Steps to buying a home? Tips? Things to avoid?

[UK2K]

I am going to be buying a new home in the next month or two. Looking for a condo, as it'll be just me living there more than likely.

So, where do you start? I searched around on realtor.com and zillow.com to find a few I like, but then what?

I applied for my VA home loan already (ahh perks of being military) so that's straight, and a condo running around 110k is only going to cost me about $720 a month for my mortgage, so I can swing that.

But where do I even start? Do I contact their realtor? Or do I find one for myself? I sent a message to a high school friend who is a realtor in Louisville, KY, and she said she could hook me up with her sister company in here. Or was that dumb?

Basically, for those who've bought homes, how do you go about it? I'm not trying to get ****ed, naahmean?

[FillJackson]

The seller has a realtor representing their interests and the buyer has a realtor representing their interests.

[UK2K]

The seller has a realtor representing their interests and the buyer has a realtor representing their interests.

So I need my own realtor then, yes? I guess it wouldn't be wise to go at it without one?

[CakeorDeath]

Congrats man.

Deciding on whether or not you want a realtor representing you can be tricky. If you are buying new construction, the seller is likely to be the builder and they may not be willing to budge on price, so an agent may not be useful there. However, a realtor can still help in that they can pull comps for you to give you a better idea if you are getting a good price based on market value. Also, a realtor representing you in this scenario may very well end up taking a finders fee instead of a traditional commission, which the builder simply pays without affecting the sale price. This means that you essentially get representation on your end for free, though since you already found a house and you likely aren't going to be able to negotiate price, the realtor in this scenario is just there to help you understand everything and make sure you don't get screwed.

If you are buying a used home, a realtor can definitely help you get a price that is fair and can help organize inspections and other analyses to ensure you don't buy something that isn't up to code or is due for immediate major repairs/renovations. This can be a huge benefit if you are buying something that is really old (30 years+) because building codes change, so the home may have been built to code but is not up to code now. This can be a nightmare for you down the road if you want to renovate. Your realtor will also help make sure all of your closing costs are in order and can help you negotiate sales price and who pays closing costs. Realtors typically make 2.5-3% of the sale price on commission, so if both sides have a realtor, plan on 5-6%. These fees are often simply added in to the sales price.

Seeing as you are looking at a condo, make sure you have a complete understanding of HOA requirements, costs, what they maintain, and what you maintain. HOAs can be notorious bastards, so make sure you know what you are getting into. Ask what you can do and what you can't; many HOAs limit what you can do in terms of any yard you have (what kind of fencing you can have, what kind of plants you can grow, etc.). Find out what they maintain (lawn mowing? Snow removal? Paint? Repairs?) and what you are responsible for maintaining. Find out how much it costs initially and what is covered (in addition to maintenance, some will include gym membership, internet, and TV). Also make sure you understand what the HOA's rights are in terms of increasing their fees. How often can they do it, how much can they increase it each time, do they have a cap, etc. Also, find out how they pursue those that don't pay and whether or not that cost passes down to other members. For example, if they hire an HOA attorney to pursue non-payers, does a share of that cost get passed down to you?

If you are looking at new construction, do some research to find out how many units are being built and for how long new construction will be going on. This is not only so you know how long you will have to deal with noise, but it will also give you an idea as to what your resale potential is. It can be very difficult not to go immediately upside down on a new construction condo/townhome if you will be competing with new construction for 10 years. Buyers will always be more attracted to a new home than a used one, and builders can often offer incentives that you can't (free finished basements, free second car garage, etc.). Also, if you are buying new construction, find out what comes standard (i.e. at the listed price) and what is an upgrade that comes at additional cost. Most builders use a model home to show you how amazing the home can be, and only when it comes down to buying are you told everything in the model home that is an upgrade and therefore costs more. The features that most commonly cost extra are things like fancy countertops (granite, quartz), fancy backsplashes (tile or stone), fancy floors (wood or stone), fancy molding or trim, separate tub and shower, double sinks, and fancy appliances (stainless steel). Know what you are buying.

Whatever you buy, make sure you can do something to increase it's value. Don't buy a house that is fully upgraded. Not only will you pay top dollar for it, but if you have to sell it in the near future, there's nothing you can do to improve it and therefore list it at a higher price than you paid for it. You are entirely dependent on the market in that scenario, which is not a good thing, as it limits your control as a seller.

Finally - on your price/mortgage. Looks like the payment you are referencing is only P and I. Not sure what kind of loans you get as a vet, but make sure you know what your true monthly payment is with P and I, mortgage insurance, homeowner's insurance, and taxes.

Hope this helps. Good luck!

[FillJackson]

So I need my own realtor then, yes? I guess it wouldn't be wise to go at it without one?

You need someone who knows the process, knows what to look for in a house (pipes good? foundation sound? were the previous prices for sales of the house legit), and represents your interest.

Most often that's a realtor.

There's lot's of sites online I would look for info.


Get your credit as good as it could be and see if you can shop for your mortgage even though, you have the VA setup. You might be able to work something even better.

[DukeDelonte13]

I don't get the appeal of shelling out house money for shared walls and association dues.

