Comments on: Buying a Home, part one: Looking at Houses http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/ personal finance that makes cents Sun, 20 Jul 2008 23:10:58 +0000 http://wordpress.org/?v=2.5.1 By: Erika http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-114691 Erika Wed, 30 Jan 2008 01:21:09 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-114691 Where on earth in the Seattle area are they finding homes that cheap? Tacoma? Puyallup? Cle Elum? Where on earth in the Seattle area are they finding homes that cheap? Tacoma? Puyallup? Cle Elum?

]]> By: Move.com First Time Home Buyers : A guide for first time home buyers » Blog Archive » A Guide on Looking for Your Dream Home http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-79888 Move.com First Time Home Buyers : A guide for first time home buyers » Blog Archive » A Guide on Looking for Your Dream Home Fri, 23 Feb 2007 23:25:07 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-79888 [...] One of the major steps to buying your first home is looking around. GetRichSlowly has created a series of posts dealing with various first-time home buyer concerns. This Blog (Part 1) deals with looking at houses. From the blog: What I mean by “needs cosmetic work” and what a realtor means by that phrase are two completely different things. To me, “cosmetic work” means I move in first and make the changes as I live there — for example, remove wallpaper or paint cabinets. It does not mean that I have to clear out all the junk, fumigate it, and totally replace the floors before moving in. [...] [...] One of the major steps to buying your first home is looking around. GetRichSlowly has created a series of posts dealing with various first-time home buyer concerns. This Blog (Part 1) deals with looking at houses. From the blog: What I mean by “needs cosmetic work” and what a realtor means by that phrase are two completely different things. To me, “cosmetic work” means I move in first and make the changes as I live there — for example, remove wallpaper or paint cabinets. It does not mean that I have to clear out all the junk, fumigate it, and totally replace the floors before moving in. [...]

]]> By: Get Rich Slowly » Buying a Home, part seven: First-Time Homeowners http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-11811 Get Rich Slowly » Buying a Home, part seven: First-Time Homeowners Thu, 26 Oct 2006 18:57:02 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-11811 [...] Week one: Looking at houses [...] [...] Week one: Looking at houses [...]

]]> By: Get Rich Slowly » Buying a Home, part six: The Close http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-11032 Get Rich Slowly » Buying a Home, part six: The Close Thu, 19 Oct 2006 15:30:16 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-11032 [...] This is the sixth installment in Luneray’s homebuying adventure. In the first part, she looked at houses. She made an offer in part two. Next, she meditated on coming face-to-face with a lifetime of debt. She worried that things were going a little too smoothly, but then last week she prepared to close. This week, things turn ugly. (Bold emphasis added by J.D.) [...] [...] This is the sixth installment in Luneray’s homebuying adventure. In the first part, she looked at houses. She made an offer in part two. Next, she meditated on coming face-to-face with a lifetime of debt. She worried that things were going a little too smoothly, but then last week she prepared to close. This week, things turn ugly. (Bold emphasis added by J.D.) [...]

]]> By: Get Rich Slowly » Buying a Home, part four: Calm Before the Storm http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-9771 Get Rich Slowly » Buying a Home, part four: Calm Before the Storm Thu, 05 Oct 2006 14:14:30 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-9771 [...] This is the fourth installment in Luneray’s homebuying adventure. In the first part, she looked at houses. She made an offer in part two. Last week she meditated on coming face-to-face with a lifetime of debt. (Bold emphasis added by J.D.) [...] [...] This is the fourth installment in Luneray’s homebuying adventure. In the first part, she looked at houses. She made an offer in part two. Last week she meditated on coming face-to-face with a lifetime of debt. (Bold emphasis added by J.D.) [...]

]]> By: Get Rich Slowly » Buying a Home, part three: Dealing with Debt http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-9176 Get Rich Slowly » Buying a Home, part three: Dealing with Debt Fri, 29 Sep 2006 04:09:55 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-9176 [...] This is the third installment in Luneray’s homebuying adventure. In the first part, she looked at houses. Last week she made an offer. In today’s third part, she discusses coming face-to-face with a lifetime of debt. (Bold text added by me.) [...] [...] This is the third installment in Luneray’s homebuying adventure. In the first part, she looked at houses. Last week she made an offer. In today’s third part, she discusses coming face-to-face with a lifetime of debt. (Bold text added by me.) [...]

]]> By: Get Rich Slowly » Buying a Home, part two: Making the Offer http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-8468 Get Rich Slowly » Buying a Home, part two: Making the Offer Thu, 21 Sep 2006 20:39:46 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-8468 [...] Last Thursday I shared the first of Luneray’s posts on buying a house. In today’s second part, she talks about the psychological impact of agreeing to an enormous loan. [...] [...] Last Thursday I shared the first of Luneray’s posts on buying a house. In today’s second part, she talks about the psychological impact of agreeing to an enormous loan. [...]

