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My wife and I are considering purchasing our first home. It will be a previously lived in home. Neither one of us has ever owned a home before. FWIW I am military and stationed in Missouri.
1. Is it better to purchase a home thru a Realtor? Or private owner?
2. Is it mandatory that the house is inspected before purchase?
3. If/when we buy a home are there any tests and such that must be done before the purchase is made? I've been told if building a new home a "perk test" has to be done, but not if it's a used home?
4. I understand that when you own a home you must also pay property tax? How does this work? I've heard you pay for it as part of your mortgage but I think I've also heard that you are annually taxed separately?
5. What are some of the other things to take into consideration?
I apologize if I've asked any silly questions...please keep in mind we are noobs in terms of real estate. Thanks!
Hey Deez, let me first say THANK YOU FOR YOUR SERVICE AND YOUR SACRIFICE, and also for your wife's and family's.
No stupid questions.
Being a newbie, get a realtor. Not an agent. Someone who has a designation of Realtor (they belong to the National Association of Realtors). The seller pays the commission (usually) which is split between the buyer's broker and the seller's broker. (This is usually figured into the price of the home, so even though they're "paying" it out of their proceeds, you're already paying it in terms of the price of the house so you might as well use a professional.) Besides, there is SO much to know/do with buying real estate, that until you've done it a few times, it's best to find a really good Realtor and it's a price worth paying to save yourself a lot of headache down the road.
Do not EVER buy a house without having it inspected. It costs about $300-$400/give or take, and can save you THOUSANDS! Please, do NOT buy a house w/o an inspection.
Not sure of what tests you're referring to, but a lender will require an appraisal before the loan will be made.
Yes, you must pay property tax and it varies by state. You can request that your lender "escrow" your property taxes, which means you pay them every month and they hold them in an account and then pay them twice a year to the state when they're due. That way you don't have to come up with a lump sum twice a year. I have mine escrowed. It's just easier that way.
Some of the other things to consider is how easy will it be to sell when you get deployed/get PCS orders or the like? Do you make enough money to qualify for a loan and afford your payments? Do you have a lot of outstanding debt in terms of car payments, credit card payments, and the like? Do you have money for repairs? Will you get a subsidy for living off post?
Why do you want to buy? That's a big question. Is it cost effective versus renting? Is your housing appreciating or depreciating in your area? (A good realtor can not only answer all these questions but will come up with a lot more!)
Good luck! You will get a wealth of information from this site. Stay tuned!!
1. Is it better to purchase a home thru a Realtor? Or private owner?
A Realtor, if you have hired them to be your buyer's agent, will represent your interests, including if you decide to purchase a For Sale By Owner (FSBO) home. They'll guide you not just in finding the home but in negotiations and through the maze that follows.
2. Is it mandatory that the house is inspected before purchase?
As far as I'm concerned, yes. Given that things turn up even in inspections of new builds (some of them major), you'll need to get an inspection so that you'll know if you're walking into a problem, and also to negotiate any repairs you might want made to the house that turn up as a result.
3. If/when we buy a home are there any tests and such that must be done before the purchase is made? I've been told if building a new home a "perk test" has to be done, but not if it's a used home?
Not sure what you're referring to here - the "perk test" that I'm familiar with has to do with fields when you're going to install a septic tank as opposed to hooking up to city sewer. Is that the situation in your area? If it's an existing home, you'll want to have a septic inspection done as well as the regular inspection. If it's a new build with a septic, chances are good that the builder will have had the perk test done as part of getting the appropriate permits, but you'd want to ask about that, of course.
If it's another kind of perk test, I'm unable to advise you because I don't know what it could be.
4. I understand that when you own a home you must also pay property tax? How does this work? I've heard you pay for it as part of your mortgage but I think I've also heard that you are annually taxed separately?
