Buying a House!

[Whitewater]

With any luck, we're going to put in our offer 7-10 days from now!!!!! Whoo!!!! We have to meet with the mortgage guy first, though, because there are a LOT of questions we have to ask and a TON of things to nail down first. Tiernan (the Future Husband) is the sole name on the mortgage (because I don't have stable employment, being a freelancer, and my credit isn't good at all . . .) and he's already been pre-approved for a mortgage.

The trouble is, the house we want to make an offer for is $10k above the pre-approval amount! We're hoping that we can make a lower offer that the bank (the house in question is 'corporate owned' whatever that means) will accept, and stick within our pre-approval.

Also the house needs some work. 'TLC' they call it -- yeah, right!!!! While everything is structurally sound, we need to pull up the non-salvagable carpet (and either put in hardwood or refinish whatever floor is in there already .. . or put in new carpet, which believe it or not is JUST as expensive as laminate or bamboo flooring), add knobs/pulls to the kitchen cabinets (ALL of them . . . ), and redo the main bathroom, because there's tile missing from around the bath faucets and the sink is old and icky and we have to replace the showerhead . . . . and put a fence around the property, because we have a dog and we don't want her getting hit by a car.

Oh, and because the home is corporate owned, the appliances are considered the personal property of the former occupants and are NOT included in the sale . . .*sigh*. More money to spend that we're not sure we have! Our mortgage guy says that appliances will be covered in a 'home improvement loan' package but if we're already at the top of our pre-approval . . . man, I just don't know.

Has anybody bought a house recently, like, within the last couple of years? What should we expect when we go to meet with the mortgage guy? Do you have any tips and tricks or advice to give us? We're first-time homebuyers and I don't mind admitting that this process is really stressing us both out, mostly because we don't know what to expect.

Horror stories are always good too. I don't intend to make light of your misfortune, but I'd like to be able to benefit from your experiences and learn from what happened to you, good or bad.


Whitewater (the stressed)

[WBandMe]

Well, I totally don't have any useful input, but congratulations on this huge milestone, and I hope it all works out!

[Whitewater]

It is huge, and I hope it works out too! Never in a million years did I think I would be buying a house before my 35th birthday!!!! Also never in a million years did I think I would be buying a house BEFORE I got married!!!! Of course, I never thought in a million years that I'd get married again -- and after being single for ten years, who could blame me? -- but here I am, so I guess anything can and does happen!

It's just so overwhelming. There's so much we have to do and learn and so many questions we have to answer -- questions we didn't even know existed -- and this is all going so much faster than we'd planned, at least, it *feels* that way.

We'd planned to take our homeowner education classes at the end of February, but now, by then we'll probably already have inspected the home formally and will be headed into closing!

There's just so much that has to happen, and it all seems like it's hurry-up-and-wait. I mean, we found the house and all of a sudden, we can't wait, we have to meet with our mortgage guy THIS WEEKEND and draw up the paperwork and get the money out of the IRA and so on, and then after we put in the offer we have a month of sitting on our rumps and chewing our fingernails while the owners of the home decide whether to accept our offer or not, and then it's race race race again to get the inspection and contractors, and then it's another 30 days before we actually close . . .

There's so much to think about. I'm really overwhelmed, here!


Whitewater

[sweetvenus]

I just bought a house four months ago as a first-time homebuyer as well. I don't know how the market is going where you live, but around here, it is still fairly stable. House hunting was incredibly frustrating to me because no one would budge on their asking price (I was looking at houses slightly above what I got approved for believing that most people would negotiate).

The best advice I can give you is to not get emotionally attached to any particular house until they accept your offer. I ended up getting the SIXTH house I made an offer on. Also, it's pretty helpful to have a buyer's agent, if you don't already have one. They don't cost you anything and are invaluable for advice (especially for looking up how much other homes in the area have gone for so you know what kind of offer to make) and taking care of most of the behind-the-scenes stuff.

Good luck!

