Give me tips to help me buy my FIRST HOUSE for my family

Be careful with newly renovated houses. Have those carefully inspected. There are lots of DIYers now with HGTV, and I have known a lot of people who have been saddled with a lot of expense to fix renovations that were not done correctly.

We followed Dave Ramsey's advice to stay around 25% of your NET pay and definitely do not go over 30%. This is for mortgage, insurance, and property tax. We lived in Illinois at the time, where property taxes are really high. During the 4 years we owned that house our costs increased a lot because of property tax increases. If we hadn't stayed in that range we would have been in a world of hurt.

If you are using a realtor, they will likely try to talk you into spending more. Ours chose to only show us crap holes, and told us that if we wanted a nice place we would have to spend more. I found our house myself by searching online, and insisted that she show it to us. Do your own numbers ahead of time and stick to them because realtors do not have your best interest in mind.

We bought our first house from a couple who had a lot of kids. They were rough on the house, so we got a good deal. It was kind of trashed, but it had a great floor plan. We put new flooring in, painted the interior, and made a few counter swaps in the kitchen and bathrooms. It ended up being a nice house, and we made a very nice profit when we sold it.

Don't know if this helps, but good luck. Just do your own math before you shop and know your numbers. Don't let anyone talk you into spending more than you can afford. There will be repairs and improvements that you will inevitably make, and you need to allow money for those things.

Agree that you should confirm that you can telecommute every other week before committing to a house

Other things to consider:

(1) why not trying renting for 6 months or a year in the rural county -that way you know whether you can handle the commute;

(2) speak with a bank or credit union that is familiar with your area - get recommendations from people you know in the community - a good lender should help you spot other potential issues;

(3) transaction costs - keep in mind that closing costs in NY are high and some communities outside of NYC have their own transfer taxes

You would be well advised to move to Wilton, CT to train with the athlete special from a distance of at least 6 ft away!

Another thing I think is weird about this post is you assume your job is safe because you've been with the company for 10 years. I'm not sure that's a good rationale for assuming your job is safe. Especially right now. The fact that you can't leave NYC and find a more flexible job or a job in a different location indicates to me that you better hope your job is safe.

I consider my job "safe" when I know I can get a competing offer within a month.

Come back to this thread when:

a) you have your telecommute approved with your boss

b) you have your aunt's enthusiastic endorsement to crash at her place every other week for the indefinite future

c) you have your credit cards paid off

I do like the one suggestion of finding a rental property in the location you're planning on buying and living in the rental for one year to see if you can really hack this major life change.

The list my wife and I made in 2002 before we bought the house we raised out 2 childern in.

1. Neighborhood more important than house. Scout out the neighborhood. Go for a couple morning or evening walks there. You'll get a vibe.

2. Walking distance to schools, some shopping, maybe a restaurant or two.

3. Walking distance to a good park. Not one of those lame street corner parks with the generic plastic playground.

4. Short commute for both of us - less than 20 minutes in normal traffic.

5. An olderhouse so neighbors won't be all the same age or same stage of life as tends to happen in generic suburban developments.

6. A variety of good running routes close to home.

Found that in Salt Lake City.

Also, a house we could afford for quite a while if one of us lost our job.

Busy day, can't answer everyone, but thanks for every tip, guys.

Usedtobeknowitall, you're tough, man. But alright, I will give the details of my 3 credit cards tomorrow if I have the time and, guess what, I will pay them off as suggested.

Don't buy until the market bottoms out. I'd wait and observe, keep your eyes on market data.

Figure out what you can afford and then find a house 10% less than that amount.

Keep living within your means.

Slcman wrote:

The list my wife and I made in 2002 before we bought the house we raised out 2 childern in.

1. Neighborhood more important than house. Scout out the neighborhood. Go for a couple morning or evening walks there. You'll get a vibe.

2. Walking distance to schools, some shopping, maybe a restaurant or two.

3. Walking distance to a good park. Not one of those lame street corner parks with the generic plastic playground.

4. Short commute for both of us - less than 20 minutes in normal traffic.

5. An olderhouse so neighbors won't be all the same age or same stage of life as tends to happen in generic suburban developments.

