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Old 01-24-2011, 01:28 PM
 
309 posts, read 570,210 times
Reputation: 192

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Quote:
Originally Posted by goindownsouth2011 View Post
Buying a home in this falling market is like trying to catch a falling knife without cutting yourself. Be sure to fully consider your rental opportunities. The old addage that renting is like throwing money away, no longer applies these days.
Why do you say this? Isn't this the time to buy because the market will eventually go up and buyers will make money now?
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Old 01-24-2011, 02:43 PM
 
Location: Cumberland
4,562 posts, read 7,623,866 times
Reputation: 2775
I have this crazy notion that one should buy a house because they plan on living in the house long term rather than viewing it as a money making tactic.

Otherwise you are a slave to the housing market. Market goes up, WOW look I made a bunch of money. Market goes down, CRAP now I am underwater on my mortgage and stuck somewhere I don't want to be.

If you are in the home you want, in the town you want, who cares about the "paper value" of your property?
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Old 01-24-2011, 03:04 PM
 
335 posts, read 570,728 times
Reputation: 297
Quote:
Originally Posted by westsideboy View Post
I have this crazy notion that one should buy a house because they plan on living in the house long term rather than viewing it as a money making tactic.

Otherwise you are a slave to the housing market. Market goes up, WOW look I made a bunch of money. Market goes down, CRAP now I am underwater on my mortgage and stuck somewhere I don't want to be.

If you are in the home you want, in the town you want, who cares about the "paper value" of your property?
A slave to the housing market???? How about all the folks out there that are slaves to a house payment they cannot afford, only because they were poorly advised that buying is always the best option.
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Old 01-24-2011, 04:12 PM
 
309 posts, read 570,210 times
Reputation: 192
Quote:
Originally Posted by westsideboy View Post
I have this crazy notion that one should buy a house because they plan on living in the house long term rather than viewing it as a money making tactic.

Otherwise you are a slave to the housing market. Market goes up, WOW look I made a bunch of money. Market goes down, CRAP now I am underwater on my mortgage and stuck somewhere I don't want to be.

If you are in the home you want, in the town you want, who cares about the "paper value" of your property?
I do plan on living in the house, and don't want it to be a money making tactic, but I do want my house to be an investment, something I can hopefully get something out of one day when I do decide to move.
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Old 01-24-2011, 06:28 PM
 
Location: Cumberland
4,562 posts, read 7,623,866 times
Reputation: 2775
Quote:
Originally Posted by goindownsouth2011 View Post
A slave to the housing market???? How about all the folks out there that are slaves to a house payment they cannot afford, only because they were poorly advised that buying is always the best option.
My point exactly. Buying isn't the always the best option, especially if what you are purchasing is something you can't really afford. You run the risk of getting trapped. I feel sorry for those that lost their jobs and are now in foreclosure, it is hardly their fault.

I have less sympathy for all of those that bought knowing the cost was too much, but were promised that they would end up on top by selling in a couple years, or knew less about their own finances than their "adviser." You are in control of your own lives people! Don't drink the snake oil!
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Old 02-08-2011, 10:21 AM
 
25 posts, read 60,929 times
Reputation: 16
I bought my first house in Nov 2009. That was the same month my apartment lease was to end. I wouldn't have thought about buying if my fiance at the time didn't bring up the idea.

My rent was 1,300/mnth - and that was all I was willing to pay for a house as well. I did a bunch of research and found my max price was 200,000 for a home. Search for some mortgage calculators online. You need to factor in the principal, interest, mortgage insurance, house insurance, HOA, and taxes. I decided to buy a home rather than renew the lease - if I could afford a house at that price, why not buy instead of rent? When you buy, at least you have the chance to build equity - you can earn that money back when you sell the property. We started searching for a home in... I think August or September 2009.

Make sure you save up enough money to make the necessary down payments. I needed $7,500 up front to pay for all the necessary upfront fees for inspections, down payments, etc.

Determine what you're needs are. A condo/townhouse may not (just guessing) require as much maintenance. The more space you have, the more you're utility bills will be.

The first step is to get pre-qualified. I could not get pre-qualified with larger well known banks due to my debt to income ratio - even though I could afford the payments. Our realtor suggested a local bank who managed to just barely pre-qualify us (me and my fiance) at 200,000. When you are pre-qualified for a certain amount, that will be the highest home price you will be able to purchase at. A realtor will not waste time with you if you are not pre-qualified.

