Friday, June 16, 2017

House Buying Tips

Here are some things to consider when looking to buy a house - comment on what you think I should add to the list!!

  1. The realtor and mortgage banker will sell you the most expensive house the calculator says you can pay - you need to look at your actual budget to determine what you can pay and stick to that.
  2. When you look at your budget remember swapping rent for a mortgage isn't equivalent. You should consider the extra costs of utilities you may not pay now, and most of all budgeting to save for the house maintenance.
    1. We tried to save ~100/month to cover these expenses. A new roof, furnace, A/C, etc. typically each cost $5,000 - $15,000 installed, so based on the estimated lives of these we determined that ~1k/year should cover these costs
    2. In the past people would just get another loan for these things, but there is no guarantee that you will have equity enough for that these days
  3. Hire your own, VERY good, home inspector (you can pick any inspector you want, please read this: Also check out his Blog and Facebook page for some interesting inspection finds.
    1. Every house (even brand new ones) will have issues that a good inspector will find, do not be disheartened when there are issues on the report. It is up to you to decide how important those items are vs. how much you like the house. Remember, you can try and negotiate on price or for repairs before close.
    2. You may need additional inspectors for specific items in the house (fireplaces, wood stoves, pellet furnaces, boiler heating systems, etc.). Talk to your inspector about what they can and cannot properly inspect. (Thanks  @Gwen)
  4. Look for not only obvious water damage, but things that could cause water damage that isn't visible yet
    1. Does the landscaping slope toward or away from the house at the foundation?
    2. Are the gutters clean and with proper drainage away from the house or are they not maintained, broken, clogged, etc. (we have even seen gutters with trees starting to grow out of them)?
  5. Believe in your gut if it is telling you something is wrong with the house or with the mortgage offer
  6. If your realtor is acting like a glorified tour guide (go look on a website and find houses you want to see and I will set up showings), find a new Realtor, you want a partner in this effort and they stand to make ~3% of the sale value of the home, so they should work to help you find the right one.
  7. Make sure you account for and get good homeowner's insurance. Understand what your insurance covers, because it may not be everything. Look for flood coverage if you can get it in your area.
  8. Try and find the least expensive house in the best / most expensive neighborhood. It will be easier to sell this house in the future (thanks +Heather Sauntry).
So - what am I missing?!?

Sunday, June 4, 2017