Buying a house

[Don]

So I'm getting ready to buy my first house. I have a realtor and I've been looking for awhile, but now I'm ready to actually buy something (probably sometime this month). Believe it or not, you can actually get something decent in a solid neighborhood for 150-ish here, so it won't be horribly expensive. Just wanted to see if you guys have any advice on things I should look out for.

[Sully151]

Ghosts. 

[Don]

17 minutes ago, Sully151 said:

Ghosts. 

That's tough man. Not even included in the seller's disclosure.

[Blarg]

Get your own independent building inspector, the real estate picked guy is not going to be trustworthy since he is paid by the seller agent. 

Roof, Plumbing and electrical are big ticket items and when they tear up your walls or floors to make a fix they walk away and leave with the holes to fix so make sure you don't need that kind of headache. 

Get a good homeowner protection policy that pays for any problems that may arise. Again, don't just take their recommendations since once you sign the agents take the money and run. Research and get the best policy for the money. 

Make sure the house has proper drainage around the property away from the structure. We've been through that crap with our house and had to replace carpets a couple times. 

Make sure your neighbors aren't in a property line dispute. Regardless if you are a new owner that legacy problem becomes yours. Home builders often drop homes too close to the property line (ignoring g the survey reports)  and no one knows it until you go to the city to get permitted for a walkway or wall and find out you can't do it. Or worse the neighbor finds our he has two more feet of land and wants you to rip everything out. 

Or fuck it all and just rent. 

[gotbeer]

Whatever research you do on a house, make sure you keep the documentation.  I had a friend buy a house with a pool.  Owner listed it in one of the posts as heated.  After the sale closed, it turned out not to be heated.  With that documentation, they were able to get the former owner to pay for the repairs. 

 

[Stradling]

18 minutes ago, Blarg said:

Get your own independent building inspector, the real estate picked guy is not going to be trustworthy since he is paid by the seller agent. 

Roof, Plumbing and electrical are big ticket items and when they tear up your walls or floors to make a fix they walk away and leave with the holes to fix so make sure you don't need that kind of headache. 

Get a good homeowner protection policy that pays for any problems that may arise. Again, don't just take their recommendations since once you sign the agents take the money and run. Research and get the best policy for the money. 

Make sure the house has proper drainage around the property away from the structure. We've been through that crap with our house and had to replace carpets a couple times. 

Make sure your neighbors aren't in a property line dispute. Regardless if you are a new owner that legacy problem becomes yours. Home builders often drop homes too close to the property line (ignoring g the survey reports)  and no one knows it until you go to the city to get permitted for a walkway or wall and find out you can't do it. Or worse the neighbor finds our he has two more feet of land and wants you to rip everything out. 

Or fuck it all and just rent. 

Eric I literally just went through this and the buyer pays for the home inspection.  If you have a good real estate agent they will point you in the right direction on this.  It certainly isn't paid for by the seller.  Also I totally agree on getting the best insurance policy you can.  We are dealing with plumbing issues at the new house and so far the policy has handled it. 

[Vegas Halo Fan]

4 minutes ago, Stradling said:

Eric I literally just went through this and the buyer pays for the home inspection.  If you have a good real estate agent they will point you in the right direction on this.  It certainly isn't paid for by the seller.  Also I totally agree on getting the best insurance policy you can.  We are dealing with plumbing issues at the new house and so far the policy has handled it. 

I had a homeowners insurance company who just denied my first claim in 19 years as a policy holder - for a $600 repair that they should have covered. They are now my former insurance company. Century National, in case you're interested. I'm with The Hartford now.

[Vegas Halo Fan]

If possible, find out when the major stuff was last replaced (water heater, central A/C and heat, major appliances if they are staying).

[Blarg]

If you are in California and decide to do even the smallest remodel of the kitchen the building inspector will require all of the appliances to be on a seperate fuse. So check to make sure the fuse box is up to code. Anything older than 10 years probably isn't. 

 

[Brandon]

2 hours ago, Stradling said:

Eric I literally just went through this and the buyer pays for the home inspection.  If you have a good real estate agent they will point you in the right direction on this.  It certainly isn't paid for by the seller.  Also I totally agree on getting the best insurance policy you can.  We are dealing with plumbing issues at the new house and so far the policy has handled it. 

it depends on the market.

i used to get 5k or so in buyer concessions (help with closing costs) and sometimes that was included. to say it is certainly not paid for buy the seller is not correct. we're in a market now where sellers don't have to make their properties more attractive with seller concessions.

[Brandon]

pretty much what eric said. do your inspections independently and through a referral source or friend. deal killers for you to watch out for are mold/mildew issues and water damage. i used to be able to just walk in and know what to look for, off the top of my head i don't remember as much. mainly look for things that will be expensive fixes.

don't go cheap on the homeowners policy.

if you need help with the loan, i can help there like i've helped a bunch of people here. questions, suggestions, advice, whatever.

good luck. it's quite the journey.

