Anyone own a home? Good update #23

[Pembroke_Corgi]

My husband and I are seriously considering purchasing a home while interest rates are low, but we are in our current lease until July 1st. We can't afford to pay a mortgage AND rent for very long, so if we do this I want to time it properly. There is a house on the market I like now, but I don't know if I can just terminate the lease even if I forfeit the deposit.

I know housing values are going down in many areas of the country, but we are planning on staying in this area so it's not like we would want to turn around and sell it.

What kinds of things do I need to know about buying a house for the first time?

About how long does it usually take to close on a house and move in?

Any other advice?

Thank you in advance!

[Emeraldgreen]

Hi, I live in Canada, so things may be different here with respect to buying a home but in general there is usually a 30 day period (roughly) between when an offer is accepted and all subjects are removed and money from the purchaser is given to the buyer. Once the money passes hands, the seller usually has to be out, either that day or soon after.
If you really like a house, the best possible advice I could give is to have a building inspection done. A place can look amazing but it can have structural issues or hidden issues that you may not know how to look for etc... These things could put a person in finanical ruin later on. Also, if you love a place and a building inspection done by a licensed inspector shows that there are certain things that will need repair within the near future (i.e. the roof or chimney etc..) then you can re-negotiate and lower your original offer to reflect those repairs that you will now have to take on. This happened to us regarding the roof and we re-offered 10,000 less than our original offer and the seller accepted our new offer.
Also, make sure that the person selling has shown you a disclosure statement that discloses any and all issues regarding the house. This is a legal document where the seller has to list if there have been any leaks and if they've been repaired, if there has been pests of any kind etc.. etc..
You can put an offer on a place and put 'subjects' on the offer such as, this offer is subject to having a building inspection done and the results of that building inspection are satistfactory to us, and if there is a well, you could put another subject that states the water will be tested and the results of that test approved by us, and even less serious things like if you really love something in the garden, like a bench, you could make the offer subject to the bench being included in the sale of the home. All kinds of stuff like that.
Hope this helps a bit and hope you get your dream home!
p.s. I used to have a Pembroke Corgi. My family got him from the Humane Society in Toronto back in the 70's. We had him for 15 years. They are great dogs!! Does yours nip your heels when you run?

[Karen]

We bought our house from my Great Aunt. Thankfully, we had a landlord that just wanted a couple months notice. Our case was different than most, because her house still had all her things in it, so we needed to do a lot of throwing stuff away respectfully before we could move our own stuff in. But normally, once you pass papers, you can move right in.

First you will need an attorney lined up, to handle the closing, etc. Then once your offer has been made and accepted, a closing date can be set and you can move in pretty quickly if the house is in good condition. You'll want a home inspection done first though, and remember, you can make a lower offer at first, just in case they accept it! You'll always need money afterwards anyway!

[Cookiebaker]

Get a Home Inspection!!!!! They know the ins and the outs of what to look for as far at flaws and damage done.

When we bought our house, instead of going through a regular real estate office, we went through a *buyer's* real estate office. They ONLY work with buyers, and therefore have no hidden motives, and anything you say to them is strictly confidential.

[caseysmom]

I think its a good time to buy. I would discuss it with your landlord, they may be willing to accomodate you.

[Ginger's Mom]

There are a few things I can add. First, be aware that closing costs are expensive (can add as much as an additional 2% to the cost of the house), so make sure you take that and moving costs (may be another $1000 or more depending upon distance who is going to help you move your possession, etc.) into consideration when figuring your down payment/out of pocket expenses. Find out what the real estate taxes are and when the properties were last assessed. I, too, highly recommend having a Home Inspector go through the house. Around here it seems that the most common closing times are about 60-90 days after the offer is accepted. I understand you are not worried about the fact that housing prices are going down (I don't think they are going to be going down so much at this time that it will make a difference), but don't allow that to sway you into making an offer that is really more than the home is worth. I really agree with Karen about going low at first.

[Freedom]

Karen said line up a lawyer. My understanding is that, out where you are, a Realtor handles it all and few people use an attorney. (Here in the East, we need both a realtor and an attorney.) For your first time, I strongly advise you to have a Realtor to walk you through step by step. It can be overwhelming, and having someone who knows "now do this" "next make that phone call" will save you lots of agony in the long run. You can line up a Buyer's Realtor, someone who represents YOU. It may cost you a bit extra ($300 to $500?) but well worth it!

Have a home inspection done.

I was going to say 60 days from offer to move in. But I didn't use a REaltor so I goofed up on a few things.

Go to your bank and get preapproved. It will speed the process along. It doesn't cost you anything for that step, at least it didn't when I bought 5 years ago.

[Edwina's Secretary]

I am in the fourth home I have bought. In Illinois you use a lawyer for the closing...here in California that is not how it is done. States are different.

The home inspection is soooo critical. Get references on the home inspector and don't just use the one your realtor suggests.

Also decide what you will do about real estate taxes. The first two houses I bought when I was single. I prefer to escrow my taxes. My husband and I do not agree on this.....