6. A variety of good running routes close to home.

Found that in Salt Lake City.

I am curious about #5. I would want a neighborhood with other kids the ages of my kids.

A few years ago I wrote the following to a friend who was considering his first house purchase. Maybe some of this will be helpful to you (noting some of it is specific to Canada):

Buying a house

Today it’s a lot easier to do basic home research than it was in 1992. You’ve got mouse-click access to active home listings across the country, google street view to take virtual walks around potential neighbourhoods, and tons of other on-line information.

You need to start with a basic idea of your minimum and desired components (number of bedrooms, bathrooms, square footage, yard, home type whether multi-unit or detached, etc etc). Realize that you will likely have to compromise on something, unless you buy land and build your own home to your plans. But these criteria will help you sift through the available listings.

The next thing (well, maybe this comes first, not sure if this is the chicken or the egg) is to decide on affordable price range. I’ll not go on at length about this, there are plenty of on-line calculators that will tell you what you can afford. But I will say that, as a general rule, banks are willing to loan you far more than you can really afford. If you borrow to the bank’s limit, you will be cash poor from mortgage payments, and you will end up paying down the principal on the mortgage very slowly. You’ll own a house, but you’ll live paycheck to paycheck and your investment will not grow like it should. So my best advice is, don’t borrow more than about half – maybe two thirds - what the bank will let you, if you can avoid it.

Perhaps equally important as basic home features and price, is location. The house by itself is not the home. The home is integrated into the neighbourhood, and the physical location has a significant effect on your lifestyle. You need to have a good internal conversation about what is important to you location-wise. Do you like privacy? Do you prefer a vibrant, mixed, noisier location, where you can walk everywhere? Do you need to be close to certain schools? Maybe health care facilities?

If you’ve thought through these three things fairly carefully, you’re ready to generate a list of possible homes, either on your own, scouring the internet, or with the assistance of a realtor. I’m in favour of working with a realtor, both for buying and selling, because, well, they know what the hell they’re doing, and you don’t. But some people prefer to go it alone. Your choice, but in my experience, it has always been well worth it. Of course you want to work with a GOOD realtor. There are duds out there. Shop around, contact at least three to interview, ask your friends for recommendations.

Once you have a list of possible homes, in the right price range, with most of the right features, in a handful of acceptable neighbourhoods, you are NOT quite ready to book viewings and start walking through. Before you walk into any homes, mark up a map with all the listings, and drive around all the neighbourhoods, looking at each house. In this drive by, you will eliminate some houses that have no street appeal to you. If you don’t like how it looks on drive by, don’t buy it. But beyond looking at the individual houses, have a careful look around the neighbourhoods. Is there a general sense of pride of ownership, or would you have neighbours with rusty beaters on the lawn? What’s traffic like? Are there local amenities, like parks, shops, etc? What’s your impression of street life… are there gang bangers on every corner, or kids on bikes and smiling folks strolling the streets?

Take a day to do a good, thorough drive, and shorten the list. NOW you are ready to book some showings. If you are working with a realtor, give them the list and get to it.

When looking through homes, you’ll need to decide what you like or don’t, and what is more or less important. The one thing I want to say, though, is be careful not to be fooled by clever staging. Some of the things we’ll talk about in selling the home can be deployed against you. In our first home purchase, we were very nearly fooled into spending $10K more than market value on a home we found very appealing, and SEEMED much bigger than it was. The sellers had staged it very well, with neutral, attractive, modern furniture and décor, and they had taken the time to de-clutter, tidy, clean. Some sellers will stage a house poorly, and you might be turned off a home because the owners are sloppy. Try to look through the home’s contents, whether very well or very poorly staged, and give the house a cold, hard look before deciding whether to offer or pass.

When you’ve found a home you love, if you’re working with a realtor, do NOT show them all your cards. The realtor is helping you, but at the end of the day they are working for themselves. Their primary motivation is to make a quick sale for the highest price possible. Quick means they get paid sooner. Highest price means they get paid more. So when a realtor is helping you buy, their personal motivation conflicts with yours… you want to get the “best” (lowest) possible price, they want to get the “best” (highest, fastest) possible sale. Honest realtors will still do their meet to try to meet your objectives, since a slightly lower price doesn’t have a huge effect on their commission, but just be a little cagey, and wary. Try to keep at least three homes as “favourites” you might offer on, even if you really only love one. This way the realtor can tell the selling realtor, honestly in his/her mind, you have other options, so you’re not seen as motivated buyers, and the sellers might be inclined to accept a bit lower offer.