[Brian's Bride]

I was a first-time homebuyer three years ago. It's an exciting process! I also had to do the education classes but ended up getting a really good loan and assistance from a local non-profit agency. I also recommend not getting emotionally attached to the house before it's yours. I would recommend getting a realtor who is working for YOU. I wouldn't recommend using the realtor from the open house. They want to sell you that property by any means necessary as they would get the full commission. Also, don't be afraid to offer lower than the asking price. Who cares if you offend the seller? And most importantly: Get the home inspection!

[70707Bride]

We are thinking of buying a house this spring. The payments would be cheaper than renting an apartment! Good luck with your house!

[SerendipityCrafts]

I am not sure if the same processes apply where you are but here are some tips that I have collected from my own house buying experiences ....

1. When you do put on an offer on a place, make sure that it's conditional upon a home inspection. An inspection will tell you what needs immediate attention and what can wait ..... if something major is wrong with the house, then you can use this info to put in a lower offer.

2. When we move into a new home we are charged a "Welcome tax" ... some welcome huh? If it's the same for you, set aside some money for this.

3. When we make an offer, it has to be accompanied with a cheque of $1000.00 or more. This money is put in trust and will eventually will come off of your down payment but giving it upfront is quite common and is a sign of good faith. If this is required where you live, make sure you have that set aside as well.

4. If the house is heated with oil, you may have to pay for the balance of the oil that is left in the tank. If this is the case, set this money aside as well.

5. There are always little things that you might not think about .... will you be needing a lawnmower? will you need curtains or window coverings for the house? do you need to buy shelving? will you be charged a fee to transfer or open a new phone account, your electricity account, your cable account?

6. While it's hard to do ........... do buy a home based on your emotions. There are plenty of places to buy but if you set your heart on ONE certain place, you might end up paying more than you want. Decide on an absolute highest price that you will pay and stick to it. There is nothing like owning your own home but it's no fun being mortgage poor (ie paying so much for your mortgage that you can't afford to decorate, go on vacation, pay for groceries, etc.)

7. If you do buy through the listing agent (ie the person that has listed the house for the seller), know that they are working for the seller. Don't disclose too much info such as the highest price you are willing to pay. Put in your offer and if the seller doesn't accept, push the agent a little. If they are the listing and also the selling agent, they are making more commission. Perhaps they would be willing to accept less commission, so that you get a lesser price & so that they will make the sale.

[Whitewater]

I am not sure if the same processes apply where you are but here are some tips that I have collected from my own house buying experiences ....

1. When you do put on an offer on a place, make sure that it's conditional upon a home inspection. An inspection will tell you what needs immediate attention and what can wait ..... if something major is wrong with the house, then you can use this info to put in a lower offer.

We'd like to do that, we're not sure if we *can*, because the home is corporate owned and it's being sold "As-Is". However, my brother the shipwright and my friend the carpenter/architect have looked the home over (we'll get a proper inspection too) and in their opinion there's nothing wrong with it bar some cosmetic stuff -- well, besides the hole in the drywall upstairs in the guest room and the lack of tile around the tub, but those are both simple fixes.

2. When we move into a new home we are charged a "Welcome tax" ... some welcome huh? If it's the same for you, set aside some money for this.

A Welcome Tax!? I don't know if we will get that -- I don't think so -- but I'll be sure to ask!

3. When we make an offer, it has to be accompanied with a cheque of $1000.00 or more. This money is put in trust and will eventually will come off of your down payment but giving it upfront is quite common and is a sign of good faith. If this is required where you live, make sure you have that set aside as well.

Yes, we have to have earnest money too. What Tiernan has available is roughly 3/4 of his downpayment right now, and he can get the other 1/4 in one month's time. So we decided that he's just going to give them the entire 3/4 of the downpayment (which is well over $1000) as earnest money and then pay the rest at closing. Hopefully having such a high amount of earnest money will show the bank we're serious, even though we'll be offering lower than their asking price.

4. If the house is heated with oil, you may have to pay for the balance of the oil that is left in the tank. If this is the case, set this money aside as well.