Most areas have property tax. How much and what will depend on where you are. You are taxed annually, but with a mortgage, your lender will be taking out the amount for taxes and insurance from your monthly payment (those amounts are added on top of your payment and you'll know in advance what they will be) and putting them in an escrow account to be available at the time payment is required. The lender will then pay the taxes and insurance for you, to assure them that they are being paid.
If you have a certain percentage down or have built up a certain amount of equity in your home, you would not need to have an escrow account, and then you would personally be responsible for saving up the money and paying the taxes and insurance each year.
5. What are some of the other things to take into consideration?
First thing to do is to get yourself pre-approved so that you will know for a fact how much you can spend. You can do that before you get a real estate agent or they can recommend some lenders if you don't know of any. (You can also get recommendations from friends and family who have mortgages and have had to deal with their own lenders and can tell you their experience from that perspective.) If you are military, you probably qualify for USAA mortgage and insurance, and they can be VERY helpful in this process.
Once you've got that done, find an agent who is used to working with first-time buyers. They'll help you find a home (though by all means you'll want to look for yourself), and they'll help you determine what are wants and what are needs for your new home. It's surprising how many times buyers start out thinking they want one kind of home and after looking for a while, will end up buying something completely different because of the learning process that looking at the options creates.
You'll want to check into insurance, and you'll want to check into the taxes for your area. If you have children, you'll want to research the schools. You'll want to look at the neighborhoods you're thinking of buying in.
Once you find a house, you'll want to get comps (houses that have sold in the area) to help you determine what offer to make. The agent will also help you write up the offer on the appropriate forms required by your state, and will help you make sure that you're abiding by all the legal requirements (and look to make sure the seller is making the legally required disclosures, as well). Once the offer is in, negotiations begin, and the seller can accept your offer, or counter it, or reject it. If they counter, then you'll need to decide if you want to accept their counter, counter back yourself, or walk away and find another house.
Once you've got a contract, you'll want to get your inspections and do your due diligence that couldn't be done before you made the offer. In Texas, we have an option period where you pay a small amount for the option of being able to walk away from the contract for any reason during a period of, usually, ten days or so. You get the inspection, determine whether you want to ask for any repairs/funds credited to you by the seller to have the repairs made and if so, how much, and negotiate that.
Then, it's headed for closing! You'll have a variety of deadlines in your contract - what they are will vary by state, so you'll need to look at your state's contract and, then, the one that you eventually end up with, because some of those deadlines are a result of negotiations. You'll need to make sure that you meet all the ones that you're supposed to and keep an eye on the one's that the seller's supposed to meet. You'll be busy getting your loan approved (you have to be finally approved, AND the house has to be approved - it has to appraise for the sale price or you'd have to come up with extra money yourself if it doesn't or pass on the house). The title company will be doing a title search on the house, there may be a survey required, things like that.
Most of this, if you have an agent, the agent will handle for you (keeping track of deadlines and so forth). Otherwise, be prepared to do it yourself.
For first time buyers, I really recommend an agent. If someone has bought several properties already, they might not need one, but since the seller or the seller's agent is usually paying the commission, in your situation I'd say get one. Interview 2 or 3 and choose the one that you feel will do the best job for you AND that you feel most comfortable working with, because this is definitely a team project.
you may also consider taking a class on your base at the family support center (or whatever they're calling it these days) for a homebuying class specifically tailored for the military and your unique needs and questions. i took advantage of the class when i was in and they provided invaluable information. if you haven't done so already, and are considering going the VA route, get your VA certificate now. sometimes it'll take a while. ..my husband and i were able to get ours w/in a couple of weeks of requesting it.
i second msfancypants. you're going to want to get an inspection on any home you're considering buying. new build or resale. this is going to be one of the biggest, if not THE BIGGEST purchase in your life.
to piggyback on msfancypants' point on what are you going to do when you get orders. ..i've had friends who were able to sell their homes w/out a problem and then others who couldn't get a buyer well after they PCSd. a couple of folks i know rented their homes after they PCSd. these are things you're going to have to think about.