Next, meet with the realtor and give them specific info as to what you want and where you want to live. Our realtor took our info, went to her office, did a property search using our info, and handed us a book of 200 some properties for us to look over. We would then narrow that down to a handful for our realtor to take us to for viewing. When it was all said and done, we viewed 30 or so properties before buying.

Once you choose the property you want to buy, you draw a contract with the realtor and offer it to the seller. If the seller likes it, you then have inspections done. Our home passed the home inspection, and failed the septic inspection. After inspections, you have the opportunity to ask the seller to make necessary fixes to the property. We had the seller remove asbestos from the basement, fix a stairway, install hand rails on stairs, etc. Since the septic inspection failed, we had to either walk away from the purchase, or ask the seller to fix the septic system. The ONLY solution was to hook the house up to the city sewer system. It cost the seller $8,000 to do this but was required if he wanted to sell the property.

Once all is well, myself, my fiance, our realtor, the sellers and their realtor, our lender, and a lawyer all met in a conference room, went over the contract and purchase, and we signed a bunch of papers. Once that is done, the house is yours.

The process is very overwhelming (for me it was) and made me never want to buy a home again lol. I've lived in the home for 2 yrs now I think... so during the first two years I had put a lot of work in fixing the lawn (it was a mess), investing in power tools to do the work, re-wiring for cable tv, installing a new mailbox, purchasing curtains to cover windows, and fixing some plumbing problems we encountered (we have a 2 yr old that likes to gum up the works). It's just a lot of small stuff, nothing major yet. At any time though our appliances could stop working as they are 20 yrs old - AC, furnace, dishwasher, toilets, etc. We purchased a home warranty which covers these appliances and costs $500 a year.

The house requires a lot more upkeep than an apartment, more than I anticipated, but it's worth it. It feels good to put work into your property and make it your own. You also end up learning real quick about how things work. I don't know anything about wiring or plumbing (why is my toilet leaking today?) - but you're forced to learn real fast when there is a problem with these things at home (ended up taking apart entire toilet to fix one piece).

There have been expenses that were unanticipated. I forgot about the home warranty (which you pay annually) last year and surprised me when it came time to renew. There were unexpected home repairs (mostly minor). Most recently I have experienced my mortgage increase $200 a month for the next 12 months due to an escrow shortage. After the shortage is covered, the mortgage goes back down to the regular rate. So, make sure you still have money in savings for the unexpected events during your first year or two.

When we bought the home, we initially thought we could just stay for three years then sell it and move elsewhere. I've learned that was a retarded thought. I've been paying my mortgage since Nov 2009. I have only put $2,000 into my mortgage principal - the rest has gone to interest and taxes. As time goes on though, more of your money will go to the principal instead of interest. So, it will be quite awhile before I can sell this place. In addition, our home is now estimated to be worth 135,000 during a recent apprasial - we bought it at 180,000.

Now is a good time to buy. I'm surprised how low the cost of housing is in some places. Get it now while its cheap, and then wait 10 years. If you don't intend to stay in one place for 10 years, do not buy.
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Old 02-08-2011, 05:45 PM
 
309 posts, read 570,210 times
Reputation: 192
Quote:
Originally Posted by jaykf014 View Post
I bought my first house in Nov 2009. That was the same month my apartment lease was to end. I wouldn't have thought about buying if my fiance at the time didn't bring up the idea.

My rent was 1,300/mnth - and that was all I was willing to pay for a house as well. I did a bunch of research and found my max price was 200,000 for a home. Search for some mortgage calculators online. You need to factor in the principal, interest, mortgage insurance, house insurance, HOA, and taxes. I decided to buy a home rather than renew the lease - if I could afford a house at that price, why not buy instead of rent? When you buy, at least you have the chance to build equity - you can earn that money back when you sell the property. We started searching for a home in... I think August or September 2009.

Make sure you save up enough money to make the necessary down payments. I needed $7,500 up front to pay for all the necessary upfront fees for inspections, down payments, etc.

Determine what you're needs are. A condo/townhouse may not (just guessing) require as much maintenance. The more space you have, the more you're utility bills will be.