]]> By: Christina http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7920 Christina Fri, 15 Sep 2006 18:37:22 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7920 Hi Luneray [LM]: Congrats on the purchase of a home. I'm happy to see you've been honoured at GRS with a weekly blogspace. This snippet brought back memories of when we bought a house: <i>My favorite of the houses was a little rambler that had been inhabited by the same person for the last 50 years. A lot of the furniture is still in the house, and it was like entering a time warp. But in a good way. The kitchen was small, but efficient, and the bedrooms were decently sized.</i> $159,950 Was this the house you bought? It took us until our housewarming, when I was giving the tour to a woman in her late 60s, to discover that the freezie-thing white GE appliance downstairs was a refrigerator, it was that old. We even have a little timewarp door for the milk delivery person to leave bottles. If you're going to live in the house a long time, and you put 20% down, then ignore the bubble folk's comments. I've read enough from you to know you're one of those solidly fiscally conservative folk: "I wasn’t going to put myself in a situation where it would take 50% of our combined income to make the house payment (and I know some people who are in that situation)." The <i>perfect time</i> to buy is best identified through the 20/20 vision of <b>hindsight</b>. Sorry to read though that you'll be moving away from our area. Hi Luneray [LM]: Congrats on the purchase of a home. I’m happy to see you’ve been honoured at GRS with a weekly blogspace.

This snippet brought back memories of when we bought a house:
My favorite of the houses was a little rambler that had been inhabited by the same person for the last 50 years. A lot of the furniture is still in the house, and it was like entering a time warp. But in a good way. The kitchen was small, but efficient, and the bedrooms were decently sized. $159,950
Was this the house you bought?

It took us until our housewarming, when I was giving the tour to a woman in her late 60s, to discover that the freezie-thing white GE appliance downstairs was a refrigerator, it was that old. We even have a little timewarp door for the milk delivery person to leave bottles.

If you’re going to live in the house a long time, and you put 20% down, then ignore the bubble folk’s comments. I’ve read enough from you to know you’re one of those solidly fiscally conservative folk: “I wasn’t going to put myself in a situation where it would take 50% of our combined income to make the house payment (and I know some people who are in that situation).” The perfect time to buy is best identified through the 20/20 vision of hindsight.

Sorry to read though that you’ll be moving away from our area.

]]> By: prlinkbiz http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7907 prlinkbiz Fri, 15 Sep 2006 15:37:08 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7907 The top of the so called bubble is passed. The market is correcting now. And it is foreclosure season. http://money.cnn.com/2006/09/13/real_estate/foreclosures_spiking/index.htm?postversion=2006091310 Personally, I would drop the realtor too- especially any realtor who will only recommend that you offer $5k less (beside the dog thing) on a property in this market that has been sitting for five months. As real estate investors, our motto is "if you aren;t embarrassed by your offer, you offered too much". There are plenty of houses- and if you hook in with the people who can find the deals- you will do well buying a home as well as investments right now. The top of the so called bubble is passed. The market is correcting now. And it is foreclosure season. http://money.cnn.com/2006/09/13/real_estate/foreclosures_spiking/index.htm?postversion=2006091310
Personally, I would drop the realtor too- especially any realtor who will only recommend that you offer $5k less (beside the dog thing) on a property in this market that has been sitting for five months. As real estate investors, our motto is “if you aren;t embarrassed by your offer, you offered too much”. There are plenty of houses- and if you hook in with the people who can find the deals- you will do well buying a home as well as investments right now.

]]> By: luneray http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7851 luneray Fri, 15 Sep 2006 02:24:34 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7851 Thanks, JD, for featuring my first time house buying experience as part of your blog. Jeff, I understand your concern and I feel compelled to speak up. I knew how much of a monthly house payment I could afford (and it fell into the 30% range of my income alone- and that includes the added transportation costs of having to move further away from my workplace). I just didn't know how much that would translate as mortgage at the time. I wasn't going to put myself in a situation where it would take 50% of our combined income to make the house payment (and I know some people who are in that situation). Thanks, JD, for featuring my first time house buying experience as part of your blog.

Jeff, I understand your concern and I feel compelled to speak up. I knew how much of a monthly house payment I could afford (and it fell into the 30% range of my income alone- and that includes the added transportation costs of having to move further away from my workplace). I just didn’t know how much that would translate as mortgage at the time. I wasn’t going to put myself in a situation where it would take 50% of our combined income to make the house payment (and I know some people who are in that situation).

