Who knows how to buy a house?

[Got Gear?]

TweetI know it's a dumb question, but I really don't know. I've never bought any realestate, but would like to purchase my 1st home this spring.

So do I just call up Remax or something and say... "I wanna buy a house!" Do you need a realtor to buy a house, or is that only if you want to sell?

Should I look for a house on my own at first, and only enlist the help of a realtor if I can't find anything? I understand that realtors will often take 10% in fees. Is there anyway to get around this? Contact the owner and arrange a private sale?

Also, what sort of things should I keep an eye out for while considering a purchase. I understand that it's usually better if you have the ability to hook up to city sewer for example... as it's only a small fee whereas replaceing your septic system can cost thousands of dollars.

Help me I'm clueless! About the only thing I know is that I need to go see the bank and get pre-approved for a mortgage.

[jipped genes]

Tweetcall a realtor tell them what your looking for they will compose a list of residences thet meet your needs and they will set times to go look at them with you. its worth the $. also it is important to get a professional house inspector to look at it before you buy. here in Texas every foundation will eventually need work and you will at one point have termites so its a sound investment.

[newgirl]

TweetOkay -- firstly every area has their own sort of culture..even within the US, some villages/towns are best using the help of an agent.

Mostly here on the Isle of Long (NY) most peeps use a Realtor to find them a home. The fee is paid for BY the seller. But lately there is a new breed of realtor -- the Buyers Broker but it has not really taken off here at all.

You can also look for Home Sales in your paper that state "Prinicpals only" -- they are not talking about school principals. This means - NO REAL ESTATE AGENTS...the owner of the home wishes to sell the home to a private party without the aid of an agent.

There are sooo many things to look for in your investment. Sewer is only the tip of the iceberg.

Also, you need to look for a home in an area that is stable and has good public school system. VERY important for your own resale value.

We hire (as buyers) at our own cost an engineer to review the home and look for any obvious big ticket repairs that need to be addressed -- the normal/average home buyer does not know a faulty foundation or header structure problem in a roof line.

I would, if I were you, contact a local broker just to see if they offer homebuyer booklets or checklists -- or even classroom style Q&A sessions. Alot of the franchise groups offer them.

And congrats Got Gear...you will among the land of the eternally indebted....just like the rest of us homeowners.

And -- I will say that homeownership while a big responsibility both in terms of time and money -- is worth every penny.

I would also suggest picking up magazines such as This Old House. Not for the aethestic reading factor -- but oftentimes they talk about what to look for in a home.

[newgirl]

Tweet

Originally posted by Crankin'steiN
When you go to get preapproved for the mortgage, they will take your total combined (you and your gf if applicable) gross income, then check to see if less then 40% of your total gross is going out to pay debts....

You must have less then 40% going out to pay your debts or they will not give you a mortgage.

I thought the debt to income ratio was 28%. I guess that could be just my area.

[Keiser]

TweetBefore you do anything, get pre approved for a certain amount. It saves a lot of trouble in the long run. Yes you'll need a real estate agent. I found that if the seller has an agent, then that agent will only deal with another agent directly... Plus when it comes down to it there is a whole shitload of paperwork and things you would have no clue about that your real estate agent will handle. Also generally the real estate agent fees are taken out of the seller, nothing out of your pocket.

Also if you can afford to put down at least 20%, then do so, otherwise you have to carry mortage insurance. Also I wouldn't buy an old house, you'll end up spending more on repairs than you would think. I wouldn't worry about the septic system and things like that, unless you are out in the backwoods somewhere.

thats all i can think of for now, also don't settle on the first thing you find, look around and remember to get your agent to negotiate the price.

[newgirl]

TweetCrank -- that is great that the ratio is that high (40%)...makes it easier for young people to get a house based on that. Seemingly that their income goes up as they age, but mortgage remains a constant -- it is a good thing to have that ratio.

Downpayment is another animal all together.

[newgirl]

TweetRRSP?

I like the 3% offset to defray some costs. Sounds like the Canadian government truly wants its citizens to own a home.

[newgirl]

TweetOkay = 401k pension plan here ==- but it is not allowed to be drawn from AT ALL...so that is great that you all can.

[Got Gear?]

TweetThey don't have RRSP's in the US? Probably just called something different.

RRSP = Registered Retirement Savings Plan.

The Cdn government let's you invest in a certain amount of RRSP's based on your income. What an RRSP let's you do is to invest the money at a lower rate of interest (compared to other investment options). The benifits come in that it's a secure investment (you'll never loose your money) and that the cdn government allows you to deduct the investment from your taxable earnings. You pay the taxes when you cash in the RRSP.
In a nutshell, you buy RRSP's while your income tax % is high, and cash them in when it's low (like when your retired and don't have income from a job).

Here's my financial situation:

-I'm planning on putting up a $20,000 down payment. The Cdn government has a 1st time home buyers plan that lets me use the RRSP's as a down payment without paying the tax penalty(20grand max).
-I currently have about 6,000 in my checking account, will hopefully be up to around 8,000 at the date of purchase. I want to reserve this money for things like buying furniture/appliances and money to take care of any renovations I'd like to do immediately. Currently I own nothing but a bed, some kitchen stuff, and an entertainment center with electronics.
-I have 0 debt currently. I own 3 vehicles that are all payed for..but not worth a heck of alot...approx 20,000 all together.
-I'm doing this on my own.. the GF will be moving in with me, but she's a starving student and won't be able to contribute much to the household.

I hope to get cleared for a $200,000 mortgage, but am hoping to buy a home in the 180 to 190 range. The plan is also to look for a home that has a suite I can rent out, or is built in such a way that a suite can be easily built.

For that price range, obviously the house isn't going to be anything spectacular. I'm a pretty handy guy, and actually look forward to doing some minor renovations and fixing up the place.