The first step is to get pre-qualified. I could not get pre-qualified with larger well known banks due to my debt to income ratio - even though I could afford the payments. Our realtor suggested a local bank who managed to just barely pre-qualify us (me and my fiance) at 200,000. When you are pre-qualified for a certain amount, that will be the highest home price you will be able to purchase at. A realtor will not waste time with you if you are not pre-qualified.

Next, meet with the realtor and give them specific info as to what you want and where you want to live. Our realtor took our info, went to her office, did a property search using our info, and handed us a book of 200 some properties for us to look over. We would then narrow that down to a handful for our realtor to take us to for viewing. When it was all said and done, we viewed 30 or so properties before buying.

Once you choose the property you want to buy, you draw a contract with the realtor and offer it to the seller. If the seller likes it, you then have inspections done. Our home passed the home inspection, and failed the septic inspection. After inspections, you have the opportunity to ask the seller to make necessary fixes to the property. We had the seller remove asbestos from the basement, fix a stairway, install hand rails on stairs, etc. Since the septic inspection failed, we had to either walk away from the purchase, or ask the seller to fix the septic system. The ONLY solution was to hook the house up to the city sewer system. It cost the seller $8,000 to do this but was required if he wanted to sell the property.

Once all is well, myself, my fiance, our realtor, the sellers and their realtor, our lender, and a lawyer all met in a conference room, went over the contract and purchase, and we signed a bunch of papers. Once that is done, the house is yours.

The process is very overwhelming (for me it was) and made me never want to buy a home again lol. I've lived in the home for 2 yrs now I think... so during the first two years I had put a lot of work in fixing the lawn (it was a mess), investing in power tools to do the work, re-wiring for cable tv, installing a new mailbox, purchasing curtains to cover windows, and fixing some plumbing problems we encountered (we have a 2 yr old that likes to gum up the works). It's just a lot of small stuff, nothing major yet. At any time though our appliances could stop working as they are 20 yrs old - AC, furnace, dishwasher, toilets, etc. We purchased a home warranty which covers these appliances and costs $500 a year.

The house requires a lot more upkeep than an apartment, more than I anticipated, but it's worth it. It feels good to put work into your property and make it your own. You also end up learning real quick about how things work. I don't know anything about wiring or plumbing (why is my toilet leaking today?) - but you're forced to learn real fast when there is a problem with these things at home (ended up taking apart entire toilet to fix one piece).

There have been expenses that were unanticipated. I forgot about the home warranty (which you pay annually) last year and surprised me when it came time to renew. There were unexpected home repairs (mostly minor). Most recently I have experienced my mortgage increase $200 a month for the next 12 months due to an escrow shortage. After the shortage is covered, the mortgage goes back down to the regular rate. So, make sure you still have money in savings for the unexpected events during your first year or two.

When we bought the home, we initially thought we could just stay for three years then sell it and move elsewhere. I've learned that was a retarded thought. I've been paying my mortgage since Nov 2009. I have only put $2,000 into my mortgage principal - the rest has gone to interest and taxes. As time goes on though, more of your money will go to the principal instead of interest. So, it will be quite awhile before I can sell this place. In addition, our home is now estimated to be worth 135,000 during a recent apprasial - we bought it at 180,000.

Now is a good time to buy. I'm surprised how low the cost of housing is in some places. Get it now while its cheap, and then wait 10 years. If you don't intend to stay in one place for 10 years, do not buy.

WOW Thanks!!!! This was extremely helpful! If you don't mind me asking, how did you meet your realtor and how much did you put down on your house?
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Old 02-08-2011, 06:54 PM
 
645 posts, read 1,737,290 times
Reputation: 451
I'm a pretty new homeowner. I used a buyer's agent and not a real estate agent. Basically a buyers agent looks out for the best interest of your the buyer.


I'm pretty happy with my house, but my only regret is not getting a house with a fireplace.
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Old 02-09-2011, 09:26 AM
 
335 posts, read 570,728 times
Reputation: 297
If the market were on the verge of a turnaround, builders would be building. But they are not. Wait it out another 2 years or so as a renter, and you might be able to buy a better house for a lower monthly payment. That's my OPINION, and nobody knows for sure what will happen to the housing market, including realtors.
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Old 02-09-2011, 10:41 AM
 
Location: Maryland - Howard County
195 posts, read 656,707 times
Reputation: 60
Clarification - A Buyer's Agent is a Real Estate Agent. A Seller's Agent is a Real Estate Agent.
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