]]> By: Gerald http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7848 Gerald Fri, 15 Sep 2006 01:19:21 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7848 How much is your realtor charging you? Did they try to convince you that the seller is paying their fees? Stop and think. The agent's commission is taken out of the total sales price that YOU pay for in your loan. In other words, if you didn't have to pay a commission your loan would be 3% (average buyer's commission)less. So not only are you paying 3%*$180k= $5400 more than you have to, you are also paying interest on it. Drop the realtor and look on your own. Better yet, buy a FSBO and save even more! How much is your realtor charging you? Did they try to convince you that the seller is paying their fees? Stop and think. The agent’s commission is taken out of the total sales price that YOU pay for in your loan. In other words, if you didn’t have to pay a commission your loan would be 3% (average buyer’s commission)less. So not only are you paying 3%*$180k= $5400 more than you have to, you are also paying interest on it.

Drop the realtor and look on your own. Better yet, buy a FSBO and save even more!

]]> By: Melsky http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7846 Melsky Fri, 15 Sep 2006 01:06:19 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7846 Owning a house is a wonderful experience, except when you buy at the top of a bubble. Watching comperable homes in your area go for tens of thousands less than you paid is pretty depressing. I would not buy a house just now. So many people are in way over their heads and have loan types where the payments will go way up when interest rates rise. I think there will be a lot of foreclosures in the next few years. Owning a house is a wonderful experience, except when you buy at the top of a bubble. Watching comperable homes in your area go for tens of thousands less than you paid is pretty depressing. I would not buy a house just now. So many people are in way over their heads and have loan types where the payments will go way up when interest rates rise. I think there will be a lot of foreclosures in the next few years.

]]> By: Jeff http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7837 Jeff Fri, 15 Sep 2006 00:13:47 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7837 You said "I hope we qualify for 180K..." That sentence raises all sorts of red flags. This is 2006, and lenders no longer really care if you can pay back a loan. You can qualify for a mortgage that you really have no business taking -- I qualified for a $400,000 mortgage before I ended up buying my $165,000 condo. The formula I've heard is you should spend no more than 28% of your monthly gross income on housing expenses -- mortgage, property taxes, association fees, PMI if you have it. That's the formula I used when shopping for my condo. It's also pretty close to the formula that banks used to use to qualify you for a loan. You said “I hope we qualify for 180K…” That sentence raises all sorts of red flags. This is 2006, and lenders no longer really care if you can pay back a loan. You can qualify for a mortgage that you really have no business taking — I qualified for a $400,000 mortgage before I ended up buying my $165,000 condo.

The formula I’ve heard is you should spend no more than 28% of your monthly gross income on housing expenses — mortgage, property taxes, association fees, PMI if you have it. That’s the formula I used when shopping for my condo. It’s also pretty close to the formula that banks used to use to qualify you for a loan.

]]> By: prlinkbiz http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7830 prlinkbiz Thu, 14 Sep 2006 23:25:06 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7830 Wow I cannot type today! lol Wow I cannot type today! lol

]]> By: prlinkbiz http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7829 prlinkbiz Thu, 14 Sep 2006 23:24:08 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7829 The real estate market is correcting and right now is a great time to buy. it is a perfect fit for this blog, because real estate is a way to get rich if you understand the market cycles. In real estate, as with most anything, yuo make your money when you buy. Even as a home to live in for twenty years- you still make your money when you buy. I would never buy real estate at market- I always look for houses well under market. The key is in knowing the right people. REAPS is WA is a large group of real estate investors. I attended this group when I lived there. It is a great place to find houses below market via the people there. http://www.reapsweb.com/ClubPortal/ClubStatic.cfm?clubID=173&pubmenuoptID=1248 The real estate market is correcting and right now is a great time to buy. it is a perfect fit for this blog, because real estate is a way to get rich if you understand the market cycles. In real estate, as with most anything, yuo make your money when you buy. Even as a home to live in for twenty years- you still make your money when you buy. I would never buy real estate at market- I always look for houses well under market. The key is in knowing the right people. REAPS is WA is a large group of real estate investors. I attended this group when I lived there. It is a great place to find houses below market via the people there. http://www.reapsweb.com/ClubPortal/ClubStatic.cfm?clubID=173&pubmenuoptID=1248

]]> By: J.D. http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7820 J.D. Thu, 14 Sep 2006 21:01:13 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7820 My own home-shopping experiences have been atypical. We bought our first house without a real-estate agent. We went to open houses. We looked around ourselves. And ultimately we bought from a "for sale by owner". It was just an average little house on an average little street in an average little town, but we loved it. Then, out of the blue, we stumbled upon our dream house, which had just gone on the market. We called around frantically, looking for an agent. We found one, and she helped us make an offer. Then we scrambled to prep our own house for market (we had no inkling that we might need to sell, so it was in need of some sprucing up). It was a manic month or two. I agree that cosmetic stuff is largely irrelevant. It's easy to change. (Though you should change it earlier rather than later; waiting just builds inertia, and you may never do the things you'd wish.) What matters are good bones and a layout you can live with. Our house has a sort of a limp (meaning it's a hundred years old and sags in one corner), but it doesn't seem to be life-threatening. I've enjoyed reading about Luneray's home-shopping process, and hope others find it fun, too. My own home-shopping experiences have been atypical.