No, the house we want is natural gas/forced air. *Thankfully* it's not oil or water based, a la radiators. Around here, it's very common for the owner of the home (whether they be individual sellers, a corporation or a bank) to pay for the utilities and the leftover taxes up until they sell the house, at which point all that becomes the buyer's responsibility.

5. There are always little things that you might not think about .... will you be needing a lawnmower? will you need curtains or window coverings for the house? do you need to buy shelving? will you be charged a fee to transfer or open a new phone account, your electricity account, your cable account?

We have thought about all the little things :) This home doesn't need much in the way of window treatments -- there are only a few windows that haven't got blinds. We'll also use the muslin curtains we have now (we'll take them along! They don't belong to the duplex we're in now) -- and when we get our rental deposit back (which comes to roughly $1100) we'll buy real curtains, or at least, the fabric to make them, which is cheaper and dead easy to do. My brother has a lawnmower he wants to give us, and my friend the architect also has a lawnmower, and our parental units will probably give us stuff like a hose and gardening tools and so on as housewarming gifts, so we'll be in good shape.

Our cable will charge about $25 to switch the service over and another $20 to hook it up, same with our electricity/heat but they all just tack it onto our monthly bill, so we won't have to pay it up front.

We plan to set aside about $100 a month for things like a barbeque, patio furniture, paint, etc -- all the little stuff that we won't be able to buy right away but that we need eventually.

[/quote] 6. While it's hard to do ........... do buy a home based on your emotions. There are plenty of places to buy but if you set your heart on ONE certain place, you might end up paying more than you want. Decide on an absolute highest price that you will pay and stick to it. There is nothing like owning your own home but it's no fun being mortgage poor (ie paying so much for your mortgage that you can't afford to decorate, go on vacation, pay for groceries, etc.) [/quote]

You're right there! (I think you meant, "don't" :)) We're just lucky that the home that meets our needs best (well, with some compromise here and there, but isn't that always the way?) is *also* a home that we actually like and want to live in! From the start, neither Tiernan nor I thought about this emotionally. We picked what we needed in a home and refused to compromise on the drop-dead stuff, while meeting in the middle about other things, and refused to let our hearts lead this charge. It's so hard!!!! We found a LOT of homes that we *adored*, emotionally, but that were so very wrong . . . . all I can say is, 'stick to your non-emotional guns, because you'll eventually find a house that not only meets your non-emotional standards, but also meets your warm fuzzies requirements too.

I think it's foolish to be so non-emotional that you buy a house that you personally can't stand, but that has everything you're looking for. After all, you have to live in it for some time, you better like it! But you also can't let your heart have it's way, or else you could wind up in some serious trouble. We're lucky that we found a house that meets all our requirements *and* that we will enjoy living in -- but we set out, originally, to find a house regardless of how we *felt* about it.

7. If you do buy through the listing agent (ie the person that has listed the house for the seller), know that they are working for the seller. Don't disclose too much info such as the highest price you are willing to pay. Put in your offer and if the seller doesn't accept, push the agent a little. If they are the listing and also the selling agent, they are making more commission. Perhaps they would be willing to accept less commission, so that you get a lesser price & so that they will make the sale.

Oh, no, we stayed FAR away from working with the selling agent on the homes. We got a buyer's agent (actually, what we got was a realtor who signed a buyer's agent agreement with us specifically, because he's also a selling agent, just not for any of the homes we went to look at!) and he is working solely in our best interests. And he is, too -- he's a friend of mine, I've known him for ten years and I know he's honest, experienced and honorable. He's been helping us through this process and if it wasn't for him, I know we both would have given up (with the prior realtor we had, we would never have gotten this far!) and would not now be considering making an offer. He's told us stuff that we *never* would have known on our own, and it's all been working as well as possible.

Buyer's agents are truly the way to go. It's very nice to have somebody else in your corner!

As for being mortgage poor, it's not going to happen. The housing market in this part of the world *tanked* and prices are falling like dominoes. Homes that were selling for $180k last year are selling for $110 now, and so on. The market here has truly bottomed out. Our agent said there haven't been low prices like this for a LONG time, and without a doubt, the time to buy is NOW. We will probably be getting a mortgage that's less than $700, including taxes and fees and insurance and all of that. That is a goodly bit less than what we're paying for rent right now!