[wopphil]

Funny that you posted this thread Don, I was going to post something similar a few days ago.

I actually made an offer on a house last week. My problem is that my offer was contingent on the sale of my house (which would take all of a day or two to sell). Although the house on which I made the offer has been on the market for 40 days, and although my offer was within 2-percent of their asking price, they didn't even counter. I was shocked, especially since their agent had said they would consider a contingent offer and we offered an aggressive timeline. 

We are now debating what to do. On the one hand, we really like the house and don't want to give up. So we may wait another week or two and, if the house is still available, may slightly increase our offer. On the other hand, since the seller didn't even counter our offer, we are disinclined to waste our time writing another offer.

[Blarg]

Why did you want the 2% difference? To the seller that is kind of a non starter offer, you weren't really asking for a break on the price, you were just dickering to be a dick. They want an easy sale not some jackass that is going to play nickel and dime games. 

Next time you make an offer make it in earnest, this is exactly what you want to pay and for a solid reason not just seeing if you can claim later you got it for under their asking price. 

[Brandon]

15 minutes ago, wopphil said:

Funny that you posted this thread Don, I was going to post something similar a few days ago.

I actually made an offer on a house last week. My problem is that my offer was contingent on the sale of my house (which would take all of a day or two to sell). Although the house on which I made the offer has been on the market for 40 days, and although my offer was within 2-percent of their asking price, they didn't even counter. I was shocked, especially since their agent had said they would consider a contingent offer and we offered an aggressive timeline. 

We are now debating what to do. On the one hand, we really like the house and don't want to give up. So we may wait another week or two and, if the house is still available, may slightly increase our offer. On the other hand, since the seller didn't even counter our offer, we are disinclined to waste our time writing another offer.

still have your realtor inquire. because of regulations and discrimination laws it's a huge deal to be transparent on this kind of stuff, so you'll get an answer.

[Blarg]

The answer is the 2% discount was a dick offer. 

[Brandon]

yeah, if you're going to come in low make sure you have a reason like comps or repairs. not just because.

it's also a sellers market here, so unless there is something wrong, no one is really coming in low.

i never used to not respond though unless the offer was just garbage and they called to ask about it. even then they got an answer.

[ABC]

There's some questionable advice in this thread or I'm not reading it correctly. I've purchased dozens of properties over the past 20 years to flip, rent or for my primary residence. My brother is a real estate broker who has completed hundreds of transactions. 

1. The buyer pays for the inspection. Inspectors recommended by agents are perfectly fine. Just do your own research on the inspector (yelp).

2. Most people hate their homeowner policies. Read the fine print. Sometimes they come through and many times the new homeowner is being unreasonable. Overall, it helps people sleep at night because buyer thinks the house is going to fall apart after purchase.

3. If you are getting significant seller concessions in this market, you are buying an overpriced home.

 

 

 

[ABC]

2 hours ago, wopphil said:

Funny that you posted this thread Don, I was going to post something similar a few days ago.

I actually made an offer on a house last week. My problem is that my offer was contingent on the sale of my house (which would take all of a day or two to sell). Although the house on which I made the offer has been on the market for 40 days, and although my offer was within 2-percent of their asking price, they didn't even counter. I was shocked, especially since their agent had said they would consider a contingent offer and we offered an aggressive timeline. 

We are now debating what to do. On the one hand, we really like the house and don't want to give up. So we may wait another week or two and, if the house is still available, may slightly increase our offer. On the other hand, since the seller didn't even counter our offer, we are disinclined to waste our time writing another offer.

 

You might have a shitty agent. Sometimes offers are dismissed because the listing agent doesn't like the buyer agent. If you like the house, have your agent call the listing agent and find out what the owner wants. There's funny psychology with home buyers and owners. Everything is taken personally and both parties think agents are worthless (in some cases that's actually true.)

At the very least, you should have a signature on the RPA to confirm that the offer was rejected. Your agent should have already talked to the LA to find out why there was no counter. Your agent needs to ask the LA, "what will it take to get into escrow?" and you should have an answer, immediately. Otherwise, think about replacing your agent. 

I don't have your offer in front of me so I can't say what the seller may have objected to, but it can be beyond offer amount and contingency of house sale. That is a significant contingency these days. Seller may have said yes earlier but changed their mind. Either way, you should know. Seller might also think that we are heading into prime buying season and he will get his price soon because values are still climbing.

As for the weird psychology mentioned earlier, why is writing another offer a "waste of time"? It literally takes seconds with docusign. I would wait to submit another offer before your agent gets more details from LA. But that shouldn't take more than a day. 

[ABC]

As for home inspection, if something comes up in the report, have a specialist come out. For example,  if the general inspector finds some issue with foundation, bring out a foundation specialist to check it out and provide a bid to remedy. Use this to get credit towards repairs. A skilled agent will know how to leverage inspections to get you an advantage in this part of the buying process. 