The "perk test" was just a general question I threw out there just for gee whiz info. The houses we're looking at are on city water.
Not sure if it's worth it to rent....been told when you rent all you do is throw your money away. At least with a house you can usually make some money off of it when you sell. Though sometimes things go wrong and you have to pay out your pocket to have it fixed...which is why you invest in a Visa card and don't use it unless you absolutely have to.
I've been renting for the last 9 years. I plan to be stationed where I'm at for at least the next 4. Plus I want to be able to not have to get yelled at if i decide to park a car on my lawn to get a car out of the garage. Or if I want to erect a huge antenna for a CB/Ham radio I can do so. (most landlords won't allow this)
How long does it take for a VA certificate? What's the prerequisites? I plan to see how much I'm qualified for, to help us out.
If I PCS....yes that's crossed my mind. As mentioned this is a hard to get out of base so I figure I'll be here for 4 years at least, if not retire. (got 9 to go)
Something I didn't ask is how does the homeowners insurance work?
First off, you want to hire a real estate agent, but it doesn't have to be a Realtor. A Realtor is just a member of the National Association of Realtors. Many good agents choose not to be members if their MLS allows a choice so the designation itself doesn't mean a quality agent.
Otherwise THL gave good advice.
Please don't park your car on the lawn. Unless you are buying the house in the middle of nowhere, your neighbors are affected by your actions. Please be considerate of them, and MOST people prefer to not see a car on a lawn.
The prereqs to do a VA loan are qualifying financially and then having a good service record. You can do 100% financing through the VA and get up to 6% paid towards your closing costs/prepaids.
If you do a VA loan they will set up an escrow account for you in which your monthly insurance and property tax payments will get placed. They will pay your property tax and insurance payments from that account.
The "perk test" was just a general question I threw out there just for gee whiz info. The houses we're looking at are on city water.
Not sure if it's worth it to rent....been told when you rent all you do is throw your money away. At least with a house you can usually make some money off of it when you sell. Though sometimes things go wrong and you have to pay out your pocket to have it fixed...which is why you invest in a Visa card and don't use it unless you absolutely have to.
I've been renting for the last 9 years. I plan to be stationed where I'm at for at least the next 4. Plus I want to be able to not have to get yelled at if i decide to park a car on my lawn to get a car out of the garage. Or if I want to erect a huge antenna for a CB/Ham radio I can do so. (most landlords won't allow this)
famous last words. . .i don't know how many people i know who bought a house, just to get orders as soon as they closed. yes, it happens ALL THE TIME. not that i'm trying to scare you, but it happens.
unless you're in a non-HOA community. ..don't count on it.
How long does it take for a VA certificate? What's the prerequisites? I plan to see how much I'm qualified for, to help us out.
the VA program helps by backing the loan. they do not loan you the money. you'll have to work with a lender--one that is familiar with the program. get a pre-approved before you start looking and you'll know where you stand. check out your credit on your own, too, while you're at it so you can take care of any of negative issues beforehand. back to the VA program. . .my DH and I got our certificates w/in a couple of weeks of applying for it (va.gov). we did this on our own although some lenders have access to get it for you.
If I PCS....yes that's crossed my mind. As mentioned this is a hard to get out of base so I figure I'll be here for 4 years at least, if not retire. (got 9 to go)
read first answer no base is "that hard to get out of", regardless of its reputation. orders requested for--or not-- come down all the time.
Something I didn't ask is how does the homeowners insurance work?
Please plan on having a few thousand in savings instead of planning to use a credit card for repairs. This is not a good mindset to have at the outset.
Ditto what everyone else said. Good luck you! I guess you are at Ft. Lost-In-The-Woods?
And, thanks very much from this Army Mom to you for your sacrifice and service. Hooah.
Whatever you do, don't buy a home on your own directly from the seller. Meaning, be certain there is at least one real estate licensee in the deal.
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no base is "that hard to get out of", regardless of its reputation. orders requested for--or not-- come down all the time. 