There’s a lot of psychology involved in the purchase offer/counter-offer process. Some people will walk away from deals for the silliest tiny thing. Don’t insult anybody. If you’re going to “lowball” an offer, be prepared for them to maybe ignore you. Try not to impose snippy conditions in the offer, treat both realtors and the sellers the way you would like to be treated. You may pick up signs the sellers are motivated, and inclined to take a lower price. Absence of one set of clothes may signal a divorce, meaning the house needs to be disposed. If a house has been sitting on the market a long time, either the sellers are just fishing, not too serious, or they might be tired of the process, willing to settle. Your realtor should be able to help you here, but trust your gut as much as or more than him/her.

A clean offer will be accepted for a lower price than a conditional offer. By clean, I mean you haven’t made it conditional on financing, sale of your own place (nobody wants to give you that if they can avoid it), home inspection, etc. If you have the financial capacity, don’t make it conditional on financing. We’ve bought a house with a clean offer that was $10k lower than a competing conditional offer. If it’s an older house, you should probably make it conditional on home inspection, to protect yourself. Unless you’re in construction and can eyeball things carefully yourself.

Once you’ve got an accepted offer, and you’ve removed all the conditions, pretty much all the hard work is done. Make sure you have a good lawyer work with your realtor and your bank to arrange the financing, title registration, etc prior to closing, then take over the house, and turn it into a home!

+10 Well said!

Rural House Seeker wrote:

Busy day, can't answer everyone, but thanks for every tip, guys.

Usedtobeknowitall, you're tough, man. But alright, I will give the details of my 3 credit cards tomorrow if I have the time and, guess what, I will pay them off as suggested.

I was being kind of tough with my advice, but it's because your proposal sounds pretty risky to me. More risk than I would be willing to take on. And I've had more than a few friends and family members that have gotten themselves stuck in a bad housing situation by getting whipped up into what they want and not being realistic about the costs and risks.

My advice - try renting a house in the nearby neighborhood, and see how much you like the commute and alternating living with your aunt. See if the pluses end up outweighing the negatives. Once you buy a house you can get stuck and really hurt yourself financially if you need to move. It will probably be cheaper, and you might save up enough to buy an even better home in the near future.

Secondly. How much credit card debt? Unless the interest rate on that debt is low (<5%) you need to pay that off now! Assuming you have only a couple k debt, yes you can pay it off and buy a home, but if you have a lot of debt, no. If you can't afford the downpayment after immediately paying off all of your credit card debt, in full, you can't afford it.

Excellent!

+1, very uncharacteristic from Brother Flagpole

Based on your combines income, you would be in the $350,000-$410,000 range.

Anything higher will do nothing but cause financial strain.

I think you need to grow up before you jump into a serious financial commitment such as a 750k home. Not trying to be harsh but seriously, you’re buying a house that will strain your household budget to the brim because you think your kids would enjoy a big yard? What if a family member gets sick and incurs a large medical bill? Will you still be able to pay the mortgage? Is that worth having a “big yard”? Stuff like that happens ALL THE TIME -and routinely causes a bad snowball effect for families if they are barely able to afford it to begin with.

You also don’t know you can negotiate with sellers and lenders? How can you possible buy a house with a high likelihood of paying way more than you should without having a working understanding of how these things work. Read a few articles online.

And the whole thing about staying at your wife’s aunt’s place half the time? That’s just weird, and adult doesn’t “crash” at a random family member’s place because they’re ill-equipped to figure out how to structure a more efficient situation.

Last, I find it hard to believe that within 2 hours of NYC there isn’t a house well under 750K that could achieve your objectives. If you’re truly willing to accept that kind of commute, search harder, there’s plenty of big properties out there at a price you could responsible purchase.

2 hours from your job? You're making a big mistake.