Order of Business

@Ldyjarhead (10157)
United States
August 31, 2008 7:42pm CST
I've bought several houses over the years, and I'm going to be in the market for one again soon. I've done conventional loans, VA, 100% financing with closing costs rolled in, etc, so I guess I've got a little experience, but there's still so much out there to know. I'm curious to know how everyone else approaches the home-buying process. When getting ready to buy a house, do you normally do the math yourself and see what you can afford, then talk with a realtor? Do you talk with a lender first to see what they will give you, and then start looking? Do you look for your dream home and then pray that the lender will give you the money? If a lender says you qualify for XXX dollars, do you look at the high end of that number, or do you shoot for something lower than that figure?
3 people like this
9 responses
@mentalward (14697)
• United States
1 Sep 08
I think it's always best to get 'pre-approved' by a lender before looking for a house. After you've done that, you know for sure what you can afford and what price range to be looking at. It also gives you an upper hand when you find the house you want. If the seller knows that you've been pre-approved and are set to go, they will be more likely to accept your offer because they know that you're good for it. It's definitely a 'buyer's market' out there right now. You can offer less than the asking price and, if it's reasonable AND you've been pre-approved, I bet the seller will accept your contract without any haggling!
@mentalward (14697)
• United States
1 Sep 08
Oh, I forgot the last part! I would do some math in my head and figure out what I could comfortably pay each month on a mortgage before making an offer. Even if a lender says you can afford, say $1,000.00 a month, if you'd be uncomfortable paying that each month, you should look at houses slightly below that price. I'd go looking at the higher-end of what the lender says I can afford, then make an offer of less than the asking price to make the payments lower. Since it IS a buyer's market, the chances are better these days that you'll be able to get the mortgage you want along with the house you want.
@Ldyjarhead (10157)
• United States
1 Sep 08
You can get different amounts pre-approved from different lenders too. They all have their own criteria. I'm hoping that I'll be able to find something livable a little above my budget and offer less and have it be accepted. The trick now is to find an agent worth a hoot. My budget is very small and there's not much available that isn't condemned.
@mentalward (14697)
• United States
1 Sep 08
Then you should start with telling the agent that you'd like to look at "handyman specials". You can get SOOOO much more for your money with them! There are some that aren't too bad; liveable but need work. When I bought my first house, that's what I was looking for. I love fixing up older houses. The way I see it, most people 'change' things once they buy a house anyway. They repaint walls with colors they like, or put up wallpaper, tear down a wall or two maybe and put in a counter, finish a basement, etc. Why buy something that looks nice for a higher price when you can buy something that doesn't look so nice right now but costs so much less? I found a great house once and almost bought it. I offered $90,000.00 for it when all of the newer (and smaller) houses in the area with MUCH smaller plots were selling for $150,000.00. It needed a lot of TLC, I never kidded myself about that. It WAS ugly! But the potential! Man! The seller accepted my offer! Well, she had it on the market for $105,000.00. I'd be in that house now, most likely, except for the lightning that hit it right before we had a settlement date set! Sigh! So, maybe that's a good place to start. You could end up with a really terrific house for very little money. You can always take your time making it look 'pretty'. Just let the agent know up front what you're looking for and how much work you're willing to put into a house.
1 person likes this
@redkathy (3375)
• United States
1 Sep 08
When we bought ours, we didn't use a Realtor at all. We looked first, then had an idea of what we would spend. Did a prelim with several lenders and then chose the house. There are lots of deals to be had right now or at least where I live.
1 person likes this
@Ldyjarhead (10157)
• United States
1 Sep 08
Who did all the paperwork for you, made the offer, etc, if not a realtor?
1 person likes this
@redkathy (3375)
• United States
1 Sep 08
We made the deal with the homeowner, each got an attorney to draw up the deal. Then applied for financing. Once approved we did closing with a title company. SO instead of a realtor fee we paid an attorney 750.00 to spell out who pays what and so on.... Title costs, points, insurance are all part of closing costs and you always will have those.
