first time home buyer city advice (Minneapolis, St. Paul: real estate, condo, mortgage broker)

[Levon]

Hi,

I'm thinking about purchasing my first home sometime this summer and I was hoping to get some insight about some areas to look into and avoid. I work at the U of MN (St. Paul Campus) I'm a single guy fresh out of college so price is some what of an issue.

[greyduk]

Haven't been in the market up there lately, but did a quick look out of curiosity a few days ago. It seems like Cottage Grove really has some good prices. The area isn't bad, especially as a young person (like myself) likely with less of a need for great schools and related things. It's probably not the most ideal commute to the St. Paul campus, but it's on the right side of the cities and could be much, much worse. I'm pretty sure I saw some decent houses down there for under $200,000

[Clifford63]

Originally Posted by Levon

Hi,

I'm thinking about purchasing my first home sometime this summer and I was hoping to get some insight about some areas to look into and avoid. I work at the U of MN (St. Paul Campus) I'm a single guy fresh out of college so price is some what of an issue.

First step of home purchase should be a conversation with a mortgage banker. You need to get prequlified and figure out what your range for purchase price will be. You will also get info on how much money down you need, which of late is more than it used to be.

Once you have a range, then it makes sense to look at where you want to focus your search for a home.

Good news is you should be able to find something close to the U in the entry level price you mentioned you are looking for.

[Slig]

I bought my first home last May and there are alot of things to consider:
-what is your price range? If you talk to a broke and find out what you are pre-qualified for, automatically subtract at least 25% of that.
-what type of home are you looking for? new, old, townhome, single family home, multi-family home, condo?
-urban, suburban or rural?
-quiet, vibrant area? what do you want to be close to? Are things like public transportation, proximity to entertainment and basic amenities important?
-where do you want to live in regards to diversity in race, religion, income, etc.?

I had a very specific set of requirements and eventually bought a house in south Minneapolis in Powderhorn. I'll be able to get a better idea of what would be a good area and option for you if you answer all of these questions I've laid out.

[Levon]

I'd prefer a single family home in more of a suburb. I say suburb because it seems like the areas can be nicer and you get more house for you money with the trade off of the commute. But my current commute (driving)is 30min and I'd like to stay around that or less. I start work a little later so I just miss rush hour both ways, so traffic isn't really an issue.

[Slig]

Being able to get more for your money in the suburbs is a myth, from my experiences the best bargains are in Minneapolis and St. Paul proper. If you think they're nicer than that's your opinion, you will find newer construction in most suburbs if that's what you prefer. Anyways, you're still being too vague, what is your specific price range. how many beds/baths, how big of a garage? 1 car, 2 car or more? Finding a place 30 minutes away or closer to St. Paul campus is a huge area, what specifically do you want to live by? What amenities, entertainment, shopping, rivers, lakes, parks, diverse or close or within a more specific homogenous group of people, is access to public transportation important, a fixer upper or a pristine move-in ready home, etc. etc.

[Levon]

Good point on the suburb myth.

3bed, 2garage, prefer 2 bath but would settle for a 1 bath. Public transportation isn't that important for me, but I can see myself getting a roommate so that might be an issue for a potential roommate.

Lakes, river, parks not that big of a need for me. As for entertainment, I would like an area with people my age (mid 20's)

As for price range I haven't talked to a mortgage broker yet so I'm not sure what I can qualify for. My credit score is excellent but I'm still young, single (no double income), and new to this whole home buying scene so I'm clueless as to what price range I could qualify for. My ballpark guess price is around 160k. As for down payment I have a good chunk saved for that.

Now a friend of mine just bought a house and he was able to get the seller to pay the closing costs. Is this normal with the market being bad right now or is this a rare thing?



Hopefully this helps. Thank you for all the imput!

[Clifford63]

Originally Posted by Levon

Good point on the suburb myth.

3bed, 2garage, prefer 2 bath but would settle for a 1 bath. Public transportation isn't that important for me, but I can see myself getting a roommate so that might be an issue for a potential roommate.