To each his own, but i'd rather spend the extra money and get a real house than a condo. I like privacy, and i'd sacrifice some of the modernness and convenience of a condo for more privacy.


get a damn good inspection too. Ask around and find out who is the most thorough. Spending money on a good inspector will pay off. Also low ball the f*ck out the property when you start making offers. All they can say is no.

[UK2K]

Congrats man.

Deciding on whether or not you want a realtor representing you can be tricky. If you are buying new construction, the seller is likely to be the builder and they may not be willing to budge on price, so an agent may not be useful there. However, a realtor can still help in that they can pull comps for you to give you a better idea if you are getting a good price based on market value. Also, a realtor representing you in this scenario may very well end up taking a finders fee instead of a traditional commission, which the builder simply pays without affecting the sale price. This means that you essentially get representation on your end for free, though since you already found a house and you likely aren't going to be able to negotiate price, the realtor in this scenario is just there to help you understand everything and make sure you don't get screwed.

If you are buying a used home, a realtor can definitely help you get a price that is fair and can help organize inspections and other analyses to ensure you don't buy something that isn't up to code or is due for immediate major repairs/renovations. This can be a huge benefit if you are buying something that is really old (30 years+) because building codes change, so the home may have been built to code but is not up to code now. This can be a nightmare for you down the road if you want to renovate. Your realtor will also help make sure all of your closing costs are in order and can help you negotiate sales price and who pays closing costs. Realtors typically make 2.5-3% of the sale price on commission, so if both sides have a realtor, plan on 5-6%. These fees are often simply added in to the sales price.

Seeing as you are looking at a condo, make sure you have a complete understanding of HOA requirements, costs, what they maintain, and what you maintain. HOAs can be notorious bastards, so make sure you know what you are getting into. Ask what you can do and what you can't; many HOAs limit what you can do in terms of any yard you have (what kind of fencing you can have, what kind of plants you can grow, etc.). Find out what they maintain (lawn mowing? Snow removal? Paint? Repairs?) and what you are responsible for maintaining. Find out how much it costs initially and what is covered (in addition to maintenance, some will include gym membership, internet, and TV). Also make sure you understand what the HOA's rights are in terms of increasing their fees. How often can they do it, how much can they increase it each time, do they have a cap, etc. Also, find out how they pursue those that don't pay and whether or not that cost passes down to other members. For example, if they hire an HOA attorney to pursue non-payers, does a share of that cost get passed down to you?

If you are looking at new construction, do some research to find out how many units are being built and for how long new construction will be going on. This is not only so you know how long you will have to deal with noise, but it will also give you an idea as to what your resale potential is. It can be very difficult not to go immediately upside down on a new construction condo/townhome if you will be competing with new construction for 10 years. Buyers will always be more attracted to a new home than a used one, and builders can often offer incentives that you can't (free finished basements, free second car garage, etc.). Also, if you are buying new construction, find out what comes standard (i.e. at the listed price) and what is an upgrade that comes at additional cost. Most builders use a model home to show you how amazing the home can be, and only when it comes down to buying are you told everything in the model home that is an upgrade and therefore costs more. The features that most commonly cost extra are things like fancy countertops (granite, quartz), fancy backsplashes (tile or stone), fancy floors (wood or stone), fancy molding or trim, separate tub and shower, double sinks, and fancy appliances (stainless steel). Know what you are buying.

Whatever you buy, make sure you can do something to increase it's value. Don't buy a house that is fully upgraded. Not only will you pay top dollar for it, but if you have to sell it in the near future, there's nothing you can do to improve it and therefore list it at a higher price than you paid for it. You are entirely dependent on the market in that scenario, which is not a good thing, as it limits your control as a seller.

Finally - on your price/mortgage. Looks like the payment you are referencing is only P and I. Not sure what kind of loans you get as a vet, but make sure you know what your true monthly payment is with P and I, mortgage insurance, homeowner's insurance, and taxes.

Hope this helps. Good luck!

Damn dude, thanks! Appreciate the help.

VA home loan is 0% down, no PMI (backed by government), reduced interest rate, and you are almost guaranteed to qualify.

It's pretty nice. Lol

[UK2K]

I don't get the appeal of shelling out house money for shared walls and association dues.

To each his own, but i'd rather spend the extra money and get a real house than a condo. I like privacy, and i'd sacrifice some of the modernness and convenience of a condo for more privacy.


get a damn good inspection too. Ask around and find out who is the most thorough. Spending money on a good inspector will pay off. Also low ball the f*ck out the property when you start making offers. All they can say is no.

I'll be living on my own. I feel like a full house (including the exterior and landscaping) is a lot to handle by myself. Even looking at condos in my price range, they're still much, much bigger than I will need in the next 5 years. I don't need a 3 bedroom condo, but any cheaper and I end up living in the ghetto I feel like.

[ALBballer]

I bought a condo a few years ago when the market was down. Here are some basic tips:

- Find a trusted realtor. Most don't give a shit and are looking to get a sales done as ASAP although most of them are useful for first time buyers in handling with the paperwork. You will also need a lawyer to close.