1 person likes this
@BarBaraPrz (19578)
• St. Catharines, Ontario
1 Sep 08
Let's see... the first place I bought,(in Vancouver) I toured it with a girlfriend during an open house showing, and liked what I saw. I put in an offer subject to financing, it was accepted, I got financing within a couple days and I was a condo owner. When I sold it seven years later, it had doubled in price and there was very little left to pay on my mortgage, so I had quite a hefty chunk of change to negotiate with when I bought my second house (in Guelph) with no job (other than a couple hours a week at minimum wage). I managed to significantly pay down that mortgage, too, so when I decided to sell (privately to friends, so no commission) I was able to buy my present abode (in Hamilton) outright and still have a bit left to live on while I looked for a job. I guess you could say I jumped with eyes closed but landed in a field of daisies anyway all three times.
1 person likes this
@Ldyjarhead (10157)
• United States
1 Sep 08
Wow, you did great! I wish my luck ran more that way. I can't even find a realtor worth a crap.
1 person likes this
@BarBaraPrz (19578)
• St. Catharines, Ontario
1 Sep 08
When I bought the condo, I wasn't even thinking about buying a place, so yeah, I'd say I was lucky.
1 person likes this
@lingli_78 (12846)
• Australia
1 Sep 08
based on my experience, i usually access how much can i afford first... then i start looking for a house with that price in the market... meanwhile, i also start looking for a financial institution that can lend me the money... after that, i just go for the auction, make the bit, win the house, settle the paperwork and settlement date with the real estate agent, find a solicitor to act on my behalf and wait for the loan to be approved... that's basically it... it is quite a lengthy process and tiring for me... good luck... take care and have a nice day...
1 person likes this
@Ldyjarhead (10157)
• United States
1 Sep 08
It definitely is. Buying a home is almost always a very stressful situation.
• United States
1 Sep 08
I've only bought one house, so far. But we did a lot of reading and went to a mortgage speciaist before we started seriously looking at houses. We didn't qualify for a huge loan to start with, but we tried to keep about $10,000 under our max. We knew we would be buying a fixer-upper anyway, so we wanted to have a bit of cash on hand for repairs, and not be sweating making a payment every month.
1 person likes this
@Ldyjarhead (10157)
• United States
1 Sep 08
I agree. I think lenders usually tell you that you can afford more than you may be comfortable with. I've never gone the limit of what they've given me.
@ShepherdSpy (8562)
• Omagh, Northern Ireland
1 Sep 08
The place I have now is the first one I've ever "owned" (With a mortgage to pay off,anyway!) as I've been living in rented places most of my life up to now..I actually was renting here,and the owners accepted my offer to buy! I put down a 10% deposit,the balance to be paid back over the term.It has a 5 Year fixed rate built in,reverting to the variable rate after this time,unless I can get a new fixed rate in place in a couple of years!
@Ldyjarhead (10157)
• United States
1 Sep 08
There's no way I'd buy the place I'm renting now. I don't want to live here one day longer than I have to!
@sanell (2114)
• United States
1 Sep 08
I wish I could buy another house, I would love to do so, get a fixer and fix it up and hope that the market goes well enough that I could then sell it or rent it or something. It would be nice but it is hard. I have been looking at areas near me because our area is really hot but at the same time I have no money, no collarteral or anything so I am stuck. Oh well. That is cool that you have those investments.
1 person likes this
@Ldyjarhead (10157)
• United States
1 Sep 08
I'm afraid that's all I'll be able to afford. I have outstanding credit, but little income.
@dragon54u (31605)
• United States
1 Sep 08
I go by the old teaching that you shouldn't spend more than 25% of your net income on housing and chose a house that reflected that. By doing it that way, I can live on 50% of my income, bank 25% and have a nice financial cushion in case things go south or I need repairs to the house (which I did and was glad I had the money!).
1 person likes this
@Ldyjarhead (10157)
• United States
1 Sep 08
That's about what I can afford, or maybe just a bit more since I'm so frugal in other areas. Less than that and I'd never find a house.
@ersmommy1 (12600)
• United States
7 Nov 08
We have only bought one house to date. We did some math. Then spoke to a lender.Obtained a conventional loan. Then we purchased the least expensive house, the size we needed, that we could. With everything going on economically right now, that puts us in better shape than most of our friends.