would anyone care to enlighten me on how to go about seeking a mortgage for more than the cost of the house?

27

[quote]coolnatedawg wrote:

[quote]MaximusB wrote:
Be advised about the HOA, and what it covers. Also understand it will go up over time.

Consider what amenities there are and if it’s worth the money you will be paying. My HOA is $540/month and all I have are some pools and tennis courts (which I have not used even once).

Think about the stuff you like to do (cooking, entertaining, barbequing in a back patio area, etc) and how this property fits those needs. For example, If you like to cook, and the kitchen is cramped or sucks, it might not be the best fit for you. If you have lots of people over and the living room area is small, again could be a problem.

Noise concerns can be address with spray foam, Quiet Rock, or both. Or just not give a flying shit about the noise. [/quote]

Dude, is that a type? $540/month!? I live in 1 of the richest counties in the nation and mine is $86/month and is a brand new community with pretty excellent landscaping, pool/clubhouse, tennis courts, and a bunch of parks.

This is obviously rhetorical b/c you aren’t supposed to leave that other thread.[/quote]

Not a typo. Overall it’s not bad for me because I bought before the housing boom.

28

[quote]coolnatedawg wrote:

This is obviously rhetorical b/c you aren’t supposed to leave that other thread.[/quote]

LOL

29

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
If the house was appraised at 156k in 2013, assuming the market stays similar I don’t see how I’d be losing money.
[/quote]

Ignore the appraisal, it’s meaningless.

If the place is on the market for $89k, then it’s worth something less than $89k. That is the current market value and the only number you should be paying attention to.

The only equity you will have in it the day you close is whatever you put down.
[/quote]

Spot on. Unless all comps are way over $89k, then that is a reasonable list price (and if they were, I imagine many all-cash flippers would bum rush it). Appraisals generally don’t mean much…especially if done by the seller.

When you buy a house, the lender will order an appraisal. The appraiser knows ahead of time the proposed sale price and, because they are scared shitless after the subprime mess a few years back, they appraise for around that (or less if there’s a lot wrong with it). If you’re doing a refi, the appraiser has a bit more latitude but it doesn’t necessarily mean the house would sell at that price.

Honestly, a good realtor worth a shit would probably have the best idea of what a place could sell for. But, then again, if you hire them, they just want to sell you a place, collect the commission and more on to the next one (not fair to say about all realtors, but…).

So the reason I say forget this place is, unless you are going to flip it (and you need the cash and knowledge to do so), I would say step back and take your time. Regardless of what realtors and brokers tell you, while today might be a great time to buy, it’s not going to change drastically in the near future.

And I am not coming down on you or even saying this place would be a horrible choice. Buyer’s remorse sucks regardless of the product, but infinitely more when it’s the largest financial transaction of your life.

30

[quote]Tyler23 wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
If the house was appraised at 156k in 2013, assuming the market stays similar I don’t see how I’d be losing money.
[/quote]

Ignore the appraisal, it’s meaningless.

If the place is on the market for $89k, then it’s worth something less than $89k. That is the current market value and the only number you should be paying attention to.

The only equity you will have in it the day you close is whatever you put down.
[/quote]

Spot on. Unless all comps are way over $89k, then that is a reasonable list price (and if they were, I imagine many all-cash flippers would bum rush it). Appraisals generally don’t mean much…especially if done by the seller.

When you buy a house, the lender will order an appraisal. The appraiser knows ahead of time the proposed sale price and, because they are scared shitless after the subprime mess a few years back, they appraise for around that (or less if there’s a lot wrong with it). If you’re doing a refi, the appraiser has a bit more latitude but it doesn’t necessarily mean the house would sell at that price.

Honestly, a good realtor worth a shit would probably have the best idea of what a place could sell for. But, then again, if you hire them, they just want to sell you a place, collect the commission and more on to the next one (not fair to say about all realtors, but…).

So the reason I say forget this place is, unless you are going to flip it (and you need the cash and knowledge to do so), I would say step back and take your time. Regardless of what realtors and brokers tell you, while today might be a great time to buy, it’s not going to change drastically in the near future.

And I am not coming down on you or even saying this place would be a horrible choice. Buyer’s remorse sucks regardless of the product, but infinitely more when it’s the largest financial transaction of your life.[/quote]

What I was thinking was either I:
buy it, fix it up and live there.
Buy it, fix it up, and rent it
Buy it, fix it up, sell it.

31

[quote]Phoenix44e wrote:

[quote]Derek542 wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
If the house was appraised at 156k in 2013, assuming the market stays similar I don’t see how I’d be losing money.
[/quote]

Ignore the appraisal, it’s meaningless.

If the place is on the market for $89k, then it’s worth something less than $89k. That is the current market value and the only number you should be paying attention to.

The only equity you will have in it the day you close is whatever you put down.
[/quote]
Who the fuck wants to buy an apartment? [/quote]

Not sure where this is coming from but it’s a townhouse, not an apartment[/quote]
Okay is there another building connected the building that you are buying that other people live in? That could be beside you, above you or below you?

I know that first quote came off harsh, was not my intent.

Its kind of like buying a trailer you have a VERY small market for resale. Reason they do not appreciate like houses can.

32

[quote]Derek542 wrote:

[quote]Phoenix44e wrote:

[quote]Derek542 wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
If the house was appraised at 156k in 2013, assuming the market stays similar I don’t see how I’d be losing money.
[/quote]

Ignore the appraisal, it’s meaningless.

If the place is on the market for $89k, then it’s worth something less than $89k. That is the current market value and the only number you should be paying attention to.