[Pembroke_Corgi]

Thank you for all of the good advice! It makes me realize how little I know about real estate!

We have decided to start by seeing if we can qualify for a home loan and how much we can afford. I am a little concerned about out-of-pocket expenses, especially since I saw at one lender that the closing costs alone were 3% of the purchase price (average homes in this area are over $200,000- we are hoping to find a home for $150,000 or less).

Denver was once the foreclosure capital of the country (it's lower now) so there are many homes that are at auction or can be had for less money than going through an agency. The bad thing is that apparently it can be hard to get approved for a loan as a result. I guess we'll see what happens. I'd really love to own a home- $1000 a month towards rent doesn't go towards any future investment like a mortgage payment would. I also put a ton of books on hold at the library about buying your first home, so hopefully I will do my research well.

p.s. I used to have a Pembroke Corgi. My family got him from the Humane Society in Toronto back in the 70's. We had him for 15 years. They are great dogs!! Does yours nip your heels when you run?

They are great dogs! My dogs don't nip but they will always run after anyone running!

[Twisterdog]

I've bought two houses, one in Colorado, and a business. In all cases, all I did was find a realtor I liked and trusted. My realtor did all the work, all I did was sign papers and show up at closing. I did have an inspection done on the properties.

[Pembroke_Corgi]

We found the perfect house- it's in a great neighborhood (it is in the best school district in the metro area) and only 5 minutes away from my job. Since it's a foreclosure, it's also about $50,000 less than most comparable homes in the neighborhood. The best part is that we can actually afford it- the mortgage even with taxes and insurance would be $100 less than our monthly rent!

We had our real estate guy put in a bid, and we will find out next Tuesday (01/29/08) if ours was the highest or not. I am keeping my fingers crossed but trying not to get too excited. It's very possible someone else will have more cash to put in a much higher offer. But we will see!

[Karen]

That sounds great. It's so hard not to get your hopes up, isn't it? Did you have an inspection done yet?

[Pam]

I am on my third home right now.

The only other thing I would suggest, in addition to a home inspection, is a termite inspection. I believe termite inspections are compulsory in most states. I owned a summer property which I sold two years ago. The realtor arranged for the customary termite inspection and chose a rinky dink company to do it. The report came back "no termites and no evidence of termite damage" and we proceeded to settlement. It turns out that the property was riddled with termites which led to a very unpleasant law suit involving the termite company and the realtor and I was also dragged into it as a party to the transaction. The litigation continues with a possible ending in April. I certainly could have done without all of this mess.

[Pembroke_Corgi]

That sounds great. It's so hard not to get your hopes up, isn't it? Did you have an inspection done yet?

Yes it is hard not to get too excited! I just keep reminding myself that if it doesn't work out there will be other houses I will like too! With this property, it's already had a preliminary inspection done so we know basically what's wrong and if our bid wins we have 15 days to get our own inspection done and prove we can pay for the house!

The only other thing I would suggest, in addition to a home inspection, is a termite inspection. I believe termite inspections are compulsory in most states. I owned a summer property which I sold two years ago. The realtor arranged for the customary termite inspection and chose a rinky dink company to do it. The report came back "no termites and no evidence of termite damage" and we proceeded to settlement. It turns out that the property was riddled with termites which led to a very unpleasant law suit involving the termite company and the realtor and I was also dragged into it as a party to the transaction. The litigation continues with a possible ending in April. I certainly could have done without all of this mess.

I'm sorry to hear about that- I hope this gets resolved! It sounds like the inspectors are really at fault. Fortunately for us, I don't believe there are termites in Denver itself. Colorado does have termites and wood-eating beetles, but these are found at higher elevations where there is more rainfall. Denver is pretty dry and there are almost no bugs (which is really nice because I don't even need to use flea protection on the dogs unless we go to the mountains for a long time- there are none!)

This does sound like you might have found a good buy. I'm especially pleased that it is close to your work as sometimes people forget (not that I'm thinking of my step-daughter or anything) that commuting expenses have to be factored into the equation.

Thanks! Unfortunately it will be a farther drive for my husband than where we live now but it's a plus it's so much closer for me.

go check the other foreclosures out in the neighborhood as well. IF that area is going on a downhill slide, the problems can often outweigh the costs. and when i went back to check out the area at friday night around 9pm and a 2 am saturday to check for ....loiters on the main area into the neighborhood. i also asked a patrolling cop if there would be a problem with his single aunt living on the block i moved to. after a few seconds thought, he said no and gave me some specific advice about which streets for me to not look at. hope this helps.

Thanks for the advice. It's very rare to find a foreclosure in this particular neighborhood. Since I work there, too, I've seen it at night and it's very safe!

Well, now I just have to wait a week. I'll let you know how it turns out!

[Pembroke_Corgi]

Well, unfortunately we didn't win the bid on the first home we liked. We were pretty disappointed, but it wasn't too much of a shock.

This last weekend we looked at more homes. The first 3 were duds, but the last one was so nice! It is in perfect condition, and in a neighborhood we both like with good resale value. We put in an offer on Saturday and we find out today by 2 pm. My fingers are crossed!