We bought our first house without a real-estate agent. We went to open houses. We looked around ourselves. And ultimately we bought from a “for sale by owner”. It was just an average little house on an average little street in an average little town, but we loved it.

Then, out of the blue, we stumbled upon our dream house, which had just gone on the market. We called around frantically, looking for an agent. We found one, and she helped us make an offer. Then we scrambled to prep our own house for market (we had no inkling that we might need to sell, so it was in need of some sprucing up). It was a manic month or two.

I agree that cosmetic stuff is largely irrelevant. It’s easy to change. (Though you should change it earlier rather than later; waiting just builds inertia, and you may never do the things you’d wish.) What matters are good bones and a layout you can live with. Our house has a sort of a limp (meaning it’s a hundred years old and sags in one corner), but it doesn’t seem to be life-threatening.

I’ve enjoyed reading about Luneray’s home-shopping process, and hope others find it fun, too.

]]> By: Mike Beversluis http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7808 Mike Beversluis Thu, 14 Sep 2006 19:53:05 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7808 Just an FYI, but some realtors will show you a couple of dumps to begin with as a way of moving your price range up. Just an FYI, but some realtors will show you a couple of dumps to begin with as a way of moving your price range up.

]]> By: Chris http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7807 Chris Thu, 14 Sep 2006 19:28:19 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7807 I think that transitioning from renting to owning your own home is always a good investment as long as you plan to stay long enough to not get hit with a tax burden. Trying to time the housing market is a lot like trying to time the stock market. I view it as I would any long term investment. Average your risks, invest in the house through improvements, and manage it wisely, and you'll come out ahead. However, if you already have a home and you're looking to use real estate as an investment tool... well, that's another thing all together. On another note: I think that when buying a house one of the most important things to remember is that it doesn't matter what it looks like on the inside. So many people are swayed by furniture, carpeting, and paint color. Things that this woman describes as 'cosmetic'. My wife and I just bought our first home a month ago and the major things we focused on were the things that we couldn't change and the big ticket items. 1. Did we like the layout/structure of the house. Did we want a garage? Basement? How many bedrooms etc. 2. Age. How old is the house? How old is the roof? How old is the AC unit, the furnace? 3. Thermal windows? 4. What type of siding? The other stuff is much easier to change. Since we've moved in we've added some recessed and track lighting, a storm door, replaced some mini-blinds, and completely repainted the interior -- all for under $500 and it COMPLETELY changes the look of the inside of the house. I think that transitioning from renting to owning your own home is always a good investment as long as you plan to stay long enough to not get hit with a tax burden. Trying to time the housing market is a lot like trying to time the stock market. I view it as I would any long term investment. Average your risks, invest in the house through improvements, and manage it wisely, and you’ll come out ahead. However, if you already have a home and you’re looking to use real estate as an investment tool… well, that’s another thing all together.

On another note: I think that when buying a house one of the most important things to remember is that it doesn’t matter what it looks like on the inside. So many people are swayed by furniture, carpeting, and paint color. Things that this woman describes as ‘cosmetic’. My wife and I just bought our first home a month ago and the major things we focused on were the things that we couldn’t change and the big ticket items.

1. Did we like the layout/structure of the house. Did we want a garage? Basement? How many bedrooms etc.
2. Age. How old is the house? How old is the roof? How old is the AC unit, the furnace?
3. Thermal windows?
4. What type of siding?

The other stuff is much easier to change. Since we’ve moved in we’ve added some recessed and track lighting, a storm door, replaced some mini-blinds, and completely repainted the interior — all for under $500 and it COMPLETELY changes the look of the inside of the house.

]]> By: The Tim http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7790 The Tim Thu, 14 Sep 2006 17:32:56 +0000 http://www.getrichslowly.org/blog/2006/09/14/buying-a-home-part-one-looking-at-houses/#comment-7790 Given the current <a href="http://www.getrichslowly.org/blog/2006/09/01/housing-bubble-reading-between-all-the-for-sale-signs/" rel="nofollow">bubbly state of housing</a>, does buying a house right now (especially <a href="http://seattlebubble.blogspot.com/" title="Seattle Bubble" rel="nofollow">anywhere in the greater Seattle area</a>) really fit with this blog's theme of getting rich slowly? It would seem to me that with the apparently high risk of a decrease in home prices in the not-so-distant future, it is more financially prudent to wait this bubble out. Given the current bubbly state of housing, does buying a house right now (especially anywhere in the greater Seattle area) really fit with this blog’s theme of getting rich slowly? It would seem to me that with the apparently high risk of a decrease in home prices in the not-so-distant future, it is more financially prudent to wait this bubble out.

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