Lakes, river, parks not that big of a need for me. As for entertainment, I would like an area with people my age (mid 20's)

As for price range I haven't talked to a mortgage broker yet so I'm not sure what I can qualify for. My credit score is excellent but I'm still young, single (no double income), and new to this whole home buying scene so I'm clueless as to what price range I could qualify for. My ballpark guess price is around 160k. As for down payment I have a good chunk saved for that.

Now a friend of mine just bought a house and he was able to get the seller to pay the closing costs. Is this normal with the market being bad right now or is this a rare thing?



Hopefully this helps. Thank you for all the imput!

There are some changes in rules that allow sellers paying closing costs. I think you can still get help with the fees, but no help with down payment now. Check with your real estate agent when you get to that point.

I don't know if the thought about getting more for your money in the burbs is true or false. You will have to take a look and see how they stack up. Sounds like you are somewhat open to that.

First house is the hardest house to buy. I had a hard time finding anyting I wanted in my range. I waited it out for a year and paid off all my student loans. There is always a way to make it happen. Best advice is gather as much info as you can as it will result in a better decision for the long term. Sounds like you are just getting started. Best of luck.

[Slig]

My experiences were similar to those of Clifford. I started looking in December of 2006 and didn't buy until May of 2008 and the buyer covered the closing costs. I couldn't even tell you how many homes I looked at where I walked in and immediately knew there was no chance I would be interested in placing a bid. I probably saw 4 houses I gave second thought too. I finally placed a bid on one house well below what it was originally listed, he countered and I accepted the counter. Anyways, now it sounds like you've thought this through and have developed a desired criteria, that's good.

I did an MLS search on SFH 150-170k with 3 br, 2 bath and a 2 car garage. In St. Paul proper 61 homes showed up, mostly on the north end and east side with a handful of homes on the west side and 4 in midtown/frogtown. Looking on the north side of 36 I found 21 homes: 7 in White Bear Lake, 1 in Vadnais Heights, 1 in Little Canada, 1 in Roseville, 1 in Shoreview, 2 in New Brighton.

There is nothing available east of 694, southeast of St. Paul there are 4 homes in Cottage Grove, 3 in St. Paul Park, 2 in Newport.

In looking in the southern suburbs, there are about 30 homes meeting the requirements in Burnsville, Apple Valley, Lakeville, Rosemount. That would be reaching the outer limits of your 30 minute drive time.

Going over to the Minneapolis side, 24 homes showed up in Richfield/Bloomington, about 20 homes in south Minneapolis (all of them on the east side of 35W), 25 or so homes in NE, 20 in North, about 85 homes in Brooklyn Center/Brooklyn Park/Crystal/Robbinsdale.

Now, here is my suggestion. If you're looking for an urban environment very close to where you work the closest homes I found were a few in NE Minneapolis, Longfellow and Powderhorn south Minneapolis, and the few houses I found in the Midway area of St. Paul or possibly the homes available around Lake Phalen. The fact that you want a 2 car garage is eliminating ALOT of possibilities in these areas, especially St. Paul proper. My brother bought a house north of 200k and it only has a 1 car garage, they just aren't common in St. Paul.

If you're looking nearby suburban, there are very few options in your range, you would have to find a house listed higher and place a low bid and hope you get lucky.

My advice to you, get yourself a good realtor and be very specific for what you're looking for and then find some houses you think have potential from an MLS search and get your realtor out to look at the houses.

[tfranklin]

Good advice from everyone. As for area's to recommend; it will depend a lot on your price point. I would suggest you consider 2br (they often have non-conforming 3rd bedrooms anyway) and 1 car garages (they are often oversized 1 car). It will make a huge difference in that price range and greatly open up your options, especially for better quality homes. As for down payments; there are some loan program available for little (3%:$4800 on $160k) and no money down (VA- loans). It just depends on your case specifically. Also, you will likely be eligible for the $8000 first time buyer tax credit. Levon; mod cut