- Perform your own CMA. Find condos that are comparable to the ones you want to buy and know what you are willing to pay. Make your realtor work and ask him/her to perform a CMA and give you a price. My realtor never did that and he was trying to get me to overpay for my condo when the market clearly gave the price of the condo. Guy was a passive aggressive dipshit. So again do your own homework b/c some of these realtors don't have your best interests in mind.

-If you are looking for homes that have been sitting on the market for a while you will probably have more negotiating room. In this market this might not be practical but.....

-Buying at this time could be good and bad. Typically lower inventory but lower demand in the winter.

- If you are buying a condo find out what the reserves and HOA fees are. If reserves are low you might be hit with a bill for a special project in the future. Have HOA Fees gone up or down in the say past 5 years? Good to know how the board and finances are run.

-I would still spend a few hundred bucks and get an inspection during the closing process. Sure the outside of the condo will be taken care of by the board but there could be some issues inside.

I created a thread a few years ago...

http://www.insidehoops.com/forum/sho...=251071&page=3

[UK2K]

I bought a condo a few years ago when the market was down. Here are some basic tips:

- Find a trusted realtor. Most don't give a shit and are looking to get a sales done as ASAP although most of them are useful for first time buyers in handling with the paperwork. You will also need a lawyer to close.

- Perform your own CMA. Find condos that are comparable to the ones you want to buy and know what you are willing to pay. Make your realtor work and ask him/her to perform a CMA and give you a price. My realtor never did that and he was trying to get me to overpay for my condo when the market clearly gave the price of the condo. Guy was a passive aggressive dipshit. So again do your own homework b/c some of these realtors don't have your best interests in mind.

-If you are looking for homes that have been sitting on the market for a while you will probably have more negotiating room. In this market this might not be practical but.....

-Buying at this time could be good and bad. Typically lower inventory but lower demand in the winter.

- If you are buying a condo find out what the reserves and HOA fees are. If reserves are low you might be hit with a bill for a special project in the future. Have HOA Fees gone up or down in the say past 5 years? Good to know how the board and finances are run.

-I would still spend a few hundred bucks and get an inspection during the closing process. Sure the outside of the condo will be taken care of by the board but there could be some issues inside.

I created a thread a few years ago...

http://www.insidehoops.com/forum/sho...=251071&page=3

[HitandRun Reggie]

If you are familiar with home values in your area, and the process itself, I'd say, what the hell, contact the sellers' agent first. A shady, motivated agent could work in your favor. 110k isn't a lot of money for a home so they are not exactly getting rich off the deal and the extra comission is just more motivation to get your offer accepted. But it sounds like you are new to the game, so it's better to get your own agent.

But if your buyer's agent asks you to sign a contract with them. Politely refuse. They will likely stick with you anyway after insisting it's in your best interest to secure their loyalty.

[ALBballer]

Out of curiosity are you looking to buy in Indy or Louisville?

[UK2K]

Out of curiosity are you looking to buy in Indy or Louisville?

Indy. I have a few realtor friends, two of which are from Louisville, that I contacted to see if they knew or could put me in touch with any realtors here in Indy that aren't shady.

[ALBballer]

Indy. I have a few realtor friends, two of which are from Louisville, that I contacted to see if they knew or could put me in touch with any realtors here in Indy that aren't shady.

Cool. I have spent a decent amount of time in Indy the past few years and think it's a cool big city with a small town feel. Centrally located in the United States, a few hour flight from most places in the US and the city itself is extremely affordable. $110k is cheap and you won't have to break the bank to become a home owner.

Most of the realtors will be ok. But like I said many of them don't have your best interest in mind since they work on a commission base and the more you pay the more money they make. Granted your realtor won't be making much off a $110k condo (probably a few grand at most) but expect the realtor to want to want to move the thing along quickly because he/she will not want to spend too much time for a few grand.

Also keep in mind since you are buying a condo chances are you will have a lot of comparables to look at. Ideally you would want to find an unit in your building that has similar square footage to the place you are looking at, in similar condition and sold within the last 3 months. If not use 6 months and if needed a year. You should also use comparables from buildings that are close by but I would recommend looking at buildings with similar year built, HOA fees, etc. You could also use zillow and redfin for home estimates but realize they are not close to being perfect but can be used as a starting point.

Also last piece of advice is if you have price in your mind what the place is worth don't tell your realtor what it is. In my personal experience I made this mistake and my realtor told the sellers realtor what my final price was and the seller's realtor wanted to play the game of "let's meet in the middle" where my price was the market price and their price was extremely overpriced. Obviously meeting in the middle would of led me to overpaying. My realtor tried to spin it off as "an extra $10-20k over 30 years is only a few hundred more a month" type of BS talk. But this might not be applicable in your case.

[~primetime~]

I'll be living on my own. I feel like a full house (including the exterior and landscaping) is a lot to handle by myself. Even looking at condos in my price range, they're still much, much bigger than I will need in the next 5 years. I don't need a 3 bedroom condo, but any cheaper and I end up living in the ghetto I feel like.

I've purchased and lived in both a condo and a house, condo is definitely better for a single guy, for sure. House is better for a family.

You don't want to deal with all the upkeep that a house requires of its just you, not worth it at all.