 

[ABC]

Home buying tip: When you go to see a house, don't ask a million questions about it in front of LA. For example, there is no way for seller or LA to know if a crack in the drywall or stucco is superficial or structural. Questions like this will make you sound like a headache of a buyer.

Always be positive and make sure everyone (LA, seller, your agent) knows how much you love the house. This makes an impression that you will likely not back out of the deal. Plus the seller gets a warm fuzzy feeling if the buyer loves their home.

Also, see how your agent interacts with the LA. Your agent needs to befriend the LA. Your agent should also STFU about the crack in the drywall. These are questions you ask AFTER you get your offer accepted.

The LA might be an idiot and your agent will have to educate him why your offer is better. For ex, does your offer include a pre-approval or a DU? Most agents have no idea what a DU is, nor why it is better. And your agent needs to take additional steps to make sure that the seller knows the difference as well and that this info is clearly communicated to seller. 

It's too time-consuming to list everything here....There are many small ways to make you look like the best buyer that add up to the LA recommending your offer over others to the seller. And for the seller to prefer your offer over others.

[Brandon]

you're going overboard with jargon. these people aren't going to know what du/desktop underwriter is.

a pre-approval letter should still work, if not this is the back up.....but also incomplete. it might be that i know both fannie (do/du) and freddie (lp) systems like the back of my hand so i know they are based off the loan application and also adjust as a processor updates the file since it pulls directly from an app. maybe it gives someone the warm fuzzies, but if they are quick to jump on it then they are a moron.....i'd feel good about it if the dti was low as shit and the credit score was solid.

[ABC]

They don't need to know what a DU is. Most agents don't know. That's why it can be powerful. The point is, has their agent asked their lender for one? Likely not. Adding a DU helps...but your agent needs to make sure the LA knows what it is and position it as "better". Most sellers are scared that the loan will never come to fruition. A DU makes the buyer appear stronger. A DU alone usually does not win the offer acceptance. That is why I stated that there are many small ways to improve your chance at winning. 

[ABC]

Home buying tip #9:

Always get a home inspection. You will read this everywhere. It's golden advice.

Also pay $200 for a sewer line inspection. And get a chimney guy out there if house has a chimney. If home inspection or seller's disclosures show any electrical, plumbing, roof or foundations concerns, get a specialist or general contractor out there, too. And if you're on a hill, spend the cash for a geologist.

[wopphil]

5 hours ago, #CF8 said:

You might have a shitty agent. Sometimes offers are dismissed because the listing agent doesn't like the buyer agent. If you like the house, have your agent call the listing agent and find out what the owner wants. There's funny psychology with home buyers and owners. Everything is taken personally and both parties think agents are worthless (in some cases that's actually true.)

At the very least, you should have a signature on the RPA to confirm that the offer was rejected. Your agent should have already talked to the LA to find out why there was no counter. Your agent needs to ask the LA, "what will it take to get into escrow?" and you should have an answer, immediately. Otherwise, think about replacing your agent. 

I don't have your offer in front of me so I can't say what the seller may have objected to, but it can be beyond offer amount and contingency of house sale. That is a significant contingency these days. Seller may have said yes earlier but changed their mind. Either way, you should know. Seller might also think that we are heading into prime buying season and he will get his price soon because values are still climbing.

As for the weird psychology mentioned earlier, why is writing another offer a "waste of time"? It literally takes seconds with docusign. I would wait to submit another offer before your agent gets more details from LA. But that shouldn't take more than a day. 

Good advice, thank you. I agree with you about the psychology of it all.  Sellers, oddly, seem to take it personal if you don't meet their asking price. Like its a reflection on them. Stupid.

Honestly, I was put off by the sellers and their agent. Their failure to counter our offer was essentially an "f-you" to us. I don't negotiate that way. And I dont want to bid against myself, either. As much as I want to buy the home, they need to sell it. It's a two-way street. My thought is that if the house is still available in two weeks, perhaps they will get more realistic. 

I am willing to increase my offer, but not by much.  The list price on the home is $970, and the realtor informed us the seller was contemplating lowering it to $955 or $960. I offered $925, but with my agent to eat 2-percent of the commission. So my offer was essentially the equivalent of $945. They have to know we will come up at least another $5. So we really aren't far apart. And given that the property has been on the market 40 days, they are probably a little over priced.

[wopphil]

8 hours ago, Brandon said:

yeah, if you're going to come in low make sure you have a reason like comps or repairs. not just because.

it's also a sellers market here, so unless there is something wrong, no one is really coming in low.

i never used to not respond though unless the offer was just garbage and they called to ask about it. even then they got an answer.

I don't know that we were that low. We effectively offered $945 against a $970 asking price  (which we understand is likely to be reduced to $955 or $960 soon). At that price point, the difference is peanuts. Certainly close enough to warrant a counter from the seller. They may very well be overpriced, given that the house has been on the market for 40 days without any serious offers (according to their agent, that is).