In addition to all of that, the sheer number of houses for sale is astounding, at least, for this small region. There were literally about 500 homes that were in our price range, that had what we needed, and that we could have looked at if we were so inclined. Of that number, I whittled it down to about 100 that we were seriously interested in (thank GOD for the Internet!) and then we whittled it down some more and eventually only looked at about two dozen of them, live and in person, that is. Of that two dozen, we would be willing to make an offer on three, the one that we like the best (which we're going to make an offer on next week) and two others, the 'just in case' houses.

Wow, this was long. I think I'm going to shut up now!!!


Whitewater

[Whitewater]

Wow, it's been a long time.

In brief, we put in the offer and the bank countered us, but alas, the counter was too high. We had to walk away, because we just couldn't counter their offer. Regretfully, we tore up our earnest money check and re-thought some things and decided to continue to look. We saw about a half a dozen more homes, but before we could even figure out whether we liked them or not, the best three got offers (and got sold!) before we had a chance to breathe.

After that, Tiernan and I both got discouraged and decided to keep looking, but slowly, and that we weren't going to offer on anything until some new properties came on the market in March, hoping we'd find something suitable then.

Then, amazing news! The home that we both fell in love with AND had originally put an offer on had dropped its price $10k and the listing price was now UNDER our maximum loan amount! We weren't expecting that to happen until the end of March at the earliest!

YAHOO! And there was much rejoicing. Having seen the home we didn't wait, but put in another offer ASAP. The price dropped on the 16th of Feb, a Saturday, and because of President's Day on the 18th -- Monday -- none of the banks were open, so we put in our offer first thing Tuesday morning, yeah, yesterday :) Or, well, techically, two days ago, it technically being Thursday now but only by a couple hours!

Because it's foreclosed and owned by the bank they *could* take up to another eight business days to get back to us, but I don't think they will. Last time it took about 4 business days, so I expect to hear back from them by Friday. We may even hear from them today . .. . keep your fingers crossed!

We expect they will counteroffer again, but this time we're ready for them. It feels SO GOOD to know that their price is under our max, because that means that the odds are strongly in our favor. This time we -can- counter their counter, and hopefully we'll all be able to meet in the middle.

I don't dare get excited and get my hopes up, though -- it's too emotionally draining to do that. Right now I'm not feeling much of anything. I'm just waiting to hear what the bank says. If they accept our offer outright, well, THEN I will scream and cry and faint and do jigs in the living room, but for now, I'm comfortably numb, waiting for my fate.

You have to have nerves of steel to sucessfully survive the process of buying your first house, I tell you what.


Whitewater

[kiddienurse601]

I TOTALLY understand the fear and anticipation. Good luck. I hope you get it and everything goes smoothly!

[Diamend]

How exciting!!!!! I'm kinda jealous though... we are trying to find a good foreclosed home also.... I'm praying for you!

[Nekochanpurr]

Yeah!! I hope you get it!!

[WBandMe]

Oh my gosh! It's smart of you to be calm about it, so on your behalf: EEEEEEEEEEE!!!!! This is so exciting!!

Good luck!

[Brandonsgirl]

This is exciting!!! Be calm...everything will work out fine!!!!! GOOD LUCK!

[Whitewater]

Well, the bank counter-offered us. Again. Although this time we can counter right back at them! Which we fully intend to do. Our realtor is fairly confident that they'll accept our counter (which will be within ten percent of the list price, finally) and we'll be able to move in sometime in April.

We'll be putting in our counter to their counter offer on Monday! We're all keeping our fingers crossed.


Whitewater

[Jamie'sBride]

We're doing the house search right now, too so it's good to read about all the ups and downs. It sounds so stressful! I really hope it all works out! Good luck! I'll keep my fingers crossed for you!

And once you get settled, you must post pics! :)

[Kfancii]

Have you heard anything more on your last counter offer?