The only equity you will have in it the day you close is whatever you put down.
[/quote]
Who the fuck wants to buy an apartment? [/quote]

Not sure where this is coming from but it’s a townhouse, not an apartment[/quote]
Okay is there another building connected the building that you are buying that other people live in? That could be beside you, above you or below you?

I know that first quote came off harsh, was not my intent.

Its kind of like buying a trailer you have a VERY small market for resale. Reason they do not appreciate like houses can. [/quote]

Houses on left and right. Separate entry. I live in the city, townhouses are pretty popular around here. It’s great for young professionals.

33

[quote]Phoenix44e wrote:

What I was thinking was either I:
buy it, fix it up and live there.
[/quote]

If that’s your intent, then my recommendation stays the same: take your time.

Only if you’re positive you could more than cover your mortgage, insurance, HOA dues, months of vacancy, etc. Renters can be a colossal PITA and even get you into legal trouble. Also, would you manage it yourself? You need to know how to screen tenants properly (rule # 1 of being a landlord)

If you have no experience here, I would stay far away from that. I can’t fathom anyone trying this without having owned property first.

34

[quote]Phoenix44e wrote:
Would anyone care to enlighten me on how to go about seeking a mortgage for more than the cost of the house? [/quote]

Not gunna happen.

35

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
Would anyone care to enlighten me on how to go about seeking a mortgage for more than the cost of the house? [/quote]

Not gunna happen.[/quote]

Maybe not, but my sister just bought a fixer-uppper with a 100k over-purschase-price loan where the extra had to be committed to renovations/remodeling. I suppose cost of the remodel could be considered part of the purchase price, but, technically, the money isn’t going to the seller.

36

[quote]jjackkrash wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
Would anyone care to enlighten me on how to go about seeking a mortgage for more than the cost of the house? [/quote]

Not gunna happen.[/quote]

Maybe not, but my sister just bought a fixer-uppper with a 100k over-purschase-price loan where the extra had to be committed to renovations/remodeling. I suppose cost of the remodel could be considered part of the purchase price, but, technically, the money isn’t going to the seller. [/quote]

this is exactly what I was looking for basically.

37

[quote]jjackkrash wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
Would anyone care to enlighten me on how to go about seeking a mortgage for more than the cost of the house? [/quote]

Not gunna happen.[/quote]

Maybe not, but my sister just bought a fixer-uppper with a 100k over-purschase-price loan where the extra had to be committed to renovations/remodeling. I suppose cost of the remodel could be considered part of the purchase price, but, technically, the money isn’t going to the seller. [/quote]

Ah, didn’t even think of a construction loan. The project will still have to appraise for more than the value of the note which might be difficult on a $89k property because there’s not a lot of headroom.

38

[quote]Phoenix44e wrote:

[quote]jjackkrash wrote:

[quote]Dr. Pangloss wrote:

[quote]Phoenix44e wrote:
Would anyone care to enlighten me on how to go about seeking a mortgage for more than the cost of the house? [/quote]

Not gunna happen.[/quote]

Maybe not, but my sister just bought a fixer-uppper with a 100k over-purschase-price loan where the extra had to be committed to renovations/remodeling. I suppose cost of the remodel could be considered part of the purchase price, but, technically, the money isn’t going to the seller. [/quote]

this is exactly what I was looking for basically.
[/quote]

Call a good mortgage broker and find out what your options are. I don’t know all the ins and outs of this stuff but this type of loan exists.

39

First of all, consider your financial resources. If you have $5K in the bank and are on a seasonal layoff, then it seems to me that you can’t really afford this place. You need to have some type of financial cushion for when things go wrong.

Second, buying real estate is for people who’ve done their homework. This is doubly true for someone who wants to fix up a place and flip it. You need to have knowledge of the market comps in the area, understand exactly what work needs to be done and what it will cost, and know what the place will be worth when you’re done with the work. Sellers are supposed to disclose any known problems, but that doesn’t mean they will. If you haven’t done all of this footwork, then you’ll almost surely get burned. All real estate transactions are a matter of public record, so the information is out there. Take a look at what this property sold for, what surrounding properties sold for and what similar properties in the area are listed for. Zillow is a good resource, but you can always go to the Town Hall to get the information as well. As someone else said, you also need to actually walk through a number of other properties on the market to get a good feel for what something is actually worth.

Finally, you need to be comfortable with the idea of living in the place for quite a while if market conditions aren’t right to sell it. If you think you’ll need to move in 1-2 years, then you might really be stuck if you need to get out. If the market isn’t good at the time, you’ll be in the position of trying to negotiate a short sale with your mortgage lender, which isn’t easy to do.

40

[quote]Phoenix44e wrote:

[quote]silverblood wrote:
What does the area look like? If a lot of residences are coming up for sale find out why.
Are local businesses closing?
Are local large employers closing or moving?
Call the police to find out about local crimes like burglary, B&E, car thefts & break ins, drug sales or labs. Drive around the area and take a close look especially after dark.
Are there issues with the local water or sewer lines being old or substandard?
Are there drainage issues or a know history of flooding from local streams?
Find out if there are any residents having construction, foundation, or mold issues.
Have you done the marble test?[/quote]

What’s the marble test?
[/quote]
Take a marble or small ball and drop it on the floor and see if it starts rolling. It shows if the floors, decks, or foundation have settled and are not level. I’ve seen floors that were an inch plus out but didn’t show sheetrock cracks in the walls or ceiling. Look to see if there is newer paint around baseboards or moulding as they may have been moved to hide gaps.